The record-union., 1896-05-09
SACRAMENTO RECoRD-UN1oN, SATURDAY NAY O. 1896.

| able at the option of the President of
| the United States If the United States
should be required to pay off any para
mount lien upon the property, and that
the mortgages be executed by the com
| panies to secure the new bonds to be
| given to the Government under the set
| tlement shall contain a covenant pro-
| viding hat, in the event of any default
continuing for six months in the pay
ment prescribed by the bill, the entire
! debt due to the United States from the
company making such default shall, at
the option Of the President of theUnited
| States, Immediately mature, and the
| United States shall be thereupon en-
| titled to enter upon and take possession
of the mortgaged properties of the de-
| faulting companies without applying to
the courts or to Congress for authority
so to do, or, if it should elect to do so, to
| institute and maintain Appropriate pro-
| ceedings at law or in equity in courts
of competent jurisdiction for the en-
| forcement of it's claims or liens under
| the bonds or mortgage.
| Owing to the extension of the lien
provided for in the pending bill, such a
| possession or foreclosure would cover
and include all the properties of the
companies, with their terminals, termi-
nal facilities, feeders and distributors
| instead of the bare lines from Omaha
| to point five miles west of Ogden, and
| from that point to San Jose, and from
| the KansaS-MiSsouri State line to
| point 394 miles west, which are covered
| by the present Government lien.
| NECESSITY FOR IMMEDIATE LEG
| ISLATION.
| At previous stages of the history of
| this matter the Union Pacific Railway
system embraced a vast and well-ap-
| pointed property, the mileage of which
aggregated about $500 miles, extend
| ing from Iowa and Missouri on the east
| through the States of Nebraska, Kan
sas, Colorado, Utah and Idaho, into the
States of Montana, Oregon and Wash
| ington on the west and northwest and
| extending southwark to the State of
Texas.
In October, 1893, this sytem passed
| into the hands Of receivers, and since
| that time disintegration has steadily
progressed. Mortgage foreclosure pro-
| ceedings are in progress upon this en-
| tire system, and reorganizations inde-
pendent of the Union Pacific Railway
Company, covering all of the main aux
| iliary systems, are in advanced pro-
gress There now remains only the
| Union Pacific Railway proper, embrac-
| ing with it's lateral branches about
1000 miles of railway, as a subject for
| Congressional legislation, so far as this
system is concerned. Even this prop
| erty must be regarded as subject to dis
memberment as result of any pro-
| longed omission on the part of Con-
gress to enact legislation necessary for
| the protection of the interests of the
| Government. Six mortgage foreclosure
proceedings are now pending affecting
| the various mortgage divisions of the
Union Pacific Railway proper, three Of
! these having been instituted under
mortgages prior in lien to the lien of the
Government upon the subsidized por-
tions of the property.
The three foreclosure proceedings upon
| mortgages prior to the lien Of the Gov
ernment upon the subsidized portions of
| the property are:
l. Suit for the foreclosure of the
| first mortgage Of the Union Pacific
Railroad Company embracing the en-
| tire Union Division. The outstanding
bonds secured by this mortgage amount
to $27,22900O, of which S6,475,0OO ma
tured on January 1, 1896.
9 Suit for the foreclosure of the Kan
sas Pacific, Eastern Division, first
| mortgage, embracing the railway Of the
Kansas Division from the initial point
near the Missouri-Kansas State line
to the one hundred and fortieth mile
post west. The outstanding bonds Sc
| cured by this mortgage amount to 81
100000, and all these bonds matured
on August 1, 1895
3 Suit for the foreclosure of the Kan
sas Pacific, Middle Division, first mort
gage, embracing the Kansas Division
from the one hundred and fortieth mile
pest to the three hunderd and ninety
fourth mile-post west. The outstanding
bonds secured by this mortgage amount
| to S4,063, ,000 and the principal of these
bonds will mature on June l, 1896.
In addition to the principal of the frs.
mortgage bonds on subsidized parts of
the railway matured and maturing, as
above stated, interest is in default upon
| the several issues aggregating the
amount of 50, 800, 100.
1t is due that it should be stated that
| beyond a monition to the Government
of the pendency of these proceedings no
applications for DEGREES affecting the
| interests of the Government have been
made pending consideration by Con-
| gress of the interests of the Govern
| ment, and opportunity for the enact
ment of such legislation as in the judg-
ment of Congress should be had.
The other foreclosure suits above re-
ferred to affect all of the unsubsidized
property of the Union Pacific Railway,
except certain land grant lands and the
Omaha bridge, the later being subject
to foreclosure at. any time by reason of
a large arrearage of defaulted interest
Pending foreclosure suits upon the
Union Pacific Railway and the matur
ity of portions of the prior mortgage
debts and subsidy bonds upon both the
Union Pacific and Central Pacific Rail
roads create a situation imperatively
demanding the action of Congress by
way of settlement of these debts or pro-
vision for the payment of the prior
liens.
1t is manifest that unless bill pro-
yiding for the settlement of the indebt-
edness of these railways is adopted by
Congress it must make immediate pro-
vision for the payment of the first mort
gage bonds upon the subsidized por-
tions of the Union Pacific Railway and
early provision for the payment of the
like bonds upon the subsidized parts of
the Central Pacific Railroad, and, III
addition to this, adequate provision for
the requirement of such portions of the
unsubsidized properties as are clearly
Indispensable to the operation of the
aided portions. In the present condi
ton of the treasury no funds are avail
able for such application; and, in the
event that Congress should desire to
carry such an undertaking into effect,
il must Immediately provide the neces-