, 1900-06-07

otlo
States, the President, on February s.
1898, authorized the secretary of the
treasury to pay the amounts lawfully
due upon the prior mortgages upon
the eastern and middle divisions of
said road.
Then the reorganization commit
tee of the Kansas Pacific offered to bid
for the road n sum which would realize
to the government the whole amount
of the principal of the debt-$6, 800, 900.
1t was believed that no better price
thar this could be obtained at a later
date If the sale should be postponed,
and 1t was deemed best to permit the
sale to proceed upon the guaranty
of a minimum bid which would real
fze to the government the whole prin-
cipal of its debt. The sale thereupon
took place. and the property was pur-
chased by the reorganization com-
mittee. The sum yielded to the gov
ernment was 5000. 900. 1t will thus
be perceived that the government Sc
cured an dvanc of $3,S03,O 900 on ac-
count of its lien, over and above the
sum which the court had fixed as the
upset price, and which the r~eorganiza-
ton committee had declared was the
maximum which they were willing to
pay for the property.
1.-THE result of these proceedings
against the Union Pacific system, en-
bracing the main line II the Kan
sas Pacific line, is that the government
" 49, n1Nttp nf tfQ GnhQfdv
claim the sum of $64, 751 .223.7 5, which
is an increase of SIS. 1897. 1876 over the
sum which the reorganization COM
mittee first agreed to bid for the joint
property, leaving due the sum of &c.
5SS, 9OO.1 10 interest on the Kansas Pa
cifc subsidy. The prosecution OF u
claim for this amount against the re-
ceiyers OF the Union Pacific Company
In 1898 resulted in securing to the
government the further amount of
1921. 1910.
The indebtedness of the Central
Pacific Railroad Company to the gov
eminent became due January 1, 1898,
when default in payment was made
by the The deficiency APP
preparation act Of July Z, 1898. ap-
pointed the secretary of the treasury.
the secretary of she interior and the
attorney general n commission with
full power to settle the Indebtedness
to the government growing out of the
issue of bonds to aid in the construc-
ton of the Central Pacific and West
ern Pacific roads. subject to the ap-
proval of the President.
AN agreement for the settlement OF
this Indebtedness was entered into be-
tween the commissioners and the
railroad companies on February l.,
1899. The amount then due to the
United States for principal and inter
est upon its subsidy liens upon the
Central Pacific and Western Pacific
railroads was SOS. S12. 715.4S. more than
one-half of which was accrued interest
upon the principal debt. The agree
ment for settlement provided for the
funding of this amount into promis-
sorry notes bearing date of February
l. 1899, payable respectively on or
before the expiration of each success
sive six months for ten years. each
note being for the sum of $780,
635.7S, or one-twentieth Of the total
amount due. The notes bore interest
at the rate of 3 per e annum. pay
able semI-annually. and had a condi-
tion attached to the effect that, If de-
fault be made either of the payment
of principal or interest of either said
notes or in any part thereof, then all
of the notes outstanding, principal n
interest. Immediately became due and
payable, Notwithstanding n other
stipulation of the agreement of settle
ment,
ut was further agreed that the pay
ment of principal and interest of the
notes should be secured by the depos-
1t with the United States treasury of
$57, $50 900 face value of first refunding
mortgage 4 per cent gold bonds, to be
thereafter issued by the Central Pa
cihc or its successor having charge of
the railroads then owned by the COM
pany, such bonds to be part of the
issue of not exceeding 500. 600. 900 in
all. and to be secured by mortgage
upon all railroads. equipments and
terminals owned by the Central Pa
cifc Railroad Company, the mortgage
being a first lien upon the property.
I'm pursuance of another provision
of the agreement. the our earliest ma
turing notes were purchased by
Speyer & Co, March 10. 1899. and the
proceeds. amounting to S11, 1852. 543.12,
and accrued interest TO the date of
payment. sS5.771.02. in all s1l,7sS.-
314.1+, were received by the Treasury