Omaha daily bee., 1897-01-24
GOVERNMENT TO FORECLOSE
Suit Against the Union Pacific Railroad
Company Commenced Yesterday,
COMPANY DECLARED TO Be INSoLVENT
Petition Has Been Filed In the United
states Circuit Court in This city
ana Defendants Are TO AM
swcr by March 4.

petition for the foreclosure Of the govern.
ment mortgage on the Union Pacific
railroad property was filed in the Of
flee of the clerk of the United
States circuit court in this city. The
papers were brought to the office by the
private secretary of w. II. Kelly, genera
counsel for the road. The petition for fore
closure is a printed document, embracing
thirty-seven printed pages, signed by Judson
Harmon, attorney general of the United
States; by George Hoadley, special assistant
to the attorney general and by John c
Gown, special counsel for the United States
With the petition were three other papers
One was the appearance of the attorney gen
eral for tie United States in the case
by John c. Gown. Another was the
petition by the attorney general asking
that the receivers of the Union Pacific be
made parties to the suit, and the third was
an order by Judge Sanborn that the receivers
ha made party to the suit
The petition for foreclosure begins with a
statement of the action brought by the
United States through its attorney general
against the Union Pacific Railroad COM
pany, the receivers of the property, and f.
Gordon Dexter and Oliver Ames as trustees,
the Union Trust company of New York as
trustee, j. Pierpont Morgan and Edgar f.
Adkins as trustees, ana the central trust
company of New York as trustee.
It says the Union Pacific company at pres
ent Is the result OF a consolidation of the
Union Pacific Railroad company, the Kan
sas Pacific Railroad company and the Den
YER Pacific Railroad and Telegraph COM
pany, and embraces all the rights, titles,
interests, properties and franchises of all
these reads. 1t follows this with an allega-
tion that the Union Pacific Railroad COM
pany is insolvent and in the hands of re-
ceivers.
The petition then describes the organiza-
tion of the Union Pacific railroad, and recites
all the acts of congress in relation thereto
showing how the provisions of the several
acts have been complied with by the com
pany, and by the government. 1t sets out
that the amount Of the first mortgage is
S27 229, 900, which is represented by the
trustees made defendants in the suit. The
second mortgage is placed at $27,236 SIP.
II also asserts that there has been no pay
ment on any of the bonds except that paid
by the government.
The petition also recites the building OF
the Union Pacific bridge between Omaha
and Council Bluffs and the issuance of bonds
as provided for by a special act of congress,
and mentions y. Perpont Morgan and Elisha
Adkins and the Central Trust company OF
New York as trustees for these bonds.
1t says that of the bonds yet to mature
SIS 9195l2 will come due January l. 1898
bonds have matured and have been paid
by the United States, and that the value of
the security held is not sufficient to pro-
tect the debt.
CONTINUATION OF RECEIVERS.
The petition then gives c history of the
litigation in which the road has been in
volved and shows by what steps the diff
fcrent defendants have been brought in con
nection with the case. II says that en-
October l3, 1898, a suit in equity was brought
and which resulted in the appointment of the
receivers That on January 2l, 1895, f.
Gordon Dexter and Oliver Ames, trustees,
brought suit setting out the priority of their
lein, and the fact that default had been made
in the payment of the amount suit which
is still in court. The Union Trust company of
New York is a trustee on mortgage made by
the Union Pacific Railroad company on
December IS, 1873; that J. Pierpont Morgan
and Edwin f. Adkins are trustees on a
mortgage deed dated April l, 1871.
The petition then asks that the court
determine the priority of tho different liens,
and how much money will become due after
the decree shall be issued; that the lien of
the United States be adjudged to be in ite
proper order a lawful incumbrance upon
the railroad property; that the court de-
termine which, II any, lien is prior to the
lien of the United States. and that provision
be made to protect said prior lien; that
upon the non-payment, after a reasonable
time. of the amount which may be ascer-
tanned by this court to be due and owing to
the United States government, after
giving all proper credits, said
len mortgage. and all statutory rights of the
United States may be foreclcsed and the
premises and franchises embraced therein !
.oli and the proceeds paid into the treasury
If the United States and applied to the |
,redt of the company; that the master-in- |
make a true description of the |
property of the road, subject TO the lien Of
he United States and liable to be sold to
'atis'y said lien; that the receivers of the |
Dad be continued to this cause for the |
and preservation OF the interests |
If all parties hereto.
Attached TO the petition are three ex-
libts. Exhibit "A'' shows the amount of |
he bonds issued to the railroad by the
government and the date of the issue. Ex-
libit "B" shows the amount of the interest
,aid by the United States on the bonds issued
o the Union Pacific Railroad company, the
interest paid by the company and the balance
# interest due the United States. Exhibit
C" shows the amount of bonds in the sink
ng fund of the Union Pacific road on January
6, 1897.
II is nowhere set out in the petition when
he defendants shall make answer, but
ccording to the rules of the court the
nswer day will be Monday, March l. 1897.
The property included in the bill is
esignated as the line of road extending
rom Council Bluffs Ia, to Ogden, Utah, in
ludng the terminals and all rights and
anchises.
JEWS EypRESSnn nv aEEIrIAIs