The San Francisco call., 1897-11-04
The Government Saves About
Thirteen Millions by the
Transaction.
KANSAS PACIFIC STOCK Is
UNIMPAIRED.
A Few More Such IDEALS" Says the
Attorney-Gensrai, Would Bank
rupt the ReorganIzers.
Special Dispatch to THE CALL
CALL OFFICE. RIGGS HOUSE. /


The CALL correspondent saw Attorney
General MeKenna this afternoon at the
Department of Justice and talked with
him for an hour on the Union and Kansas
Pacific sales.
In the course of a casual conversation,
which was Introductory to an interview,
Mr.. McKenna said that the depar tment
was at present engaged in going over the
treasury's accounts with the Union P acific
Railroad proper, so as to arrive at IN ac-
curate determination OF its inde btedness.
Then he said:
MANY statements have been printed as
coming from me or other officers of the
Department of Justice, but in some cases
the reports have been rarbled or distorted,
or else the figures have been inaccurately
printed by mistake OF the telegraph
operator or newspaper compositor; so, if
you will pardon me. [ will set down the
figures for you on this pad of-paper"
The Attorney-GeneraI then commenced
his talk, occasionally making figures with
notations opposite. He said:
at has been charged in certain quarters
that the reorganization committee was the
beneficiary of deaP made with the ad-
mlnistration. This is man:festly unjust,
for any one who has read the late pub
Iished statements OF Mr.. Huntington or
his associates or presentatives could see
that the committee very reluctantly
yielded when they saw that the Govern
ment meant to postpone tae sale so as TO
let IN other bid lers. OF course, ii may be
said that Mr.. Huntington, his associates
and agents are affecting q disappointment
and making querulous complaints merely
for effect, but does any sensible man
reahv believe that the reorganization
committee is pleased with an arrangement
whereby they are compelled 10 pay
IS, 900 more than they at first thought
was necessary? a few more such deals
as this would bankrupt the committee.
This administration by its arrange
ment has procured nearly $13, 900 0OO
more than under the terms proposed by
the preceding administration, and it
amounts 10 SIS, 100000 if we consider the
Kansas Pacific also, FOR the guarantee on
the Kansas Pacific IS retained on the up
set price fixed by the DEGREES on that
road. The truth is that even under Presi-
dent Cleveland's administration the Gov
ernment and the REQ ganization commit
tee were adverssrles in a business trans
acton, or, rather, they have been
legal adversar,es, and This admins
tration found the same state OF affairs ex-
isuug. The committee held not only a
first lien on the Union Pacific and as
stockholders practically owned the road
but held also first lien on Kansas Pacific
and other liens subordinate TO the Gov
ernmept's.
"Of course it was the plan of the
closure proceedings, clear OF the Govern
ment lien. They sought 10 enlist the
Government as party TO these proceed
lnGs, for they realized that this was indis-
pensable as part of the programme.
But We would not risk sale in which
there would be but the two bidders-the
committee and the Government. Il is
unnecessary to mention the many good
reasons why the Government did not wish
to bid on the road. 1t IS sufficient to say
that upon our refusal to do so the COM
mittee guaranteed bid of $40 700 600.
The Govern ment, IN consideration OF this
offer, began an independent suit to fore
close its own mortgages, and at the same
time agreed to appear in the suits
brought on the first mortgage, and when
DEGREES were made by the court the
Government concluded to appeal, but
when the committee offered TO increase
its guarantee bid by al bout 81. 800. 900, max
ing it a total of $50 0O0. 00O, the Govern.
ment agreed not to take all appeal In con-
sideration of the latter offer.
THE property was then offered for sale
and advertised for four weeks, which was
deemed a sufficient time, inasmuch as
great publicity had been given the court
proceedings, not only through the me-
dunn of dispa cheS pub isheI in the
United States, but in England and the
continental countries OF Europe, and the
Government was certainly justified in be.
Heving hat the interested and prospective
bidders had been fully attentive to these
proceedings in court. But even after all
OF this wide publicity, when the Govern
ment ha reason to b4ileve that better
bids might be secured by delay, the suits
were postponed. OF course, the reorgani-
zatlon committee was highly pleased With
his last deal"
The Attorney General continued, iron
ically: Probably that is the reason they
sought TO prevent the postponement.
When they saw that a postponement
could only be avoided in one way they
offered to bid the total amount OF the
Governments claim on the Union Pacific.
OF course they were Just tick ed 10 death
becanse CT a deal by which they had 10
pay $500 600 in addition 10 the $4 300, 900.
making So, 800. 900 altogether more than
they had expected to pay.
Now, as to the Kansas Pacific" con-
tinued the Attorney General, as he jotted
down q few figures on his pad o: pa per.
1T has been charged that the Govern.
ment has impaired its Kansss Pacific
claim because of the separate sales The
court ordered that they should be sepa-
rate-the Union Pacific on November l
and and he Kansas Pacific on the 5th
and Oh. 1t is true there was only dii-
ference of few days provided bv the
cour. IS decree, but yet the sales were to
be separate.
1T is nonsense to say that the Govern
menrs claim IS lost. The very lowest
urice that can be bid is $12, 800 900. The
tirsi-mortCage lien will probably not
amount to N7V0O. .0O0 because the receivers
have mnneN Ihnt IN a be nnnlied ON this