The herald., 1895-10-20
THE PLAN THEY PROPOSE
Prompt Foreclosure Upon Maturity of
Indebtedness
The Guatemala Government Prohibits the
Sale of Little Road Owned by
Mr.. Huntington

WASHINGTON. Oct. 19.-The report
of the government directors of the Union
Pacific has been made to the secretary OF
the interior. They recommend the fol-
lowing as basis of the settlement of the
debt, 10 be mplished by congress
lonal legislation. The attorney general
shall, Immediately after the maturity of
any portion of the debt due the United
States from the Union Pacinc Railroad
company, or the Central Railroad
company. institute proceedings for the
protection and foreclosure of the lien of
the United States from omaha to Ogden,
and similar proceedings for the lien from
Ogden to Sacramento and thence to San
Jose. The secretary of the treasury shall
have the power TO pay. settle and adjust
all amounts due or to become due, for
principal and interest. which are secured
by liens prior to the liens of the United
States, including the power to take
assignments of any foreclosure DEGREES
securing such prior liens, il necessary.
The entire property is to be sold to such
corporation as will agree to refund the
entire amount advanced by the govern
ment. The purchasing committee or
pl,te the construction from Sacramento
to Oakland, but shall not be allowed to
consolidate with any other transconti-
mental line. Until purchasing commit
tee is found the control of the property
shall be in the hands of the courts hav-
ing jurisdiction of the foreclosure pro-
ceedings of the government liens.
The board says that the fixing of the
minimum price Of the roads would be at
tended with some difficulty. but free
negotiations with all competitors deslrous
of bidding would soon develop the
limits Of price to be obtained. They be-
lieve that such scheme would realize q
better return to the United States than
could De reached through any funding
bill or extension of the present inoepted-
ness. Portions of the government debt
| OF both road will mature early in 1896.
| The board thus sums up the situation
| of the roads,
| Pacific and Union Pacific in its sinking
funds, October l, 1895, $2l, 1856, ,095; in
sinking fund to the credit of the trustees
| of the Central Pacific mortgage lien of
| which is prior to the lien OF The United
States as stated in the report of 1894,
S6, 496, 244; amount of PRIOR bonds of the
| Union Pacific Railroad company and
Central Pacific Railroad company, ex-
elusive OF the Kansas Pacific railway,
| $55, s57 ,000 amount required 10 complete
payment of the Omaha bridge bonds,
$1,000. 900.
The cash balance in the hands of the
Union Pacific receivers applicable to
Union Pacific property probably will be
approximately sufficient to meet the ar
rears of interest accruing ON its prior
| ronds.
The interest on the Central Pacific
| prior bonds is paid up to date.
| The board says that therefore tho en-
tire gross amount of prior liens of the
| Union Pacific and the Central Pacific, ex-
elusive of the Kansas PACING, less the
amounts stated held in the sinking
| funds, will be $50, 961, $50. The amount
| purchase the prioI liens is liable to be
| Increased II the above mentioned sums
in the sinking funds of the United States
| under decisions of the secretary of the
treasury and the encouragement should
| not be avalla Bile for the purpose indicated.
! The board says that if congress should
| fix the price which it is willing to receive
| in satisfaction of its claims at a sum
which should meet the approval of an
intending purchaser, the entire transac-
| ton could be so arranged between the
contracting parties as to avoid the neces-
| sity for any expenditure of moneys in the
treasury for the purpose of taking up
| pIior liens.
The board suggests that the secretary
obtain from the bond-aided roads a full
statement of all lands remaining in their
hands as the property of the companies.
Sale Prohibited