St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1895-01-20
The MOVE IS MADE.
First Mortgage Bondhelders
Begin Proceedings in Judge
Sanborn'S Court.
FoRECLosING ON THE q. P.
Matter Taken Under Advise
ment After a Thorough
Discussion.
NO PLOT is INTENDED.
Scheme for Defrauding the
Government Denied by
Officials.
NO PLOT IS INTENDED.

ST. LOUIS, Jan. 19.-Before Judge
Walter H. SanboIn, of the United
States circuit court, today. Attorneys
Winslow S. Pierce and r. A. Hall, of
New York, representing T. Gordon
Dexter and Oliver Ames, second trust
ees for The first mortgage bond holders
of the Union Pacific Railway company,
fled a bill of complaint setting forth
that the interest on the S27,OO0,O00 OF
first mortgage bonds had been defaulted
Jan. l, 1895, and asking the foreclosure
Of the mortgage and appointment Of
separate receivers for that division OF
the Union Pacific covered by the mort
gage and Known as the main line. At
torneys John M ThurSton and T. w,
Kelley, for the present receivers, under
the Ames suit, represented the road.
Mr. Pierce, for the trustees, also pre-
sented formal order closely following
that in the Denver Pacific case and
asked that it be made the order Of the
court. After considerable general dis
cussion by counsel of the proper ver-
biage of the order. the court took the
matter under Amusement and vii rem
der decision later, probably the first
of next week.
The discussion between the attorneys
and Judge Sanborn partoek of the nat
ure of a friendly Interchange of opinion,
and, while nothing was definitely
stated, it seemed to be generally ac-
cepted by counsel for both sides that
the order asked would issue. though
the exact terms, of course, remained
with the Judge for final determination.
The principal subject Of discussion
was the protection of the present re-
ceiyership creditors, and as result OF
the exchange Of views it was pracu-
cally agreed that the order to issue
should protect in every way the claims
of creditors under the sO-called AmeS
suit. Not only the funds in the hands
of the receivers at present, but any
further earnings necessary to meet SAID
claim, will be set aside for that purpose
after due process of law. As explained
by Mr.. Pierce, the main purpose of The
application was to place the old main
line of the Union Pacific, that portion
specifically covered by the terms OF the
first mortgage, under separate manage
ment, though it is expected that the
same individuals will act as re-
ceivers. Most of the argument in
duIged in was as to details of manage
ment, the idea being to so arrange as
to permit the earnings of the main line
to stand by themselves and, therefore,
in position to be subject to the equities
of the first mortgage. At the same time
the representatives of the bondhOlderS
desired the operation of the branches
as we'll as the main line, in such man
ner as to carefully guard all sources of
income-raising on both. The bill OF
complaints as fled is formal statement
of the terms of the mortgage, the de-
fault in interest, the relation of the first
mortgage to the others and the position
of the main line and branches towards
each other. The order asked for, it is
stated, is practically the same as that
issued In the case of the Denver Pacific.
Prior to beginning his bill of complai Mt
Mr.. Pierce stated that the matter Of
asking an order Of foreclosure aud the
appointment Of receivers was purely
one of form. He said that it was being
done on all the Union Pacific lines when
the interest defaulted, and denied that
it was done for the purpose Of stirring
up congress.
He said the first mortgage bondhold-
ers wanted protection and were taking
the customary course. He further
stated that the present receivers. known
as the Ames receivers, would doubtless
be reappOinted. Mir. Pierce says that
so many limbs have been Topped off the
Union Pacific system under the present
receivership that it has been pretty
well stripped. The new receivership,
| if directed, will take the place of the
old receiYerships Oil all lines affected
by the first mortgage.
Foreclosure suits similar to this have
been instituted in the case of the Ore
gon Short Line, the Utah Southern, the
Utan Il Northern. and, in fact, i'll many
places on the system where the coupons
are in default The same procedure
| will doubtless follow everywhere on the
system.
Judge Caldwell tonight made sug-
geStiOn in regard to the case. He said:
Il am not now speaking as judge or
as a lawyer, but if | were in congress |
would propose a scheme which. if ii
could be made TO pass the senate, would
settle the whole matter. l would intro
duce bill to have the government to
buy up first mortgage and run the road
Itself That would settle the trans
continental rate question and would
straighten out the whole matter.
CIT ~ RATES COMING