The Advocate and news., 1898-03-02
Sale Of the Kansas PaCiRo Railroad.


organization company for $6,S0S,OOO, the
principal of the debt due the United
States from this part Of the system, on
bonds Issued in its favor from November
l, 1865, to January /, 1868. The interest
due and unpaid, March 81, 1896, was
$6,4OO,904.S7. Interest accrued since that
time would have increased the total to
about S7OO0,O00 on the day of sale.
There was but one bidder, the agent
Of the reorganization committee, and he
bid the exact amount Of the principal,
excluding the interest.
The Senate of the United States lmme-
diately passed a resolution declaring
that the sale ought not to be confirmed
unless the bidder at the sale agrees to
pay the full amount OF interest due.
That resolution will probably carry the
subject into party politics, and the people
Will want to know, and they ought TO
know, the material facts.
The governments lien on the Kansas
Pacific was for bonds issued In aid of the
construction of the road beginning at a
point half mile west Of Kansas City,
Mo-, to point distant therefrom west
eTly 5J3.94 miles,.
The original location Of this road con-
templated its junction with the Union
Faciflc railroad at the intersection of
that road with the Tooth meridian Of
longitude. The length Of that line would
have been 393.94 miles. BY an act Of
Congress approved July 3, 1866, the lOca-
ton Of the line was altered so as to be
permitted to extend directly to Denver,
Col, and to make its connection with the
Union Pacific at point not more than
fifty miles westerly from the meridian OF
Denver. 1t was also provided by that
act that the Kansas Pacific company
should be entitled to only the same
amount of bonds Of the United States
that 1t would have been entitled to II
it had connected with the Union Pacific
at the Tooth meridian, as at first in
tended and the bonds issued were, in
fact, to cover a distance equal to the
length Of the line as originally located,
which is, as above stated, 1884 miles
westerly from point half mile west
Of Kansas Cit, Mo-; and this line was
divided at the 14Oth mile post into the
eastern division and the middle division.
The line was extended on the east
across the State into Kansas City, Mo-,
in order to reach the center of traffic
there; and the western division was ex-
tended to Denver; but as above stated,
the bonds covered only to the 394th mile
post The terminal facilities acquired
by going into Kansas City, Mo-, were
and are very valuable, and without the
western extension the road would be
valUeless unless connections were made
with the main line or with some other
road that had good terminal arrange
ments west.
When the subject was before Congress
in 1899 and 1897 the whole matter was re-
ferred to a committe of the Senate, and
Senator Gear, of Iowa, submitted long
report covering the whole Union Pacific
system. AS to the matter Of terminal
advantages or outlets, committee says
that the portions of the Union Pacific
system which had been aided by the
government "are incomplete as to out
lets and practically without terminals
and other indispensable adjuncts."
This raised the question whether the
governments lien extended over the ter
minals which had been acquired by the
company after the line had been located,
and on that point the committee say:
These could not be embraced or con-
trolled in proceedings for the foreclosure
Of the governments lien, and could only
be availed of to complete the lines which
might be acquired by the government
under foreclosure by the outlay Of large
sums OF money In addition to those which
would be required to discharge the prior
liens upon the aided lines"
Senator Gear strenuously opposed the
policy of government purchase of the
road and made much Of the terminal
question. Senator Thurston, Of Nebraska,
had been the general attorney for the
Union Pacific system before he became
Senator, and by force Of habit, possibly,
gave all his influence In the Senate
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