New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-01-20
UNION CIFIC FORECLOSURE
FIRST MORTGAGE BONDHOLDERS ASK
FOR 1T
THEY APTEAR ny COUNSEL BEFORE JUDGE SAN
BORN IN ST. LOrIs-ATToRNEY-G GENERAL
oINEY SURPRISED But WILL oP-
POSE THE REQUES'

OINEY SURPRISED. But WILL OP-
POSE THE REQUEST
ST. Louis Jan 19-United States Circuit Judge
W. F. Sanborn. in chambers. this morning. re-
ceived bill of complaint from Winslow s. Pierce,
Of New-York representing the trustees OF the first
mortgage bonds of lhe Union Pacific Railroad
Company. These bonds apply to what is known
the main line. which extends from Omaha to
ogden. a distance Of over 900 miles. The petit
ton is a vouminous document, consisting of
ffty-siX pages Of briefed matter. and recies the
default Of the company in the payment of the in
terest due january /. 1895. The bond issue
amounts to nearly s27.OOO.OOO. and the interest
makes it in the aggregate $50. 600. With the
bill Of complaint; a form OF an order of fore
closure asked by the bondhoders. The form was
the main subject If discussion before Judge San
born.
United States Sena tor-elect John NJ. Thurston.
OF Omaha, who is general solicitor of the Union
Pacific Railway Company. and Judge Kelly. as
sistant solicitor appeared for the receivers. and
objected to some Of the provisions Of the proposed
order Some corrections We're ordered by Judge SAN
born. and recess was taken to get the amended
form I'm readiness. The pertinent object OF the pc
titon is TO take the main line out OF the general
receivershp and have the accounts kept sepa-
rately. The understanding is that the same re-
ceivers will be continued though operating the
main line ostensby independent Of Its connections.
Judge Sanborn has taken the matter under con
slderation, and It is possible that decision Will
be reached this evening. but hardly probable that
1t will be made public until Monday on account
Of the mass Of documents which the court must
digest.
In the presentation ~ the matter Mr.. Pierce
was assisted by r. s Hall. Of Omaha.
Washington. Jan. ls.-Atorney-G General Olney
info mad al T.
closure proceedings had been begun In ST. LOUIS
Mo- to-day by the first mortgage bondholders
against the Union Pacific Railroad. This road
has recently defaulted in its interest payments,
and this reason Is given az the immediate cause
for the foreclosure proceedings. The uhlted
States holds a second lien upon the Union Pacihc
Railroad for many million dollars. and is, oi
course. much Interested in the legal proceeding
already instituted which may jeopardize the IN
terest Of the United states in this property
Attorney General Olney said the government
was alive 10 the situation. and would he alert III
protecting the vast interests Of the United stats
in the Union Pacific Railroad. The act OF Maich
3. 1887. he said provided how this should De d"h'
Section 4 reads as follows
That whenever In the opinion OF the President
II shall be deemed necessary TO the protection OF
the interests and the preservation OF seeui,g ~.
the United States in respect OF It's lien morsake
other interest In any OF the properly OF any OF
all OF the several companies upon WHICH a. ~ ~,
mortgage. other encumbrance paramount 10
the right title or interest OF the United States for
the same property or any part OF thr Sam, il"S
exist and be then lawfully liable 10 De efor'., 80,
he
direction OF the President. redeem or other"ise
clear off such paramount mortgage. or other en-
thereof cn, ef the treasury and the
United States shall thereupon become and be sub
pertaining to the debt, m9rtgage. len or Other
encumbrancc in respect OF which such payment
shall have been made.
The same section directs the Attorney General
to take all the necessary legal steps. under drcr-
ton OF the President. "io protect and defend IN"
rights and interests Of the United States IN such
contingency.
II Is stated officially that the Government VIII
resist foreclosure proceedings and that tnii
states District Attorney clopfon. u the Eastern
District of Missouri. and Gc0rg" lioadly special
counsel viii represent IN" United states In ~"
case Counsel from the - partm"nt ~ Justice.
solcltor-Gcneral Maxwell and Assistant A'i9r-
ney-General Whitney may also be- designated to
represent the United States
Acknowledgement Olncy had not been officially
advised ~ the movement los the first mortgage
bondholders when the Department u Justice
closed for the day but said he would doubtless %"
In due time. There was. ~ said. no hurry IN IN"
matter. II Is pointed out that NJ Law" as ''"i
I'm the quoted section is amply sufficient - pro-
tect the Interests ~ the United States IN tho
Union Pacific Railroad. but that the CONDITION ~
the Treasury may not bc such ~ would in the
judgment OF the President. a. Nfy him IN direct
ing the Secretary ~ the Treasury o. bill in the
Tnion Pacific Railroad and pay IN ~ first mort
gtge bonds out ~ the Treasury. without Congress
sional legislation authorizing him 10 do 30.
CHANGE ~ PITTsBtRG AID LAKE ERIE.
P,tsburg. Jan i9.-Ex-Judge J. II. Reed. % the
United States District Court. AZ present director
and acting president OF the Pittsburg and Lake
Erie Railroad. stated to-day that General - ".
Callwel who succeeded Mr. Ncwell ~ president
OF the Lake Shore and Michigan Southern Rail
WAY Company. would also succeed Mr. Newell ~
nresidenf OF the Pittsburg and Lake Erie Railway
the election 10 be- held In f1ttsbufs on Jhhu'i,