The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-01-23
Agreement Between Attorney General
Harmon and the REORGANIZATION
Committee Syndicate.
At LEAST 45,754,O00 IN CASH
TO BE PAID THE GOVERNMENT
WHEN THE ROADS ARE SOLD.
Four and a Half Millions Deposited
by the Syndicate as a Guarantee
of Its Good Faith.

Special to the Indianapolis Journal.
WASHINGTON, Jan. 22.-AS predicted by
your correspondent, the government will
assist in the foreclosure proceedings against
the Pacific railways. Attorney General
Harmon made a statement to that effect
to-day. He announced that ne entered into
an agreement with the reorganization COM
mittee of the Union Pacific and the Kansas
Pacific by which the government is to join
the committee in foreclosure proceedings.
The committee guarantees TO the govern
ment that at the foreclosure sale it shall
ceive a bid of at least the original amount
of the bond less payments made by the
company to the government with interest at
the rate of l-3 per cent. per annum. The
a -rrpon statement is a substantiation of
the news contained in these dispatches for
the past fortnight relative to the fore
closure part to be taken by the government
in the indebtedness settlement Several
pretentious papers in the East are engaged
in a heated fight over the question OF pre-
cedents i'm the publication of the inside facts
of the deal between the government and the
Union Pacific reorganization committee.
The Journal had the facts several days
ahead of any of its Eastern contemporaries.
The following-named gentlemen comprise
the reorganization COMMITTEES: Louis Fitz-
gerald. chairman, Jacob III. Schiff. Chaun-
cey NJ. Depew, t. jefferson Coolidge, w.
Marvin Hughitt and Oliver Ames.
1t is understood that the necessary legal
proceedings incident TO the government
taking part in the foreclosure suits now
pending at Omaha on behalf of the first
lien holders will be begun at once, and the
case pushed TO a speedy conclusion The
outlines of the agreement with the reor-
ganization committee were approved by the
| attorney general very soon after the failure
| of the funding BILL only the exact amount
of the guarantee remaining in allegiance.
| Nor was this point decided until Judge
| Harmon's visit to New York early in the
| present week. The first offer of the syn
| dicate was $45.O00,00O even. The attorney
| general, however, insisted on an increase
| of $754, 900 which was finally agreed to at
| the last conference yesterday. This makes
| the tota. amount which the government
| will receive in cash s54. 754 600. From this
amount, however, the government will re-
| deem at maturity the bonds now outstand-
| ing. the last of which does not become
| due until 1899. The interest on these bonds
until maturity will also be paid by the
government.
| In official circles the agreement is re-
II
| ernment. Although the interest which the
government has paid and will continue to
| pay until the last OF the outstanding bonds
| mature was at the rate of per cent. the
| figure obtained by the attorney general is
| regarded as very liberal. For many years
| the governments money involved in the
| Pacific railroads has not been regarded as
| an investment, and the interest payments
| have not been looked on other than as an
| expense The settlement of the matter
/ therefore. without further trouble or ex-
| pense even at the figure guaranteed, is
| looked on with much favor.
| Kuhn, Loeb & Co, bankers for the reor-
| ganization committee, have assured to the
| committee the funds required to carry its
| agreement with the government into effect.
| People well informed in the situation inti-
| mate that i'm order to limit the present
| issue of first mortgage bonds of $1o,0oO,O 900,
| which, it appears, is the intention some
| Junior issue of bonds will have to receive
| less than it was at first intended to give
| them. 1t is understood that Kansas x Pa
| cific consols and the sinking fund bonds
| will be modified as to terms before the
1 plan becomes operative.