Custer weekly chronicle. [volume] (Custer City, S.D.) 1890-1931, 1897-01-09
The PACIFIC RAILWAY DEBT
Congress Must Act or the President
Will Do So.
He Desires a Full Settlement Before
His Administration Ends-.
A Victory for the
Santa Fe.

Washington, Dec. 30.-It was report
ed yesterday tina President Cleveland
has decided to direct the immediate
foreclosure Of the governments mort
gag on the Union and Central Pacific
railroads. The foundation for this re-
port was the statement in MI. Cisve-
lands message to congress that the gov
eminent would be forced to take some
immediate action regarding the indebt-
edness Of these roads. IL can be stated
gress takes speedy action regarding Pa
cifc railroads legislation the president
viii order a foreclosure Of the govern
ment's mortgage. Mr.. Cleveland has
had several interviews recently on the
subject with the attorney general and
secretary Of the interior and has fixed
on a definite program, contingent only
on the action Of congress.
President Cleveland has determined
that before his administration ends
there shall be a settlement Of the Pa
ciic railroads debts on a basis 70 be
pi1BBSFl ny tOlEINES OF "A lDItflDNuIFs
Debate on the funding bin proposed
by the Pacific railroads committee wa.
begun in the senate last Tuesday. and
the house has set January Z, s and 8 for
consideration Of the measure. Unde1
this bin the debt OF the Pacific railroads
now due the government will be paid in
installments, bearing . per cent inter
est, extending for about fifty years.
II congress passes this bill, or another
having a settlement OF the question In
view. the president will take no action.
II a bill is not passed, or IL. after a r-a-
sOnable time, there seems no prospect
Of a settlement by congress. the attor-
ney general will file a bill for the fore
closure Of the lien of $33.-
0J0, 900. The interest on the Pacific rail-
road bonds has accumulated until every
81 900 subsidy bon issued by the gov
eminent now represents. with the &C
crued interest. a claim against the rail-
ways of $500. The government viii re-
deem &c. 900, 900 Of the Pacific railroad
subsidy bonds on January /. and this
will place the railroad in default 10 the
government. so that a foreclosure can
follow at any time.
II is the contention Of the governments
that the railroads are already in defaul:
and have been for several years. bui
this has been denied by the roads. They
have asserted that the carriage OF
United States mails, troops, munitions
Of war and other government property
for which they have been credited on
the books Of the government, offset ali
claims against them that have mature
heretofore. They don't assert, however,
that such credits will offset so. 900, 600 to
be paid by the government next week,
and therefore there will be no question
about a default after that date.
The governments claim against these
railroads is not the only one. The first
mortgage bondholders have an unsat-
isied claim of 1873, 900, 900. which is prior
to the governments mortgage.
The Union Pacific road from Omaha
10 ogden Is now in a receivers hands by
virtue Of a foreclosure instituted by
these bondholders. The plaintiffs in
this case, which is pending In the United
States court in Omaha. have sought 10
bring the government in as a party 10
the suit and thus throw the whole con-
troversy into the courts. The govern
ment has kept u OF II. and because Of
its sovereignty a remain until 1;
decides 10 enter its appearance ~volunta-
lily, which is not probable.
There is no probability Of any immedi-
ate action by the executive against the
Pacific railroads, but it is reported that
Secretary Francis and Attorney Gen.
eral Harmon have been requested TO be
fully prepared for such action in case
congress fails to seetle the controversy