The daily silver state. [volume] (Winnemucca, Nev.) 1903-1907, 1905-04-18
GIGANTIC MERGER.

1t is announced tina the merger of the
and New York Central railroads has been
fully agreed upon and that tn plan is for
the Union Pacific to purchase the other
two systems, paying therefor in ponds
presumably collateral bonds, secured by
the stocks of the purchased roads, says
the San Francisco Chronicle. As all the
roads are mortgaged, it is impossible to
effect such a shifting of securities as to
make the new bonds a direct lien on the
physical properties. The bond issue re-
quired is said to be $3.50, 900, 0OO of 3A and
4 per cent bonds, which is the sum pau
by the Union Pacific for the equity of
the stockholders of the other systems,
subject to all their mortgages and obli-
cations. 1t is stated that these under
lying stocks and bonds aggregate more
than $4,000, 900, 900, so that when the new
bonds are issued the total capitalization
of the consolidated system VIII approach
s. ,00O.0 900, 900.
The merger is intended mainly for max
ing money for the underwriters, although
there are doubtless business advantages
to be gained by the transaction, and II
will be possible to give the pubic better
and more economical service. 1t will be
interesting to read the details Of the I'M
derwriting when they appear, if they do
appear. There seems to be a good mar
gin for somebody. New York Central
stock has been selling around 15912, the
total issue being $1S2, $780, 900, The total
market value beng not qulte $211, Is 200.
This stock is to be purchased at $500 per
share, making 1894, 500, 600. The total Chi
cago and Northwestern stock issued is
$l09, 900. 900, unless there have been some
very recent issues. 1t was quoted a uay
or two ago at 24l19, which would make
1858, $50. 900. This stock is to be purchased
for $500 per share, which would make
1921, 200, 900 for the lot, or s59l, 500, 900 for
the outstanding stock of the two systems.
But before the deal is made the Chicago
and Northwestern stockholders are to re-
ceive 16S, 500 shares of new stock as a
stock dividend'-costing n~othing-which
will be sold with the rest at $500 per
share, and the New York Central stock
holders are to buy 1875, 375 shares at SIS
per share, which they will immedia .ely
resell at $500 per share, the total to be
paid for the new stock of both systems
being $SS, 725, 900. which, added to the value
of the stock already outstanding. makes
a grand total of $3.50, OO0. 900 for the stock
of the two systems. The dispatch, how
ever, states that the total issue Of bonds
is to be $3.50. 900, 900, which leaves S1l0, OOO,-
600 unaccounted for. This is probably, in
part, at least, for outstanding stock is
sued since the latest available statement,
or to be available for raising cash when
needed. If not, it is an unusually large
honorarium, even for New York captains
of finance.
IS Mr.. Bryan announces that his par
amount issue" on the next trip is to be
public ownership" of things generally
he will doubtless be pleased to note that
one system at least is getting into shape
to take over with little figuring. But the
price seems "a little steep. Thirty-six
thousand miles of road at SO, 900. 600. 600 or
whereabouts is over $4,000 per mile, and a
great deal of mileage is cheaply built
feeders, not worth. with their equipment,
half that money.