The morning call., 1894-04-27
Interest-Bearing Bonds to Be
Issued to the Government
IN FULL PAYMENT OF ITS CLAIM.
They Are to Run for a Hundred
Years, and Sinking Fund Pro-
vided i'm the Meantime.

of the bill prepared by the Department of
Justice for the reorganization of the
Union Pacific and readjustment of the
claims of the United States against the
company. The bill authorizes the Secre-
tary of the Treasury, with the approval of
the President. to receive In exchange for
the present claims of the United States
against the Union Pacific Railway Com
pany and liens of the United States upon
properties of said company bonds to ali
amount equal to the aggregate indebted
ness of said company to the United States
on the first day of July, 1894. for the prin-
cipal and interest of the bonds of the
United States issued in aid of the con-
struction of the Union Pacific and Kansas
Pacific railroads. The new bonds shall
bear interest at the rate of per cent per
annum and be secured by mortgage. The
aggregate amount Of Indebtedness shall be
computed and ascertalned as follows:
First-To the total amount of the prin-
cipal of said bonds of the United States
shall be added the interest which shall
then have been paid, and the interest then
and thereafter payable by the United
States thereon until the respective dates
of the maturity of said bonds, as if no
payment had been made or credit given
thereon.
Second-From the aggregate amount so
ascertalned shall be deducted any and all
payments or credits upon the said indebt-
edness to the United States, as shall ap-
pear in the bond and interest accounts of
said companies respectively with the
United States as of July 1, 1894.
Third-The present worth of the bal
ance fund shall be computed as of July
!, 1894, by discounting the said balance al
the rate of per cent per annum for the
period between the said last-men toned
date and the average date of maturity of
said bonds of the United States.
The amounts computed and ascertained
shall be deemed to be the amount due to
the United States on July l, 1894, and the
bonds of said company shall be received
by the United States as herein provided at
par for said amount. The bonds to be
received by the United States are to run
100 years, to mature July l, 1894. and to
draw per cent per annum interest. The
bonds shall be secured by mortgage
covering all the property. real. personal
and mixed of the railway company.
Under the terms of this mortgage the
Union Pacific, beginning with the year
1906 shall pay annually into the said
treasury sinking fund 81. 900, default
for six months TO be cause for foreclosure.
The funds and securities now in the
hands Of the treasury Union Pacific fund
shall be held as further security for the
new bonds to be issued. The Attorney
General is given authority to cooperate
with the Union Pacific Reorganization
Committee now at work. The plan this
committee shall agree on, it is provided,
shall limit the annual fixed charges of the
company to SIS, 100000. Bonds for extern
sion and development of the reorganiza-
ton system may be issued hereafter by
consent Of two-tbirds of the board of re-
organization. the bonds to be subject to
the general mortgage bonds. Power is
given the company to issue preferred and
common stock to an amount to be fixed by
majority of the stockholders. The exist
ing first mortgage bonds ale superior to
the Governments lien.
The company is given power to provide
for by issuing at or before maturity other
bonds to run not exceeding seventy-five
years and to bear not exceeding per cent
annual interest, the lien to he the same as
the present bonds. An annual sinking
fund of S4500 is provided for The re-
demption of these bonds. The board of
directors is to consist Of FIVE Government
directors and fifteen other directors, seven
of whom may be chosen by preferred
stockholders and eight by common stock
holders. Provision is made for the courts
controlling and providing for debts of he
company and for other incidents of the
foreclosure.
Boston, April 26-The Boston News
Bureau understand from authoritative
sources that the executive authorities at
Washing ton in the Union Pacific reor-
ganization committee have agreed on
Attorney-Genera Olney's plan for an aG-
justment of the Union Pacific debt to the
Government. Judge Hoadley, as the rep
resentative of the United States Attorney
General, has been at work upon the de-
tails of the matter, and on Friday Attor-
ney-General Olney, it is understood, will
submit his bill for an adjustment of the
railroad de BIT to the Government, to which
all parties interested, it is believed, will
readily consent. 1t will remain with
OOueIcSo W w VIC QucSllUH Oh q
settlement at this session, and Washing
ton advices ale TO the effect that under the
leadership of the Pacific Railroads Com
mittee the question will be taken up and
passed probably before the tariff legisla-
ton is finished
Attorney-General Olney's bill provides
for the full payment of the Government
debt and accrued interest. The Govern
ment lien will remain unchanged and
be improved by the cancellation of ST.
500. 600 of first-mortgage bonds OF the rail-
road sinking funds now 10 the United
States Treasury, which will reduce the
first mortgage to S26.O00,00O This Gov
eminent settlement and reorganization of
the Union Pacific will be without ref
erence TO the Gulf Short Line and naviga-
ton systems.
NEW YORK. April 26.-Judge Hoadley
tonight declined to confirm or deny the
report from Boston concerning the Union
Pacific reorganization plan. He said he
had been summoned to appear before the
House Committee on Pacific Railways
next Friday and would then probably have
something definite TO say.
EThe main features of the legislation pro-
posed In the plan submitted by the Attor-