Untitled Page 11

Southern Pacific Company,
MILLS BUILDING, 23 BROAD ST.

New York, Jany. 20th. 1897

Mrs. Jane L. Stanford,

San Francisco, Cal.

Dear Mrs. Stanford:

I telegraphed you, last evening, in reply to your despatch of
January 11th. From the time yours was received until within the last few
days, matters between ourselves and Speyer & Co., in reference to M. I.
bonds, were at a standstill. We preferred, if possible, to leave the
present issue of bonds unchanged, save by reducing its amount. Speyer &
Company, on the other hand, insisted - and, no doubt, with good reason -
that they could not make a market, or find purchasers, for the bonds in
their present form. They have constantly insisted on making two series
of bonds; the first preferred for so small an amount that they would com-
mand confidence as an absolutely safe security, and the second, or con-
solidated, limited sufficiently to make payment of interest, on both
series, less than what it is now on the existing series, and, at least,
reasonable certain, even in times of depression. The result is that a
contract can now be made as expressed in the memo. which I enclose here-
with. By examining it, you will see that if the bankers take all of the
first preferred, and only $2,000,000 of the consolidated, the proceeds
will just about pay off the loan of August 27th last, which matures next
August. There can be little doubt that they will take all of the first
preferred, since it will certainly be for their interest to do so. It is