Cameron County press. [volume] (Emporium, Cameron County, Pa.) 1866-1922, 1900-06-14
sSss
Pacific Railroad Settlements.
.s9.os

deem the incumDTanceG upon the property,
winch were pr4Or 10 tnc I,ll u! tnC govern
ment suOaIuy, Dy paying tho sums lawful
ly que IN respect tnereul out "a the treas
uyy uI the United states, the president,
on February ., 1895, authorized me SecrC-
tary OF the treasury TO pay the amounts
lawfully que upon their prlor mortgages
upon the eastern and miuuIe divisions OF
said road.
'.Ihcn the reorganization committee of
the Kansas Paolhc offered to bId for the
road a sum which would realize to the gov
erLment the whole amount OF the prln-
cipaI OF the debt, $6,3U3UUO. 1t was be-
lieyed that no better prce than this could
be obtained at a later date if the sale should
be postponed, and ii was deemed best to
Permit the sale to proceed upon the guar
antee OF a minimum bid which would real
ize to the government the whole principal
of its debt. The sale thereupon took place,
and the property was purchased by the
reorganization committee. The sum yield
ed to the government was SG,3O3, 600. 1t
will thus be perceived shat the government
secured an advance OF S., S03, 900 on account
Jf its lien, over and above the sum which
the court had fixed as the upset price, and
which the reorganization committee had
declared was the maximum which they
were willing TO pay for the property.
The result of these proceedings against
the Union Pacific system, embracing the
main line and the Kansas Pacific line, is
that the government has received, on aC-
count of its subsidy claim, the sum of $6l,-
15l, ,223. 10, which is an increase of SIS,
9y7,lG3.I6 over the sum which the rcorgan-
ization committee first agreed to bid for
the joint property, leaving due the sum of
50, SIS, 900l9 interest on the Kansas Pacific
subsidy. The prosecution of a claim for
this amount against tho receivers of the
Union Pacific company In 1898 resulted in
amount of $S21. .S97 20.
"The Indebtedness of the Central Pacific
Railroad company to the government be-
came due January J. 1898, when default in
payment was made by the company. The
deficiency appropriation act of July I, 1895
appointed the secretary of the treasury,
Nn cor Of nf h1 Int tnri ha
tGrney general a commission with fun
power to settle the indebtedness to the
government growing out of the issue of
bonds to aid in the construction of the
Central Pacific and Western Pacific roads,
subject to the approval If the president.
"An agreement for the settlement Of
this Indebtedness was entered into between
the commissioners and the railroad COM
panies on February J. 1899. The amount
then due to the United States for principal
and interest upon its subsidy liens upon
the Central Pacific and Western Pacific
railroads was S5S.Sl2,15,4S, more than one
half of which was accrued interest upon
the principal debt. The agreement for set
tlement provided for the funding of this
amount into promissory notes bearing date
of February l. 1S99 payable respectively on
or before the expiration of each successive
six months for ten years, each note being
for the sum of s., $40, 6357S or one-twen-
tieth of the total amount due. The notes
bore interest al the rate of three per cent
| per annum, payable semiannually, and had
condition attached to the effect that if
btIdull Dc llldut GlIDer IN the payment OF
| principal or interest of either of said notes
or in any part thereof, then all of the notes
outstanding principal and interest, imme-
diately became due and payable, notWith-
standing any other stipulation of the agree
| mcnt of settlement
1T was further agreed that the pay
ment OF principal and interest of the notes
| should be secured by the deposit with the
! United States treasury of S57 600 face
! value of first refunding mortgage four per
| cent. gold bonds, to be thereafter issued by
! the Central Pacific or its successor having
| charge of the railroads then owned by the
| company, such bonds to be part of an issue
| of not exceeding 800 900, 600 in all, and to
| be secured by mortgage upon all railroads.
| equipments and terminals owned by the
| Central Pacific Railroad company the
| mortgage being first lien upon the prop
| eTty.
! I'm pursuance of another provision of the
| agreement the four earliest maturing notes
! were purchased by Speyer e Co. March TO-
1899, and the proceeds amounting to s11,-
| ,G2'9i5.l2, and accrued interest to the date
| OF payment, S35,71l.02, in all 81, ,79S, ,314 H.
! were received by the treasury March %
! 1893, as part payment of the Indebtedness
Of the Central Pacific and Western Pacific
haliroad companies. The properties of the
! various companies comprising the Central
! Pacific system were subsequently, conveyed
! 70 new corporation called the Central
| racine railway company which latter ex-
! ccuted the mortgage and bonds provided
for by the agreement of settlement.
! "On October 7. 1899. bonds were delivered
| 10 the treasury department by the Central
! Paclhc Railway company to secure the
| outstanding notes held by the treasury
| The United States. therefore, holds the
| notes of the Central Pacific Railroad com
! panY guaranteed by the Southern Pacific
! Ral!road company to the amount of $47.-
| VoO,II2.36. bearing interest payable semi
! annually at the rate of three per cent per
! annum, and secured by the deposit of an
equal amount of first mortgage bonds of
! the Pacific Railway company thus proVid-
| ing, beyond any doubt. for the sure and
| gradual payment of the whole of this sub
| sidy debt and providing in the meantime
| for the payment of interest at the rate of
| three per cent. upon the unpaid balances
| The United States. through the settlement
! agreement thus entered into will be re-
| imhursed the fun amount of the principal
| and interest of the Central Pacific and
! Western Pacific debt agCregating $5S.S12,-
! 715.4S.
! The amounts due to the United States
| March l, 1900. from Pacific railroads on ac-
| count of bonds issued in aid of their con-
! struction were as follows: