The record-union., 1897-10-10

Of the Debt Twice Oyer.
WASHINGTON, Oct. 9.-The Attor-
ney- General to-day gave out the fol-
lowing statement regarding the sale Of
the Union Pacific Railroad:
There seems to be a misapprehen-
sion Of the action of the previous Ad-
ministration in regard to the Pacific
railroads. There was no agreement to
sell the roads or the sinking fund Of
the Union Pacific.
In consideration of the appearance
of the United States in the foreclosure
proceedings already commenced and the
prosecution Of its own mortgage, il was
guaranteed a bid of S45 795, ,059 at the
sale, which should be ordered by the
court, over and above the amount Of
the first mortgage. This amount in
Guided the sinking fund and SIS, 100000
in addition.
There was no formal agreement. II
consisted Of letters between the Reor-
ganization Committee and separate
counsel of the Government and Attor-
ney-General harmon, all of which were
published in Senate document So, Fifty
fourth Congress, second session.
The agreement. as have said, goes
no further than to provide for the ap-
pearance Of the Government in suits
brought for the foreclosure of the first
mortgage bonds and bringing suit of
foreclosure of its own.
The sale of the property was (and
necessarily must be- by the direction
Of the court as in other foreclosure
suits, with the whole world for bid
ders
The appearance was made and the
suits instituted as agreed before the
advent OF the present Administration.
These suits, therefore, it had to accept
and it has endeavored to secure such
decree as it believed the Government
under the law Incorporating the rafl-
roads was entitled to-
1T may be disputable as to whether
the agreement to go into court should
have been made II is not disputable
as to what the Government, after it
was in court, could do. There, like any
other suitor, the Government was sub
ject to orders of the court l mean, of
course, subject to the orders of the
court as a creditor. As sovereign, its
powers could not be affected and have
not been by the DEGREES. We think
therefore, that the action of the Gov
eminent and the situation are very
plain. 1t has not sold its interest 1t
has enabled interests to be sold at pub
lie auction to the Reorganization Com
1nittee or to any committee or to any
body or association which or who may
bid the highest.
In what I have said l do not mean
to imply criticism on the previous Ad-
ministration. What it did it no doubt
did on mature reflection and in sincere
judgment, and its action was recon-
mended by both receivers, who had
been appointed upon the application of
the United States, and was also unani
mously recommended to the i've Gov
eminent directors.
Now. as to the relation of the
Government to the DEGREES. They, as
rendered, were in many respects graf
flying, but in other respects were not.
as the Government strenuously con-
tended for For instance, the Omaha
bridge mortgages, amounting to about
81 zoe, 600, were adjudged to be supe-
rior TO the lien of the Government on
that part of the road between Omaha
and Council Bluffs, and in addition
the money and assets in the hands of
the receivers accruing from the opera
ton of the roads were ordered to be sold
instead of being reserved to meet the
efficiency judgment expected to be OBJ
taind by the Government This
amounted to more than 100000. This.
of course, would become important il
the price bid at the sale should not
equal the Governments lien.
Dissatisfied with the DEGREES. there
fore. the Government considered the
propriety of an appeal. The Reorgani-
cation Committee. learning this, came
forward with an increased bid of over
1900. 600. making the total guaranteed
bid $50. .000, 600, instead of $40, Io4 ,OoJ,
an increase of S4.213,941.
..This increase removed the objections
to the DEGREES so far as the money con-
tentions were concerned. In all else the
DEGREES were just and satisfactory.
Under these circumstances an appeal
did not seem justified.
REGARDING a higher bid, the prospect
of it seems as great now as II would oe
later These considerations determined
the Government 1t must be remen-
bered that the Governments lien IS
second one-second to first mortgage
Of $50. .OOO. 900. The advantage it has se--
cured, therefore, is, TO repeat some
what, that at the sale under the DEGREES
of foreclosure there viii be a bid for
the roads of fifty millions Of dollars
over and above the first mortgage, and,
besides, the benefit Of absolute freedom
of competition at the sale. The Gov
ernment may, therefore. secure its
whole claim through a higher bid. 1t
is sure of $4,000, coo. and this amount.
in connection with the payments al
ready made, will pay the principal ef
the debt twice over"