The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1897-01-23

erai Harmon, Are Considered TO
Have Converted a bad Debt into
Cash.
WASHINGTON. jar. - Attorney Gen
eIsL Harmon today gave out a statement
~ the agreement wtsh the reorganization
COMMITTEES OF the Trnicn Pacific railway.
Upon the defeat OF the funding BIZ in the
house tne president directed tne attorney
general TO commence foreclosure proceed
inss against the Union Pacific Railway
Company first making the best arrange
nlenrs obtainable for the protection OF the
government. On Thursday agreement
vas made which vii result in immediate
STEPS TO foreclose
The chief subject OF the negotiations
was the protection OF the government
against risk OF sacrifice % It's claim By sale
Al price which would leave nothing sub
stantial after paying the prior liens. This
protection is now assured By a guarantee
that the government shaI receive Of its
len on the aided portions Of the Union Pa
cihc and Kansas Pacific lines. including
the sinking fund. NOT less than ss5. .1154 GsG.
The sale VIII be public SO that the govern
ment viii receive the benefit Of any higher
principal and interest.
The sum Of $4,000 In cash was Thurs
day deposited with the United States Trust
company OF New York By General Lewis
Fitzgerald. chairman OF the committee. as
security. According TO the terms OF the
agreement the committee will bid par for
the sinking fund If its desired 10 sell il
any time before the foreclosure sale.
Bills In equity have been prepared.
aEef
Hon. George Headley. special counsel. and
forwarded to ST. Louis where they viii on
Friday De presented 10 Judge Sanborn who
has jurisdiction on al the property in the
district and whose consent TO their fling
Is necessary, because the receivers in
charge OF the property are made
parties defendant. They are original bills.
and not cross biEs in the pending suits.
Whether they VIII proceed as independent
bills. or be ordered TO stand as cross bills
In the pending suits. VIII be determined
By the court. but ia either event the re-
suit viii be practically the same. that IS
to say. sale OF the property under the gov
eminent lien as well as under that Of the
first mortgage
Bills win also be fled In the districts Of
Iowa. Nebraska, Wyoming, Colorado and
Utah.
Separate bills for the foreclosure OF the
lien on the Kansas Pacific are in course or
preparation. These VIII be fled in Mis-
souri, and Kansas.
The proposed arrangement was submit
ted 10 the government directors before 1t
was closed. They al recommended its
adoption. Their general opinion was thus
expressed:
THE government cannot prudently
longer defer settlement or this matter,
The Union Pacific system has already
- n has
been permanently reduced. ReorEaniza-
tons of allied and neighhoring proper
ties have each been accomplished or are
n prospect of early consumma ton. and
the breaking III of the entire Union Pa
ciac system has been and Is steadily pro-
gressing II therefore seems 20 Us mex
pedleut u not dangerous. TO neglect this
opportunity 0f reatxinE the sum ofTeFed,
and thus expose the government 20 con-
tlnuous depreciation of Its security.
II is believed that there viii be higher
bids bat II not the estimate shows that
from the amounts already received from
the company the government viii al least
realize 4 sum equivalent 30 the principal
Of the subsidy bonds with interest at
ala per cent. from their issue 20 an
average date Of their maturity. or about
: Is per cent. from date OF issue 10 Jan
uary l. 1S97. The minimum 81 81. 15i 90
guaranteed the government IS in cash, so
that all relations with the property will
terminate upon confirmation Of the fore
closure sale.
The course 10 Re pursued with respect
Ia the Central Pacific has not yet been
determined.
Tho following named gentlemen com
prise the reorgsuiza ton committee: Louis
Fitzgerald chairman; Jacob II, Schirf.
Chsuncey NJ Depew, r. Jefferson Cool
idEe, ". Marvin Hughitt and Oliver
Ames.
1t ia understood that the necessary legal
proceedings incident 70 tha governments
taking part in the foreclosure suits now
pending az Omaha on behalf OF the first
lien holders will be begun az once and the
case pushed 80 a speedy conclusion. The
outlines of the agreement with the reorgau-
ization committee were approved BY the
attorney general very soon after the fail
ure Of the funding bill. only the exact
amount OF the guarantee remaining IN
allegiance, Nor was this point decided uu-
tl Mr. Havmon's vlsl, 10 New York early
This week. The first oHer 81 the syndicate
was SiSd 90 even. The attorney general.
however, insisted uron an Increase of S75s. -
90. whieh was Gualiy agreed 20 al the last
conferences yesterday. This makes tire
ootal amount waica .he government vii
reoeive 80 cash St.,54,oa From this
amount. however. ihe government VIII re-
deem az maturity the bonds now outS-sa.i-
unsil ISss The interest on these bonds un-
ul maturity Vi0 also be Paid By tas gov
eTnmcnt.
In Official circles The agreement is re-
garied as hisaiy advantageous 60 the gov
eminent although the inta~est whica the
soyrramsn. has paid ana vii continue 10
pay until the last OF the outstanding bonds
natures pas az the rate Of s per ceut. TIE
fisareS Obtained hv rhe attorney general
are regarded AS very liberal For many
years tee govern nert's money involved In
tho Pacific railroads has n1t been REGARDED
as au inves. meut ard tae tu.eres. nav
n1ents nave uoE beea booked urau other
ihsu as an expense. even a. ne fgurss
e3arAnoee.i. ASS taF agreement teeref,~e
IS booked up2a Nl,a fnaeh gaver
Junior BundhoIders win Io<~
NEW YORK. Jar @-People wrl IN
formed on the ctca Pacta- stta4-te~ In
Hmase that n or1cr 20 l.u,i- .he present
.ssse - ugst mortgage ooads og s-s sa se
whsca il appears - tae Intention. some
aotsss % ,he tgnlor issue - bo2as VII
have ;e receive Jess than IL was AZ e-st
satEudes fo give theT II .s unEe~Sfo9s
te1t Nsusas & Farise censo,s and tha
siak tx fund bonds vii ~ nnodt6es a. tee
tar1s of eee plan e~eouss operative.