Omaha daily bee., 1907-05-10
MAY BE IxcHANG,D t,R COMMON SToCI

NEW YORK. May 9.-New capital Issues,
aBgregating fl36.0O0OOO. which were an
nounced today by the Union Pacific and
Southern Pacific companies created a SEN
sation in financial circles and resulted In
sharp decline in prices on the Stock eX-
change. When the announcement was made
that the directors will ask their stockhold-
ers to authorize such Issues quotations of
Union Pacific shares dropped a total Of
$S.25 per share from the previous high fig
ure OF the day. Part Of this decline was
made up In later dealings. This latest
move on the part Of the Hartman systems
caused much comment in financial circles
and drew a statement from Mr.. Hartman,
who said the directors decided II would be
better TO offer stockholders preferred stock
at par rather than to sell Southern Pacific
bonds at a high rate OF interest. He be-
lieves this will better maintain the credit
Of the company
Southern Pacific hasa floating debt of
about $32 10000 said Mr.. Hartman. "Of
this sum S14.2O0,00O Is payable to Union Pa
cifc for advances Under the arrangement
announced today Union Pacific will take IS
per cent Of the SS6,OOO,OOO stock offered by
the Southern Pacific. Stockholders of
Union Pacific will hold a meeting in June
to authorize an issue of s100.O0OOO0 of COM
mon stock. An issue OF $75O00.OO0 deben-
extent OF 100000. so that when all deben-
lures are converted there will still remain
a balance OF $60OO0.OO0 common stock au-
thorized. but not Issued"
Mr.. Hartman also said that the Union
Pncifc has S2l3 10000 in unencumbered as
sets and 1.62s miles OF unmortgaged track.
Under the plan announced today the de-
benture bonds, which will bear per cent
interest and which will be sold to stock
be converted into common stock OF the
Union Pacific at any time within three to
five years at the rate Of Sl75 per share of
common stock The market value OF the
common stock at the close OF the exchange
today was S143 g per share.
The directors of tho two companies also
goted today to place the stock of the re-
Ypective companies on quarterly dividend
basis instead of serni-annual basis, as
heretofore, The first quarterly dividends,
(which were declared today, were at the
same rate as In the recent past. This was
"a per cent on Union Pacific common. ~
per cent on Southern Pacific. thus con-
tlnuing the interest Distribution to stock
holders at the rate OF 10 per cs.t for the
former and per cent for Southern Pacific
BIE surplus for Year.
At a meeting OF the board Of directors
OF the Union EdClHC company To-Day the
chairman submitted a statement showing
the estimated earnings over operating ex-
penses for the year ending June 80, 1907, to
be $S2.465,OOO
Dedueting from this the interest on the
funCNd debt. ts.l54OOO; sinking fund re-
aulrements. - 10000: interest on loans,
tST7oOO. and other expenses. $1,000. would
leave surplus of approximately ST.
10000.
The statement continues:
I'm addition TO the above. income the
company will receivs interest and dlvi-
dends other than from investment securi-
ties. N2S2s,OoO; rental OF steamships. S244.OOO,
which win bring the total income of the
company up to say S6.s24. OOO."
Mr.. Hartman stated that It was his
belief that the actual returns would be
greater rather than less than the esti-
mated figures as they had been made up
on very conservative lines. After paying
the dividend on the preferred stock,
100000, and the dividend on the common
stock S2O,Ooc,oOo, there would be something
over tiaOoO,oo0 over and above all re-
quirements OF every kind
THE floating Indebtedness OF the Union
Pacific was incurred for the following ex-
penditures, which have not been cap
italized:
Construction and acquisition OF new
lines. s2s.172.oOo: payment on account OF
the San Pedro road, slS.O5O,o0O steamships
Manchuria and Mongolia, S5.i26OOO; rollinR
, stock, S9,S0e0c0; lands and miscellaneous
real estate. S2,os0ooo. a total OF S6s,sSs. 90 q
Large Holdings of stocks,
According to the chairman's statement
the company owns SS0O97,COO face value
OF bonds charged on the books at 81. $4,000
SiN.75soO0 par value investment stocks and
rights costing siSi,lS2OO0. standing on the
books at s9S,g5s.ooO: t7O62S.O0O par value;
ether stocks charged on the books at Sss.
clIOO
According to the statements submitted
70 the directors OF the Southern Pacific to-
day the probable earnings OF that company
for the year ending June 90 1907 win be
Approximately $a56L00O; liked charges in
eluding reserve for depreciation OF rolling
stock AS92S,0o0 leaving a surplus over
nNed and other charges OF SIS. 76S. 900; from
this is TO be deducted dividends Of per
cent on preferred stock. S2.769O and divl-
dends OF per cent on common stock, s.s9e.
GOV lsaving a surplus after payment OF
dividends OF Sl3lO6WO
Mr Hartman stated that in his opinion
the actual figures would show greater re-
suhs rather than less
- Al present the floating debt OF the south
ern Pacific is So, $4,000 OF which sl4. go OO
Is due the Union Pacific.
The Central Pacific Railway companv
has paid three installments Of notes dus
the United States government releasing
funding bonds OF that company 10 the
amount OF ts,s22oOO which are In the treas
ury. and there Is also in the treasure
against which pothing has been issued
ts7AO0O q. n. and s. A. second mortgses
bonds, making the total capital expendi.
lure against which nothing has been issue
tsSii4oo0 which more than accounts for
the floating debt OF s22500.O0a
Other than the above the company has
the following assets against which thero
has not been amy issue of capital obliea-
tions;
Bonds ana stocks principally Of Oh