Custer weekly chronicle. [volume] (Custer City, S.D.) 1890-1931, 1897-01-09
The PACIFIC RAILWAY DEBT
Congress Must Act or the President
Will Do So.
He Desires q Full Settlement Before
His Administration Ends-.-
A Victory for the
Santa Fe.

Washington, Dec. 30.-It was report
ed yesterday that President Cleveland
has decided TO direct the immediate
foreclosure of the governments mort
gage on the Union and Central Pacific
railroads. The foundation for this re-
port was the statement In Mr.. Cleve-
lands message TO congress that the gov
eminent would be forced 10 take some
immediate action regarding the indebt-
odness OF these roads. 1t car be stated
on absolute authority that unless con-
gress takes speedy action regarding Pa
cifc railroads legislation the president
will order a foreclosure of the govern
ment's mortgage. Mr.. Cleveland has
nae several interviews recently on the
subject with the attorney general and
secretary of the interior and has fixed
on a definite program, contingent only
on the action Of congress.
President Cleveland has determined
that before his administration end
there shall be a settlement of the Pa
cihc railroads debts on a basis to be
proposed by congress or a foreclosure.
Debate on the funding bill proposed
by the Pacific railroads committee was
begun in the senate last Tuesday, and
the house has set January Z. s and 8 for
consideration of the measure. UndeT
this bill the debt of the Pacific railroads
now due the government will be paid in
installments, bearing . per cent inter,
est, extending for about fifty years.
If congress passes this bill, or another
having a settlement of the question in
view. the president will take no action.
If a bill is not passed. or If, after a rea-
sonable time, there seems no prospect
of a settlement by congress, the attor-
ney general will file a bill for the fore
closure Of the government lien of $685.
600, 600. The interest on the Pacific rail-
road bonds has accumulated until every
81 900 subsidy bond issued by the gov
eminent now represents, with the ac-
crued interest, a claim against the rain
ways of 81 800. The government will re-
deem $40, goo, 600 Of the Pacific railroad
subsidy bonds on January /, and his
will place the railroad in default to the
government. SO that a foreclosure can
follow at any time.
II is the contention Of the governments
llldl lllt lOAhS tlt dllttuN III utlduls
and have been for several years. but
this has been denied by the roads. They
have asserted that the carriage of
United States mails, troops, munitions
Of war and other government property
for which they have been credited on
the books OF the government, offset all
claims against them that have matured
heretofore. They don't assert, however,
that such credits will Offset $40, 600, 600 tu
be paid by the government next week,
and therefore there will be no question
about a default after that date.
The governments claim against these
railroads is not the only one. The first
mortgage b~ondholders have an unsat-
isGed claim of $33, 900, 900, which is prior
to the governments mortgage.
The Union Pacific road from Omaha
to Ogden Is now in a receivers hands by
virtue of a foreclosure instituted by
these bondholders. The plaintiffs I'm
this ease, which is pending in the United
States court in Omaha, have sought &c
bring the government in as a party t.
the suit and thus throw the whole con
troversy into the courts. The govern
ment has kept out of 1t. and because o.
its sovereignty can remain out until i
decides to enter It's appearance volunta
lily, which is not probable.
There is no probability OF any immedi
ate action by the executive against tn
Pacific railroads. but it Is reported tina
Secretary Francis and Attorney Gen
eral Harmon have been requested to b
fully prepared for such action in cas-
congress fails to settle the controversy