Evening journal., 1897-01-23

haee3e Overrides the Executive.
WASHINGTON, Jan. 23.-Attornev Gen.
eral Harmon has given out the following
statement of the agreement with the re
organization committee Of the Union Pa
cifc railroad:
Upon the defeat OF the funding bill in
the house tire president directed the attor
Dey general to commence foreclosure pro
weddings against the Union Pacific Rail
road company, first making the best ar
rangements obtainable for the prote3tion
of the governments interests. Following
the lines indicated in his last rerort, the
attorney general tegan rego t.ations with
the Reorganization committee, On Thurs
day an agreement was made which viii
result in immediate steps to forcclose
The chief sub. .ect OF the negotiations was
the protection o. She government against
the risk of sacrifice of its claim by a sale
at price which would leave nothing sub
stantial after paying prior liens. This pro
lection is now assured by a guarantee that
the government shall receive on its lien
on the aided portions Of the Union Pacific
and Kansas Pacific lines, including the
sinking fund, not less than S45, 754, 600
The sale will be public, so that the gov.
ernment will receive the benefit of any
higher bids up to full amount of it's claim,
principal and interest. The sum of 81. 500,
O00 cash was on Thursday deposited with
the United States Trust company of New
York by General Louis Fitzgerald. chair.
man of the committee, as security accord.
ing to the terms of the agreement. The
committee agree to bid par for the sinking
fund if it is desired TO sell at any time be.
fore the foreclosure sale
Bills in equity have been prepared,
signed by the attorney general and Hon.
George Hoadley, special counsel, and for.
warded to St Louis where they will Oh
Friday be presented to Judge Sanborn,
who has jurisdiction in all the districts
and whose consent to their fling is neccs
sary, because the receivers in charge of the
property are made parties defendant
They are original bills and not cross bills
In the pending suits.
Whether they will proceed as inderend
ent bills or be ordered to stand as cross
bills in the pending suits will be deter.
mined by the judge but in either event
the result will be Practically the same
viz, the sale of the property under the
governments lien as well as under that OF
the first mortgage The bills will be filed
in the districts of Iowa, Nebraska Wyo.
nAAhEf CbAlidAlO anu 1 lhLs l-kItIUtt Nlllc
for the foreclosure of the lien on the Kan.
sas Pacific are in course of preparation.
These will be filed in Missouri and Kansas.
Approved by Government Directors.
"The proposed arrangement was sub.
mitted to the government directors before
it was closed. They all recommended it's
adoption. Their general opinion was thus
expressed:
The government cannot prudently
longer defer the settlement of this matter.
The Union Pacific system has already been
much curtailed, and its revenues have
been permanently reduced. Reorganiza.
tions Of allied and neighboring propcrtie:
have either been accomplished or are il
train for early consummation, and the
breaking up Of the entire Union Pacific
system has been and is steadily progress.
ing. 1t therefore seems to us inexpedient
If not dangerous TO neglect this opportu
nifty of realizing the sum offered and thus
expose the government to "a continuous
depreciation of its security.
1t is believed that there will be higher
bids, but If not an estimate shows that
crediting amounts already received from
the company, the government will mt least
realize a sum equivalent TO the principle
of the subsidy bonds with interest at about
3M per cent from their issue to the aver
age date of their maturity, or about g. 4;
per cent from date Of Issue to Jan. /, 1897
1.-The minimum of S45, 754, 600 guaran.
teed the government is in cash, so that all
relations with the property will terminate
upon the confirmation of the foreclosure
sale.
THE course TO be pursued with respect
to the Central Pacific has not yet been de
termined. -
The following named gentlemen com
prise the reorganization committee:
Louis Fitzgerald, chairman; Jacob II
Schiff, Chauncey NJ Depew, Z. jefferson
Coolidge, W. Marvin Hughlitt and Olive
Ames.
Legal Proceedings Under Way.
1t is understood that the necessary lega
proceedings incident TO the government.
taking part in the foreclosure suits nov
pending at Omaha on behalf of the frs
lien holders will begin at once and TIN
case pushed to speedy conclusion. Tit
outlines OF the agreement with the reor
ganization committee were approved b.
the attorney general very soon after TIN
failure Of the funding bill, only the exac
amount of the guarantee remaining il
abeyance, Nor was this point decided unit
Attorney General Harmon's visit to New
York early in the present week.
The first offer of the syndicate was S45,
000, 600 even. The attorney general, how
ever insisted upon an increase of S754, 600
which was finally agreed to. This make
the total amount which the governmen
will receive in cash Sl5, 754. 900. From
this amount, however, the governmen
will redeem at maturity the bords nov
outstanding, the last of which does not be
come due until 1899. The interest oi
these bonds until maturity will also b
paid by the government.
In official circles the agreement is re
garded as highly advantageous to the gov
ernment. Although the interest which tn
government has paid and will continue {
pay until the last of the outstanding bond
mature was at the rate of per cent, tn
figure obtained by the attorney general
regarded as very liberal For many year
the governments money involved in tn
Pacific railroads has not been regarded a
an investment, and the interest payment
have not been looked upon other than a
an expense. The settlement Of the matte
therefore without further trouble or eS