The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1897-01-23

| Washington. Jan. 22-The following
statement was given to the United
Associated Presses by Attorney-Gen-
eral Harmon this afternoon:
Upon the defeat of the funding bill
in the house. the president directed
the attorney general to commence fore
closure proceedings against the Union
Pacific Railway company, first max
ing the best arrangements Obtainable
for the protection of the governments
| interests Following the lines indi-
Gated in his last report. the attorney
general began negotiations with the
reorganization committee.
On Thursday an agreement was
made which will result in immediate
steps to foreclOse. The chief subject
of the negotiations was the protection
OF the government against the risk of
sacrifice of its claim by a sale at a
price which would leave nothing sub
stantial after paying prior liens. This
protection is now assured by a guaran-
tee that the government shall receive
on its lien on the aided portions of
the Union Pacific and Kansas Pacific
lireS, including the sinking fund, not
less than $45. 1874 900. The sale viii be
public, so that the government will re-
ceive the benefit of any higher bid up
to the full amount of its claim, princl-
pal and interest. The sum of $4,500.000
cash, was on Thursday deposited with
the United States Trust company of
New York by General Louis Fitzger-
aid, chairman of the committee as Sc
curity according to the terms of the
agreement. The committee agree to
bid par for the sinking fund, if il is de-
sired to sell it at any time before the
foreclosure sale.
signed by the encouragement and
Hon. George Hoadley, special counsel,
and forwarded to st. Louis, where they
will on Friday be presented to Judge
Sanborn, who has jurisdiction in all
the districts and whose consent to their
fling is necessary, because the receiv-
ers IN charge of the property are made
parties defendant. They are original
bills and not cross bills in the pending
suits Whether they will proceed as
independent bills, or be ordered to
stand as cross bills in the pending suits
will be determined by the judge, but in
either event the result will be prac-
tically the same, viz: the sale of the
property under the governments lien
as we'll as under that of the first mort
gage. The bills will be filed in the
districts of Iowa, Nebraska, Wyoming,
Colorado and Utah. Separate bills for
the foreclosure of the lien on the Kan
sas Pacific are in course ~ prepara-
ton. These will be filed in Missouri
and Kansas.
1.-The proposed argument was sub
mitted to the government director be-
fore il was closed. They all recon-
mended it's adoption. Their general
opinion was thus expressed:
The government cannot prudently
longer delay the settlement of this
matter. The Union Pacific system has
already been much curtailed and its
revenues have been permanently re-
duced. ReOrganiZatiOnS of allied and
neighbOring properties have either been
accomplished or are in readiness for
early consummatiOn, and the breaking
up of the entire Union Pacific system
has been and is steadily progressing
It. therefore. seems TO us ineXpedient.
if not dangerous, to neglect this OppOr-
tunity of realizing the sum offered, and
thus expose the government to a con-
tinuOus depreciation of its security.
1T is believed that there will be
higher bids, but. if not, ar estimate
shows that, crediting amounts already
received from the company, the gov
ernment will at least realize a sum
equivalent to the principal of the sub
sidy bonds, with interest at about 1-3
per cent for their issue to the average
date of their maturity, or about 3.45
per cent from date of issue to Jan. ].
1897
THE minimum of s45, $4,000 guaran-
teed the government is in cash. so that
all relations with the property viii ter
inmate upon the confirmation of the
foreclosure sale.
The course to be pursued with re-
spect to the Central Pacific has not
yet been determined"