Vernon County censor. [volume] (Viroqua, Wis.) 1865-1955, 1900-06-06
PACIFIC RAILROAD SETTLEMENT. II
Ranks One of the Greatest Achievements of President
McKnIeys Administration.


the upset price, and which the reorganIza-
ton committee had declared was the mn XII
mum which then were willing to pay fer 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 S64.
T5i,. '&T5, which is an increase of SIs,a9T.-
1870 over the sum which the reorganiza-
ton committee first agreed to bid fel the
Joint property, leaving due the sum % So
oSS,eOol 10 interest on the Kansas Pacific
subsidy. The prosecution OF claim for
this amount against the receivers of the
Union Pacific Company In 1895 resulted In
securing to the Government the further
amount of SS21. S9T.70.
The Indebtedness OF the Central Pacific
Railroad Company 10 the Government be-
came due Jan. l, 1898, when default in pay
ment was made by the company. The def
cheney appropriation act OF July Z, 1898
appointed the Secretary of the Treasury,
the Secretary of the Interior, and the Al
torney General. a commission with full
power 10 settle the Indebtedness to the
Government growing cut of the issue of
bonds TO aid In the construction of the
Central Pacific and Western Pacific Roads,
subject TO the approval of the President.
An agreement for the settlement of this
commissioners and the railroad companies
on Feb l. 1899. The amount then due 10 the
United States for principal and interest upon
its subsidy liens upon the Central Pacific
and Western Pacific Railroads was S5S.sl2.-
IlJ.4S, more than one-half of which was
accrued interest upon the principal debt.
The agreement for settlement provided for
the funding of this amount into promissory
notes bearing date of Feb. /, 1899, payable
m hnfa ha nj Ion NJ
each successive six months for ten years.
each note being for the sim of 81, $40 635. rs,
or one-twentieth of the total amount due.
The notes bore interest at the rate Of 8 per
cent. per annum, payable semi-annually, and
had condition attached to the effect that
II default be made either in the payment of
principal or interest of either of said notes
or In any part thereof, then ali of the notes
outstanding, principal and interest, impe-
dIately became due and payable. notwith-
standing any other stipulation of the agFee-
ment of settlement.
Ut W4s further agreed that the payment
Of rincipal and interest of the notes sheNd
be secured by the deposit with the United
States Treasury of $5I $40 600 face value of
first refunding mortgage 4 per cent. gald
holds, to be thereafter issued by the Cent3ai
Pacific or its successor having charge Of tse
railroads then owned by the company, such
bonds to be part Of an issue of not exceeding
S10O, 000 100 in all, and to be secured by
mortgage upon all railroads. equipments
and terminals owned by the Central Pacific
Railroad Company. the mortgage being q
first lien upon the property.
In pursuance of another provision of the
agreement, the four earliest maturing notes
were purchased by Speyer q Co, March 10,
1899, and the proceeds. amounting TO S11,-
762,543.12 and accrued interest to the date
of payment, $357TL.02 in all S11,79S,3 1I.14,
were received by the Treasury March ~,
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
to a new corporation called the Central Pa
cltie Railway Company, which latter exc
cuted the mortgage and bonds provided for
by the agreement of settlement
"On Oct. I, 1889, bonds were delivered %
the Treasury Department by the Central
Pacific Railway Company TO secure tie out
standing notes held by the Treasury. The
United States, therefore, holds the notes
Of the Central Pacific Railroad Company
I guaranteed by the Southern Pacific Railroad
| Company to the amount of S47 $50, IT,. SO
bearing interest payable seml-annually al
/ the rate of per cent per annum, and Sc
| cured by the deposit OF an equal amount
| of first mortgage bonds of the Pacific Rail
! way Company, thus providing, beyond any
doubt, for the sure and gradual payment Of
the whole of this subsidy debt, and pro
yiding in the meantime for the payment
of interest at the rate of 3 per cent. upon
the unpaiG alances. The United States.
through The settlement agreement thus en-
tered into, will be reimbursed the full
amount of the principal and interest Of the
Central Pacific and Western Pacific debt,
aggregating S5SSi2, 1888.
THE amounts due to the United States
March 1, 1900 from Pacific railroads on ac-
count of bonds Issued in aid of their con
struction, were as follows: