The Meeker herald., 1897-10-16
UNION PACIFIC SALE.
TERMS OF THE COMPROMISE
Attorney General MeKenna Iss.ss staee-
ment Of the Agreement Made e-Th1nks II
the Best to He Obtained.


Washington, Oct. 9.-The attorney
general to-day gave out the following
statement regarding the sale Of the IN
ion Pacific railroad:
"There seems to be a misappfehen-
sion OF the action Of the previous adj
mInIstration In regard to thePacihc rail
roads. There was no agreement to cell
the roads or the sinking fund Of the
Union Pacific.
in consideration Of the appearance
OF the United States in the foreclosure
proceedings, already commenced. and
the prosecution of its own mortgage, ii
WAS guaranteed Il bid of S45.I0S,060 at
the sale. which should be ordered by
the court over and above the amount
of The first mortgage. This amount In
cluded the sinking fund and $28,5OO.-
900 in addition.
There was no formal agreement. II
consisted OF letters between the reor
eaniZation committee and separate
counsel of the government and Attor-
ney General Harmon, all Of which
We're published In Senate document 81.
Fifty-fourth Congress, second session.
''The agreement. as ! have said. goes
no further than to provide for the ap-
pearance of the government in suits
brought for the foreclosure Of the first
mortgage bonds and bringing suit OF
foreclosure for its own.
The sale of the property was land
necessarily must be by the direction
of the court. as in other foreclosure
suits. with the whole world for bid
ders.
THE appearance was made and the
suits Instituted. as agreed b<fore the
advent of the present administration.
These suits. therefore, 1t lad TO ac-
cepi. and it has endeavoreJ to secure
such decree rs ii believed tue govern
ment under the laws incorporating The
railroads was entitled To.
1T may he disputable as u whether
The agreement TO go into coart should
have been made Il is not disputahle
as TO what the government after 1t
was in the court. could 90. There,
like any other suitor. the government
was subject 10 the orders Of the court.
l mean, of course, subject to the or
ders OF the court rs n creditor. AS
sovereign. its powers could net be ar
fected. and have not been by the de-
crees. We think, therefore, that the
action of the government and the stu
alton are very plain. 1t has not SOLD
It's Interest. 1t has enabled interests
10 be sold at public auction to the re-
organization committee. or to any tolu-
mittee or TO any body or association
which. or who. may bid the highest.
"In what | have said do not mean
to imply criticism OF the previous ad-
minstration What II did, 1t no doubt
lid on mature reflection and In SIN
.erest judgment. and its action was rec
ommended by both receivers, who had
been appointed upon the application
Of the United States. and was also
unanimously recommended by the five
government directors. ft
Now ms to the relation Of the gov
ernment to the .decrees: They, - rem
tlcrel. were In many respects RrNAfy-
irg. but In other respects were not as
the government strenuOusly cortended
for. For Instance. the Omaha bridge
mortgages. amounting to about 81
100000. were adjudged to be superior
to the lien of the government on that
part of the road between Omaha anl
Council Bluffs. and in addition, the
money and assets in the hands OF the
receivers accruing from the operation
of the roads We're ordered to be sOld
instead of being reserved to meet a
deficiency judgment expected TO he Oh
tained by the government. This
amounted to more than $2.0OO.OOO.
This. of course. would become impOr
tant II the price bid at the sale should
not equal the governments lien.
Dissatisfied with the DEGREES. Their,
fore. the government considered the
propriety of an appeal. The reorgani-
zation committee. learning this. came
forward with an increased bid Of over
S4.0OO.00O. making the total of their
guaranteed bid S5O.O0O.OOO instead of
S45.1J4 .059. m increase of $4.24j.01.
This increase removed the objections
to the DEGREES. so far as the money
contentious We're concerned. In all
else the DEGREES We're just and satisfac-
tory. Under these circumstances an
appeal did not seem justified.
Regarding a higher bid. the prospect
Of it seems as great now as II would
be later. These considerations deter
mined the government. 1t must be re
membered that the governments lien
is n second one-Second to a first mort
gage of S33. 3.OO0.OO0. The advantage 1t
has secured. therefore. is. to repeat,
somewhat that at the sale under the
DEGREES of foreclosure there will he n
bid for the roads of fifty millions of
dollars over and above the first mort
gage. and. besides. the benefit OF ab-
solute freedom of competition at the
sale. The government may therefore.
secure its whole claim through high
er bid 1t is sure of $.O.OOO.0OO and
this amount, in connection with the
payments already made. will pay the
principal OF the debt twice over.