New-York tribune., 1909-06-09
TO REDEEM PREFERRED
Southern Pacific Directors Issue Gail
to Stockholders.

The directors Of the Southern Pacific Company
issued call yesterday for the redemption OF the
preferred stock in accordance with decision
reached before the departure OF Mr.. Hartman for
Europe and noted in The Tribune few days ago.
The call presents choice Of three offers 10 the
preferred stock holders set forth in the state
issued the close of the board meeting
which is follows:
The board of directors Of the Southern Pacific
Company to-day called for redemption the preferred
| stock OF that company AT $ll5 a share On July
! At the same time the board authorized an issue
of exceeding s1oo 100000 of 4l2 cent twenty
crFe Eenrs at dJ9 "a ana hid ha S entitled
dollar for dollar in addition $50 in cash
| for each share Of stock so exchanged.
Thus the holders Of such preferred stock now.
and until and including July Is, will have three
| options: CD To exchange such stock for like
amount Of said ~ per cent bonds and 500 share
! IN cash 90 70 convert such stock into the COM
10 surrender the said stock on July IS and receive
A scmi-annuai dividend of So 30 a share on the
preferred stock heretofore declared Will he payable
OF record such June 80. and a quarterly
dividend on the common stock of 81 80 share
dividend warrants appertaining to the common
Hence m TO guard m agnst s me 2sS 20 OF
vert their stock prior to July when both classes
that holders of preferred stock converting the
same now and leaving an order Will on July -
be paid the difference in dividends. amounting to
Pending the engraving Of the Az per cent bonds
to those desiring to avail themselves OF the prNl-
lege to exchange their preferred stock tor nonaS
and cash. The bonds will he OF the denollta.,i ~,
Of 81 900, and TO effect exchange the stok .;uS
rendered in lots of shares. multipes thereoi
There is outstanding s74s63.4o0 Of the preferred
stock out of a total authorized issue or 3lV"7VVr
The Union Pacific through the oregon Short Line
Railroad Company is the largest individual share
holder owning according to the last annual report
s34 2oOOO Of the stock which s1Sooooo is pledged
under mortgages. The Union Pacific also owns
500 eco coo OF the common stock. The preferred
stock which was authorized in June 1904, has been
redeemabA, at the option of the company, at lI'
at any time UP 20 July !. 1910. option which has
now been exercised and convertible into common
stock at par the option Of the holder
r, has long been the belief Wall Street that the
issue would be retired before July 1910. although
until within the last few months the disparity in
price between the common and the preferred has
been 50 large as to offer no nduCement TO the
ferred stock holders to make the exchange int" the
common. 1nat disparity amounted TO nearly -
points in 1905 % points in 1906. TO almost 30
points in the panic period in October, 1897. and TO
about y points in August l@S, the month in which
the common for the first time crossed par.
In the current year the preferred has ruled only
from . to points above the common. and at the
close Yesterday the difference stood at IA. points.
the preferred being 1851 and the common at
1897. Both issues touched new high record marks
Yesterday the compon. on heavy transactions ad-
vancing to I35 and the preferred to 49, Each made
a net gain o than points. and Union Pa
cifc. which moved in sympathy with them gained
a point
dends while the dividend rate of the common is
per cent but it IS believed that the common Is TO
be placed on a per cent basis after the retirement
of the preferred