Custer weekly chronicle. [volume] (Custer City, S.D.) 1890-1931, 1895-01-26
TO GEORGE GOVERNMENT
Idea Of the Proposed Union PACING
Foreclosure.
That IL tho Opinion In New YORK 'Hy
According TO tho Ierald-f the
Property Is Sold II VIII Not
Bring over . 2,OOO,o00.

New YORK, Jan. lo.-Thc Herald
says this morning: There is little
doubt in New York that the proposed
foreclosure of the first mortgage of the
Union Pacific railway instituted in the
United States circuit court at 1T. Louis
today is part of n scheme TO coerce the
government into a settlement, in ac'
cordance with the plan of the reorgan-
izntion committee and the syndicate
which offers to undertake the read ust-
ment Of the company's affairs.
The receivers of the companies nj.
mitted yesterday that they understood
the intention was TO foreclose the first
mortgages of all the chief branches,
although they said that they personally
had nothing 10 do with these proceed
ings. The result of this will be tho
complete disruption of the system un
less the government gives in to the
~reorganizers aud consents TO the
reduction OF the interest OF
the proposed blanket mortgage from
3 TO . Ser cent. IL was said yesterday
that interest would be paid in n few
days on the Utah and Northern IS Gov
ering the January and July, 1894, cou
pons. because this branch has earned
the said interest. but it is not known
when the January. 1898. coupons vii
be paid. 1t is utterly impossible 10 pay
the coupons OF most Of the bonds men
tiored above. The excuse of the com
pany is that it is not war
ranted i'm diverting it's revenues
10 branches tina have not
been self sustaining. While the re
c~eivers disavow any responsibility foI
the action 10 be taken today, they
freely admit the probable effect. Mr..
EllerJ Anderson said: ~ believe the
intention is 10 press the suit on the
first mortgage pro nptly and if the
property goes TO a sale IL may not
bring any more, and perhaps
not rs much, ms the first
mortgage and interest which
is about S32, 900, 900. In this casc the
government will lose its entire claim
of $40, 600, 900 where it now has an OPP.
portunity To make a very advantageous
settlement at n lower rate of interest.
1t is hardly likely that any legislation
can be secured at this session looking
to any movement on tho part of the
government to protect its interests"
The case comes up on n bill of com
plant from Winslow =. Pierce. of New
York, representing the trustees of the
first mortgage bonds of the Union Pa.
cific Railroad company. These bonds
apply TO what is known rs the main
line, which extends from Omaha 10
Ogden, "A distance of over 1000 miles.
The petition is a voluminous document,
consisting of 81 pages of
briefed matter and ~recites the
default OF the company of the payment
OF the interest due January /, 1895.
The bond issue amounts to nearly
S27, 000, 600 and the interest, making il
in the aggregate Of $50, 900. 900. With
the bill of complaint was "a form of an
order of foreclosure asked by the bond
holders. The form was the main sub
ject Of discussion before Judge San
born. United States Se~nator-elect John
NJ. Thurston of Omaha, who is
general solicitor OF the Union PacifS
Railway company, and Judge Kelly.
assistant solicitor, appeared for receiv.
ers, and objected to some of the provi
sions Of the proposed order. Some cor
rections were ordered by Judge San.
born and n recess taken 10 get the
amended form in readiness. The
pertinent object of the petition is
TO take the main line out OF
the general r~eceivership and have
the accounts kept separately. The un.
Outstanding is that the same receivers
will be continued through, operating
the main line ostensibly Independent,
of its connections Judge Sanborn has
taKen the matter under consideration
and it is possible that a decision will
be reached this evening, but hardly
probable that il will be made public
until Monday on ccou of the mass
of documents which the court mus,
digest.