The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-01-23
NATION Isl 10 FoREcLosE.
LIONS GUARANTEED BY THE
SYNDICATE.
SOLUTION THOUGHT SATISFACTORY.
IN cial Circles the Attorney Gen
eraI Is Thought to- Have Made
"a Good Bargain.

HlTiL - MADE by the Union Pacific re-
organization committee that it has
GENE to an agreement with the gov
eminent, in accordance with which the
latter has begun foreclosure proceed
lngs OF its lien upon the Union Pacific
hnes' inclusive. of the Kansas Pacific
hne.- The reorganization committee
guarantees minimum bid Of some
thlng ever ,$45 900 900, fer the govern
ments claim upon the railroad AMI
1cr the government Union Pacific sink
Ing fund bonds, and has deposited
$4,50O,OOO as earnest money. Kuehn,
Loeb q Co., bankers for the reorgan-
lzatlon committee, have assured to the
committee the funds required to carry
It's agreement with the government
| into effect @ F7f.'T
washington, Jan. 22-Attorney Gen.
eral Harmon today gave out the fol-
lowing statement Of the agreement with
the reorganization committee Of the
! Union Pacific railroad:
Upon the defeat of the funding bill
IN the house, the president directed the
attorney general to commence foreclos-
/ dre proceedings. against the Union Pa
CHIC railroad company, first making
the best arrangements obtainable for
the protectioniro f the governments in
terests. Following the lines indicated
IA MS last report, 1.-THE attorney general
! began negotiations with the reorgan
lzauon committee On Thursday an
agreement was made which will result
Ia hin, immediate steps to foreclose The
chlef subject Of the negotiations was the
protection of5the government against
] risk OF sacrifice Of it's claim by a SALE,
which would leave nothing substantial
after paying prior liens. This protee-
tlon IS now assured by guarantee that
the government shall receive on its
hen on the aided portions of the Union
racine and Kansas Pacific lines. in
ciuulng the sinking fund, not less than
! SAC, 754, 900.
/ Inc sale will be public, so that the
government will receive the benefit of
| any hlgher bids up to the full ano,Int
cL us cialm, principal and interest. The
! sum OF S4,50O000 cash was on Thurs
| cay deposited with the United States
Irust company, of New York, by Gen.
/ LOUIS fitzgerald, chairman of the com
mlttee, as security, according tn tha
terms OF the agreement The com
Hlttee agrees to bid par for the sink
ing Iund, II 1t is desired to Sell it AT
any time before the foreclosure sale
bl1is In equity have been prepared
9Isheu by the attorney general and
alu5i. tTeor &c ahoadley, special counsel.
-dHu ,IoTWard6d to- st. louis 4whert1f +Ja1y.
VIII De presented to Judge Sanhorn
VINO mas Jurisdiction in all the districts
| ana whose consent to their filing is
| necessary, because the receivers ~
charge OF the property are made mar
ties defendant. pal
Ihey are original bills and not cross
t nllIa ~ Inc pending suits. Whether
lney Will proceed as independent hills
or be ordered to stand as cross,
| Guys IN the pending suits will he de-
| termlned by the judge, but in either
event the result will be practically tho
same, viz: The sale of the pronertv
under the governments lien as we'll
aS uhQer that of the first mortgage
6lils VIII be filed in the districts of
IOWA, Nebraska, Wyoming Co1o,-a IL
and Utah: Separate bills for the fore
closure OF the lien on the Kansas pa
enc are in course Of preparation
THESE will be filed in Missouri and
Kansas diiu
he proposed arrangement was sinh
r r 10 the government directors be-
mended its adoption. Their general
OPINION was thus expressed:
Inc government cannot nrudan+>,,
longer DEFER the settlement of this mai
ter. The Union Pacific system has OIL
ready been much curtaiIed and its
revenues nave been permanently re-
yucca. Reorganizations of the allied
ana nelghborirlg properties have either
been accomplished or are in train for
early contamination, and the breaking
up OF the entire Union Pacific svstem
has been and is steadily progressing
1t therefore seems to us inexpelient If
rot dangerous, to neglect this opnor-
tun1ty of realizing the sum offered
and thus expose the government tn -
continuous depreciation of it's secur-
ity.'
1T is believed that there will ha
higher bids, but if not an estimate
shows that with the amounts aIreadv
received from the company, the gov.
eminent will at least realize a SIM
equivalent to the principal of the
bonds, with interest at about 9 12 nov
cent from their issue to the ayera ee
date of their maturity, or about 345
per cent from date of issue to Jan.
1897. The minimum of S45, 1854 900 g11ar
anteed the government is in cash. so
that all transactions with the prop
erty will terminate upon the com
pletion of the foreclosure sale. The
course to be pursued with respect to
the Central Pacific has not yet been
determined"
The following named gentlemen com
prise the reorganization committee:
Louis Fitzgerald, chairman; Jacob Fl.
Schiff, Chauncey M. Depew, T. Jeffer-
son Coolidge Marvin Hughitt
and Oliver Ames. 1t is understood that
the necessary legal proceedings Incl
dent to the government taking part In
the foreclosure suits now pending at
Omaha on the behalf of the first lien
holders, will be begun at once and the
case pushed ITO a speedy conclusion.
The outlines of the agreement with the
reorganization committee were an
proved by the attorney general very
soon after the failure of the funding
BILL only the exact amount of the
guarantee remaining in allegiance. Nor
was this point decided until Judge
Harmon's visit to New York early in
the present week.
The first offer of the syndicate was
$45 G00,6 600 even. The encouragement
however, insisted upon an increase
which was ffnally agreed to at the last
conference yesterday, making the total
amount which, the government will re-
ceive in. cash $45, 754 900. From this
amount, howsver,l the government will
redeem, at nfatuEity, the bonds now
outstanding, the last of which does not
become due antilo 1899 The interest on
these bonds until maturity will also
be paid by the government
In official circles the agreement is
regarded as highly advantageous to
the government, although the interest
which the government has paid and
will continue to pay until the last of
the outstanding bonds mature was at