The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-10-10
INDUCED THE GOVERNMENT NOT
TO APPEAL IN UNION Pa
CHIC CASE.
AS Mr.. M'KENNA VIEWS 1T.
AN OFFICIAL STATEMENT OF THE
STATUS FROM THE ATOTOR-
NEY GENERAL.
COMPETITION OPEN TO WORLD.
When the Road Is Sold Any One
who Wishes to Do So May
Offer Bid.


ney general today gave out the follow
ing statement relative to the sale Of
the Union Pacific railroad:
There seems to be misrepresentation
cf the action of the previous admins
tration in regard to the Pacific rail-
roads. There was no agreement to sell
the roads or the sinking fund of the
Union Pacific. I'm consideration Of
the appearance of the United States in
the foreclosure proceedings, already
commenced and the prosecution of it's
own mortgage, it was guaranteed bid
of $45, 754, 05999, at the sale which
should be ordered by the court over
and above the amount of the first
mortgage. This amount included the
sinking fund and was based on an es-
innate of par for the sinking fund and
$2S, 500, 900 in addition.
There was no formal agreement. 1t
consisted of letters between the reor-
ganization committee and special coun-
sci of the government and Attorney
General Harmon, all Of which were
published. The agreement, as [ have
said, goes no further than to provide
for the appearance of the government
in suits brought for the foreclosure Of
the first mortgage bonds and bringing
foreclosure suit Of its own. The sale
of the property was to be (and must
necessarily be- by the direction of the
court as in other foreclosure suits with
the whole world for bidders.
The appearance was made and the
h.
advent of the present administration.
These suits, therefore, it had to accept
and it has endeavored to secure such
DEGREES as it believed the government,
under the laws incorporating the rail-
road, was entitled to. 1t may be dis
putable as to whether the agreement to
go into court should have been made.
1t is not disputable as to what the
government, after it was in court,
could do. There, like any other sutton,
the government was subject to the or
ders- Of the court. l mean, of course,
subject to the orders of the court as
creditor. AS sovereign, it's powers
could not be affected and have not
been by the DEGREES.
We think therefore, that the action
of the government and the situation
are very plain. 1t has not sold it's in
terests. 1t has enabled all interests to
be sold at public auction to the reor-
ganization committee or to any COM
mittee or to anybody or association
which or who may bid the highest.
NO CRITICISM.
In what I have said do not mean to
imply criticism of the previous admin
istration What it did, it no doubt did
on mature reflection and in sincerest
Judgment, and it's action was recon-
mended by both the receivers, who had
been appointed upon the application OF
the United States and was also unani-
mously recommended by the five gov
eminent directors.
Now as to the relation of the govern
nent to the, DEGREES. They, as rem
dered, were in many respects crafty
exceedingly so, but in other re-
spects were not For instance, the
Omaha bridge mortgages, amounting
to about 81 900 were adjudged to be
superior to the lien of the government
on that part of the road between
Omaha and Council Bluffs, and in adj
dition the money and assets in the
hands of the receivers, accruing from
I dered to be sold instead of being re-
served to meet a deficiency judgment
expected to be obtained by the govern
ment This amounted to more than
81 000, 900. This, Of course, would be-
come important if the price bid at the
sale should not equal the governments
hen.
Dissatisfied with the decrease, there
fore the government considered the
| - I,o1 ind
prepared the papers for such appeal.
The reorganization committee, learn
ing this, came forward with an in
creased bid of over four millions of
dollars-making the total of their guar
arteed bid $50,000,000 instead of $45,-
754, 059.99, an increase of $4.245,94 This
increase removed the objections to the
decrease, so far as the money conten-
tons 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 1t would
be later. These considerations deter
mined the government. 1t must be re-
membered that the governments lien
| is a second one, subject to first mort
gage of $50, 000, 900. The advantage it
has secured, therefore is, to repeat
somewhat, that at the sale, under the
| DEGREES of foreclosure, there will be a
bid for the roads of $4,000, 900 over and
above the first mortgage, and besides
! the benefit Of absolute freedom of COM
! petition at the sale. The government
may therefore secure it's whole claim
through a higher bid. 1t is sure Of
| 50,0000 900, and this amount Gin connec-
ton with the payments already made)
will pay the principal of the debt twice
! over"