The times. [volume] (Richmond, Va.) 1890-1903, 1897-01-23
FORUCLOSURE PROCEEDTNGS
By the Government Against the Pacific
Railroads to Begin at Once.


WASHINGTON. D. c.. Jan. 22-The
following statement was given TO the
press by Attorney Harmon this
evening.
Upon The defeat of the funding bill in
the House. the President directed the
Auouey-General TO commence foreclo--
ure proceedings against the Union Pa
cinc Railroad Company. drst making the
best arrangements Obtainab.c for the pro-
lection of the Governments interests.
Following the lines indicated I'm his last
report. the Attorney began nego-
tiau0ns with the Reorganization Com
mittce. ON Thursday am agreement was
made which win result in immediate
steps for foreclosure. The chief subject
of the negotiations was the protection of
the Government against the risk of sacri-
flee of its claim hy sale at price which
would leave nothing substantial after
paying prior liens.
This protection is now assured by o.
guarantee that the Government shall
receive ON its lien ON the aided portions
of the Union Pacific and Kansas Pacific
lines. including the sinking fund.- not less
than Sf5.7-4.O0o The sale viii Doe public
go that the Government viii receive the
benefit of any higher Nids up to the fun
amount of its claim. principal and in-
terosi The sum of of Sl5u0Ol cash was
ON Thursday deposited with the United
states Trust Company. of Now York, by
General Fitzgerald chairman of the COM
mittoa. as security. according tO the terms
of the agreement. Tine committee agree
to bid par for the sinking fund f it. is
desired TO sell it at ony time before
the foreclosure sale.
"Bms n equity have been prepared.
signed 10y the AttOrncy-Gcncral and
Hon George Hoadln special counsel
and forwarded 90 ST. Louis where they
win ON Friday Doe presented 10 Judge
sanb0rn. who has jurisdiction in all the
districts and whose consent 10 their
nlinp is necessary because the receivers
in charge Of the property are made
parties defendant They are original bills
and not cross bills in. the pending suits.
Whether they will proceed as indcpend-
emit bills or be ordered to stand as
cross bills i'm the pending suits Will be
determined 10y the judge. hut in either
event. the result will Dee practically the
same. viz. the sale OF the property under
the governments lien as We'll as under
that of the first mortgage. The bills VIII
Dee filed I'm the districts OF Iowa, Nebraska
wyoming Colorado. ana Utah.
Separate bills for the foreclosure of
the lien on the Kansas Pacific are in
course of preparation. These will be
filed in Missouri and Kansas.
"The proposed Arrangement WAS SUBJ
mitted to the government directors be-
fore 10 was closed. They all recon-
mcndod its adoption. Their general
opinion was thus expressed:
"The Government cannot prudenuy de-
ter the settlement of this matter. The
Union Pacific system has already been
much curtailed and fits revenues have
been permanently reduced. Reorgani-
cations of allied and ncishhoring proper
ties have either been accomplished or arc
I'm train for early contamination, and
the breaking up of the entire Union Pa
cinc system has been and S. steadily pro-
crossing. II therefore, seems TO MS
iuexpcdient. If not dangerous 90 neg
lect this opportunity OF realizing the sum
offered. and thus expose the Govern
mcnt to a continuous depreciation OF IFS
security.
"It is hoped that there viii be higher
bids. but II not an estimate shows that
crcditlne amounts already received from
the company the Government will at
least realize sum ebuivalent 10 tha
principal of the subsidy bonds with in-
terest az about 1-3 per cent. from their
issue 20 the average date of their ma
turty. or about 3.45 per cent. from date
of issue TO January J. 1897.
"The minimum of S515fo00 guaranteed
tho Government is i'm cash so that all
relations with the property viii terminate
upon the confirmation of the foreclosure
sale.
The course to be pursued with respect
20 the Central Pacific has not yet been
determined.