The record-union., 1894-05-11
UNION PACIFIC DEBT.
Bill Providing for the Payment of the
GoYernment Bonds.

Government Bonds.
New YORK, May 10.-In pursuance of
notice to T. G. Morrison, a member of
the NewY ork bar, that the House Com
mittee on Pacific Railroads. would hear a
presentation of the case here regarding
the Union Pacific Railroad, that gentle
man has sent to the committee a lengthy
communication embodying his views,
and inclosing the draft for an Act, enti-
tied .Bill to provide for the payment of
the United States 6 per cent. bonds. issued
in aid of the Union Pacific and Kansas
Pacific, with the proceeds of Government
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 purely business
standpoint His proposition seems to be
a reply to the plans of the Attorney
General, and appears to be the first sug
gestion in favor of sustaining the full
claim of the Government, it being under
stood that Mr.. Morrison's clients are
willing to purchase the Government
mortgages. He says the bill proposes
that the Govern ment shall realize from
it's property rights in the railroads the
funds necessary for the payment of the
United States 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
the 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 COM
pany's bond and stock holders to have the
first privilege of subscribing to the COM
pany's bonds, the total amount receiva-
bic being the total amount of net liability
OF the company, being the principal and
interest OF said bonds, less the sinking
fund.
Mr.. Morrison argues that the property
affords TO their security holders desir-
able investment, as at two per cent. on
5,000,O00 only 81, 100000 would be re-
quired on the interest, which is less than
one-half the minimum earnings. The
balance would then be applicable to the
payment OF interest of their own present
Union Pacific securities, or the holders of
the bonds could themselves give four per
cent. on the same amount of new bonds
out of the net earnings OF the Govern
ment divisions. In addition, they could
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 mortgage with their own
subscriptions, they could renew them at
five per cent, or as a prior lien, with
long time bond; the Government would
at once accept its claim, capitalized and
paid over, and thus sever all connection
with the company. The company there
upon enjoys full Latitude in financing as
well as in it's general corporate affairs.
The transfer of the Government inter-
est upon full payment is the primary pur-
pose of the bill. In aid thereof, and in
addition thereto, it provides for forecios-
ure proceedings of the interest of any one
who may become the owner of the Gov
ernment liens. In case the bond and
stockholders ofthe Union Pacific could not
avail themselves of the favorable terms
for REDEEM ption provided in this bill aud
the Government thereupon forecloses, the
Importance of the judicial facilities here
in provided is much accentuated.