Elmore bulletin. [volume] (Rocky Bar, Idaho) 1889-1906, 1897-01-27

his official advisers are not satisfied, it
is said, with the guarantee behind the
$50, 900, 900 offer made by the commit
tee.
1t appears that the government, after
the failure of the funding bill, finds it
self in the position of any creditor r.
an insolvent company, or at any rate,
in the position of any of the interests
with secured liens against the bond
aided roads. 1t confronts, with the
other creditors of the line the dilemma
of being a party to the foreclosure pro-
ceedlngs, or party to reorganization
arrangement. 1t is therefore weighing,
apparently, the comparative merits Of
the two courses of action, in their re-
spective promises of return to the gov
ernment for its outlay in the past. In
one important respect, however, the
government has an advantage over the
/ other creditor interests, partly by rea-
son of the failure of the Powers fund
ing bill The government position
is now all that could be desired. Un-
less the president is absolutely salts
fed that the government will be fully
! Piph'btNA iilNlCA IblNilbSuIt I16 lS HOb
/ obliged to foreelose, and the first mort
gage bondholders will be powerless to
sell the road on account of the sover-
eighty of the government. Under ex-
isting law the government would re-
ceive more than it would under the
Powers proposition. But the desira-
bility of the government dissolving
partnership with the roads is admitted
ON all sides, and, if the president finds
an opportunity of doing this under ad-
vantageous conditions, as from authen-
tic information he will, the dissolution
would undoubtedly be welcomed. In
few days the position of the govern
ment has changed from that of sup
! plant to that of practical dictator.
/ Before the bill was defeated the gov
ernment was in the attitude of asking
/ the roads to return. Now the govern
ment, through the president, is saying
To them, You must give the govern
ment what it will deem fair return. y
On the other hand, it is clear that
the administration has been conferring
with the Union Pacific reorganization
/ committee, and an agreement may be
I lNdAlItd w iAll Nlldb tlIHtI
comprising or dispensing with fore
closure proceedings In reorganization
schemes the various creditor interests
come together and agree upon a distri-
button of the insolvent company's as
sets. In the present case for exam
/ pie, the first-mortgage holders will
have to receive dollar for dollar, as
4 they would receive it under foreclosure
/ of their mortgage. Other creditors,
including the government, would come
in for a pro rata share of the estimated
/ value OF their liens, based in the ag-
gregate on the earning capacity of the
4 property involved, and in each case
upon the degree of subordinacy of their
respective claims.
Indications are that the government
i is inclined to enter into reorganiza-
tion agreement that contemplates fore
closure and sale, with certain prear-
ranged results, and that President
Cleveland will be able to secure for the
! government an adequate return for its
loan to the Pacific railroad companies.
He is now said to have assurances from
/ two syndicates that if the road is sold
under foreclosure proceedings the bids
made will be far enough in excess oil
the first mortgage lien to give the gov
ernment fair return for the money it
is out through its pecuniary advances
to the companies. As soon as these as
surances are made formal, which they
will be in short time, the president,
under the authority given him by the
act Of 1887 will enter an appearance
for the government in the foreclosure
proceedings began by the irst-mortgage
bondholders, and an order for the sale
of the property will be obtained
According to the treasury figure OF
January 10, the net amount due the
United States by the bond-aided roads,
after deducting the amounts credited
on account of transportation service, is
1921 $40, 876, the original principal OF
which was $64, ,623, ,512. In addition
TO the amount for which they were
obliged TO the United States, the COM
panies under authority granted by
congress, issued bonds amounting to
t S64, 613, 900, which have since by act
of congress become first lien on the
roads.
i =. IL r. i