Evening star., 1897-01-22
RAILROADS
Action Taken at the Cabi-
net Meeting Today.
ATTORNEY GENERALS PLAN APPROVED
A Strong Syndicate Said to Be
Back Of the Proposition.
MILLIONS TO BE PAID

Important action was taken at today's
jrstment Of the claims of the government
against the bonded Pacific railroad COM
paDies. 1t is the result of Attorney Cen
eral Harmon's recent conferences with the
reorganization syndicate and the railroad
directors. The Attorney General spent
two days in New York on this business,
ard the deal that has been under discussion
ever since the defeat of the funding bill in
the House was closed. subject only to the
approval of the President. The Attorney
General returned to this city last evening,
and his action in the matter received the
Endorsement of the President and cabinet,
it is said. at today's meeting. 1t is un-
derstood that an official announcement on
the subject will be ma de late this after
noon.
Plan Of ReOrSa ixatiOn.
Although not officially admitted, it is un-
derstood that the plan of reorganization
agreed upon includes the acceptance by
the government of the offer of tna reor-
eanization committee to pay $4,000
above all prior liens. The syndicate behind
this committee is one of the strongest ever
formed in Wall street. and includes nearly
| eN cry prominent financier interested In rail-
road property.
The plan of reorganization is based gen.
orally upon the recommendations contained
in the last annual report of the Attorney
General to Congress on the subject as in
dorsed by the President in his annual mes
sage.
The following paragraphs from the At
torney Generals report gives the attitude
of tie admins tration in this matter:
Administration's Attitude.
The report of Mr.. George HoadIy, spe-
;al Go, nj rod % ctnvx
that there is no substantial change in the
state of the litigation about the Union
Pacific railway and its branches.
Il have grave doubts as to the ability Of
the government to preserve the present ST.
uation much longer. 1 am advised that an
attempt will be made to enforce the gov
crnn ents appearance in the foreclosure
case with view of giving complete
title to the purchaser at the foreclosure
sale. While believe the position hereto
fore taken and still maintained for the
government is the true one, namely, that
its appearance can not be compelled, II
must be confessed that the contention of
opposing counsel is at least debatable,
viz, that while the government can not
be sued with a view to Recovery against
it, 1t may properly be made party to a
suit in equity brought by the HOLDERS of
bonds issued by lis express consent upon
property upon which ii has itself reserved
a lien.
las the only object of steadfastly keep
ing the government out of the cases thus
far has been to secure some favorable
solution of the difficult problem presented
by its ownership of subordinate security
upon property whose value is generally be-
lieved to be insufficient TO pay in full any
but the first-mortage liens, l think tina |,
unless the pending funding bill be passed
and accepted, the government should en-
deavor to secure terms for its appearance e
In court in the way of an assurance of
such bid on the property in case of judi
cial sale as will secure to 1t a fair realiza-
ton Of the value of its lien. If this be not
done and the government should be com
PEELED to sue to protect its own interests
or required to appear and set up its claim
in the pending cases, the benefit of the
position SO long maintained may be largely
lost,