The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1894-05-11

New York, May 10.-In pursuance of
a notice to Mr. T. G. Morrison, a mem
Der of the New York bar, that the House
committee on Pacific railroads would
hear presentation Of the views he
represented regarding the Union Paci-
fic railroad, that gentleman has sent
to the committee a lengthy commune
cation, embodying his views and enclos-
ing the draft for an act entitled, "a
bill to provide for the payment of the
United States per cent. bonds, issued
in aid of the Union Pacific and Kansas
Pacific. with the proceeds of the gov
eminent bonds placed on the railroads
for that purpose"
He says the relations between the
United States and the Union Pacific
are treated in the bill from a purely
business standpoint. His proposition
seems to be a reply to the plans of the
attorney general and appears to be the
first suggestion in favor of sustaining
the full claim of the government, it be-
ing understood that Mr.. Morrison's
clients are willing to purchase the gov
eminent mortgages. He says the bill
proposes that the government shall
realize from its property rights in the
railroads the funds necessary for the
payment of the United States 6 per
cent. subsidiary bonds, with interest,
to accomplish which it authorizes the
secretary of the treasury to assign the
government mortgages for cash.
The bill. in order to facilitate the ac-
quiring of the government mortgages
by bond and stockholders of the Union
Pacific railway, who will naturally de-
sire to acquire them and avoid the fore
closure features of the bill, enables the
company to issue its bonds, to be Sc
cured by an assignment of the govern
ment mortgages to the trustees, the
company's bond and stockholders to
have the first privilege of subscribing
to the company's bonds, the total
amount receivable being the total
amount of net liabilities of the COM
pany, being the principal and interest
| of the aid bonds, less the sinking fund.
Mr.. Morrison argues that the pro-
perty affords to their security holders a
desirable investment, as at per cent.
on S85,000,000 only $1,700,000 would be
required on the interest, which is less
than one-half the minimum earnings
would then be, applicable to the pay
ment Of interest of their own present
Union Pacific securities, or the holders
of the bonds could themselves have
per cent. on the same amount of new
bonds out of the net earnings of the
ulNlSlOuS. LII dOulllDIl tIICy
| could give themselves a new general
mortgage on their system of branch
lines. and other property which they
now offer to the government, or if they
do not choose to take up the first mort
cages with their own subscriptions,
thev could renew them at per cent,
or as a prior lien, with a long time
bond the government to at once &C
cept its claim capitalized ana paid over,
and thus sever all connections with the
companv. The company, thereupon,
eniovs full latitude in financeering as
we'll as in it's general corporate affairs.
The transfer of the government in
terest upon full payment is the primary
purpose of the bill In aid thereof, and
in addition thereto, it provides for fore
closure proceedings, of the interest of
any one who may become the owner
! of the government liens. In case the
bond and stockholders of the Union
Pacific could not avail themselves OF
the favorable terms for redemption pro-
vided in this bill, and the government
| thereupon forecloses, the Importance OF
1.-the judicial facilities herein provided is
much accentuated.