Omaha daily bee., 1897-01-23
FoRECLosE THE PACIFIC ROADS
Syndicate Guarantees the Govern
mcnt,s CInim of Si5.75I.O 1000.

Syndicate Guarantees the Govern
mcnts Claim OF Sf5,55f,ooe.
WASHINGTON, Jan. 22.-The attorney
general has entered into an agreement with
the reorganization committee of the Union
and Kansas Pacific railroads by which the
government Is to join the committee on fore
closure proceedings. The company guar
antees to the government that at the fore
closure sale It shall receive bid Of at least
the original amount of the bonds, less pay
ment made by the company to the govern
ment, with interest at the rate of 3h per
cent per annum. The agreement has been
signed and active steps will be taken In n
few days.
Attorney General Harmon today gave out
the following statement of the agreement
with the reorganization committee of the
Union Pacific railroads:
Upon the defeat OF the funding bin in the
house, the president directed the attorney
general to commence foreclosure proceed
ings against the Union Pacific company
first making the best arrangements obtain
able for the protection of the government :
interest. Following the lines indicated in
mis- last report, he consulted with the re-
organization committee. on Thursday an
agreement was made which VIII result In
subject of the negotiations was the protec-
tion of the government against the risk of
sacrifice of It's claim by sale at a price
paying prior liens. This protection IS now
assured by a guarantee that the govern
lines Kansas Pacific line, Including the
sinking fund, not less than si5 154,OOJ. The
sale Will be public, so that the government
will receive the benefit or any higher bids
up to the full amount of It's claim, principal
and interest
DEPOSIT A FORFEIT.
The sum of $i5O0OOO casa has been de
posted with the United States Trust com
pany by General Louis Fitzgerald, chair
to the terms of the agreement The com
mlttees agrees to pa par FOR the sinking
before the foreclosure sale. Bills in equity
have been prepared and signed by the at
torney, general and Hon. George Hoadley'
whore they win on Friday be presented to
Judge Sanborn. who has jurisdiction in all
filing is necessary because the receivers i'm
charge Of the property are made parties
not cross bills in the pending suits Whether
they will proceed as bills or be ordered to
stand as cross bills in the pending suits will
be determined by the Judge, but In either
same viz. The sale of the property under
OF the first mortgage. The bills will be
filed in the, districts of Iowa, Nebraska, Wy
for the foreclosure on the Kansas Pacific
are In course of preparation. These will be
hled In Missouri and Kansas
The proposed Arrangement was submitted
to the government directors before II was
Their general opinion was thus expressed:
THE government cannot prudently longer
defer the settlement OF this matter. The
Union Pacific system has already been
much curtailed and its revenues have been
permanently reduced. REPRESENTATIONS of
either been accomplished or are in train for
early consummntlon and the breaking up
OF the entire Union Pacific system has been
steadily progressing. 1t therefore seems to
us ncNpedent. If not dangerous, to neglect
this opportunity OF, realizing the sum offered
aud thus expose the government to a con-
tInuous depreciation Of It's security"
~ Is believed that there viii be higher
- lTaaR 10 a1asN hot
with amounts already received from the
company the government will Rt least real
subsidy bonds With interest al Al, about St '5 5$
per cent from their issue to the average
from date of Issue 10 January i, ISL. 81 Tho
minimum of 600 tho government is to
receive In cash, so that an relations with
the property VIII terminate upon the ter
mlnation OF the foreclosure sale. The course
TO be pursued with respect to the Central
Pacific has not yet been determined.
PERSONNEL or THE COMMITTEE,
Tho following named gentlemen comprise
the reorganization committee; Louis Fitzger-
aid. chairman; Jacob Schiff Chauncey NJ
Depew, T. Jefferson Coolidge, w. Marvin
Hughltt and oliver Amos.
1t Is understood that the necessary legal
proceedings incident TO the governments
taking part in the foreclosure suits now pend
Ing In Omaha on the behalf OF the first lien
holders will be begun at once and the case
pushed To a speedy conclusion. The outlneG
VI lhe dbiN'h'Ht WIN tAe reorganization
committee We're approved nv the attorney
general very soon after the failure OF the
funding bill only the exact amount OF tho
guarantee remaining In abeyance Nor was
this point decided until Judge Harmons
visit TO New York early in the present week
The first offer Of the syndicate was St5, ,000,-
900 even. Tho attorney general, however, in
sisted upon an Increase OF s75i000, which was
finally agreed to at the last conference yester-
day. This makes the total amount which the
government Will receive In cash Si5, 75i 900.
From this moment, however the government
VIII redeem at maturity the bonds now out
standing. the last OF which do not become
sln unlll 1900 The lnInrLsl On Ihnan honda