Hot Springs weekly star. (Hot Springs, S.D.) 1892-1917, 1900-06-08
ssaSana
PACIFIC RAILROAD SETTLEMENT.
Ranks as One Of the Greatest Achievements Of President
McKinley's Administration. ss Is

est Achievements Of President :
Administration. h. sss .
amounts lawfully due upon the prior mort.
cages upon the eastern and middle divisions
Of said road 81. +.
Then the Reorganization committee Of the
Kansas Pacific offered to bid for the road a
SUN which would realize to the Government
the whole amount of the principal OF the
debt, $8.S0S. 600. 1t was believed that no
DETER price than this could be obtained at
a later date IL the sale should be postponed,
ana 1t was deemed best to permit the sale to
proceed upon the guarantee of q minimum
bid which would realize to the Government
the whole principal of Its debt. The sale
thereu2on took place, and the property was
purchased by the reorganization committee.
me sum yielded to the Government was
So.ao3,Cc0. 1t will thus be perceived that
tue Government secured an advance Of 3d.
100000 on account Of Its lien, over and
above the sum which the court had fixed as
the upset price, and which the reorgan:za-
ton committee had declared was the maxi
mum which they We're 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 or Its subsidy claim, the sum of $B4,-
Iol,2.23.1o. which Is an increase of SIS, O07,-
1880 over the sum which the reorguniza-
tion committee first agreed to bid for the
yoiht property. leaving due the sum at 49,
ooe,oUO.la Interest. on. the Kansas. Pacific
SUBSIDY. The prosecution OF a claim for
thts amount against the receivers of the
Union Pacific Company In 1893 resulted In
securing to the Government the further
amount of SS21, S07.T 70.
1.-The Indebtedness Of the Central Pacific
Railroad Company to the Government be-
came due Jan, l., 1888, when default In pay
hient 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 AT
tOrney General, u commission with full
power to 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.
A agreement for the settlement OF this
Indebtedness was entered into between the
commissioners and the. railroad companies
on FEB. j, 1851. The amount then due toithe
United States for principal and interest upon
lis subsidy liens upon the Central Pacific
ana Western Pacific Railroads was $5S. S1o,-
aio.3S, more than One-hnlf 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. 1, 1902, payable
respectively on or before the expiration Of
each successive SIX months for ten yenrs,
each note being for the sun. OF So, 040, 635. 7s,
or 0ne-twentietl of the total amount due,
The notes bore Interest at the rate Of 8 per
cent. per ann,lm, payable ~semi-annuuily, and
mad a condition attached to the effect that,
It default be made either in the paYment Of
principal or interest Of either Of said notes
or in any part thereof, then allHof the nptes
outstanding, principal and Interest, ,,imme-
diately became due and payable, nStwlth-
standing any other stipulation OF the a9ree-
ment Of settlement - ~ H. n
1T was further agreed that the. payrnent
OF principal andYinterest of the notes should
he secured BY the deposit with. The United
States Treasury OF $57 500, 0CO face valu;. of
first refundins MORTGAGE per cent. gold
0olds, 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, 0O0,0 GOO in all, and to be secured by
mortgage upon all railroads, equipments
and terminals owned by the Central Pacific
Kaiiroad Company. the mortgage being a
first lien upon the property.
In pursuance of another provision of the
agreement, the four earliest maturing notes
We're purchased by speyer u Co., March 10,
lS90, and the proceeds, amounting to SILL
762,a43.12, and accrued interest to the date
of payment, $35, i'll 10, in all $11, 10s, BIZ, IA.
were received by the Treasury March %,
1893, 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
L p{fn 1bai1yS-uy ftnp,,,,r {, 40. ..
cuted the mortgage and bonds provided for
by the agreement of settlement.
"On Oct. q, 1870, 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
guaranteed by the Southern Pacific Railroad
Company to the amount Of S47, O5O, 172. 30,
bearing interest payable s~emi-annually at
the rate of 3 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-
vtding In the meantime for the payment
of Interest at the rate Of 3 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 $685. 12,715.4s.
The amounts due to the United States
March L, 1000. from Pacific railroads on ac-
count of bonds issued in aid of their con-
struction, were rs follows: M etilt \
AMOUNT DUE THE UNITED STATES
Name of noud- "'fifi ''r'' Il ~ ~
Central Branch Union Pacific.
sioux city ana Pacific.
Total. . !. -. ............,,..........