River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1898-12-08
Nther Currency Legislation Needed
THE PACIFIC RAILWAYS.
Plan Adopted for Making the Gov
ernment Secure.

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 lst and
End of November of this year. The amount
due the government consisted of the prin-
cipaI of the subsidy bonds, S27, 23G, SIP, and
the accrued interest thereon, $3l, I'll, 5Il.UI,
making the total indebtedness $50, 4iS, 223.7 10.
The bid at the sale covered the first mort
gage lien and the entire mortgage claim of
the government. principal and interest"
This left the Kansas PAGING case uncon-
Cluded. BY a decree of the court in that
case an upset price for the property was
liked at a sum which would yield to the
government only 81, 100000 upon its lien.
The sale at the instance of the government
was postponed first to December Is, 1897,
and later upon the application of the
United States was postponed to February
Is, 1888. Having satisfied myself that the
interests of the government required that
an effort should be made to obtain a larger
sum / directed the secretary of the treas
ury, under the act passed March 3, 1887, to
pay out Of the treasury to the persons en-
titled to receive the same the amounts due
upon all prior mortgages upon the eastern
and middle divisions of said railroad out
of any money in the treasury not other
wise appropriated. Whereupon the attor-
ney general prepared a petition to be pre-
scented 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 lights Of said prior
lien holders and that a receiver might be
appointed to take possession of the mort
gagged premises ana maintain and operate
the same until the court or congress other
wise directed. GheTeupOn the r-eOrganiza-
ton committee agreed that If said petition
was withdrawn and the sale allowed TO pro-
coed on February Is they would bid "A sum
at the sale which would realize to the gov
eminent the entire principal of its debt, So
ac3,OO Believing that no better price could
be obtained and approaching the Difficult
ties under which the government would
labor II it should become the purchaser Of
the road at the sale, in the absence Of any
authority by ongres 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 it's debt, the sale should proceed. By this
transaction the government secured an ad-
vance of 50, S03. eco over and above the sum
which the court had fixed as the upset
price, and which the reorganization com
mittee had declared was the maximum
which they would pay for the property.
II is a gratifying fact that the result of
these proceedings against the Union Pa
cinc system and the Kansas Pacific line
IS that the government has received on
account Of its subsidy claim The sum Of
$64, 75I, 223.7 -. an increase of SIS, 9f7. 1919 Owe
the sum which the reorganization commit
tee originally agreed to bid for the Joint
property, the government receiving its
whole claim. principal and interest in the
Union Pacific and the principal OF its debt
on the Kansas Pacific railroad. Steps nave
been taken to fOreclose the governments
lier upon the Central Pacific Railroad COM
pany, but before action was commenced
congress passed an act. approved July Z.
1898, creating a commission consisting Of
the secretary of the treasury, the attor-
Eey-general and the secretary OF the IN
terror and their successors in office, with
fun power to settle the Indebtedness to
the government growing out OF the issue
Of bonds In aid of construction of the Cen
trail Pacific ard Western Pacific bond-aided
railroads, subject to the approval of the
president. No report has yet been made
to me by the commission thus created.
Whatever action is had looking TO a set
tlemeHt Of the Indebtedness in accord
ance with the act referred to will be duly
submitted to congress.