St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-10-16
UP. RECEIVERSHIP.
How the Situation Is Viewed by
COnpreSSmen.

congressman.
WASHINGTON, Oct. 15.-The reSolu-
ton passed by the house relating to the
receivership of the Union Pacific rail
way. and calling upon the attorney gen
eral to inform the house about the legis-
lation, if any. required 10 secure the in
debteGneSs OF that company to the gov
eminent, may result in some important
developments in the relations Of that
company and the government. The
relations between the government
and the company were materially
altered when the road went into the
hands of a receiver. Not so much from
legal standpoint as by the Thurman
act, the government obtained lien on
all properties of the company, but the
insolvency of the company renders it
impossible for it to discharge its obi
cations to the government when they
mature. 1t gives the receiver under
the common law power to convert as
sets into cash and empowers him to
issue receivers certificates to operate
the road. Then these would constitute
lien paramount TO that OF the United
States. Some of the bonds mature in
1895, and if matters with the road go
badly under the receiverShip the result
might be to throw the governments
claims and all other liens into the court.
with the inevitable effect of great loss
to the governments interest.
MIR. Reilly, the present chairman of
the committee on Pacific railroads,
thought it would not be proper for him
to discuss the resolution in an interview
with a representative of the Associated
Press.
MIR. Cultivate, of Ohio, the former
chairman of that committee, said:
1.-The principal debt of the Union Pa
cific railroad. including the Kansas Pa
chic, to the government is So, 000,00 for
bonds which were issued to aid in
building their roads. These bonds were
issued every time section of twenty
miles in length of the road was built.
| They began to be issued in 1S6465, and
| have thirty years to run. AS the inter-
est was per cent and but very little
| has been paid upon it, the amount of in
tereSt is much more than the amount of
! the principal"
"Do you think the rights of the gov
ernment are endangered by the COM
| pany being put i'll the hands of a receiY-
| er?'
Not necessarily. 1t will be the duty
| of the government to be made party
| to the relation, and the attorney gener-
| al to see that the management of the
road under the receiver is not WaSteful
and destructive. The object of having
a receiver appointed, as l understand,
was to preserve the property of the
| company and enable them to tide over
! the present embarraS Sment."
'HaYe you any suggestions as to
| further legislation to protect the inter-
| est of the government?
"Ies. | would suggest the Immediate
| passage of an act Increasing the num-
Der of directors of the road which the
| government may appoint to such an eX-
tent as that the government directors
! should constitute a majority of the
baard. l would authorize the company
| TO refund the first mortgage debt, which,
| by the way, equals in amount the prin-
| cIpal debt to the government. and also
| floating debt. 1t might be better TO say
to extend both of these indebtedneSses
| for a period OF fifty years. or on the
same limit, dividing the bonds into
three series: the first series l should
make 4 per cent bonds, issuing to an
amount sufficient to pay off the first
mortgage Indebtedness. The second
series l should make 80 percent bonds,
Issuing them in an amount sufficient to
pay off the principal of the debt dine the
| government, SO that the government
should receive its payment of the prin-
cipal at this time. The third series l
should issue an amount equal to the
interest due the government at a low
rate of interest, and to be delivered to
the government"
But suppose this plan of yours Is
| found impracticable?"
''Well, In that case | should author
iZe the government directors to present
to congress plan for the reorganiza-
ton of the road in such way as to be
the best for the government that is pos
sible, without any regard whatever to
the present stockholders. They should
be entitled to no consideration what
ever before the government. Of course,
as l am no longer member of the com
mittee on Pacific railroads, have not
matured the plan which am suggest
ing. This is but a suggestion. Ii the
bill which l had the honor to report
from the committee in the Fiftieth con-
gress had been passed, the government
would already have received a consider
| able portion of the principal of the
debt due it, or the road would have be-
| fore this been sold or reorganiZed."