The L'Anse sentinel. (L'Anse, L.S., Mich.) 18??-current, 1900-06-09

deem the membranes upon the property,
which were prior TO the lien OF the govern
ment subsidy, by paying the sums lawful
~ due In respect thereof out OF the treas
ury OF the United States. the president,
on February 5, 1888, authorized the secre-
tary OF the treasury to pay the amounts
lawfully due upon their prior mortgages
upon the eastern and middle divisions OF
said road.
'"fhen the reorganization committee of
tho Kansas Pacific offered to bid for the
road n sum which would realize to the gov
ernment tho whole amount of the prin-
cipal OF the debt, 50, 900. 1t was be-
lieved that no better price than this could
be obtained at a later date II the sale should
be postponed and IL was deemed best to
antee of a minimum bid which would real
lie 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 $6.3O3.OW. 1t
will thus be perceived that the government
secured an advance OF $3,sO3 goo on account
of 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. IL
that the government has received. on ac-
count OF Its subsidy claim. the sum of $64,-
75l, 223.7 %, which Is an increase OF $751;
997. 3.76 over the sum which the reorgan-
ization committee first agreed to bid for
the joint property, leaving due the sum OF
Sc. 6SS, 9OO.l9 interest on the Kansas Pacific
subsidy The prosecution OF claim for
this amount against the receivers of the
Union Pacific company in 1898 resulted in
securing to the government the further
amount of 1921, S9770
1.-THE Indebtedness of the Central Pacific
Railroad company TO the government be-
came due January l, 1898. when default In
payment was made by the company The
appointed the secretary of the treasury,
the secretary of the interior. and the at
torney general commission with full
power to settle the Indebtedness to the
government growing out OF the issue of
bonds to aid In the const auction of the
Central Pacific and Western Pacific roads,
subject to the approval of the president.
IAN agreement for the settlement of
this Indebtedness was entered into between
the commissioners and the railroad COM
panies on February ], 1899. The amount
then due to the United States for principal
and interest upon It's subsidy liens upon
the Central Pacific and Western Pacific
railroads was $5S,Sl2, 7l5.4S, more than one
half of which was accrued interest upon
the principal debt. The agreement for set
Element provided for the funding of this
amount into promissory notes bearing date
OF February /, 1899, payable respectively on
or before the expiration of each successive
SIX months for ten years. each note being
for the sum of $2,9i0 635.7S, or one-twen-
tieth OF the total amount due. The notes
bore interest at the rate of three per cent.
per annum, payable semiannually, and had
L,
default be made either 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
ment of settlement l.
1t was further agreed that the nav
ment OF principal and interest OF the notes
should be secured by the deposit with the
United states treasury of $57,S20.000 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 500 900, 900 in all, and to
be secured by mortgage upon all railroads,
equipments and terminals owned by the
mortgage being first lien upon the prop
erty
agreement, the four earliest maturing notes
were purchased by Speyer & Co. March 10,
1899. and the proceeds, amounting TO ST.
s2sisi2, and a. accrued interest 70 the date
OF payment, S5, Tl.02. In all s11.79S, 3l4.l4,
were received by the treasury March "a
1899. as part payment of the Indebtedness
OF the Central Pacific and Western Pacific
Railroad companies. The properties of the
various companies comprising the Central
Pacific system were subsequently conveyed
70 :. new corporation called the Central
Pacific Railway company, which latter ex-
ecuted the mortgage and bonds provided
for by the agreement of settlement
On October 4 1899, bonds were delivered
Pacific 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
Railroad company. 70 the amount of h7,-
ooO.li236, bearing interest payable semi
annually at the rate OF three per cent Der
annum. and secured by the deposit or an
equal amount of first mortgage bonds of
the Pacific Railway company, thus provid-
gradual payment of the whole of this s,,b-
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-
imbursed the full amount of the principal
and interest of the Central Pacific ard
Western Pacific debt, aggregatlng $5S.Sl2.-
7l5.4S.
THE amounts due 10 the United States
March !, 1900, from Pacific railroads on Sc
count OF bonds issued in aid of their con-
struction were as follows: