The advocate., 1897-09-29
UNION PACIFIC TO Be SOLD
President Mckinley Has Approved the
Agreement,

A Washington dispatch says the Union
Pacific reorganization committees prop
osition for the settlement Of the COM
panys debt to the United States will be
accepted, the government mortgage will
be foreclosed, the road sold and the COM
pany reorganized.
The agreement to which President Nc
Kinley has decided to give his sanction
is the same which was submitted to
Congress by President Cleveland last
January. Under this agreement the reor-
ganizatlOn committee agrees to bid for
the road under foreclosure sale the
SUM Of $45,754 O59.99.
In order to give an ineligible state
ment of what this bid will mean to the
United States, it is necessary to enter
briefly into the story of the Union Pa
cldcs obligation to the government.
The principal debt of the Union Pacific
to the United States was $35, ,539, ,512. The
interest paid by the government amounts
to $685. ,S9S.l1. The whole indebted
ness on July 1, 1897, was $40, ,494, ,4O5 IL.
The sinking fund of the Union Pacific in
the hands OF the Treasurer Of the United
States on the same day was $17,7S8,-
209.86. After deducting the sinking
fund, which Is an asset Of the company
in the hands Of the United States for the
purpose of paying the debt of the Union
Pacific Railroad Company to the gov
ernment, the sum of $28,015,85013 re-
mains to be paid. That is the only sum
which the Fitzgerald reorganization
committee, as 1t Is known, will be re-
quired to pay the government.
The loss to the government Is the diff
ference between the $53,000,00O, which is
the net amount due the government, in
odd dollars, making loss Of nearly
S25,000, 900, In round numbers, according
to the figuring Of the opponents Of the
agreement. Some Of those who favored
the compromise figure the governments
loss at much less, but Senator Gear the
Chairman of the Pacific Railroad COM
mittee Of the Senate, and an untiring
champion of the compromise, admitted
in debate with Senator Morgan In the
Senate that the loss to the government
will closely approximate $25,0O0O00.
The agreement for the foreclosure sale
also contains provision for the reorgan-
ization of the Union Pacific Railroad
Company and it's Kansas Pacific branch.
The reorganization committee consists
of the following: Louis Fitzgerald,
Jacob H. Schiff, T. Jefferson Coolidge,
Jr., Chauncey M. Depew, Marvin Hughitt
and Oliver Ames. The new capitaliza-
tion Of the company under the Fitzger-
aid plan will be $100, ,0O0, 600 Of A per cent.
bonds, $75,0O0,0OO Of preferred stock and
$61 100000 Of common stock. With a
cash expenditure of $29 700, 900 and lit
tie over the company will get property
which they will capitalize at $236, 900, 900,
The opponents Of the compromise have
asserted that this capitalization shows
clearly that the reorganization commit
tee expects to earn interest and divl-
dends upon this amount, and If this Is
80, those against the compromise see no
reason why the government should lose
anything in the settlement.
On the other hand 1t Is contended
that this is the very best proposition
which the government can get, and that
its acceptance will rid the government
Of a problem which has cost the country