Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1913-04-22
Federal Judges Favor Exten-
sion Asked for By Lovett,
Provided They Have Juris-
diction in Premise,
STOCK OF S. P. HELD BY
u. P. TO BE IN TRUST
Effective Method Devised to
Prevent Control of One
Company by Other is Out
lined by Attorneys,
ony Morning Journal Special Leased wirc)

(By Morning Journal Special Leased Wire.)
81. PAUL MINI. April 2l.-The
presentation of motion for an extern
sion Of time TO July ist which was
taken under adviscment by the court.
and the informal presentation Of th'
revised plan for the dissolution Of the
Union Pacific and Southern Pacific
railway merger. marked the confer
ence here today between Robert ).
Lovett. Of the Union Pacific Railway
company. and United States Circuit
Judge Walter IL. Sanborn, William
G. Hook aud Walter l. Smith.
Mr. Lovetts motion for an cxten-
sion was at first denied, the judges
being undecided 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 II WAS decided toI
leave the question of jurisdiction to|
the supreme court
All three OF the judges expressed
their opinion that the extension
nHnWlu Wf HiNMANNs INtiEAANn AAtA AAA'
railway was doing AN IN its power to-
present q plan of dissolution that
would be acceptable to the supreme
court and to the attorney general.
IN a telegram TO District Attorney
c. g. Iloupt, which was read TO the
court United States Attorney General
McReynolds declared his willingness
to grant the desired extension.
Upon Information from 'le supreme
court as to the iursdietip If the cir
cult iudges, tbs court fPf Us Aat
reconvenc to act on Mr.. Lovett's mO-
ton. It may be some time however
before this is done
Mr. Loyett and his associates left
late today for Washington to place
the time extension motion before the.
supreme court.
Following his presentation Of the
motion, Mr. LoVett informally pre-
sented TO the court tentative plans
for the dissolution. Late this after
noon a synopsis OF these plans was
given out by the Judges. the principal
points being as follows
The amended plan in brief is that
the entire $l26.650.000 in southern
Pacific stock TO be distributed shall
be deposited with trustee and dis
franchised while so held. that GER
tificatcs of interest shall be issued byI
the trustee against said shares which
shall carry no voting right and which
shall be exchangeabe for Southern
Pacific shares held by the trustees
only upon the filing of an affidavit
by the applicant for such exchange,
showing that such applicant does not
own 1,000 shares or more of Union
Pacific stock, and that these certifi-
Gates of interest shall be offered for
subscription ana purchase TO all Tn
ion Pacific stockholders ratably at a
distribution ratio not less than 3S per
cent The largest Union Pacific stock
holders 36S in number, according to-
the September stock list. which was
before the supreme court, are by this
amended plan, entirely excluded from
the acquisition of any of the South
ern Pacific shares to be distributed.
They may purchase their ratable
shares of certificates Of interest, but
they cannot themselves convert the
certificates Of interest into the depos-
tied Southern Pacific shares, because
of their inability to swear that they
do not own ,000 or more shares Oi
Union Pacific stock.
THE exchange cannot he affected
for them through some dummy orl
agent because the proposed afiidaVitl
requires the applicant to swear that
he is bonafide owner OF the certifi-
Gates of interest presented for con-
version.
THE objection expressed in the SUI
preme courts opinion of January g.
1913, therefore is absolutely avoided
for the 3GS Union Pacific stockhold-
ers, TO whom alone the objection per
tanned, instead of being entitled as
their pro-rata shares to ~ per cent OIL
Southern Pacific stock and being the
oretically able to increase this hold
ing by acquisition Of rights from the
smaller shareholders, are not entitled
to acquire one single share of south
ern Pacific stock to be distributed. but
are specifically disqualified from such
acquisition
The amended plan continued.
But even il it be assumed that any
concert Of action by the 21,IS2 hold
ers Of Southern Pacific stock, result /
ing in a control Of the elections of the
Southern Pacific company were pos
sible the effect would not be TO con
tinue the previous combination. These
l,7S2 holders assumed to he able toi
control the Southern Pacific com
pany by the holding Of virtually as
per cent Of it's stock. are not in con
troll of the Union Pacific railroad
company. and are not able to elect
its directors, since their aggregate
holdings of T. p stock amount toll
only 37.2 per cent Of the L. F. and
as the votes of the remaining 36S
stockholders hold 62S per cent. nat
urally represent the controlling inter-
est Of the Union Pacific company"
The plan also provides for the sale
to syndicate or ON the New York
stock exchange Of any certificates OIL
interest not subscribed for by the Tn
ion Pacific shareholders.
The certificates of interest" it'll
continues. acquired on the openI
market still will be subject to the
conditions that they cannot be con-
verted into stock bv any Union Pa
eific shareholder holding I 600 shares
or more"