The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-01-24
UNCLE SIMS LIEN
PROCEEDINGS TO FORECIOSf1 ON
THE UNION PACIFIC PROPERTY
BEGUN.
A BILL IN EQUITY FILED.
RECEIVERS, TRUSTEES AND FIRST
MORTGAGE BONDHOLDERS
MADE DEFENDANTS.
Order Quietly Issued Allowing the
Government to Begin AN Action
ON Its Lien.

OMAHA, Neb., Jan. 23.-Attornay
General Harmon, through Special Coun-
sci John c. COadey, filed in the office of
the clerk of the circuit court at noon
today, a bill in equity calling for the
foreclosure of the government second
mortgage on the Union Pacific main
line from Omaha to Ogden. and the
Kansas Pacific from Kansas to Denver.
The bill recites the acts of congress.
and shows how the government got into
the case. 1t then recites the defaults
III the terms of the mortgage and calls
Tor decree OF foreclosure and sale in
accordance with the terms Of the mort
gage. Under the rule of the court the
defendants have until the first Monday
In March to answer the bill. The re-
CeiVerS Of the Union Pacific, the gov
eminent trustees and the first mort
gage bOndhOlders are made defendants
Although the filing of the bill had
been long looked for there was no
demonstration at its reception. Clerk
Hills, OF the circuit court, was not
In his Office when the private secretary
OF General Solicitor Kelly, of the Union
Pacific, came in with the papers. Two
lonely reporters welcomed him. Clerk
Hills came in and the papers were for
mally filed and the great suit was be-
gun with as little display as if it were
the most ordinary routine of the office.
The petition describes the organiZa-
ton of the Union Pacific railroad and
recites all the acts of congress in re-
latlon thereto, showing how the pro-
visions of the several accounts have
been complied with by the company
he II
the amount of the first mortgage is
So, 200, which is represented by the
trustees made defendants in the suit
The second mortgage is placed at $27,-
256,5l2. 1t also asserts that there has
been no payment 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 is
suance of bonds as provided for by a
special act of congress and mentions
j. Pierpont Morgan and Elisha Atkins
and the Central Trust company, Of
New York, as trustees for these bonds
1t says that of the bonds yet to mature.
$l5,919,512 will come due Jan. l. 1898.
and $3,l51,OO0 Jan. l, 1899; that all other
bonds have matured and have been
paid by the United States and that the
value of the security held is not suf-
ticient to protect the debt
1nc pellllOII lueu gives a history OF
the litigation in which the road has
been involved and shows by what steps
the different defendants have been
brought in connection with the case,
and asks that the court determine the
priority of the different liens, and how
much money Will become due after the
decree has been issued; that the lien
Of the United States be adjudged to
be in its proper order a lawful encum-
pfance upon the railroad property;
that the court determine which if 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 reasonable time
or the amount which may be aScer-
tanned by this court to be due and ow-
ing to the United States government.
after giving all proper credits, said lien
mortgage. and all statutory rights of
the United States, may be foreclosed
and the premises and franchises en-
braced therein sold and the proceeds
paid into the treasury of the United
States and applied to the credit of the
company; that the master in chancery
make true description Of the prop
erty of the road, subject to the lien of
the United States and liable to be sold
to satisfy said lien; that the receivers
of the road be continued to this cause
for the protection and preservation of
the interests Of all parties hereto.
At the Union Pacific headquarters
there was little stir, but the officials
dtclined to talk for publication. Presi-
dent and Managing Receiver S. H
Clarke, expressed satisfaction at the
state of affairs, but declined to go into
details in discussing the matter. It
IS the prevailing sentiment at head
quarters that the move is the best that
could have come. 1t is in line with
the policy advocated by President
Clarke, since the road fell into its pres
ent straits.
One Of the officials at headquarters
when told that the bill in foreclosure
had been. filed this noon, said: ITO
tell the real truth, that is one of the
best things that ever happened to the
Union Pacific. Now we can break away
from the government and operate the
road along better lines. We can do