The morning call., 1894-05-11
1T MUST BE PAID.
Settle Up the Union
Pacific Debt.
MORRISON HAS A SCHEME.
Which He Believes Will Be
Fair All Around.
SUBMITTED TO THE CONGRESS
Under His Bill the BondhoIders
Would Buy Off the Govern
ment Claim.

NEW YORK, May 10.-lu pursuance OF
notice to T. 6. Morrison. member of the
New York bar, that the House Committee
on Pacific Roads would hear a presenta-
tion of the views he represented regarding
the Union Pacific Railroad, that gentle
man has sent to the committee a lengthy
communication embodying his views and
nclosing 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 Pa
citic with the proceeds of the Government
bonds placed on the railroads for that pur-
pose"
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 ap-
pears to be the first suggestion in favor Of
sustaining the full claim of the Govern
ment, it being understood that Mr.. MOrri-
sons clients are willing to purchase the
Governments 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 per cent subsidiary bonds,
with interest, 10 accomplish which 1t
authorizes the Secretary of the Treasury
to assign the Government mortgage for
cash. The bill, in order to facilitate the
acquiring of the Government mortgages
and bonds of stockholders of the Union
Pacific Railway. who will naturally desire
to acquire them and avoid the foreclosure
features of the bill, enables the company
TO issue its bonds, to be secured by an
assignment of the Government mortgages
TO the trustees, the cOmpany's bond and
stock holders to have the first privilege OF
subscribing to the company's bonds, the
total amount receivable being the total
amount of net liability of the company.
being the principal and interest of the aid
bonds, less the sinking fund.
Mr.. Morrison argues that the property
affords to security holders a desirable in
vestment, as at per cent on SS5. 100000.
only 81. 100000 would be required on the
interest, which is less than half the mini
mum earnings 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
per cent on the same amount of new
bonds out of the net earnings of the Gov
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 mortgages with their own
subscriptions. they could renew them at 5
per cent, or as a prior lien with a long
time bond. the Government would at once
find its claim capitalized and paid over
and thus sever all connections with the
cnmuany. The company thereupon would
enjoy full latitude in financing as we'll as
in its general corporate affairs The trans
fer of the Government interest upon full
payment is the primary purpose of the
bill, but in aid thereof, and in addition
thereto, it provides for foreclosure pro-
ceedings in the interest OF any one who
may become the owner Of the Government
liens. Ia case the bond and stock holders
of The Union Pacific could not avail them
selves of the favoroble terms for redemp-
tion provided in this bill, and the Govern
ment thereupon fOrecloses, the Importance
of the judicial facilities herein provided is
much accentuatpd.