Omaha daily bee., 1895-06-07
FIGHT In THE LAST DITCH
Hearing the Short Line Case Commenced
Before Judge Merritt.
OBJECTION TO RECEIVERS CERTIFICATES
Loan Company Also Asked to Take the Un'
profitable as Well as the Profitable
Portion of the Property
Hearing Continued To-day.

SALT LAKE Utah, June 6.-(Speci3l Tele-
gram.)-The last act in the great struggle
for the possession of the Oregon Short Line
and Utah Northern opened in Judge Merritt's
court today, and among the chief actors were
some of the most brilliant and distinguished
attorneys in the United States. The court
room was crowded with railroad officials and
business men, among the spectators being
John NJ. Egan, appointed by two courts as
receiver for the Short Line. Intense interest
is taken in the proceedings, as it is the i'm
preston that the result may overturn traffic
conditions in the west and northwest and
affect the material interests of this region.
Some new questions were raised at the
hearing today. The petitioners asked that
such an order be entered as will leave it
optional with them whether they accept the
Utah Southern and Utah Southern extension
lines, extending from Salt Lake to Frisco.
Both OF these lines are now operated at
loss. The petitioners do not object to
operating them, but are not willing to pay
the defaulted interest. Counsel for the op-
position insist that the American Loan and
Trust company should take all the lines or
none, and that it should pay all defaulted in
terest out of its own funds, without the aid
Of the court in the issue of receivers certih-
Gates 1t was also suggested and even
Egan's appointment, a joint receiver also be
appointed to protect local interests, certain
interests that are Independent of those rep
resented by the American Loan and Trust
company. This latter proposition was bitterly
opposed by the petitioners During the ar
gument some warm disputes arose among
counsel as to what was said and done before
Judges Sanborn and Gilbert.
Questions and expressions dropped by the
court during the arguments indicate an in
n1f TO tn1rA tIA s,ta 1. IT,,g..
Pacific into consideration, and some modifca-
tons Of Judge Sanborn's order are predicted.
1t is expected that the arguments will con-
sumo the entire day tomorrow, and that the
court will then take the case under advise
ment.
Mr.. Storey, for the American Loan and
Trust company, opened the proceed
ings by recountng the history of the
now notable case. He said the interest on the
mortgage was in default and the traffic con-
tract having been broken by the Union Pa
cifc it had no claim. Therefore the Loan
and Trust company demanded its right under
the mortgage. 1t was wrong to place both
interests, which were adverse to each other,
in the same hands. The loan company Of
fered to pay the interest on the first mortgage
and asked the termination of the Union Pa
cific Teceivershp
Senator Thurston said I'VE are willing,
IL you pay, but you ask the court to raise
the money by receivers certificates"
Mr. Storey said they only asked the right
to pay it out of their own property.
Judge Merritt made several inquiries as to
the intention to leave the--utah Southern
extension and was informed such was not
the intention, but there was no direct as
surance that the Lean and Trust company
would take that extension.
e. p. Sanborn, representing the one-twelfth
Of the second mortgage bonds mort
gage bondholders, argued against the separate
reCelvership. He said that the larger in
terest was in behalf of those who ask for
the retention of the five receivers now in
charge of the Union Pacific. If the loan
company woull ray the fist NOR ge defa
ing interest then il would have a right to
ask for separate receivers, but they do not
pay the interest, and in asking for the is
sue of receivers certificates for that pur-
pose they practically ask the court to bor-
row the money.
Mr. Hill followed in the interest of the
Oregon Short Line company. He objected
to the issue of receivers certificates and
claimed cny a portion of the road was to
be taken, as agreed upon with the loan COM
pany, and that it was an effort to dismem-
ber the road and increase the indebtedness
of the Short Line.
p. l.. Williams, representing the Union
Pacific and the local stockholders, said if
a receiver was appointed it should be
stipulated that the entire road should be taken
and that the receiver should be some man
who was acquainted with all the interests.
Judge Marshall, for the Loan and Trust
company, said the suit by which the five re-
ceivers were appointed was collusive suit,
and that the parties did not represent any
of the creditors of the Union Pacific. He
urged the claim of the loan company to a
receiver was a right which could not be de-
MED. The case will be continued tomor-
row.
John M. Egan was shown the dispatch
from Denver today stating that Mr.. Dodge
has been called to Salt Lake for consultation,
looking to a business connection between the
Oregon Short Line and the Rio Grande West
ern roads. Mr.. Egan says he is making no
arrangements in advance of Judge Merritt's
decision, and that he has had no communica-
tion whatever with the Rio Grande people at
Denver.