The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1897-01-24
ACTION FOR FORECLOSURE.
The Government Files Bills AGA inst
the Pacific Railroad
TO FORECLOSE ON UNION DIVISION
Suits Brought at Omaha md at 81.
Louis mt the Instance of Attor-
ney General Harmon.

Omaha. Neb., January 2s,-Attorney
General Judson Harmon, through Counsel
1ohh u Cowan. filed in the office OF the
clerk OF the circuit court OF the United
states at noon today a bill In equity call
| Ing Tor the foreclosure of tho governments
second mortgage on the Union Pacific main
line from Omaha TO Ogden and the Kansas
Pacific from Kansas City to Denver The
nii recltes the acts OF congress prior to
the organization Of the company and shows
now the government came into the case.
1t then recites the defaults in the term of
the mortgage and calls for a decree OF
foreclosure and sale In accordance with the
terms OF the mortgage. Under the rules
vi tne court the defendants have until the
first Monday in March to answer the bills
me receiver Of the Union Pacific the gov
cIhment trustees and the first mortgage
oondholders are made defendants
Al the Union Pacific headquarters there
was iittle stir, but the officials decline
| 10 taiH Tor publication President and
Managing Receiver S. II. II. Clark ex-
pressed satisfaction at the Stalc OF affairs
put declined to go into details In discuss
ing the matter. 1t is the prevailing SEN
| timent at headquarters that the move is
| the best that could have come. IT ia IN
dent Clark since the roads fell into the
| present straits.
The petition desires the reorganization
oil the Union Pacific and recites all the
acts OF congress in relation thereto, show
| ing how the provisions of the several acts
have been complied with by the company
and the government 1t sets out that the
amount OF the first mortgages, S29 229, 900,
which is represented by the trustees made
defendants in the suit. The second mort
gage is placed at S27 23G.5l2. 1t also as
serts that there has been no payment OF
| any of the bonds except that paid by the
government. The petition also recites the
building of the Union Pacific bridge be-
tween Omaha and Council Bluffs and the
Issuance of bonds as provided for by spec
ial act OF congress and mentioned J. Pier
| pont Morgan and Elisha Adkins and the
Central Trust company OF New York as
| trustees for these bonds. 1t says that on
| the bonds yet TO mature, the sum of s15,-
| 9l9.5l2 is due January ]. 1898, and $3l57,-
| 600 January !. 1899; that all other bonds
have injured and have been paid by the
| United States and that the value Of the
securities held is not sufficient to protect
| the debt
| The petition then gives a history OF the
| litigation in which the road has been in
volved and shows what steps the different
defe ndants have brought in connection
with the case and asks that the court de-
ter,nine the priority of the different liens.
aid how much money will become due af-
ter the decree has been issued: that the
lien of the United States be adjudgcd to be
in its proper order lawful incumbrance
upon the railroad property: that the court
determine which. If any, lien Is prior to
the lien Of the United States, and that pro-
| vision be made to protect said prior lien
that upon the non payment after a rea-
| scnable time. OF the amount which may be
| ascertained by the court to be due and ow-
4 n hn tad tat, .
| giving all proper credits said lien, mort
| gage and all statutory rights of the United
| States may be forecosed and the premises
| and franchises embraced therein sold and
| the proceeds paid into the treasury OF the
| United States and applied to the credit of
the company: that the receivers OF the
| road be continued TO this cause for the pro-
lection and preservation Of the interests Of
all parties thereto.
Action at st. Louis.
st. Louis, January 23.-United States Cir
cult Judge Sanborn has issued an order au-
thorizing foreclosure suit against the re-
ceivers Of the Union Pacific railway The
government representative who appeared
before Judge Sanborn is General ]. C. Cow
en- of Omaha General Cowen kept his mis-
sion a secret. but quietly intimated to
"ttbo tN'hpCih AHiAih ehV touio So VI liz
day that he might presently desire an audi
ence before the night ended. At late
hour last night General Cowen appeared at
the hotel and was Immediately admitted to
the judges room, where a proceeding in
chambers was duly begun with the usual
formalities.
The attorney for the government was pro-
vided with voluminous document, which
tyng nj ttrndn nd tn hn
ing that the lien of the United States on
the Union division of the Union Pacific
railway be forecosed. 1t is the practice OF
the United States courts in proceedings
against property In the hands of receivers
not to permit suits to be filed against them
without permission first having been OBJ
tanned from the Judge in whose circuit the
property is located Accordingly General
Cowen asked for an order of the court for
leave to sue the receivers who were ap-
pointed at the instance OF the first mort
gage bondholders and who are now In pos
session of the property.
The court granted an order giving the
United States permission to sue the re-
ceivers upon condition that the government
appear in the suit brought by Dexter and
Others trustees for the first mortgage
bondholders OF the Union Pacific railway,
the United States and others.
General Cowen entered an appearance for
the government In the Dexter suit. and
asked leave to answer for the other cases.
The permission was granted. the necessary
orders were made and a messenger was ut
once dispatched to Omaha Neb., where the
orders and the bill for foreclosure will be
filed
The Union division Of the Union Pacific
railway, on which the government seeks to
foreclose its second mortgage. extends
from Council Bluffs, Iowa, to Ogden, Utah.
and embraces ,oi3 miles out OF a total
mileage operated by the company of 1903
miles The receivers Of the entire property
were Amounted In October 1898. The re-
oeiyers are s. II. H. Clark. oliver w. Mink,
o. Ellery Anderson. John w. poane and
Frederick X. Coudert
Committee VIII Report Anyhow.
Washington, January %. - Chairman
povnre NJ the Pacific railroad committee