The herald., 1897-01-24
FORECLOSURE BILL
IS FILED At OMAHA
To Protect Government
Interests
UNION PACIFIC RAILROAD DEBTS
To Be Collected by Due Process
OFFICIALS ARE SATISFIED
And Look for Permanent Benefit to Dc
System
The Government Directors Formally Express
Their Approval
Dissatisfied Christian Endeavorers my
Decide to Convene at Philadelphia
Instead of at San Fran
cisco.
And Look for Permanent Benefit to Dc
System
The Government Directors Formally Express
Their Approval
Associated Press Special Wire

OMAHA, Neb., Jan. 23.-Attorneya
General Judson l.. Harmon, through sps-
cial counsel John c. Gown, filed in tho
office of the clerk Of the circuit court %
the United States at noon today bin
calling for the foreclosure Of the govern
ment's second mortgage on the Uniou
Pacific main line from Omaha to Ogden
and the Kansas Pacific from Kansas
City to Denver. The bill recites the acts
Of congress prior to the organization Of
the company, and shows how the govern
ment got into the case; then recites the
defaults In the terms of the mortgage.
and calls for decree of foreclosure and
sale in accordance with the terms Of the
mortgage. Under the rules of the court
the defendants have until the first Mon-
day in March to answer the bill. The re-
ceivers Of the Union Pacific, the trust
companies and first mortgage bond
holders are made defendants.
Although the filing Of the bill has long
been looked for, there was no demon
stration at it's reception. Clerk Hills Of
the circuit court was not in his ONCE
when the private secretary of General
Solicitor Kelly of the Union Pacific came
in with the papers, The papers were for
mally filed, and thus the great suit was
begun with as little display as If it were
the most ordinary court routine of the
office.
At the Union Pacific headquarters
there was little stir, but the officers de-
cline to talk for publication.
President and Managing Receiver 3,
H. Ell. Clarke expressed satisfaction at
the state of affairs but declined to go in
to details in discussing the matter It il
the prevailing sentiment at headQuar-
ters that the move IS the best that could
have come. 1t is in line with the policy
advocated by President Clarke since the
road fell into its present straits.
The petition describes the organiza-
ton of the Union Pacific railroad and
recites all the acts of congress in rela-
tion thereto, showing how the provis-
ions of the several acts have been COM
piled with by the company and by the
government 1t sets out that the amount
of the first mortgage Is 500 ,299, 900, which
is represented by the trustees. made
defendants in the suit. The second mort
gage is placed at s27236, 512. 1t also as
serts that there has been no payment ON
any Of the bonds except by the govern
ment.
The petition also recites the building
of the Union Pacific bridge between
Omaha and Council Bluffs, and the issu-
ance of bonds. as provided for by spe-
cial act of congress. and mentions ].
Pierpont Morgan and Elisha Adkins and
the Central Trust company of New
York as trustees for these bonds. 1t says
that of the bonds yet to mature, 1884,
152 will become due January 1, 1898, and
50, 157, 900 January l. 1899; that all other
bonds have matured and have been paid
by the United States and that the value
of the security held is not sufficient to
protect the debt
The petition then gives history of the
litigation in which the road has been
involved, and shows by what steps the
different defendants have been brought
in connection with the case, and asks
that the court determine the priority Of
the different liens and how much money
will become due after the decree has
been issued; that the lien of the United
States be adjudged to be in it's proper
order a lawful incumbrance upon the
railroad property; that the court deter
mine which, if any, lien, is prior to the
lien of the United States, and that pro-
vision be made to protect said prior lien:
that upon the non-payment, after o
reasonable time, of the amount which
may be ascertained by the court to be
due ana OWING TO the OnlteQ States gov
ernment, after giving all proper credits,
said lien mortgage and all statutory
rights of the United States be foreclosed,
and the premises and franchises emb-
raced therein sold and the proceeds
paid into the treasury Of the United
States and applied to the credit of the
that the master In chancery
make a true description of the property
of the road, subject to the lien Of the
United States and liable to be sold to
satisfy said lien; that the receivers Of
the road be continued to this cause for
the protection and reservation of the in
terests of all parties hereto.
One of the officials at headquarters.
when told that the bill in foreclosure
had been filed this noon, said: '"To ten
the real truth, that is one of the best
things that ever happened to the Union
Pacific. Now we can break away from
the government and operate the road
along better lines. We can do business
as the other roads do, free from any en-
tanglements of the court
'To be sure, it is a long way to look
ahead to the complete situation of the
affair, but not SO far that we cannot see
in the dim future what the final solution
will be. There is no doubt that the Union
Pacific and the Oregon Short Line and
the Utah Northern will continue as one
railway, to all intents and purposes, even
after the segregation of the latter. Tho
Union Pacific would be itself again. III
permanency is assured. The west Wln
soon see one OF the greatest railway syu-
TENS in operation ever known, and the