The Birmingham age-herald., 1913-02-10
Wickersham Agrees to Plan
Proposed to Dissolve the
Hartman Merger
PLAN SAME AS ONE
MADE BY TWO ROADS
Contracts Necessary for Carrying Out
Agreement Complete-Effective
ness of Plan Conditioned on APP
proval of District Court

Washington, February 9.-Attorney
General Wickersham tonight announced
that he had reached an agreement with
the representatives of the Union Pa
eifle and Southern Pacific railroads for
the dissolution of the great Hartman
merger as decreed by the supreme
court.
The plan announced tonight is assem-
TALLY the same as that made public a
few days ago by the two roads when
they reached an agreement satisfactory
to themselves. dissolving the merger
The Attorney General in public state
ment tonight goes into greater detail.
Ihowever, and declares that competition
will supplant monopoly under the
agreed scheme of separation. lie gives
it his unqualified approval.
The various contracts necessary for
the carrying out of the agreement au-
thorized by the boards of directors or
the railroad companies have been COM
pleted and the effectiveness of the plan
Is conditional upon its approval by the
United states district court TO which It
will be presented at an early day.
Relieve Railroad Monopoly
| In his statement the Attorney General
says:
''The result of the whole transaction
will be to create ideal competition con-
ditions between the Union Pacific and
the Southern Pacific for transeonti
mental business between eastern points
and Portland and San Francisco. and TO
| relieve the states of California and
oregon of the monopoly of railroad
control which has been the occasion OF
such widespread dissatisfaction In the
past. The Attorney General feels that
| the approval and carrying out of this
plan Will accomplish results of inesti-
mable benefit to the public and results
far more satisfactory than there was
any reason to anticipate could have been
lseeured."
| The agreement Is stated by the At
ltorney General as this,
| "T'he plan In brief, provides for the
ldisposition of 1,286,500 shares of stock
of the Southern Pacific company which
the supreme court requires the Union
Pacific to dispose of by Offering the
same for subscription to and among the
Stockholders of the Union Pacific and
| the Southern Pacific companies. tho
holder OF every four shares Of stock
| of the Union Pacific to have the right
| to subscribe to one of such Southern
| Pacific shares, and the holder of every
three shares of Southern Pacific stock
| to have the right TO subscribe for one
share of such shares. The larger pro-
portion given to the Southern Pacific
stock n olders was insisted upon by the
| Attorney General for the purpose of in
suring a wider distribution among the
Southern Pacific share holders and to
-
Idue control of the Southern Pacific COM
lpany by the stockholders Of the Union
Pacific
Result of Distribution
"rhe result of the distribution, II all
the share holders should avail them
selves of their subscription right, Will
lbe that the present stockholders of the
Southern Pacific company VIII own II
per cent of It's capital stock while the
lstockholders of the Union Pacific will
lonly hold 30 per cent The stock is 50
offered for subscription at price prac-
tically equal to par. payable in four
Iinstallments. extending over period
of nine months. one of the conditions
OF the plan is that the amount of stock
so offered shall be under written by a
lresponsible underwriting syndicate and
Isuch an underwriting is being arranged
by the firm OF Messrs. Kuhn Loeb a
Co, and the National city bank as syn
dieate managers.
"Out of the proceeds Of such sale OF
stock the Union Pacific Railroad COM
Ipany is to pay to the Southern Pacific
company for the entire capital stock of
the Central Pacific Railroad company
now held by the southern Pacific COM
pany, the total consideration amount
ling to upwards of s104.0o0,00 and the
Iexisting leases of the Central Pacific to
the Southern Pacific railroad are to be
cancelled.
"Provislon is also made for the lease
In perpetuity by the Central Pacific to
the Southern Pacific OF the line con-
meeting the Southern Pacific road In
ICalifornia with the oregon and Calf
fornia line making direct connection
/ from San Francisco to Portland. ore;
land for the grant by the Southern Pa
| S>~-~-
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