The San Francisco call., 1897-10-31
Attorney General MCKenna
Tells of the Methods of
Litigation.
UNCLE SANS LIENS ALL
WELL PROTECTED.
Reorganization Comm ttee Forced
to Increase Is Guarantee at
Least SIS, 100000.
Special Dispatch to The CALL


NEW YORK, Ocl. 30.-A special to the
World from Washington says: Attorney
General McKenra made to ms to-day a
complete explanation of the Government 5
side OF the Union Pacific question.
'it has been repeatedly charged" /" said
the Attorney General, "that the Govern
ment has displayed too much reticence in
the matter of the Union Pacific. 1t could
not do otherwise than preserve rhe secrecy
which applies TO most law business. The
subject has been one which has concerned
almost exclusively the law department of
the administration.
There was no deal with the reorganiza-
ton committee. Tie Government and
committee from the very beginning have
been legal adversaries. Sucn was the case
under Mr.. Cleveland's s administration and
the same applies 10 this administration.
The committee had first lien on the
Union Pacific. and, as the holders of the
stock OF the company. owned the road. 1t
held also a first lien on the Kansas Pa
cific, and other liens subordinate to that
of the Government. The committee s
purpose was to obtain title to the roads
through foreclosure, clear of the Govern
ments lien.
This could only be done by the Govern
ment becoming a party to the proceed
ings. The Government could not be made
party without its consent, or at least
it was disputable if it could be. Fore
closure without the Government being a
party would therefore leave the roads sub
jeCt 10 equity of redemp ption in the
Government. The Government there
fore was desired as party, but it would
not become so and risk the sale of prop
cry with no bidders but the reorganiza-
tion committee and itself. There were
many reasons against the Government
being a bidder.
ITO overcome its objections the reor-
ganization committee guaranteed a bid
for the roads OF $45, 700, 900 in round num-
bers. In consideration of this the Gov
eminent appeared in the suits brought
by the tirst mortgages and COM
menced Independent suits to fore
close its own mortgages. In these
suits the testimony was taken and
contentious were made and as KeenIy
made as iitigants make contentious IN any
suiI. Some of these contentious were de-
cided for the Government, some against
II, and DEGREES were entered. From
these DEGREES the Government concluded
10 appeal The reorganization committee
hen fered to increase its guarantee bid
to $50. 600 900, an increase OF $4 800 000 If
the Government would not appeal. This
increase covered the money objections TO
the DEGREES and il was accepted.
The committee then proceeded to exc
cute the DEGREES, and advertised the prop
critics for sale. The notice given was four
weeks. The Government hoped that
this would prove sufficient. Ii rea-
sonably anticipated that intending
bidders had been attentive TO the suits
and their progress The DEGREES besides
were entered in the latter part of July,
and wide publicity was given. l repeat,
we reasonably hoped that iour weeks
notice would be sufficient.
"But the Government took no chances.
and when 1t became convinced there was
a prospect OF better bids by delay it re-
solved to ask for a postponement of the
I sales, and 1t notified The reorganization
<cOm m ittee and directed i;s special counsel
10 make an appeal TO Judge San born. 1t is
hardly necessary to say that this move
ment was not in the interest of the reor-
eaniZatlon com mittee, but against it,
The committee sought to prevent it but
without success; and to make it unneces-
sary offered to bid the whole of the
Govern ment's claim on the Union Pa
cific-or rather to bid such sum at the
sale as would pay the first mortgage and
net the Government the whole of its
claim-in other words. an increase of lis
bid of So 600 900. Does this look like oeal3
|, Ii is absurd and farccal to saw so. The
sum of the increase procured for the Gov
ernment by this admlnistl alton is nearly
Sl3 OO0, 00C--in effect more than that
SIS 900, 600, Considering the Kansas Pacific
also. because the guarantee on the Kansas
Pacific is retained in the upset price fixed
bv he DEGREES on that road. Does this
look like a deal with the reorganization
committee2'