The Owosso times. (Owosso, Mich.) 1897-1926, 1898-12-09
THE PACIFIC RAILWAYS.
Plan Adopted for Making the Cow
eminent Secure.

In my last annual message i 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
End of November of this year. The amount
due the government consisted of the prin-
cipal of the subsidy bonds. sN, ,5l2. and
the accrued interest thereon, $Sl,21.5l1.N,
making the total Indebtedness sos, AS. 223.75.
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 a decree of the court in that
case an upset price for the property was
fixed at q sum which would yield to tho
government only $2,500,000 upon its lien.
The sale at the instance of the government
was postponed first to December 10, 1897,
and later upon the application of tho
United ted States was POSTPONED o to February
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 8, 1881, 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
Of any money In the treasury not other
wise appropriated. Whereupon the attor-
ney general prepared petition to be pre-
sented 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
lien holders and that a 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 reorganixa-
ton committee agreed that II said petition
was withdrawn and the sale allowed to pro-
coed on February 16 they would bid sum
at the sale which would realize to the gov
eminent the entire principal Of its debt, S.
100000. Believing that no better price could
be obtained and approaching the Difficult.
.NAIx h. II
labor II II should become the purchaser Of
the road at the sale, in the absence OF any
authority by congress to take charge OF
the guaranty Of a minimum bid which
should give the government the principal
Of its debt the sale should proceed. By this
transaction t the o government secured an ad-
which the court had fixed as the upset
price, and which the reorganizadon COM
mittee had declared was the mailman
which they would pay for the property.
1t Is gratifying fact that the result of
these proceedings against the Union Pa
cinc, system and the Kansas Pacific line
ID that the government has received on
account Of its subsidy claim the sum Of
$6, Isl, 223 7 increase Of SIS, 97 163. 1S ever
the sum which the reorganization eomrndt-
tee originally agreed to bid for the joint
property, the government receiving It's
whole claim, principal and interest. In the
Union Pacific and the principal Of its debt
on the Kansas Pacific railroad. Steps have
lien upon the Central Pacific Railroad COM
pany, but before action was commenced
congress passed an act, approved Jtly q,
1893. creating commission consisting Of
the secretary Of the treasury, the attor-
ney-general and the secretary Of the In
terrier and their successors In ONCE, with
full power to settle the indebtedness 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 con 1ress