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Show oo UNION PACIFIC FINANCES AND IMPROVEMENTS Ilayden, Stone & Co., in a weekly review of the busmes outlook, treats on Union Pacific, as follows: The situation of Union Pacific with regard to income after disposal of its Southern Pacific stock Is completed may be euch as to effect a change in the Islanding of the company, both as an 1 investment institution and as a 10 ; per cent dividend-payer. Alteration of its position in this connection. If changes are effected. Is not to bo BC-! BC-! ceptod as making for reduction in value of the shares. On the contrary, there Is considerable basl6 for expecting ex-pecting that any changes In Union Pacific's dividend rate and Investment j standing consequent upon liquidation of its Southern Pacific stock might ' result In strengthening Union Pacific j share from the market standpoint. The problem of Union Pacific, If j proceeds of sale of Its Southern Pacific Pa-cific stock arc held intact for reinvestment re-investment In the Union Pacific property prop-erty or in other securities, will be to derive a return on the funds equal j to that now enjoyed. W ith Southern Pacific stock paying 6 per cent dividends the return to Union Pacific is about 6 2-3 per cent on the market value. The amount of I stock to he sold Is $88,857,600. The proceeds of pale of this stock will be, presumably, close to $80,000,000. Union Un-ion Pacific has no maturing Indebtedness. Indebt-edness. Its present railroad system would probably require Beveral years to absorh profitably additional investment invest-ment of $80.000,000.. In tho dissolution plan of last February, the proceeds of sale of its I Southern Pacific stock were to be I Id vested by Union Pacific in purchase I of the Central Pacific, which would have afforded a most suitable outlet for the proceeds from this liquidation. ,Thls plan was abandoned because of conditions Imposed by the California railroad commission. In the original I proposal, which was not approved by the court, the Union Pacific planned the distribution of the Southern Pacific Pa-cific stock outright to its common shareholders. In neither of these prior plans, therefore, was there any problem of re-Investment of a huge amount of liquid capital. In the present plan there is apparently appar-ently no obstacle to prevent Union Pacific from distributing the cash proceeds pro-ceeds as an extra dividend to Its common com-mon stockholders The offering ot certificates representing the Southern Pacific shares, and convertible into I those shares when presented by others oth-ers than Union Pacific shareholders has been approved by the court No Injunction Is placed upon Union Pa-cilfc Pa-cilfc In regard to disposal of the proceeds pro-ceeds The preliminary report submitted by Union Pacific covering the fiscal year ended June 30, 1913, shows 15 1-2 per cent earned on its common 6tock. The Southern Pacific stock to be sold yields Income equal to 2 1-1 per cent on Union Pacific common and represents a market value equal to about $33 per share of Union Pacific Pa-cific common stock, Including tho additional ad-ditional amount of common stock Issuable Is-suable on conversion of bonds. When the unmerglng of the Pacifies Pa-cifies Is finally completed, the Union Un-ion Pacific should be in a stronger position than at any time In the past two years during which there has been great uncertainty as to what the supreme court would decree Now that the Union Pacific can proceed pro-ceed to finance Its long contemplated Improvements, such as the finishing of the double traeklng from Omaha to Ogden, there should be a period of great activity all along the line, particularly par-ticularly between Ogden and Echo, where there i6 now a single track, although that part of the road, because be-cause of heavy grades and curves. Is more In need of double tracks and other Improvement work than auy other stretch. |