New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-04-22
NFW DISSOLUTION PLAN
FOR PACIFIC MERGER
4. S. Circuit Judges Favor Ex-
tension of Time for Putting
1t Into Effect.
ATTORNEY GENERAL FOR IT
Revised Proposition Would En-
tirely Eliminate Union Pacific
Control-Matter Up to
Supreme Court.

lion Of the revised plan for the dissolu-
ton Of the Union Pacific and Southern
Pacific Railway merger. marked the CON
ference here to-day between Robert s.
Lovett. Of the Union Pacific, and United
states Circuit Judges Walter II. Sanborn.
william c. Hook and Walter l. Smith.
Mr.. Bovett's motion for an extension
was al first denied. the judges being unde-
cded whether the Court Of Appeals had
the Jurisdiction to grant an extension
under the mandate of the Supreme Court
Of the United states. but later it was dc
cided 10 leave the question of jurisdiction
10 the Supreme Court.
All three Of the judges expressed their
opinion that the extension should he
granted. believing the railway was doing
all in It's power to present a plan of dis
solution that would he acceptable to the
supreme Court and TO the Attorney Cen
eral
Ina telegram to United States Attorney
G.. c. Houp: which was read TO the court.
United States Attorney General Mercy
nolds declared his Willingness for the ex-
tension.
as 10 the jurisdiction Of the circuit judges
tho Court of Appeals may reconvene to
act OIL Mr. LOvett's motion. Ii may be
some time. however. before this is done.
Mr. Lovett and his associates left to-day
for Washington TO place the time extern
sion motion before the Supreme Court.
Plans for the Dissolution.
l.,
ton, Mr. Lovett informally presented TO
the court tentative plans for the dissolu-
ton. Late this afternoon a synopsis Of
these plans was given out by the judges,
the principal points being as follows
The amended plan, i'm brief is that the
entire sl26.6500J0 i'm Southern Pacific stock
10 be distributed shall be deposited with
trustee and disfranchised while So held;
that certificates Of interest shall be issued
By the trustee against said shares. which
shall carry 10 voting right AID which
shall be eNchanseahie for southern Pa
cihc shares held by the trustee only upon
the fling of an affidavit ny the applicant
for such exchange. showing that such
applicant does not own l.o0 shares or
more OF Union Pacific stock. and that
these certificates Of interest shall be-
offered for subscription and purchase To-
all Union Pacific stockholders ratably at
distribution rate of not less than IS per
cent The largest Union Pacific stock
holders G6S in number. according To the
September stock list which was before
the Supreme Court are by this amended
plan entirely excluded from the acquisl-
ton Of any Of the Southern Pacific shares
TO he distributed. They may purchase
their ratable shares Of the certificates or
interest but they cannot themselves con
vert the certificates of interest into the
deposit coupons which represent Southern
Pacific shares because of their inability
10 comply with the condition precedent OF
swearing that they do not own 1909 cr
more shares OF Union Pacific stock.
The exchange cannot be effected for
them through some dummy or an agent
because the proposed affidavit requires the
applicant 10 swear that he is the bona
hde owner of the certificate of interest
presented for conversion.
The objection expressed in the SUI
preme Courts opinion OF January 6. 1913,
therefore is absolutely avoided. for the
rs Union Pacific stockholders. 10 whom
alone the objection pertained. instead oil
being entitled as their pro rata shares 10
@ per cent OF Southern Pacific stock and
being theoretically able 10 increase this
IN holding by acquisition OF rights from
the smaller shareholders, are not entitled
10 acquire one single share OF Southern
Pacific stock 10 be distributed. but are
specifically disqualified from such acqulsl-
ton"
Previous Combination Impossible.
The amended plan continued:
But even if IL be assumed that any
concert Of action by the 2l.Ts2 holders OF
Southern Pacific stock resulting in con-
troll Of the elections Of the Southern "a
dhc Company were possible. the erect
would not be 10 continue the previous
combination. These 2l.7s2 holders as
sumed to be able 70 control the Southern
Pacific Company by the holding OF Writ
ually &c per cent OF its stock are not III
control OF the Union Pacific RalIioau
Company. and are not able to elect lts
directors. since their aggregate holdlhsS
q Union Pacific stock amount to only
S72 per cent Of the Union Pacific Stock
and as the remaining 3GS stockholders
control 62s per cent, they naturaiiE
represent the controlling interest OF inc
Union Pacific Company
The plan also provides for the SAFE 10
syndicate or on the New YORK oto0N
Exchange Of any certificates Of interest,"
lot subscribed for by the Union faci"o
shareholders.
The certificates OF interest the pia'
continues, acquired on the open marie.
will still be subject to the conditioh Una.
they cannot be converted into stock oS
any Union Pacific shareholder hoio'"s
100 shares or more"
II the Supreme Court grants the eA-
tension OF time requested by Judge hoo-
ert S. Lovett. chairman OF the UNION
cihc executive committee. 1t Will perihit
the circuit judges to study the lnioriiia'
plan providing for a trusteeship OF the
S8,65o0co Southern Pacific stock held ny
the Union Pacific and make any sueses-
lions for changes they might desire alter
us formal presentation. The posslDiieS
Of a receivership for the Union racine
VIII in all probability be ehmiha'e'
should the higher tribunal decide IN lawn
OF the railroad.
The proposed exclusion Of Union IA
clhc shareholders owning more than one
thousand shares OF Southern PACING stoch
from participated in the dissolution plan
was construed as favorable TO the South-
ern Pacific because such a plan could
only mean the wide distribution OF the
stock and the elimination. once ana io'