Omaha daily bee., 1895-12-08

which the government directors aim to reach
meets with my hearty approval. Their theory
OF the procedure to reach this result can in
my Judgment be simplified and so far as the
government Is concerned, greatly improved.
Simply stated, they suggest that the United
States, an the owners Of second mortgage,
commence foreclosure proceedings, and con-
tinue the present receivership until the
proper DEGREES can be entered and sale made,
the government to purchase or redeem from
the first mortgage and resell to the highest
bidder, who will pay not less than a stated
minimum percentage of the governments 5
claim. such percentage to be fixed in the act
This procedure would throw the whole
burden of foreclosure proceedings upon the
government, would compel it to meet its own
maturing bonds and provide moneys sum
clent to pay off the first mortgages. 1t in
wolves all the tedious delays and uncertainties
Of court procedures, in which the representa-
tives of all underlying mortgages, claims
and demands can interpose complicated is
sues, and it is doubtful IL the government
could in that way finally dispose OF the prop
srty and restore to its treasury the amount
realized for its claim until the foreclosure
cases were finally passed upon by the su-
preme court of the United States. / think
the government can sell its second mortgage
claims outright to the highest bidders and
realize in that way speedily every dollar 1t
could hope to make out of the property in
any other way that has ever been proposed
VALUE OF SECOND MORTGAGES.
"All ether second mortgage railway bonds
have a market price, which Is determined
from time to time by the business judgment
Of the monetary and commercial world, and
which represent the face cash value of the
second mortgages interest in the property
If the government were today a private
owner of the second mortgage bonds on the
Pacific roads these bonds would have GER
tain market value, which would be accepted
without question by the holders and by pro-
posed purchasers as their real value, and any
settlement of such second mortgage obliga-
tions would be made at the market price
Of the bonds. That is the only fair basis
upon which business men can dispose Of
their securities or settle their claims against
railway companies or any other mcrtgaged
property
BETTER SELL THE MORTGAGE.
'In my Judgment there is only one simple.
clean, practical and business way for the
government to proceed-ofrer its second mort
gage claim against each road to the highest
bidder and sell it for whatever 1t will bring.
The desire of great capitalists to secure con-
troll OF these properties VIII insure bids for
all the properties are worth; provide by act
OF congress that the purchaser of the govern
ment claim against Pacific road shall take
all the rights Of the government, including
its lien, its power Of entry and its privilege
OF foreclosure; give the purchaser an addi-
tional inducement to bid fair price by con-
ferring upon some one circuit court of the
United States full jurisdiction to carry ON
foreclosure proceedings as to the entire line,
and create the purchaser at the foreclosure
sale into a corporation. with all the powers
and privileges and subject to all the obll-
cations and duties conferred and imposed by
the original Pacific railway acts, The gov
ernment would in this way get cash at an
early date for the full market value OF its
claim, and the ultimate character OF the Pa
cifc roads as government agencies for all
public business and emergencies would be
preserved.
"In order that no combination of railroad
interests could be formed, remote as such
possibility is, to prevent competition, and
fair bid at the proposed sale of the govern
ment interest, 1t would be well to fix mini
mum price perhaps so per cent of the en-
tire amount due the United States, below
which no bids would be received.
BIDDER MUST PAY CASH.
"From the brief outline OF my proposed bill
on this subject some Of the public prints
have assumed that the plan contemplates
that the government take the bonds of the
purchaser or OF the new company to be
formed by the purchaser in payment Of the
amount bid | have never had any such idea.
l think We have passed the point where an
extension of the government debt under any
new bond or other form of Indebtedness can
be further considered. II the government
sells Its claim to the highes; bidder that
40 purchaser can be found with the neces-