The silver state. [volume] (Winnemucca, Nev.) 1909-1925, 1913-07-01
court APPROVES
UNMERC|NC Plan

Attorney General McReynolds, with
the approval of President Wilson,
agreed upon with officials of the rail
road, was submitted to the Federal
Court at st. Paul yesterday 1t al
lows until January l, 1916, for the
complete dissolution of the combination
adjudged illegal by the Supreme
Court.
All previous plans are superseded
by this latest one, which proposes
that the Union Pacific shall exchange
$39, 100000 of its $126,000,000 hold
ings in the Southern Pacific for the
Pennsylvania road entire holdings
in the Baltimore and Ohio-virtually
an equal amount-and that the re-
naming $Ss,000,000 shall be sold to
the general public through a trust
company.
U. P. Stockholders Barred.
No present stockholders in the
Union Pacific, continuing as such,
might buy any of the Southern Pa
cifc stock so sold, and each perchaser
would be obliged to make affidavit
that he was not acting in concert or
Southern Pacific to secure a new con-
troll for the Union Pacific.
The transactions would begin on
November l, 1913, and if not com
plete by January l, 1916, the court
would direct the disposition of any
Southern Pacific stock remaining un-
taken.
The court will be asked, before ap-
proving the plan, to allow time for
any one, whether an interested party
or not, to interpose objections.
The government expressly stipu-
lates that should any illegal conditions
arise from the exchange of Pennsyl
vana and Baltimore and Ohio stock
either under existing laws or future
legislation or future Interpretation by
the courts Of present statutes, the gov
ernment would have the right "free
ly to assail the arrangement
McReynolds' Statement.
Here is the attorney generals state
ment, in part, as presented to the
court:
The proposed sale to the Pennsyl-
vania Railroad company of 3S2,924
shares $3s s,292 ,400) of the capital
stock of the Southern acifc com
pany, now owned or controlled by the
Union Pacific Railroad company (be
ing about IA per cent of the total
capital stock of the Southern Pacific)
in exchange for 425,472 shares ($42.-
547 ,200) of the capital stock of the
Baltimore and Ohio Railroad company
now owned by the Pennsylvania Rail
road company (being all of such stock
held by the laatter, and 2004 per cent
of the entire share of the Baltimore
and Ohio company, obviously goes
far to separate the Southern Pacific
company from the Union Pacific com
pany, and to that extent breaks up the
particular unlawful combination be-
tween them assailed in the original
bill, and now before the court for dis
solution.
Moreover, it divested the Pennsyl
vania Railroad company of large
aomunt of the capital stock of an ac-
tive competitor-the Baltimore and
Ohio Railroad company-and thereby
remedies a highly Objectionable con-
dition. So far as | am able to ascer
tain, such exchange would not result
in creating any new combination in
restraint of trade nor any other con
dition in violation of existing laws
U. P. Would Own 3S Per cent B. &. o.
Should the exchange be made, the
Union Pacific Railroad company
would then own $500 per cent of the
capital stock of the Baltimore & Ohio
Railroad company and the Pennsyl-
vania railroad would own IA per cent
of the capital stock of the Southern
Pacific company.
While the lines of the Pennsylvania
system appear to be competitive
with those of the Southern Pacific svs-
TEN and the lines of the Union Pacific
system, non-competitive with those of
the Baltimore & Ohio system, it is
manifest that the Pennsylvania lines
and the Southern Pacific lines do not
connect so as to form continuous
route nor do those of the Union Pa
eife and Baltimore & Ohio.
Trustee Plan.
These provisions put the disposition
of such shares (those remaining after
the transfer by the L. p to the Penn
sylvanial under the direction of the
court. The proposal is to transfer
them to trust company which shall
become a party to the proceeding and
trustee has no power to vote the
shares except when and as directed
by the court. Union Pacific stock
holders will be entitled to subscribe
for certificates of interest issued by
the trust company representing the
shares in its custody, payment to be
made either in full at the time of
subscription or $25 per share then and
the remainder within twelve months
with interest at 6 per cent
But the holders will have no vot-
ing rights and will receive no divid
ends until their certificates are con
verted into stock of the Southern Pa
eific company and such conversion can
only be made upon affidavit that the
applicant owns no shares of the Union
Pacific and is not acting for or on
behalf of any stoekholder thereof. or
in concert agreement or understand
ing with any other person. firm or cor
poration for the control of the South