Twice-a-week plain dealer. (Cresco, Howard County, Iowa) 1895-1913, 1897-01-26
WILL ACT AT ONCE.
Foreclosure Proc oedings Against
Pac f1c Roads Begun.
FIRST STEPS TAKEN At ST. LOUIS.
Attorney General Harmon Makes State
ment of the Governments Position
Statement OF Reorganization
Committee.

step to secure foreclosure of the lien
of the United States government upon
the Union Pacific railway was taken
here Friday evening. United States
District Judge Sanborn was called upon
at the Southern hotel at nine o'clock p.
III. by Attorney John c. Cowen, of
Omaha. He asked the judge to direct
that foreclosure proceedings be begun
at once. All the legal bearings of the
case We're discussed by the two jurists,
and finally the judge issued the order.
Mr.. Cowen had barely sufficient time
to catch a train for Omaha, where he
will institute foreclosure proceedings
to-day.
Statement by Attorney-General Harmon.
Washington, Jan. 23.-lt was decided
at the cabinet meeting to begin fore
closure proceedings against the Pacific
railroads at once. The line of proce-
dure will be as indicated by the attor-
ney-general in his annual report.
The following statement was given
out by Attorney General Harmon Fri
day evening:
Upon the defeat of the funding bill in
ney general to commence foreclosure pro-
ceedings against the Union Pacific Rail-
way company. first making the best ar
rangements obtainable for the protection
of the governments interests. Following
the lines indicated in his last report the
| attorney general began negotiations with
the reorganization committee. On Thurs
day 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 it's claim by q sale at
| price which would leave nothing substan-
tial after paying prior liens. This protec-
ton is now assured by a guarantee that
the government shall receive on it's lien
on the aided portion of the Union Pacific
and Kansas Pacific lines, including the
sinking fund. not less than $45,75l, 900. The
| sale will be public, SO that the government
will receive the benefit of any higher bids
up to the full amount of its claim, principal
and interest. The sum Of $4,50O,00O cash
| was on Thursday deposited with the United
States Trust company Of New York, by
Gen Louis Fitzgerald, chairman Of the
committee, as security, according to the
terms Of the agreement. The committee
| agreed to bid par for the sinking funds II
| 1t is desired to sell it at any time before
| the foreclosure sale.
1.-THE proposed agreement was submit
| ted to the government directors before 1t
adoption. Their general opinion was thus
| expressed:
The government cannot prudently
longer defer the settlement of this matter
The Union Pacific system has already
been much curtailed and its revenues have
been permanently reduced. Reorganiza-
| ton of allied and neighboring properties
have either been accomplished or are in
| train for early contamination, and the
| breaking up of the entire Union Pacific
| system has been and Is steadily progress
| ing. 1t therefore seems to us inexpedicnt
If not dangerous. to neglect this opportu-
nifty of realizing the sum offered and thus
expose the government to continuous de-
| probation of it's security
ut Is believed that there will be higher
| bids, but, If not. an estimate shows that,
| crcditing amounts already received from
| the company, the government will at least
| realize sum equivalent to the principal
| of the subsidy bonds with interest"
Marks the End of Relations
AS indicated by the statement, the
settlement agreed upon with the reor-
| ganization committee marks the ending
of the relations between the federal
government and the Union Pacific COM
pany. 1t does not interfere, however,
with the right of the government to in
stitute proceedings to protect itself in
any phases of the litigation that may
be discovered later. So far as the Cen
trail Pacific road is concerned, matters
are not in shape for settling it's rela-
| tons with the government, but some
thing IS likely to be done in the near
future. The reorganization committee
OF the Union Pacific Railway company
consists of Louis Fitzgerald, chairman:
Jacob II. schiff, I. Jefferson Coolidge,
Jr., Chauncey M. Depew, Marvin
Hughitt, and Oliver Ames, second.
Committees Statement,
New York, Jan. 23.-The following
statement by the reorganization com.
mittee of the Union Pacific railway was
made here Friday:
The Union Pacific reorganization COM
mittee has come to an agreement with the
| government In accordance with which the
latter has begun foreclosure proceedings
OF Its lien upon the Union Pacific lines. in
elusive of the Kansas Pacific line. The
reorganization committee guarantees q
minimum bid of something over s45. 900. 00C
Tor the governments claim upon the rail
cihc sinking fund.- and has deposited s. 200.
ooO as earnest money. Kuhe, Loeb & Co,
| bankers. for the reorganization committees
has assured to the committee the funds
required to carry its agreement with the
| government into effect. By the terms ol
the settlement the government will receive
the original amount of the six per cent
bonds issued by 1t in aid Of the IJnior
Pacific, less payments made by the com.
pany to the government with interest n,
the rate of 3l4 per cent. per annum. The
detailed statement of the debt of the Unto1
Pacific made on October /, 1896. was as
| follows:
Principal, s27,2se,512; interest accrued
and not paid, s343.74S; interest paid by thu
Union Pacific. $15,9SS.035 balance of inter.
est paid by the United States, $50, 1O5, 700
principal of Kansas Pacific debt, Sc. goa. 900
interest on Kansas Pacific debt, Sc. 493. S43.
THE principal of the debt, by the fore
going figures amounted on October /, Il
$SS,639,512 and interest to $36,944,3OO, while
both together amounted to $40, 4S3, Sl2. The
sinking fund created for the payment O,
the government debt now amounts t.
something over $N,000,OoO and 1t is chief,
in government railroad bonds. This funt
is to be retained by the syndicate formed t.
provide funds to pay off the government
debt and to carry out the reorganization
plans. The net amount to be paid to tn,
government is therefore $4,000. 00O."
Separate Coach for Negroes.
Jefferson City, Mo-, Jan. 23.-Repre
sentative Harrell, of Clay county, has
introduced bill in the Legislature com
polling railroads to set apart coach fol
negroes in Missouri. After an exciting
debate the house took recess withou
acting on the bill.