Kansas City journal. [volume] (Kansas City, Mo.) 1897-1928, 1898-12-06
THE PACIFIC RAILROADS.
More Than the Original Reor-
SanixatfOn Bid.

In my last annual message / stated:
The Union Pacific railway. main line. was sold
under the decree OF the United States court for the
district of Nebraska the LIST and I'd Of November of
This year The amount due the government consisted
OF the principal Of the subsidy bonds. So. 90, So. and
the accrued interest thereon, SCI. ail. 81. OF. making
the total Indebtedness SIS. fis. 20. IS. The bid at the
sale covered the FIRST mortgage len and the entire
mortgage claim Of the government, principal and IN
terest.
This left the Kansas Pacific case uncon-
Guided. By a decree of the court In that
case. an upset price for the property was
fixed at a sum which would yield to the
government only two and one-half million
dollars upon its lien. The sale. at the in
stance of the government. was postponed.
first to December Is. 1885,. and later. upon
the application of the United States. was
postponed TO February 16, 1893.
Having satisfied myself that the inter-
ests of the government required that an
eiort should be made TO obtain a larger
sum. / directed the secretary of the treas
ury, under the act passed March 5. 1851.
10 pay out of the treasury to the persons
entitled to receive the same the amounts
due upon all prior mortgages upon the mid
die and eastern divisions of said railroad
out OF any money in the treasury not 9TH
erwise appropriated.
NSSSiScE hpHlleO FOR.
Whereupon. the attorney general pre-
pared a petition to be presented to the
court. Offering to redeem said prior liens in
such manner as the court might direct.
and praying that thereupon the United
States might be held to be subrogated to
all the rights Of said prior Iien-holders,
and that a receiver might be appointed to
take possession Of the mortgaged premises
and maintain and operate the same until
me court or congress otherwise directed.
Thereupon the reorganization committee
agreed that If said petition was withdrawn
and the sale allowed to proceed on Feb
ruary l6. they would bid a sum at the sale
which would realize to the government the
entire principal of it's debt-S6 03O, 900,
Relieving that no better price could be
OBTAINED, and approaching the difficulties
under which the government would labor
II ~ should become the purchaser of the
lhority by congress to take charge of and
operate the road. / directed that upon the
guaranty OF a minimum bid. which should
give the government the principal of its
debt, the sale should proceed. BY this
transaction the government secured an ad-
whics OF $4,000 over and above the sun
price and which the reorganization COM
mittee had declared was the maximum
winch 1t would pay for the property.
Proceeds From the Sales.
1t is a gratifying fact that the result of
these proceedings against the Union Pa
ciflc system and the Kansas Pacific line
IS that the government has received, on
account of its subsidy claim, the sum of
sei. .1l .223.I 20. an increase of SIS. 997, l63. ID over
the sum which the reorganization commit
Tee originally agreed to bid for the Joint
property, the government receiving Its
Whoie claim, principal and interest. on
Union Pacific and the principal of its debt
on the Kansas Pacific railroad.
steps mad been taken TO fOrecloSe the
governments lien upon the Central Pacific
haliroad Company, but before action was
commenced congress passed an act ap-
proved July Z. 1888. creating a commission
consisting OF the secretary of the treasury.
the attorney general and the secretary
or the interior and their successors in office
with full power TO settle the indebtedness
70 toe government growing out of the issue
OF ponds IN aid of construction of the Cen
tral Pacific and Western Pacific bono aid
ed railroads. subject 10 the approval of the
president.
No report has yet been made to me by the
commission thus created. Whatever ac-
tion IS held looking to a settlement of the
Indebtedness in accordance with the act
referred to will be duly submitted to con-
gress.