Omaha daily bee., 1897-01-24
UNION PACIFIC FORECLOSURE.

UNIUN PdCIFTC FORECLOSURE,
The steps taken during the past
week by the representatives OF the De-
partment of Justice under direction of
President Cleveland and the cabinet, In
sure practically beyond revocation the
sale of the Union Pacific railroad under
foreclosure of the second mortgage held
by the federal government. Thus after
long protracted delay involving untold
loss TO both the railroad and the public
the government has finally reached the
position that has been persistenty and
consistently advocated by The Bee for
the last ten years or more. The part
nership that has existed between the
government and the Pacific roads since
the early Cos is to be not extended by
the funding of the debt, but summary
dissolved by the sale of the govern
-ment's interest to the highest bidder.
Cutting this knot should relieve con
gress of further fruitless discussion of
the Pacific railroad debt settlement and
remove forever the temptation to sac
riiice the public interest in these roads
to the private gain of any syndicate of
railway magnates.
At the same time 1t must not be. inn
aCined that the mere order of foreclosure
Is the final solution of the Pacific rail
road problem. Under the terms of the
agreement entered into between the at
torney general of the United States ana
the Union Pacific reorganization commit
al
and that is n guarantee to the govern
mcnt that there will be a bid of not less
than the stipulated upset price based on
the face value of the debt and the ac-
crued sinking fund payments. Foreclos-
ure, however, is only Il preliminary to re-
organization. Are the new owners to be
left perfectly free to reinflate the existing
fictitious capitalization and go through
again and again the disastrous process OF
bond floating and stock watering? Are
the people dependent upon the road to be
compelled to continue paying eXorbitant
passenger and freight transportation
rates to meet interest on the present CO.
lossal capitalization, or one still larger!
Is the road to be weighted down anew
with fixed charges bound to eat up more
than the traffic will produce, and be
driven in few years 10 second re-
ownership on the same plan as recently
occurred in the case of the Atchison!
Are any provisions to be made TO insure
for the Union Pacific the cooperation of
the Central Pacific, that is Indispensable
D.; q 10 ;.,+ Ia, ,l,ot m
the great transcontinental thoroughfare
for the whole country?
These are questions that vitality CON
Germ every inhabitant of every state
through which the Pacific roads pass. but
they cannot be definitely answered until
the purchasers of the road are known
and the scheme of reorganization made
public Whether the federal govern
ment is still in position to insert condi-
tons in the decree of sale to safeguard
fully the patrons of the roads and gen
eral public depends upon the precise ma
ture of the agreement of the attorney
general with the bondholders' committee
SO far as possible the government ought
to provide against having the property
nsed solely for stock jobbing purposes
The chief advantage of foreclosure is
that it offers an opportunity TO wiring
some of the water ont of the roads and
that opportunity should not be permitted
TO pass unheeded.
Foreclosure having been determined
upon, the court proceedings should be
expedited in every proper way and the
period of blighting uncertainty cut short
as early as possible. The reorganiza'
ton of the Pacific roads upon firm and
stable footing and their operation upon a
basis of economy and sound financiering
cannot fail 10 work incaIculable benefit
to the people of the western states and
contribute measureably to the better set
Element OF the country the development
of it's resources and the restoration of
general prosperity.