The Washington herald., 1913-05-30
SLOW MARKET,
WITHFAIR Tone
Bears Look Through South
western Rails for Weakness.
Leaders Act Better.
UNION PACIFIC'S PLANS
Street Not 0ptimistie-Local Bonds
Firm-Three Days Holiday
in Stocks.
UNION PACIFIC'S PLANS
By L. A. FLEMING.

Inc nnal CLOSING lOf tne tnlte odss
adjournment was better than MANY had
expected. The leaders. the big stocks
that have made long regulations. the
group referred to as standard rails, I"
Middle Western and Eastern, Chicago
and Northwestern, Great Northern. Atch-
ison, Pennsylvania, New York Central
and Reading, and stocks Of their ilk. did
fairly well, and give promise Of breaking
away from the cheaper Southwestern
and Middle Western stocks Also from
industrials that yield always 10 the
pressure of the bear, that are a menace
10 the list yielding when rsided and
weakening efforts of friends OF the mar
ket elsewhere.
In the other list are such stocks as
Kansas City Southern. Frisco. Fries. Al
ton, Rock Island. Texas Pactnc, ana
others of like ilk.
1t was Texas Pacific wherein the
bears were successful yesterday, though
they brought Frisco second preferred
down TO low mark of 6l-4. Cast Iron
Pipe preferred was another weakiInS. for
! l-s loss. Texas Pacific dropped from
Is "a to u ~, which is some drop when
one considers that K was 20 per cent OF
the price.
Firmer Opening.
With the immediate opening IL point
advances were made in the high-grade
shares. Then came the development of
weakness in the Southwestern group
Alton. Frisco, Missouri Pacific. Texas
Pacific. and elsewhere, and the list
turned the other way for average point
setbacks
Then came the announcement that
Judge Lovett would make public a plan
which the directors OF the Union Pa
cific, or rather the special committee
handling this matter, would recommend.
The Street liked the news, but the plan
did not appeal to the Street especially
as II contemplated the sale OF $l26, OUO oUp
Southern Pacific stock on the Street.
But the fact that, the market will be
closed for three days induced some COW
ering and a fairly good close.
Union Pacific Plans.
Chairman Lovett. of the Union Pacific
Company, issued the following statement:
Following the failure of the original
plan as modified and the expirationNof the
underwriting syndicate on March Is. all
negotiations for the control of the Cen
trail Pacific were abandoned.
Judge Lovett. after rehearsnhg the his
tory of the case in the past, says that
certain details still remain to be settled
but the salient features of the two plans
now proposed are as follows:
I'VE propose to offer the Southern Pa
ciic stock held by the Union Pacific for
public subscription in a way similar to
that in which New York City bonds are Of
fered, namely, to invite bids at such prices
and for such amounts of stock as the
bidder may desire, with A minimum price
TO be hereafter determined under which
no bid will be accepted, with such restric-
tons as the court may prescribe respect
ing the amount of stock to be allotted to
Union Pacific holders
Provision is TO be made for underwrit-
ing the offer in order TO insure its sue
cess. An alternative We propose is TO de-
post the stock in the hands of some bank
or trust company as trustee without voI-
ing power. against the issue of its bens-
ficial certificates therefor, such certificates
having no voting power, but emitting the
holder to all dividends and being ex-
Ch. cable for the stock itself upon the
execution by the holder of an affidavit
that he is not the owner of any Union
Pacific stock
- AS this would result in disfranchise-
ment of the stock while held by the trus-
tee and as long as held by any Union
Pacific holder. it is proposed that in this
case the certificates should be offered TO
the shareholders of the Union Pacific
alone, at such prices as the board of
directors may hereafter determine and
that if at the time deemed necessary the
offer should be underwritten.
IT is our intention to promptly submit
these plans TO the court with the request
that after such notice and hearings as the
court may deem proper, both plans be ap-
proved, with a provision permitting us to
adopt which ever appears To be the most
feasible and 10 make the offering within
4 definite time to be fixed by the court;
failing which the stock TO be placed in
the hands Of receiver 10 be appointed
by the court"
May Suit the Court.
The plans named may and may not suit
the court. But the Union Pacific directors
have gone as far as they can to reach an
agreement and if turned down in this
proposition will put it up to the govern
ment, to the legal department, to make
effective edicts OF the court.
The Southern Pacific officials have not
met the wishes Of the court in the mat
ter Of transferring Central Pacific TO give
Union Pacific 4 coast line to Frisco, but
the Union Pacific is big enough property
10 finance the construction of the needed
link to Frisco.
The second plan looks the least feasible
from court point OF view. The first