The Providence news. (Providence [R.I.]) 1891-1906, 1897-09-23
Governments Lien on
Union Pacific Road.
OFFER WILL BE ACCEPTED
Purchasers OF the Property Will
Pay $2s,OOO,OOO.
THE GOVERNMENT WILL LOSE.

Washington. ID. c., Sept. % President
Mckinley will, when he returns from his
trip To Massachusetts. issue an order 90
the secretary of the treasury for the fore
closure Of the government mortgage on
the Union Pacific Railroad. The order
will be issued 20 the secretary Of the
treasury, and thus will close one OF the
most troublesome problems with which
the administration has had TO deal, and
which for long time has caused end
less contention in Congress.
10 bring about this result tho proposi-
tion made by the Union Pacific reorgan
izatlon committee for the settlement of
the railroad company's debts will be ac-
ceptsd, the road will be sold, and tho
company will be reorganized.
Ihis result has been expected since the
failure OF the last Congress TO accomplish
any legislation looking to the settlement
of this vexing question, and the state
ment that the governments mortgage Is
TO be foreclosod comes directly from
official sources. and cannot be denied
successfully.
The agreement to which President Nc
kinley has decided TO give his sanction
is the same which was submitted TO Con-
grcss by President Cleveland last Jan
uary. Under this agreement the reor-
ganization committee agrees 10 bid for
the road, under foreclosure sale, the
sur, of s45. 754, o5a.
In order o. give an intelli yiple state
mont Of what this bid will mean TO the
United States, 10 Is necessary TO enter
briefly into the story OF the Union Pacific
obligation to the government. The prin-
- - a III. al fl. sA..
United States was $35, $50, BIZ. A portion
nj this has not yet been advanced by the
United States The interest paid by the
government amounts TO $50. 954. S93. IL.
Tne whole Indebtedness on the first day
of July, 1897. was $40, 49i, 405. IL. The
sinking fund of the Union Pacific in the
hands OF the treasurer Of the United
States on the Same day was Sl7. s3S, 20a S6.
After deducting the sinking fund. which
is an asset to the company in the hands
Of the United States for the purpose of
paying the debt of the Union Pacific
Railroad Company to the government,
tho sum OK SIS. 0l5. $50. IL remains to be
paid. That is the only sum which Fitz-
ycrald's reorganization committee, as Ii
ie known. will be required to pay the
government
The loss to the government is the
al Inference between $53. 600, 000 which is
he net amount due the governments, in
round NUM- bers and the $2S, 900, 000, max
ing loss of nearly $25. 600, 000 in round
mum bers according TO the figuring of the
opponents of the agreement.
Some of those who have favored the
compromise figure the governments loss
at much less but Senator Gear the
chairman Of the Pacific railroads COM
wittee OF the Senate, and an untiring
champion Of the compromise. admitted,
in q debate with Senator Morgan in the
senate that the loss to the government
would closely approximate s25, 0O0 600.
The agreement for the foreclosure sale
also contains provision for tho reorgan-
ization OF the Union Pacific Railroad
Company and its Kansas Pacific branch.
The organization committee consists
RI Louis Fitzgerald, Jacob ii. Schiif. T.
jefferson Coolidge. Jr.. Chauncey IN.
Depew, Harvin Hughitt and Oliver Ames.
The new capitalization OF the company
0nder the Fitzgerald plan will be $780,
900, 600 OF per cent. bonds. $40. 600. 600 of
preferred stock and SCI, 000, 900 of common
= ock. So with cash expenditure of
t2s, 0O0 600 and little over the company
will get property which they will
oapitaiize at 1926, 000 00o
The opponents OF the compromise have
asserted that this capitalization shows
clearly that the reorganization committee
expects TO earn interest and dividends
upon this amount and, II this Is so, those
against the compromise SEQ no reason why
the government should lose anything in
The settlement
On the other hand il is contended that
shis IL the very best proposition which tho
government can get, and tnat its accept
ance will rid the government OF a prob
lem which has cost the country great
deal in congressional consideration.
The main lines of tho Union Pacific
Railroad Company are as follows: Union
division. Council Bluffs TO n point lyo
miles west OF Ogden, l0iS0l miles;
Kansas division, Kansas City TO Denver.
643. So miles; Leavenworth branch, Law
renee TO Leavenwoth. 81. 90 miles CHEYENNE
division. Denver to Cheyenne l0l. 10
miles.
The reorganization OF the comnany will
be effected Immediately after the fore
closure sale, the plans for 10 having al
ready been perfected.