The Cape Girardeau Democrat. (Cape Girardeau, Mo.) 1876-1909, 1897-01-30
r STEP TAKEN.
The Attorney General Directed to
Begin Proceedings
Against the Union Pacific Railroad Co,
After First Making the Best Arrange
lDents Possible for the Protection
of the Governments Interests

WASHINGTON, Jan. 23.-The follow
Jog statement was given to the United
Associated Presses by Attorney Gen.
eraI Harmon yesterday evening:
Upon the defeat of the funding bill
IN tue house, the president directed
the attorney general to commence
foreclosure proceedings against the
Union Pacific Railway Co., first max
ing The best arrangements obiainahle
for the protection of the governments
in tereSts Following the lines indi.
Gated ia MS last report, the attorney
general began negotiations with the
Reorganization committee. On Thurs
day An agreement was made which
will result in Immediate steps Il fore
close The chief subjects of the ne
gotiatIonS was the protection of the
government against the risk of sacrifice
of its claim by a sale at a price which
would leave nothing Substantial after
paying prior liens. This protection is
now assured Gy a guarantee that the
government shall r~eceiv. on its lien
on the aided portions of The Union Pa
ciic and Kansas Pacific lin. !ac,I..-
lag n sinking fund. not .esa t..ia
SD, 7ji 900. the sale VIII b.: rsUi.c,
So that the government VIII receive
the benefit of any higher bid, Gp"to
Ia full amount Of its clai:I. principal
and interest The SUN Of 81. 800, OJOcash
wa GA Thursday deposited wI;G the
United States Trust Co. Of New York
BY Gen. Louis Fitzgerald, chairman of
tide cO:Hmittee, as security according
TO the terms Of the agreement.
The committee agree % bad paEior
the sinking fund ii it is desired to sell
it at any time before the {2reclosure
sale Chooses. in equity have been pre-.
pred, signed by the attorney General
ana lion Geo. iioai!y, special coun-
sci, ana forwarded to -. Louis. whe=e
they will be presented TO Judge SAN
borE, whO has jurisdiction il AL tie
DISTRICTS and whose consent to thc.r
filing is necessary because the recriv.
er> IA charge of ihe pryi cry are
made parties defendant. They are
original bills and not cross bills
in the pending suits. Whether
they will proceed as independent
bills or DC ordered to stand as cross
bills in the pehGing suits will be de-
teruIined By tine judge, but in either
event the result WA be practically the
satne-viz: The sale of the property
under the gOvcrnInent's lien, as well
rs under mai Of the first mortgage.
The bills will be filed in the districts
of Iowa, Nebraska, Wyoming, Colo
RADIO and Utah. Separate bills for the
foreclosure Of the lien on the Kansas
Pacific are in the course of prepa-
ration. These will be filed in Mis-
souri, and Kansas.
The arrangement was submitted
20 The government directors before it
Was closed. They all recommended
It's adoption. Their general opinion
was thus expressed: The govern
IIent can not prudently longer defer
GSEe settlement of this matter. The
EuiOn Pacific system has already been
much curtailed and its revenues have
been permanently reduced. Reorgan-
izatiOns OF allied and nejShboriuG
properties have either been accom-.
.pIisiIed or are in train for early con.
summation and the breaking up of the
entire Union Pacific system has been
huu 10 h'eduiiy progressing. 1t lneTe-
fore seems TO US ine%xpedient, if not
dangerous, to neglect this opportunity
OF realizing the sum offered and thus
expose the government to a continu-
Gus depreciation of its security"
1t Is believed that there will be
higher bids, but. if not, an estimate
shows that. crediting amounts al
ready received from the the
government will at least realize ii sum
equivalent to the principal of the sub
sidy bonds with interest at about 35
per cent from their issue to the aver
age date OF their maturity, Or about
3.45 per cent. from date of issue to
January 1, 1897. The minimum of
S4j.T54. 900 guaranteed the government
II in cash, SO that all relations with
the property will terminate upon the
confirmation of the foreclosure and
sale of the property.
The course to be pursued with re-
.Bpect to the Central Pacific has moi
vet been determined.