Custer weekly chronicle. [volume] (Custer City, S.D.) 1890-1931, 1897-01-30
GOVERNMENT TO fORECLOSE
Agreement Made With Reorganiza-
ton Committee.
Minimum Bid la Guaranteed..Gov
ernment Will Receive Forty.
Five Million for Its
Claim.

New York, Jan. 22.-The government
has arranged It's deal for closing cut Its
interest in the Union Pacific and Kan.
sas Pacific Railway companies, and
foreclosure proceedings will be insti-
tuted within a few days.
Mr.. Winslow S. Pierce. the attorney
for the reorganization committee, has
returned TO the city from Washington,
where he went to submit the offer of the
committee TO the attorney general. That
offer was as follows:
"In the event that the government
shall at nice take proceedings in the
pending foreclosure suits, or by indie
pendent bills, for the enforcement OF
its liens upon the railroads and property
of the Union and Kansas Pacific Rail
ways by sale, and for the sale of thu
sinking fund in the hands of the secre
tary OF the treasury relating TO the
Union Pacific company, the committee
Is prepared to guarantee a minimum
bid for the Union Pacific and Kansas
Pacific ines Of railroad and the prop.
erty embraced within the Len Of the
government, inc for the cash n Sc
curities in the Union Pacific sinking
fund, taken at par. which shall produce
the government over and above any
prior liens and charges upon the sys-
tenn and sinking fund the net sum of
$45, 600, 0OO."
This sum Is slightly below the upset
price which the government desires TO
fix of sc % per cent Of the entire gross
debt OF the Union Pacific and Kansas
Pacific, amounting TO 500, 600, 900 / n round
figures but it was accepted by the attor-
ney general n an agreement vac en-
tered into by which, on the deposit by
the reorganlzatiC n committee OF ~, $780,
O0O-10 per cent of the guaranteed bid
In a New York bank to be designated by
the secretary OF the treasury, foreclos-
ure proceedings will at once be insti-
tuted by the attorney general.
The papers nave been prepared and will
be sent as soon IS notification of the de-
post is had to the various officials of the
department OF justice i'm each state in
which proceedings must be entered.
Attorney General Harmon is expected
here tomorrow TO consult with Chairman
Fitzgerald and Mr.. Pierce Of the reorgan-
ization committee, and with Ex-Governor
Hoadley, the governments counsel for the
Union Pacific railway company.
The proposal from the reorganization
committee IN In such shape that that body
will be permitted TO put I'm minimum bids
for separate portions of the system as
embraced I'm the different foreclosure pro-
ceedings, conditioned on these minimum
bids aggregating not less thsn the NS,-
O0, 600 above named and in case the prop
critics are not sold as a single piece.
The members OF the reorganization COM
mittee of the Union Pacific railroad are
General Louis Fitzgerald. president of the
Mercantile Trust company; Marvin II.
Hewitt, president OF the Chicago and
Northwestern railroad; Chauncey VI. De-
pew. L. Jefferson Coolidge, jr., Oliver
Ames Second and Jacob Schiff. Alvin W.
Krech, who is connected with the Mercan-
tile Trust company, is secretary of the
committee, and Kuhn, Loeb e. Co. are its
bankers.
The principal of the bonds issued by the
government for the benefit OF the Union
and Kansas Pacific roads, both payable by
the Union Pacific. is 1888. 539, 81. OF this
only Sl3, 100000 has matured. The balance
OF principal Is due as follows: January l..
1898, sl9, 342, 5l2: January /, 1899, 1915, 900.
The interest upon these bonds which has
not been paid. after deducting the sinking
fund provided by the Thurman bill, is
about So, 100000