Cottonwood report. [volume] (Cottonwood, Idaho) 1893-1901, 1895-02-01
Foreclosure by First Mortgage Bond
holders Thought Not to Prejudice the
Governments Interests = Order Cow
ers seven Type Written Pages.

holders Thought Not to Prejudice the
Governments Interests Order Cow
ers Seven Type-written Pages.
ST. LOUIS, January 23.-United States
Circuit Judge Walter H. Sanborn to-day
handed down a decision upon applica-
ton of E. Gordon Dexter and Oliver
Ames, second trustees for the first mort
gage bondholders OF the Union Pacific
Railway Company, for a separate re-
ceiver for the portion of the Union Pa
cific system covered by the first mort
gage. The decision on the order covers
seven closely typewriter pages, and in
effect grants the application. The re-
ceivers appointed are the same as those
now in charge of the entire system, viz.
s. H. H. Clark, Oliver w. Mink, E. FL
lery Anderson, John w. Doane and
Frederic R. Coudert. The order pro-
vides that funds already earned by the
road be used by the receivers to settle
debts and just claims under the present
receivership. In addition the court re-
serves the right to order that any def
from future earnings under a separate
receivership. In effect the decision to-
day simply sequestrates the old main
line from the rest of the system only SO
far as accounts are concerned, SO that the
property covered by the first mortgage
shall be within. easy reach of the mort
gagees.
The property covered by the first mort
gage referred to in the order is that
placed upon the main line of 1,036
miles, extending from Omaha to Ogden,
and no other. The other portions OF the
road and branches, while under the man.
agement of the came receivers, will have
a separate system of accounting, al
though they will be run by the same ex-
ecutive. Before he issued the order
Judge Sanborn stated that he had
changed one clause, making future earn
inps to q certain extent liable for present
Indebtedness, as he felt that too much
protection could not be given the present
receivers in the Ames case. He stated,
however, that before making any order
to pay any OF the present operating in
debtedness he would always give the
plaintiffs in the foreclosure suits the
privilege of hearing.
Attorney Price for the compliments
stated that he was perfectly satisfied
with the order. The Judge then called
for the appearance OF the Union Trust
Company and that OF the Union Pacific
Railroad Company. Mr.. Pierce pre-
scented one and Attorney Kelly in behalf
of the Union Pacific the other. Judge
Sanborn appointed Mr.. Kelly special
clerk and messenger for the court to
carry the order and the appearance to
| ~ I - Il
trict of this circuit at Omaha and place
them on file. Judge Sanborn stated
after the order had been issued that the
appointment of the new receivers in no
wise changed the manner operating the
system, but that the future surplus earn
| ings OF the main line would now apply
to the payment of the first mortgage
bonds.
TlIURsToN ON THE FORECLOSURE.
| OMAHA, January 23.-The Union Pa
cific attorneys, who went to St. Louis to
assist in foreclosing the first mortgages,
returned to-day. Speaking OF the suit,
Judge Thursl on said:
| 1.-THE situation of the property has
! reached the point where foreclosure was
inevitable. The first mortgage interest
/ is in default and the system in the hands
OF receivers. The first installment oil
SO, 475, 900 of the principal will be due
January /, 1896, and there is no posi-
bility OF that amount being paid except
| by foreclosure sale. This foreclosure Of
the first mortgage on the part of the
Union Pacific main line is really the last
foreclosure to be brought. The mort.
cages on the Oregon Railway and Navi-
CATION Company, the Union Pacific
Denver and Gul', on all the divisions Of
the Oregon Short Line and Utah North.
ern, Kansas Pacific, Denver Pacific, Kan
| sas Central and several other branch
lines are already in process of foreclos.
! ure, and receivers have been appointed
under all of them. This foreclosure doe,
not prejudice the governments interes
in any possible way. The government
can come into this case and foreclos,
its mortgage as a second lien, or it car
foreclose independently, but always sub
ject to the first mortgage. The time ha
now come when Congress must eithel
act during the present session or tn,
matter will pass beyond legislation anC
must be settled by the courts. l an
very glad this is so, because it will re
lieve me as Senator from the RESPONSE
bility Of legislation"