New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-05-30
UNION PACIFIC BOARD
AGREES ON TWO PLANS
Directors Adopt Alternative
Methods for DisSOIving South.
ern Pacific Merger.
TO MEET COURTS DECREE
One Scheme Is to Offer South
ern Stock to the Public, the
Other to Deposit 1t with
Bank as Trustee.

Bank as Trustee.
Two plans for the divorce OF tho Union
Pacific and the Southern Pacific lines
were approved by the Union Pacific d.
rectors yesterday to conform to the disso-
luton decree Of the United States Su-
preme Court handed down last December.
The first OF the plans provides fer the
Offering OF S12s,s50000 Southern Pacific
stock held by the Union Pacific at public
subscription by inviting bids, similar TO
the method pursued in the recent sale OF
city bonds. A minimum price for the
stock. should this plan be acceptable TO
the Attorney General, is to be determined
later.
The alternative plan is that the Union
Pacifcs holdings in Southern Pacific be
deposited with a bank or trust company
as trustee. without voting power. against
an issue Of beneficial certificates. to be
offered only to Union Pacific stockholders.
These certificates would entite the hold
er TO all dividends on Southern Pacific
stock. but would be exchangeable for the
stock itself only on execution by the hold
or OF an affidavit that ne is not the
owner of any Union Pacific stock.
Neither OF the plans makes mention OF
the Central Pacific except TO state that
negotiations for its control were aban-
doned following the failure OF the mod-
fed plan on March IT, on the expiration
OF the underwriting syndicate
Judge lcvett's Statement.
Judge Lolett, chairman OF the Union
Pacific board, gave out statement. in
which he said
Following the failure OF the original
plan as modified and the expiration OF
the underwriting syndicate on March IS.
all negotiations for the control OF the
Central Pacific were abandoned, and the
Union Pacific proceeded with the develop
ment OF a plan for the disposition Of its
holdings Of Southern Pacific stock with
out reference TO the Central Pacific.
Upon our application 10 the Supreme
Court for an extension Of the time which
would expire on May IL. the Attorney
General in that connection made it plain
that he contemplated proceedings TO COM
pei the Southern Pacific 10 relInauish
control OF the Central Pacific Immediate
~ after the Supreme Court granted the
,iations were resumed between the Union
Pacific and the Southern Pacific. and
earnest efforts have been made to formu-
late a plan which would include the
transfer 81 the Central Pacific.
These negotiations continued until a
few days ago. when IL became apparent
that no solution could be found which
would meet the views OF the two COM
panies directly interested and al the
same time satisfy the requirements OF the
government and the California Railroad
Commission. and OF the French banks
whose consent was necessary in connec-
ton with certain provisions OF the Cen
trail Pacific European loan indenture.
Accordingly negotiations had TO be aban-
doned.
we have informed the Attorney Cen
eral Of the situation, and have again re-
stricted our efforts 10 working out plan
dealing only with the disposition OF the
Southern Pacific stock. After much con-
slderation We have decided upon the two
alternative plans which have to-day been
approved by our board Of directors.
1t Is our intention to promptly submit
these plans TO the court. with the request
that. after such notice and hearing as
the court may deem proper. both plans De
approved. with a provision permitting US
TO adopt whichever appears TO be the
more feasible and % make the offering
within a definite time. 10 he fixed by the
court. falling which the stock 10 be placed
in the hands OF receiver 10 be appointed
by the court
Expect Liberal Time.
Union Pacific banker said that should
the alternative plan be acceptable. lib
eral period would undoubtedly be granted
for the sale OF the stock.
Announcement Of the proposed plans for
the separation OF the Pacific roads was
followed by spirited trading in Union Pa |
chc on the Stock Exchange. Within |
few minutes the stock, which had been I
ranging around $50. dropped TO 1875 !
falling /. and 4 between sales. This de- !
cline was followed by almost as violent |
n rally. the stock moving UP TO l49 with |
similar wide fluctuations as were recorded /
on the decline. Southern Pacific also |
sold z points under the price prevailing /
at noon.
Washington. May 29.--Attorney Cen
eral McReynolds declined to-day 10 com
init himself on the plans for the diSsolu- !
ton OF the Union Pacific merger His at
titude is unknown. He said he had not !
seen the plans
II seems practically certain that the i
Attorney General will institute a suit
against the Southern Pacific under the
sherman antitrust law 10 compel that /
road TO divorce itself Of the Central Pa
cldc. lie has said that II the Union Pa
cihc dissolution plans did not provide for
that separation he would take steps to
force il. The Attorney General il is said.
could not force the Southern Pacific TO
give up the Central Pacific as a condition
precedent to his approval OF the pending
dissolution. because the Supreme Court
did not order that enforcement. leaving
the question open TO negotiation or fur
Their litigation.
MANN CALLS HOUSE CAUCUS |