The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-10-10
Attorney General McKenna's State
ment of Reasons for Not Opposing
Sale of the Road Nov. L.
OUR STOCK OF GOLD GROWING
HAS INCREASED OVER $15,OOO,OOO
SINCE THE 1ST OF AUGUST,
And Is Expected to Aggregate Over
appointment of COnsuls.

WASHINGTON, Oct. 9.-Attorney Gener-
al McKenna to-day issued an official state
nent announcing that the government had
decided not to appeal the Union Pacific
foreclosure suit, but to allow the road to
be sold on Nov. l. in consideration of the
Union Pacific reorganization committee
raising it's guaranteed bid from $45. ,059 to
$500OO,0O0. The road, he added, is to be sold
to the highest bidder but with minimum
being guaranteed as stated. Following is
the text of the statement:
There seems TO be a misrepresentation of
the action of the previous administration
In regard to the Pacific railroads. There
was no agreement to sell the roads the
sinking fund of the Union Pacific. In con-
sideration of the appearance of the United
States in the foreclosure proceedings al
ready commenced and the prosecution of its
$45 I54, O59.99 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 estimate of part of the sinking fund
and SIS 100000 in addition.
There was no formal agreement. 1t con-
sisted of letters between the reorganization
committee and special counsel of the gov
eminent and Attorney General Harmon, all
of which were published in Senate docu-
ment No SO, Fifty-fourth Congress, second
session. The agreement, as 1 have said,
goes no further than to provide for the APP
pearance of the government in suits
brought for the foreclosure of the first
mortgage bonds and bringing suit for the
foreclosure of its own The sale of the
property was to be (and necessarily must
be- by the direction of the court as in other
foreclosure suits with the whole world for
bidders. The appearance was made and the
suits instituted as agreed before the advent
of the present administration These suits,
therefore, it had to accept, and 1t has en-
deavOred to secure such DEGREES as 1t be-
lieved the government. under the laws in
cooperating the railroads, entitled to-
lit may be disputaule as to whether the
been made. 1t is not disputable as to what
the government, after it was in court, could
do. There, like in any other suit, the gov
eminent was subject to the orders of the
court. l mean, of course, subject to the
orders of the court as creditor. AS sover-
eign its powers could not be affected and
have not been by the DEGREES. We think,
therefore, that the action of the govern
ment and the situation are very plain. 1t
has not sold its interests 1t mas enabled
all interests to be sou at public auction
to the reorganization committee, or to any
which or who may bid the highest
In what l have said L do not mean to
imply criticism of the previous administra-
ton. What it did it no doubt did on ma
ture reflection and in sincerest judgment,
and its action was recommended by both
the receivers, who had been appointed on
the application of the United States, and it
was also unanimously recommended by the
five government directors.
NOW, as to the relation of the govern
ment to- the DEGREES, they as rendered We're
in many respects Notwithstanding
so-but in other respects were not as the
government strenuously contended. For in
stance, the Omaha bridge mortgages,
amounting to about 81 200, 900, were adjudged
to be superior to the lien of the government
that part of the road between Omaha
and Council Bluffs and in addition the
money and assets in the hands of the re-
ceiverS, accruing from the operation of the
roads, were ordered to be sold instead of
being reserved to meet d deficiency judg-
ment expected to be obtained by the gov
eminent. This amounted to more than
$4,000 This, of course, would become
important If the price bid at the sale should
not equal the governments lien.
Dissatisfied with the DEGREES, therefore,
the government considered the prOpriety of
an appeal, and had indeed prepared the
papers for such appeal. The reorganization
committee, learning this, came forward
ing the total of their guaranteed bid $780,
600 900, instead of $45, 75f, 059 gan increa Sc
of $,245 941. This increase removed the OBJ
jections to the DEGREES so far as the money
contentious We're 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 it would be later.
These considerations determined the gov
eminent. 1t must be remembered that the
governments lien is a second one-subject
to a first mortgage of $33, 600 900. The adj
vantage it has secured, therefore, is, to re-
peat somewhat that at the sale under the
DEGREES of foreclosure there will be a bid
for the roads of $50, 0G0 600 over and above
of absolute freedom of competing at the
sale. The government may, therefore, Sc
cure it's whole claim through higher bid.
1t is sure Of $50 900 600, and this amount lin
connection with the payment already made)
will pay the principal of the debt twice
OVER