New-York tribune., 1908-03-27
NEW =. P. BOND ISSUE.
DIRECTORS TAKE ACTION.
Pffuss 20 Sue Hartman and Others
for Stock Profits.

-,o-rEage bonds secured by the systems n
aao-tgaged lines The amount Of the issue
1ct made public, but II was said unofhciaIly that
: would be in the neighborhood Of s50,000.000
a call vas issued for special meeting of stock
soldiers May authorize the bond issue
z II Hartman president Of the Union Pa
-ifc. said after the meeting that he wished il
sistinctly understood that these bonds were
Tot the nature Of the high interest bearing
collateral trust notes which have been issued
80 largely by railroads of late. but out
and out first mortgage obligations. He added
HAT this was the first step in the direction of
financing on a low (cheap) basis by the rail
ads
At the special meeting May the stock
holders will also be asked 10 ratify the taking
ove- py the Unicn Pacific of the physical prop
eTr.ce Of the Leavenworth, Kansas & Western
Railway Company and of the Topeka & North
sestern Railroad Company. which are already.
through ownership Of stock. part Of the system.
MIILAR EXPLAINS MEETING.
II explanation OF this meeting Secretary AIillar
made The following statement:
The purpose is merely To prepare the way for
tne @ = a1e wen Az az issue ot bonds @ Saa h
uecided upon. The Leavenworth. Kansas d West
ranies OF the Union Pacfic which owns all the
miles OF railroad extending from Leavenworth 10
-iiltonvte, Kan, and the latter thirtyseven and
half miles. from Menoken TO Onaga, Kan, both
of which have all along constituted practically part
as4 Ti-ja ~ ne nfvsjcsI D-orerTjs in The TSnjoo
Pacific. canceIlinE the stock and bonds. so that
created. may attach as first len on these rail
] Tey Nh oes az 90 % 0Shf f no Pa ReF fc al
with these VIII Aggregate over twelve hundred
1no--gaged lines controlled through ownership OF
al their stock making in all about l650 miles: Il
Is necessary under the laws Of Kansas, by which
the companies were incorporated. that the con
Ssfi9a ] or rs sale he Of th pgieal P[6PereE 6 5h9nd &
stautial charge Of ownership is involved
Although some plan for new financing by the
Union Pacific has long been expected. the an
nouncement took Wall Street by surprise and
rad a pronounced effect the stock market
While the directors in session il was
ported that there would be an announcement Of
the proposed segregation plan for disposing OF
TIE Union Paci8c's stock holdings in other roads
IN This rurnor Union Pacific common stock sold
sIp 1881. the highest point attained the
present movement. and the whole market rose
-Ehen the bond issue was announced there was
q drop in Union Pacific 10 1854 and the rest of
HE market declined sharply There was some
rally before the close.
WALL STREET PUZZLED
Wha. puzzled Wall Street most TO figure
scr what purpose the bonds were 10 be used
-r1en and if issued. Il is known, OF course. that
The Union Pacific has put & large part Of its
siquid surplus assets into the stocks and bonds
rf other roads in recent years. These have OF
course deprecated heavily in the last two years,
and in some cases the dividend return has been
cut down A, the same time the Union Pacific
has been largely engaged in construction and de-
--eIopnaent work which has taken large sums Of
ready cash.
The last financing done by the Union Pacific
,ss II MAY. 1907. when the directors called
upon the stockholders TO ratify issue OF
zIoo.6oo.ooo common stock and ss5,ooo,eo0 per
CEN convertible bonds, TO be issued az 80 and
Convertible into common stock al 10 AT the
same tine the Southern Pacific issued IN the
-eighborhood Of s36.0o0.0 GOO additional preferred
stock A. thIs time the Union Pacific had a
floating debt Of nearly s75.000000. and it was
supposed that q large part Of the proceeds o.
he bond issue would go 10 HqaIoate Ials n
dehtedness At the time a. The issue MI HAITI
rnan said that the frequent breaking Of steel
,1ils on the systems lines vas one Of the rea-
sons for the need Of additional capital
NJ Hartman also said al that time that the
T-ntor Pacific had 1928 miles OF completed road
unrnor-gaged against which il was expected 10
ssere and hold IN its treasury s70,00oooo 70 $50
o00 200 OF first mortgage bonds. Wall Street
wondered yesterday whether the present new
issue was the one 70 which Ar. Hartman re-
fired ar the time Of the above statement.
In lso5 the Union Pacific stockholders au-
sao-ized al issue Of s100.000oo0 additional pre-
cer-ed stock. and according TO the last annual
report al Of this stock still remains unissued in
tie conpanyss treasury. At the meeting yester-
..av 70 action was taken the segregation
pla-.
DECLINE TO SUE COLLEAGUES,
-Ea directors however adopted resolutions
declining 70 bring suits against AIr Hartman
James stillnnan and Henry H Rogers as re-
quested by certain Connecticut stockholders, on
the ground that these three directors had prof
.ted e the expense Of the Union Pacific by SELL
ing 70 IL stock Of the Illinois Central Railroad
Company, Of the Railroad Securities Company
snd Of the 81. Joseph & Grand Island Railroad
Company The following statement was issued
IL expIaration Of the action % the board
-re-e v-ae fzfs before the board comnunioa-
ton dated March g. 1895. addressed 20 the boafn
r I = Sto-rs and Henry r BUCK. OF tart
ioro Conn; " A Arnold. Of y NllIlIIlahuC; 5 ON
tng thsr actions q Law or In equity be con
Rogers 1r1 James Stiilraan. respectively, who
directors Of thfs company. on account oI
some il bil:rv 10 this company claimed IN SAID
Communication 70 nave arisen in connection with
lie purchase bs this company OF STOCK oI tN,
Illinois Central Railroad Company. The Rallroaq
Island Railroad Company. and upon, o9t Co.91G -
trsron of said communication ano 9eu4dIIa -
vas upon motion. duly made and seconded UhaHi-
Ilouslv
Resolved First. that the above mentioned de-
-1a1d that actions al Law or quits in equity M oe
.ccoCnI II matters alleged IN tlt dyonS =,
tioned communication be and such oeTnahe -
- T,b. i8TeresI of Directors Hartman. Rog-
ers ana Stillman respectively IA the stock "a
= s ,, Sc.apa55 pa 4ioo9 ai Securities company and
EEAG and a