The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-04-08
SECRECY ABOUT STOCK ISSUE.
Many Theories in Regard to Purpose
of Proposed Union Pacific Increase.

Many Theories in Regard to Purpose
Of Proposed Union Pacific Increase.
New York, April S.=Wau street was
/ taken absolutely by surprise by the
| announcement of e H Hartman
president of the Union Pacific. that
the directors had decided to ask the
stockholders to authorize the issue of
$10O'VOO'0O0 of new preferred stock,
70 pc equal IN every respect to the
preferred stock at present outstandi
/ The first effect of the announcement
was TO cause pressure of Union Pa
| c1tlc stock for sale.
A representative of the Union Pa
| cl1c said this afternoon that the carry
ing out of the new proposition would
enable the company to make a more
hDeraI distribution of its surplus to
common stockholders. He added:
1t IS not the policy of the company
TO announce beforehand its plans IN
III they have matured, and when all
matters having to do with the pro-
posed new issue of preferred stock are
definitely settled announcement of the
same will be made in the customary
manner"
One of the stories heard in the
| afternoon to account for the stock
issue was that it was to pay for
Northern Securities stock bought
from par to $50. Another story, and
one to which considerable credence
attached, was that it was for the pur-
I
control of the Union Pacific, and that
there was something in the stories
heard lately that this control had
been threatened by extensive acquisi-
interests.
The prevailing disposition in Wall
street today was to regard the new
stock issue as especially intended to
stocks of other companies. One
| broker sent out word that he had
| heard that it was for the purpose of
/ obtaining control of the Northern Pa
| cific when the Northern Securities
company distributed its assets, an OBJ
vious impossibility, in view of the su-
preme court opinion delivered last
/ Monday. Another house said: eve
/ believe that the issue is for the pur-
! pose or paying for a majority of the
| stock of the New York Central road,
of which there are 1,322,50O shares
outstanding. Fifty per cent. of this
amount, or a majority, say $1,000
shares, at $50 would cost 500, 800, 900.
We think the other announcements
/ in the deal, such as the retirement of
/ Northwestern stock by an issue of
/ bonds, will shortly follow"
All that Hartman would say was:
1.-The company will be placed in a po-
sition admitting in due time of a more
4 liberal attitude toward the distribution
/ of it's surplus income
In his circular to the stockholders
]
son for the new stock issue that ga
| corporation, whenever possible, should
finance at least a part of its capital
requirements-esp specially such as arise
/ in connection with the acquisition of
stock of other mpanies-through the
/ issue of stock rather than through the
creation of fixed interest bearing obi
cations"
When Mr.. Hartman was asked the
reason for the new issue he said:
I'VE need the money. Maybe we
want to buy some railroads. possibly
/ in Africa -
The only other thing Mr.. Hartman
would say was that the new issue
ought to commend itself to investors,
because it creates a contingent rather
than an absolute liability. He pointed
out that the stock is selling higher to-
/ day than the bonds.
| One explanation for the new issue
was that Hartman is trying to clinch
| his control of the Union Pacific, and
/ by issuing preferred instead of COM
mon stock Offset purchases made by
other interests.
Some of the railroads which, &C
cording to rumor, the Union Pacific
will buy with its new stock are the
Chicago & Northwestern, the St. Paul
the Santa. Fe, and the Illinois Central,
in the last named of which Hartman
/ is an influential director.