The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1895-10-28
Which Stands in the Way OF
Reorganization
NORMALLY MANY MILLIONS
OF Book Accounts Not Secured by
Bonds
The Proposed plan VIII Show the rlarket
Value of the Government Lien
to Be About 900.
Associated Press snecial Wire.

w
SANFRANClSCO, Oct. 2I.-Oliver w.
Mink OF Boston, one of the receivers of the
Union Pacific, W. X. Kelly, assistant
general solicitor of the Union Pacific at
Omaha ana general attorney of the same
system for Nebraska and Iowa, Erastus
Young, general auditor of the Union Pa
oific at Portland, who are in this city,
held prolonged conference i'll relation
to the settlement of a dispute between
the Union Pacific and the Oregon Rail
way and Navigation company over the
settlement of certain claims, consequent
upon the appointment of a receiver for
the Oregon Railway and Navigation COM
psny, which was formerly part OF the
Union Pacific system. The matters I'M
der consideration. Mr.. Mink said, were
OF a nature similar to those which formed
the issue in the suits recently argued be-
fore the circuit court OF appeals in this
city by the attorneys for both companies.
When asked for his opinion on the re-
cent report Of the government directors
of the Union Pacific. Mr.. Mink said:
l have only Just received copy of that
report and have not yet had a chance TO
peruse it fully, bNt from what | can
gather from the newspapers, / understand
that the government directors have re-
commended that the goNernment foreclose
its mortgage on both the Union and Cen
trail Pacific take UP the Mrst mortgage,
and after procuring possession of the
through line from Omaha to San Jose,
sell it to the highest bidder. The gov
eminent directors OF the Union Pacific
who, by the way. have no jurisdiction
over the Central Pacific, have declared
that the best interests of the public
would BIZ subserved by s,Ich proceeding.
They have satisfied themeves, beyond
doubt, that the road would sell for much
more than the amount of the first mort
gage, and that the margin of lroiit over
and above the amount of the first mort
gage, which the government would have
to look after. would go much farther
toward wiping out the government in
debted I'M ss than by any other plan OF
procedure.
ION the other hand, the 6rst mortgage
hondholders are now attempting to reor.
ganiZe the Union Pacific on lines which,
it is hoped, will enable tile government
to recover as much on its second mort
gage as the second mortgage is worth. 1t
is proposed that stock to the amount of
500, 0J0. 900 and bonds in the sum of $75.
900. 900 be issued TO the present holders in
lieu OF the securities they now possess.
The proportion offs took and bonds which
would be given Tor the old stock and
bonds, has not as yet been agreed upon,
but it IL thought that there would be
enough left to satisfy the government
claim on the road.
The governments lien on the road. it
sohuld be remembered, is simply book
account and is not represented by bonds.
1t is accordingly worth only what it
would bring in the open market. The
plan of the government directors, should
say, would be good way of determining
the value of the government lien on the
property. But whether the United States
the railroad business is question which
l am not prepared to discuss"