The record-union., 1897-10-29

ClNClNNA11, OCT % Judge JuQ-
SON Harmon, who was Attorney-Gen-
eral under the last administration of
President Cleveland, to-day gave out
the following statement regarding the
proposed sale of the Union Pacific Rail
way:
Among the criticisms OF the Union
Pacific situation, it is publicly de-
clared by some that the foreclosure of
the Government lien on the main line
and OF that on the Kansas Pacific line
should have been in a single suit, and
that possible loss by breaking up the
unity of the properties might have been
avoided by afterward consolidating the
several suits. This statement is wholly
unfounded. AS the property is located
/ in seven different States and judicial
districts, a separate suit has to be
brought in each.
The advantage Of this to the Gov
ernment was plain from the start. Ac-
cOrdingly, in a bill for settlement pre-
pared at the request of Congress by
Mr.. Olney he inserted the provision au-
thorizing the foreclosure of all the
Government liens in a single court, if
such should become necessary. The bill
failed and the provision with it.
I'm the Attorney Generals report for
1898 (p. 30 the subject was again
urged upon the attention of Congress as
follows: AS it may become advisable
or necessary for the Government to
institute legal proceedings against one
or both of the companies named, beg
to call attention to the necessity of d
law giving some proper court in the
District of Columbia jurisdiction of the
entire property, and of all the party
in interest
What has been hereinbefore said as
to the general necessity of giving one
court full jurisdiction in such cases ap-
plies with especial force here. Such a
provision was included in the bill pre-
pared by Attorney General Olney at the
request of the last Congress. (See his
report for 1894, p. 26) 1t should now
be put in the form of a separate Act,
so as to be made independent of any
particular plan of reorganization. I'm
til the passage of such an Act, any
attempt of the Government to protect
its rights by litigation will be greatly
hampered.
"A general law for all like cases was
recommended (p. 24). The Attorney
| General followed his report by prepar-
| Senators Morgan and Brice on Decem-
Der 90, 1895 Fifty-fourth Congress,
first session, VOL %, record, D. 26S and
269). 1t was not passed, although it
was recommended. Report 1896, y.
25) Consequently, when the President
directed the foreclosure, provided the
too common fate of junior liens could
be avoided by guaranty, as he had
| fr Il HI n.
! cember Z, 1896 (second session Fifty
fourth Congress, p. u, in case Congress
should fail to act, the necessity of sep
arate suits could not be avoided.
THE guaranty secured by a large
deposit of money, assured the Gov
ernment. in cash on it's second lien, in
the distribution of proceeds of sale, at
least the principal of all its subsidiary
bonds and more than half of the in
terest, which ran per cent for the
thirty years, and, unlike the principal,
was not invested in the property, but
went to the bondholders. To make
this guaranty good required a bid at
the sale of about $4,000 per mile for
the entire system, or $4,000 per mile
for the part subject to the Govern
ment's lien. including the sinking fund,
company was entitled The arrange
ment was recommended in writing by
every Government director and re-
ceiver
''The Governments lien did not cover
the entire property of the company, nor
even all its lines of railroad, and the
remainder of both property and lines
was heavily mortgaged to others.
Whether by the terms of the Act the
Government created for itself more
than u mere lien is by no means clear
under the decision of the Supreme
Court, but its claim as a general credf-
tor. if such it have, was not qualified
nor surrendered.
THE sale was to be at public auc-
ton, subject to the approval of the
court, ard free and open to any and
all bidders, without restriction or con-
dition, as shown by the terms of The
agreement submitted to Congress at the
time, January 2S, 1897 (second session
Fifty-fourth Congress, p. 1241). The
suits which were brought in February
had to remain separate, like those
| brought to foreclose the prior mort
cages, making a unit sale Of the en-
tire property possible only by concur
rent action of the various courts, with
the consent of all parties.
THE consolidation of the suits has
| always been as much out of the ques-
tion as foreclosure by a single suit was
in the beginning.
"JUDsON HARMON"
A Woman Frozen to Death.