Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1900-06-05

cages upon the eastern and middle divisions
of said road
Then the reorganization committee of the
Kansas Pacific offered to bid for the road
sum which would realize to the Government
the whole amount Of the principal of the
debt. $6,303, 900. 1t was believed that no
better price than this could be obtained at
later date if the sale should be postponed,
and it was deemed best to permit the sale TO
proceed upon the guarantee of Il minimum
bid which would realize 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 yielded TO the Government was
S6,S03, eco. 1t will thus be perceived that
the Government secured an advance of So,
100000 account of its lien, over and
above the sum which the court had fixed rs
the upset price, and which the reOrganiZa
ton committee had declared was the maxi
mum which they were willing to pay for the
property.
me result or 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,-
751, .222. 10, which is an increase of SIS. 997,-
1876 over the sum which the reOrgan;za-
ton committee first agreed to bid fer the
joint property, leaving due the sum OF So
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 $S21 SOTO.
The Indebtedness Of the Central Pacific
Railroad Company to 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 / 1898,
no nf Aa
the Secretary of the Interior and the At
tOrney General, commission with full
power TO settle the Indebtedness to the
Government growing cut of the issue Of
bonds 10 aid in the construction Of the
Central Pacific and Western Pacific Roads,
subject 10 the approval Of the President.
AN agreement for the settlement of this
Indebtedness was entered into between the
commissioners and the railroad companies
on Feb. ]. 1889. The amount then due tG the
United States for prime pal and interest upon
its subsidy liens upon the Central Pacific
and Western Pacific Railroads was S5SS12,
ibis, more than Oue-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. l, 1899. payable
respectively en- or before the expiration OF
each successive SIX months for ten years,
each note being for the sum of $3.50. So -,
or One-twentieth of the total amount dUe.
The notes bore interest at the rate of per
cent. per annun, payable sem-dnnually, and
had condition attached to the effect that,
If default be made either in the payment OF
principal or interest of either of said notes
or il any part thereof then all of the notes
outstanding, principal and interest. imme-
diatey becam + iue and payable, notwith-
standing any other stipulation Of the agree
ment of settlement.
1t was further agreed that the payment
of principal and interest of the notes should
be secured by the deposit with the United
States Treasury Of SOL so, Geo face value of
first refunding mortgage per cent. gold
holds, TO be thereafter issued by the Central
Pacific II its successor having charge of the
railroads then owned by the company, such
bonds to be part Of an issue of not exceeding
S1OO,0O0CO0 in all, and to be secured by
mortgage upon all railroads, equipments
and terminals owned by the Central Pacific
Railroad Company, the mortgage being Il
first lien upon the property.
in pursuance of another provision Of the
agreement, the four earliest maturing notes
were purchased by Speyer Il Co, March 10,
1899, and the proceeds, amounting to Sill
49,, 343. L, and accrued interest to the date
of payment, $50, III .02, in all Sill ,314.14
were received by the Treasury March ~
1899, as part payment OF the Indebtedness
OF the central racine ana western Pacinc
Railroad Companies. The properties of the
various companies comprising the Central
Pacific system were subsequently conveyed
to new corporation called the Central Pa
cihc Railway Company. which latter exc
cuted the mortgage and bonds provided for
by the agreement Of settlement.
ION Oct. Z, 1899, bonds were delivered to
the Treasury Department by the Central
Pacific Hallway Company to secure the out
standing notes held by the Treasury. The
United States, therefore, holds the notes
Of the Central Pacific Railroad Company
Company to the amount of S47, $50, 172 So
bearing interest payable semi-annually at
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-
viding i'll the meantime for the payment
of interest at the rate of per cent. upon
the unpaid balances. 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 $5S, 812, 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