The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-01-22
UNION PACIFIC CASE
PETITION OF FIRST MORTGAGE
BONDHOLDERs GRANTED.
Receivers Appointed by Judge SAM
born - Freight Rates .Slashed-sIr.
Pelrce and the IT,, St. L.. & X. G.

cult Judge Walter II. sanborn handed down
his decision on the application of f. Gordon
Dexter and Oliver Ames, second mortgage
bondholders of the Union Pacific company,
for separate receiverships for that portion
of the Pacific railway system covered by
the first mortgage. The decision. or order,
covers seven closely typewriter pages, and
in effect grants the application. The re-
ceivers appointed are the same as those
now in charge OF the entire systems. III.
H. Clark, Oliver w. Mink, Z. Ellery An
derson, John w. Doane and Frederick r.
Coudeft. The usual thirty days for filing
bonds and ninety days for filing their first
report are allowed the receivers The or
der. which embraces fully twelve clauses.
provides that funds already earned by the
road shall be used by the receivers to settle
debts. and just claims under the present re-
ceivership. In addition the court reserves
the right to order that any deficiency in
such funds shall be made up from future
earnings under the separate recivership. In
effect the decision simply sequeStrateS the
old main line from the rest Of the system,
only so far as accounts are concerned SO
that the property covered by the first mort
gage shall be within easy reach of the mort
The property covered by the first mort
on the main line of 1,036 miles. extending
from Omaha to Ogden. and no other. The
es while under the management Of the
same receivers, will have a separate sys-
tenn of accounting, although they will be
run by the same executive. Before he is
sued the order Judge Sanborn stated that
ne had changed one clause, making future
as he Felt aha top
much protection could not be given the
present reeevsrs IN the Ames ease He
Indebtedness he would always give the
plaintiffs in the foreclosure suit the priv
ilege of a hearing. Attorney Pierce for
the complainants, stated that he was per-
born stated that. the appointment of the
new receivers In no wise changed the man.
ner OF operating the system. but that the
future surplus earnings of the main line
would now apply, to the payment of the
iirst-mortgage bonds.
Judge lThurston said to-day: 1.-THE stu
alton of the property has reached point
where foreclosure was inevitable The first
mortEage interest Is in default The s sys.
tnstallment of Sc, $4,000 of the principal will
be due Jan; l. 1896. and there is. no possi-
cept by. foreclosure sale. This foreclosure
of the. first mortgage. on. the Union Pacific
main line is really the last foreclosure to
be brought, the mortgages on the Oregon
Railway and Navigation Company, on the
nn OF the osson short q line and nd
Utah Nort ls,rn on the Kansas Pacific, the
o se ns arc and ID
process Of foeclosure and receivers have
been appointed under all of them. This
ments interest in any possible way, the
government can come into this case and
Il can foreclose Independently, but always
subject to the first mortgage. The time
has now come when Congress must either
act during the present session or the mat
ter. has passed beyond legislative control
and must be settled by the courts. ! am
me; as Senator, from the responsibilities
The PIERCE Recefvershlp.
r. B. f. Perce. notice of whose appoint
ment as receiver of tina Toledo, 81 Louis
q Kansas City was published yesterday,
returned from Chicago last night. lie con-
firms the report, but says Judge Woods has
not mentioned to him on what date he
shall assume the duties CT the position, con-
sequently Mr.. Peirce has little 10 say about
the matter. An impression prevails In rail-
road circles that Receiver PIERCE will take
with him for traffic manager John Lazarus,
traffic manager of the INDIANAPOLIS De-
catur d Western who is very efficient
name 20 lp1k as5er any ora h Of railway
who for some years was superintendent of
the l., p: W.. may be given position.
Il should be said, though, that w. S.
Weed. the general freight agent of the H..
st. l.. d *. c., is one of the best freight
erai freight agent OF, the Lake Erie &
Western. and, under adverse circumstances,
made an excellent record on the T.. ST. L.
-
always had to contend with poverty and.
except in power, is still a sufferer in its
business for lack of sufficient rolling stock
IN the last two years the physical condi-
eion of the property has been greatly i'm
proved. and s. r. Galloway, late receiver,
now general manager of the Nickel-plate
has reason to be ashamed of what he
has accomplished since appointed receiver,
which was May IL. 1893. The prospects are
good that the road will rest in the hands of
a. receiver for some time to come so many
are the pending claims against it.
Freight Rates Demoralized.
traffic manager who never makes
much buster or charges that lines are cut
ting rates, without proof, said, last even
ing. that not at any time In years had the
Decentralization in freight rates been so
extensive; that is, affecting SO many class
es Of freight. There have been times, he
said, when rates were cut deeper, but it
would be only on certain classes of freight
Now traffic with some lines Is 60 light that
1t Is, and VIII make rates that will get it,
He did not think the east-bound rate on
grain was lower than on the basis of %
cents per 100 pounds. Chicago to New York
and IL was the weak lines that We're cav
yying IL at that rate, as the strong lines
DO not dare 10 make that rate, lest the
weak lines should 90 lower than The 20-cent
basis, and rates generally go lower For
once the weak lines have the advantages
Were there plenty of business the case
would he different: tina xtrong lines N~uld