The Kimball graphic. (Kimball, Brule County, Dakota [S.D.]) 1883-1905, 1895-01-26
TO GEORGE GOVERNMENT
Idea of the Proposed Union Pacific
Foreclosure.
That Is the Opinion In New York City
According to tho Herald--If the
Property Is Sold 1t VIII Not
Bring Over S%3e,ooo,OOo.

NEW York, Jan. 19.-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 st. Louis
today is part of q scheme 20 coerce the
government into g settlement, in ac-
cordance with the plan of tire reorgan.
iZation committee and the syndicate
which offers to undertake the readiust-
ment of the company's nffni re-.
The receivers of tho companies ad.
mitted yesterday that they understood
She intention was to foreclose the first
mortgages of all the chief branches,
although they said that they personally
had nothing to do with these proceed.
ings. Tho result of this will be the
complete disruption of the system un.
less the government gives in to the
r~eorganizers aud consents to the
reduction of the interest or
the proposed blanket mortgage from
3 to . Per cent. 1t was said yesterday
that interest wonld be pnid in II few
days on the Utah and Northern IS O
ering the January and July, 1894, cou
pons, because this branch has earned
the said interest, but it is not known
when the January, 1895, coupons will
be paid. 1t is utterly impossible to pay
the coupons OF most of the bonds men.
toned above. The excuse of the com
pany is that it is not war
ranted in diwerting its revenues
to branches that have moi
been self sustaining. While the re.
ce!vers disavow any responsibility TO,
the action to be taken today, they
freely admit the probable effect. Mr..
Eller' Anderson said: 81 believe the
intention is to press the suit on the
first mortgage promptly and if tho
property goes to n safe it may not
bring any more, and perhaps
not as much, as the first
mortgage aud interest which
is about S32, 900, 900. In this case the
government will lose its entire claim
of $40, 900, 900 where it now has an OPP.
portunity to make a very advantageous
settlement at q lower rate of interest.
1t is hardly likely that any legislation
can be secured at this session looking
to any movement on the part of the
government to protect it's interests"
The case comes up on n bill of com
plant from Winslow S. Pierce. ofaNew
York, representing the trustees of the
first mortgage bonds of the Union Pa.
cific Railroad company. These bonds
apply to what is known as the main
line, which extends from Omaha to
Ogden. q distance of over 1000 miles.
The petition is a voluminous document,
briefed matter and recites the
default OF the company of the payment
of the interest due january /, 1898.
The bond Issue amounts to nearly
81, 1000, 900 and the interest, making it
in the aggregate of $50, 900, 900. With
the bill of complaint was II form of un
order of foreclosure asked by the bond.
holders. The form was the main sub.
ject of discussion before Judge San
born. United States Senntor-clect John
M. Thurston Of Omaha, who is
general solicitor OF the Union Pacific
Railway company, and Judge Kelly.
assistant solicitor, appeared for rcceiv.
ers, and objected to some Of the provi
sions of the proposed order. Some cor
rections were ordered by Judge San.
born and a recess taken to get the
amended form in readiness. The
pertinent object of the petition is
to take the main line out o.
the general ~receivership and have
the accounts kept separately. The nm
derstanding is that the same receivers
will be continued through. operating
the main limo o%stcnsibly independent
of it's connections. Judge Sanborn has
taken the matter under consideration
and it is possible that u decision will
be reached this evening, but hardly
probable that it will be made public
until Monday OF account of the mas.
OF documents which the court mus
digest.