Los Angeles daily herald., 1888-01-08

years axt0f the lSe Gay OF jury, 1855
The said bonds shall bear interest q
the rate Of 8 per cent per annum, pay
able eemi-annually on tho first days
Of January and July OF each year, ant
shall at the time OF execution and de
livery Of the said mortgage be deliv
cred TO the Secretary Of the Treasury
SEQ. 5. The mortgage aforesaid
ehall contain a covenant providing
that in the event of any de
fault continuing for Fix months in the
regular payment of interest ON the
said bonds or of the sinking fund pay
mont required by this act, the entir,
debt due to the United States shal
Immediately mature at the option
of the United States and
shall also contain such other
terms and stipulations as may be
deemed necessary to efficiently secure
the said bonds, and as may be ap'
proved by the Secretary of the Treas
ury OF the United States. 1t shall
also be made, executed and recorded
so as to conform to the laws of the
various States or Territories in which
the property described in the mort
gage is situated, and shall be OF such
form. tenor and effect as shall make
the security of the said mortgage a
valid and legal one under the laws Of
such States and Te ritories.
Sec. 6. The said Union Pacific Rail-
way Company shall annually, on the
first day OF July in each year, COM
mencing on the first day ofJuly, 1889,
pay to the trustees named in the said
mortgage, the sum of one-half of one
per cent.of the entire am,lnt Of the
outstanding bonds issued under the
said mortgage until and including the
year 1883, and after that date shall
pay annually the sum of one per centum
Thereof, the annual payments made
shall be held by the trustees as sink
ing fund, applicable to the redemption
OF the principal Of the said bon Is at
maturity, whether arising from the ex-
piration Of their term, or by reason of
a default in the payments OF interest.
The said trustees shall have full pow
eY to invest, reinvest and change the
investment Of the funds, securities
and MONEYS held by them 10 the said
sinking fund. 1t shall be the duty Of
the said trustees on or before the first
day of August of ea.h year, after the
first dav OF July, 1889, to report to the
Secretary Of the Treasury the condi-
tion Of tie prop try held by them and
Of the said sinking fund and all the
investments thereof made by them.
SEC. z. The existing statutory lien
OF the United States shall remain in
full forco for security for. the debt du,
from the said Union Pacific Railroad
Company and the Kansas Pacific
Railway Company to the United
states, until all the liens on Tho prop
ertY sf-cted b. the said mortgage
and existing at the time of its de-
livery and subsequent to tho said
statutory lien, should have b en- paid,
satisfied, discharged OF record. In
any proceedings for the enforcement
OF such statutory lien, or Of the mort
gage provided for in this act, the
United States shall have the right to
pay to any holder OF any bonds or OBJ
legations secured under such subse-
quent liens, or to the trustees Of any
mortgage securing the same the value
of such bonds or obligations, ndshali
thereupon be subjected to all the
rights Of such holders in any properly
held "a security for such bonds or Oh.
legations.
Section s. No dividends on capital
stock or otherwise shall be paid By
the said United Pacific Railway Com
pauy unless the same shall have been
actually earned during the fiscal year
preceding the year in which said divi-
dend shall be declared, nor unless
such company shall have paid sill
interest on any of the bonded debts
and all sinking fund obligations
and unless the said earnings, after
deducting all interests accrued but not
payable at the time Of the declaration
of such dividends shall be sufficient
to justify the payment thereof. In no
event shall it be lawful for tn, said
company to pay any dividend exceed.
ing the rate of four per centum per
aunum, unless the said company
shall at the time Of declaring such
dividends in excess of four per
centum per annum, pay an amount
equal to the excess over four per
centum per annum SO declared
TO the said trustees OF the
said mortgage for the purpose OF
the sinking fund, and unless theearn
ings OF the said fiscal year shall be
sufficient to justify the payments of
such excess, aud also the said pay
ment to the trustees Of the sinking
fund. Any amount SO received by
this said trustees shall be held and
invested by them for the purpose and
subject to the provisions Of section 6.
Any director or officer who shall pay
or declare or aid in paying or declar-
ing any dividends prohibited by this
act, shall be punished by imprison-
ment not exceeding two years, and by
a foe of not exceeding $4,000.
SEC. 9. Nothing in this act con-
tanned shall be deemeI to in any man
ner effect the obligations of said COM
pany to keep It's said railroads and
telegraph lines in proper repair and
use, and at all time to transmit dis
patches over said telegraph lines, and
transport mails, troops, munitions of
war, and supplies Of public store upon
said railroads for the Government,
or any department thereof, when
ever required to do SO, at fair
and reasonable rates of compen-
sation, not to exceed the low
est rates paid by any private party
for the same kind OF service. La the
discharge Of those duties the said COM
pany shall bo subject to and bound by
the provisions Of any act of Congress
exercised hereunder. relating 70 DOS.
tai, military, or any ether Govern
ment transportation, and shall give
the Government preferences in the
use of the same for all the purposes
aforesaid as mentioned Ia the sixth
section OF the act Of July LIST, 1862,
and all acts anendatory OF the said
act.
SEC. 10. Tho Union Pacific Rail-
way Company may at any time after
tho execution and delivery of the
said bonds. but only so 1ono 40 tha