Omaha daily bee., 1895-12-08
WAY OUT OF THE DIFFICULTY
Senator Thurston Gives His Views o
Pacific Railway Matters.
HISTORY OF THE ROADS REVIEWED
Reiterntes His Previously Expressed
Opinion that the Only Practical
Solution IN for the Govern
ment to Sell Its Claim.

WASHINGTON, Dec. 7.-(Special) l)-Since
1t has become known that Senator John NJ.
Thurston of Nebraska had in contemplation
bill looking to the adjustment of the govern
men,'s claim against the Union and Central
railroads and since interviews with him
upon this question have been largely OF a
character to leave his relative purpose in the
background your correspondent sought the
late solicitor general of the Union Pacific
system with view of securing from him
some authoritative utterance upon this very
vital question, In tracing the history Of
these roads, the senator said: The present
Ulion Pacific Railway company was formed
by a consolidation of the Union Pacific Rail-
way company, with a line from the Missouri
river to Ogden; of the Kansas Pacific Rail-
way company with line from Kansas City
to Denver, and of the Denver Pacific Railroad
company, with line from Denver to Chey
enne, there connecting with the main line
between Omaha and Ogden. The entire mile
age of the consolidated company Is about
500 miles OF main line without branches or
feeders. Up to the time this property went
into the hands of receivers the Union Pacific
had secured by ownership of stock, lease or
traffic agreement, control of vast system
OF railway lines. aggregating nearly 5000
miles of road extending into thirteen states
and territories and occupying the best part
OF the country between the Missouri river
and Portland, Ore.
The insolvency OF the Union Pacific and its
allied lines brought on by hard times and
general s'agnation Of business. has resulted
in the commencement Of many foreclosure
proceedings. until today all parts of the
tire system are under process or foreclosure,
and about half OF the connecting and auxil-
iary lines have passed entirely out OF Union
Pacific control, are being operated under
separate and independent managements. and
whatever interest the Union Pacific had In
them has been virtually wiped out. All the
remaining branches and connecting lines are
I'm process of foreclosure. and, IL the present
situation continues, viii soon be sold by the
courts and reorgsnized as independent lines.
thus stripping the Union Pacific company of
all its branches and feeders and leaving 1t
only It's main line OF 800 miles, as already
stated. i@,f
FIRST MORTGAGE INDEBTEDNESS.
ION these main lines there are first mort
cages having priority over the government
claim. amounting to upwards of SAC. .O00. 900,
being nearly or quite $4,000 per mile. The
first mortgage bonds are held by multi
tude OF investors, and the mortgages at the
present time are all being forscosed. 1t is
extremely doubtful II this property goes to
sale on foreclosure that 1t Will bring anything
more than the amount OF the first mortgage,
and certainly there would be but little OF
the purchase price left after satisfying the
first mortgage to apply upon the government
Indebtedness.
I'm the absence OF any law authorizing the
appearance OF the attorney general In these
foreclosure cases or providing for bringing
the United States into court by process. It is
probably true that the government would
not be bound by the foreclosure sale. but
would stand the same as any other second
mortgage entitled to redeem from the sale
by repayment OF the purchase price and OF
any proper outlays for the betterment of the
property by the purchaser. This right OF
the government to redeem would not be a
.t.. hs .t.. aenhI ghAA
equitable rules should have to be exercised
within a reasonable time after sale.
Should the government redeem from the
tirst mortgages either before or after sale,