Crawford avalanche. (Grayling, Mich.) 1879-19??, 1897-11-11
Bonds Brought About One-Third.

Bonds Brought About One-Third.
The Union Pacific Railroad was sold in
Omaha ut auction Monday. The sale was
forced by the United States, holder of a
second mortgage. In order to protect
stock and bondholders, the reorganiza ton
committee bid in the property, real and
personal that is 10 say, track, rolling
stock and bonds. For the railroad proper
the committee paid $50, SS3, 2S1 81; for the
bonds, 1865, ,2J0.99. There were no
other bids. The price obtained is sufficient
to pay the government in full. Mastery
in Chancery w. ID. Cornish OF st. Paul
conducted the sale, and il is said his fee
will be the largest ever given an auction
eer, as the Union Pacific is the most val
liable property ever sold at auction.
The idea of uniting the Atlantic and Ia.
ciic coasts by system of railways took
shape in a bill that passed the United
States Senate June 20. 1862 by a vote OF
% to 8. This was the actual starting OF
the Union Pacific. The House passed the
bill by vote of 104 to II, and four days
later President Lincoln made it u law by
afiixing his signature.
A charter for 100000 900 was given
the corporation and II land grant OF ~
100000 acres attached. The company
was formally chartered July 2, 1S62, with
authority to construct IL railway from
Omaha TO the eastern boundary OF the
State Of California. The act incorporat-
ing the company provided for govern
ment subsidy equal to $4,000 per mile
for that portion of the line between the
Missouri River and the base of the Rocky
t,;p GlO lnD milo for a dis
tance Of $50 miles through the mountain
range $4,000 per mile for the distance
intermediate between the Rocky and Sic!
ra Nevada ranges. and $4,000 per mile
for a distance of $50 miles through the
Sierra Nevada.
The company had also n land grant
equaling 1880 acres 10 the mile. Ihe
original act provided that the government
subsidy should be first mortgage OH the
road, but by amendment it was made
second mortgage, the company being au-
thorized to issue its own bonds TO an
amount equal 10 the government subsidy
as a first mortgage on the line. The whole
available capital of the road that was
ultimately TO cost SJ0,0OO,OO0 was only
$21S,000.
The government had offered in subsa-
dies more than the cost of the construc-
ton OF the road, and Oakes Ames, Of Eas-
ton, Mass. who was interested in the
building Of the road, formed corpora
ton which became known as THE Credit
Mobiler of America" which was to re-
ceive all the profits Of the constructors
and divide them among the stockholders
in the Credit Mobiier. The profits were
enormous. amounting to $43 .929,3 ,32S. Un-
der the Ames contract alone and within
one year dividends were paid amounting
to $40 per cent. on the capital stock.
The matter was investigated by Con-
gress and the expulsion of Ames from the
House of Representatives, of which he
was then n member, was recommended.
1t was. however, never carried out The
first eleven miles Of the road were COM
pleted Sept. %, 1865, and the road was
completed to its junction with the Cen
tral Pacific at Promontory Point, Utah,
May 10. 1869.
The meeting of the two roads was duly
celebrated. Gov. Leland Stanford Of Cal
ifornia, president of the Central Pacific,
was present. as was Vice President Du-
rant Of the Union Pacific. Ties were laid
for the rails and when they met the last
spike. which was of gold, was driven. Tel
egraph wires were connected, so that each
blow of the silver sledge was reported in
stantly in all the large cities from the At
lantic TO the Pacific.