The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1898-12-07
THE PACIFIC RAILWAYS.
Plan Adopted for Making the Gov
eminent Secure.


eminent 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-
cipal of the subsidy bonds. $27 ,23G,512 and
the accrued interest thereon, So, 2l1 ,5ll.U,
making the total Indebtedness $5S AIS, 70.
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 Pacific case uncon-
cluded. BY 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 S2,5OO,000 upon its lien.
The sale at the instance of the government
was postponed first to December 10, 1897,
and later upon the application Of the
United States was postponed to February
It, 1898. 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
the United States might be held to be
subrogated TO all the rights of said prior
lien holders and that receiver might be
appointed to take possession of the mort
gagged premises and maintain and operate
the same until the court or congress other
wise directed. Thereupon the reorganiza
ton committee agreed that If said petition
was withdrawn and the sale allowed to pro-
coed on February 16 they would bid a sum
at the sale which would realize to the gov
eminent the entire principal of its debt, Sc,
100000 Believing that no better price could
he obtained and appreciating the difficult
ties under which the government would
la Dor II IL should become the purchaser OF
the road at the sale. in the absence Of any
authority 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
vance of SO. $685. 600 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.
1t is a gratifying fact that the result OF
these proceedings against the Union Pa
cific. system and the Kansas Pacific line
IS that the government has received on
account Of its subsidy claim the sum OF
S64 701, 223 TO- increase of SIS 997 1853. "a
the sum which the generalization commit
tee originally agreed 10 bid for tho joint
property, the government receiving its
whole claim, prn cipal and interest in the
Union Pacific and the principal OF its debt
been taken TO foreclose he governments
lien upon the Central Pacific Railroad com
pany, but before action was commenced
congress passed an act, approved Juiy Z,
1898, creating commission consisting OF
the secretary of the treasury, the attor-
ney-gereral and the secretary of the in
terrier and their successors in office, with
full power TO settle the indebtedn ess TO
the government growing out of the issue
of bonds in aid OF construction of the Cen
trail Pacific and 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
Element OF the Indebtedness in accord
ance with the act referred to will be duly
submitted to congress-