The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1904-10-22
RAILROADS.
HOW HARTMAN
MAY LOSE THE U. P.
STANDARD OIL INTERESTS REACH
ING OUT FOR CONTROL.
"a Slight Difference of Opinion That
May Force Hartman to Spend Forty
Million Dollars to Keep His Road
from Passing Into Other Hands.

Special to The Journal.
New York, Oct. 22.-E. H. Hartman,
Kuhn, Loeb & Co., and the affiliated !
banking interests of the Standard Oil !
company all deny most emphatically
opinion between the Standard oil com
pany and E. H. Hartman. This de-
NAL has been current now in Wall
street for ten days, but no one is yet
persuaded that it is genuine.
The facts of the case, as seen in Wall
Serv af dstnet Of fas opnen
between Mr.. Hartman and the Stand
ard Oil interests in the board of di-
rectors, over the question of whether or
not the convertible bonds shall be con-
funded into interest bearing bonds at 4
per cent: The Standard Oil crowd want
the bonds converted into common stock,
because this would entail the creation
of $s0,o0O,OOO additional stock. This
new stock would compel ape m Mr.. Hartman
buying half of it to keep control of the
road or to allow the control of the road
to pass into other hands. The "other
hands, would be the hands Of the
Standard Oil people.
The gist of this matter is the nature
of the convertible bonds. To make the
matter clear the following table of tho
stock of Union Pacific and the con-
vertible bonds is interesting and neces-
sary:
Common sos TO 90O goo
Convertible bonds ............... S6647 900
Total NEUTRALITY-SUSPICIOUS.. $2o4, 800. 800
The bonds are convertible into COM
mon stock at any time before May l,
1906. If they were converted the stock
would be as above. There would be
2.Y49,69S shares Of stocks entitled to
vote at the annual meeting of Union
Pacific. To control the meeting and
| to own or hold proxies for l,47500O
shares, or over half the stock. If, on
the other hand, Mr.. Hartman can pre-
vent the bonds from being converted
into stock there will not be need for
any such amount Of stock. 1t must
have no vote. Neither would they have
vote if they were converted into
other bonds, but they would if con-
verified into stock. If they were con-
verified into bonds the only voting Sc
curities would be the stocks as they
stand today, as follows:
common ....'...s.......'...... .$loS 20 9Oo
Total Observation-Disclosures. sos 1922 800
| One half Of this would be only
| l,041, 161 shares, or about $50, 900 shares
less, than would be required in case the
conversion were carried out.
Now, if Mr.. Hartman had to 90 into
the market and buy this 100000 shares
of stock at the present prices, it would
cost him nearly $5O,OO0,OOO cash. He
could not do it. If this conversion is
allowed to take place, the control of
Union Pacific will go out of the hands
of E. H. Hartman. The holders of the
convertible bonds will become the own
ers of $4,000 shares of stock, and will
have the balance of power. The City
National bank, the Standard Oil bank,
holds great block Of the convertibles
and will hold the balance Of power if
the conversion goes thru. That bank
will give its proxies to e. H. Hartman
SO long as peace continues, but not
afterwards.
Mr.. Hartman fears that if this con-
version takes place and he is not able
to buy in the $5O,OOO,OOO of stock in
the market, his road and all it's con-
trolled roads will pass under the domi-
nation of another interest-namely, the
Standard Oil interest
|, If the Standard Oil interests predom-
J mated in the Union Pacific it might
come about next year that the Standard
Oil interests would vote with the Rock
Island or with J. ]. Hill or with George
Gould. No one can say. In any event,
3 if the alliance between Hartman and
Standard Oil was broken at all, it is
manifest that the Union Pacific and
all its controlled and affiliated roads
would be at once lost to E. H. Harri-
! man. The pet ambition of lifetime
would fall at once to the ground.