in the name of or as directed by receipt-holders will be delivered in exchange for full-paid receipts. No subscription or assignment of this privilege will be recognized unless made on the forms approved by the Union Pacific Railroad Company. No holder of the stock of either the Union Pacific Railroad Company or the Southern Pacific Company shall be entitled to any of the above mentioned shares unless the terms of subscription herein specified are fully complied with. The subscription and respective instalment payments must be made at the dates and in accordance with the provisions stated above. Checks or drafts in payment of subscriptions must be drawn in favor of the National City Bank of New York in New York funds or in favor of Baring Brothers & Co., Ltd., in London funds, as the case may be, and for the exact amounts covering the respective instalments. The plan and the agreements embodying the same will not become effective unless and until approved by the District Court of the United States for the District of Utah in the suit of the United States of America vs Union Pacific Railroad Company et al., now pending therein, upon the mandate of the Supreme Court of the United States, nor unless and until the Railroad Commission of the State of California shall approve the provisions of said plan in respect of which in the opinion of the Company's counsel the approval of said Commission may be necessary or advisable to give the same validity. By order of the Board of Directors. FREDERIC V. S. CROSBY, Treasurer, Union Pacific Railroad Company, 165 Broadway, New York. New York, February 10, 1913. $10,000,000 1 SEVEN PER CENT. CUMULATIVE PREFERRED STOCK (Preferred as to Both Dividends and Principal) of UNITED DRY GOODS COMPANIES Dividends Payable Quarterly at the Rate of Seven Per Cent. Per Annum from June 1st, 1909. Shares $100 each. Office of J. P. Morgan & Co., 23 Wall St., New York, May 27th, 1909. UNITED DRY GOODS COMPANIES (A Corporation Under the Laws of Delaware.) Having sold a large portion of the above Preferred Stock, we offer, subject to prior sale and change in price, the balance of the $10,000,000 Seven Per Cent. Cumulative Preferred Stock of the United Dry Goods Companies at $110 per share. Attention is called to the letter received from John Claflin, Esq., printed below; and also to the report of Messrs. Haskins & Sells, Certified Public Accountants. Provision has been made either in the certificate of incorporation or in the by-laws to the following effect: (1) That from time to time by vote of the Board of Directors additional authorized Common Stock to the amount of $25,000,000 may be issued and disposed of for the following purposes: (a) To be sold for cash at not less than par. (b) To be exchanged for the various classes of stock of The Associated Merchants Company on equitable terms. (2) That from time to time by vote of the Directors additional authorized Preferred Stock to the amount of $6,000,000 may be issued and disposed of for the following purposes: 1 Three-quarter page advertisement in Wall Street Journal of May 28, 1909. (a) To be sold for cash at not less than 120, excepting that $1,000,000 thereof (reserved for the exclusive benefit of the employees of the Companies) may be allotted from time to time by the Directors of the United Dry Goods Companies at a price not less than par on such terms and conditions as shall encourage and enable the employees to participate in the profits of the business. (b) To be exchanged for the Preferred Stocks of The Associated Merchants Company on equitable terms. No stock other than that above mentioned can be authorized without consent of stockholders, as provided in the certificate of incorporation or by-laws, and no bonds can be issued except upon the written consent of three-fourths of the holders of each class of the company's stock, or by a vote of the stockholders holding at least three-fourths of the amount of each class of the capital stock of the corporation represented at a meeting specially called for that purpose or an annual meeting. Temporary certificates will be issued pending the delivery of the definitive stock. Application will be made to list the stock on the New York Stock Exchange. We offer and recommend this Preferred Stock as a mercantile investment of the highest class. J. P. MORGAN & Co. 224 Church Street, MESSRS. J. P. MORGAN & Co.: NEW YORK, N. Y., May 25, 1909. Dear Sirs-The United Dry Goods Companies, incorporated under the laws of the State of Delaware, has issued at par $20,000,000 Capital Stock, divided into $10,000,000 Common Stock and $10,000,000 Seven per cent. cumulative Preferred Stock, having a preference as to both principal and dividends. It has acquired from me in exchange for $8,650,000 of its Common Stock $8,650,000 of the Capital Stock of The Associated Merchants Company out of a total issued Capital Stock of $17,250,000. This gives the United Dry Goods Companies control of The Associated Merchants Company, which has control of the following companies: Wholesale: The H. B. Claflin Company. Retail: James McCreery & Company, 34th Street, New York. Stewart & Company, of Baltimore. and Four-fifths of the Common Stock of The market value of The Associated Merchants Company's stock is more than par, and the dividends on the $8,650,000 of its stocks at current rates exceed the dividend requirements on the $10,000,000 Preferred Stock of the United Dry Goods Companies. The United Dry Goods Companies has bought outright from me four large stores, to wit: Hahne & Company, of Newark, Powers Mercantile Company, of Minneapolis, The William Hengerer Company, of Buffalo, and The available income of these four stores alone, disregarding all other sources of income, exceeds the dividend requirements on the $10,000,000 Preferred Stock of the United Dry Goods Companies. In the acquisition of the entire Capital Stock of these stores the United Dry Goods Companies has paid current market values for their tangible assets as appraised by independent experts, without any allowance for their exceedingly valuable good-will. The merchandise has been taken at figures somewhat below wholesale prices. Upon the opening of its books the balance sheet of the United Dry Goods Companies will stand in substance approximately, thus: In the tangible assets is included the entire capital stock of Hahne Realty Company. This stock represents the store property of Hahne & Company, and is appraised subject to a mortgage of $1,250,000 on said property. It is taken over by the United Dry Goods Companies at the net value so determined. This mortgage can be paid in 1911, two years hence, should the company so desire. There is no net indebtedness whatsoever against any other of the tangible assets aforesaid, an amount of cash exactly equal to the indebtedness of each company conveyed being left in the treasury of each company to cancel its indebtedness. This cash is additional to the tangible assets of $10,000,000, and is also additional to the $1,350,000 cash in the treasury of the United Dry Goods Companies. The fact that the United Dry Goods Companies has no net indebtedness, has assets at market value more than double in amount the face value of its Preferred Stock, and has from various and separate sources an income which in bad times would be more than double its preferred dividend requirements, renders its Preferred Stock exceptionally safe as to principal and as to dividends. In this relation it is interesting to note the dividend record of The H. B. Claflin Company, which was incorporated in 1890, and that of The Associated Merchants Company, incorporated in 1901. The H. B. Claflin Company has paid dividends on all classes of its stock from organization to date, covering the three panic periods of 1892-1894, 1903-1904 and 1907-1908, always full fixed dividends on its Preferred Stock and dividends at a rate never less than six per cent. on its Common Stock. The total dividends on its Common Stock amount to 139 per cent. The present dividend rate of eight per cent. has not been changed in ten years. The Associated Merchants Company has paid regular dividends on its Preferred Stocks from organization to date, and numerous additional dividends beyond those provided for in the organization of the Company. After accumulating a safe surplus during the first year and a half of its corporate existence, it began dividends on its Common Stock December, 1902, at the rate of Seven per cent. per annum. It has maintained this rate to date, and has paid frequent extra dividends. Its average distribution for the last six years has been more than Eight per cent. per annum. In an experience covering more than eighteen years in one case and eight years in the other, neither company has ever needed to modify in the least the statements or promises made in its prospectus. No change is proposed in the management of the affiliated companies. The active heads of the various companies will continue their customary work. I will continue to be President of The H. B. Claflin Company and of The Associated Merchants Company and of the United Dry Goods Companies if the stockholders so wish. I enclose copies of the Certificate of Incorporation and of the By-Laws of the United Dry Goods Companies. JOHN CLAFLIN. |