Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1900-06-07
PACIFIC RAILROAD SETTLEMENT.
Ranks as One of the Greatest Achievements Of President
McKinley's Administration


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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 princlpal OF the
| debt, $6.303 900. 1t was believed that no
better price than this could be obtaipad at
| later date Ii the sale should be postponed,
and 1t was deemed best to permit the sale TO
| proceed upon the guarantee OF minimum
| bid which would realize to the Government
| the whole principal of its debt. The SAFE
thereupon took place, and the property was
| purchased by the reorganization committee.
| The sum yielded to the Government was
| Sc, 3OS, 600. 1t will thus be perceived that
| the Government secured an advance of 3d.
| $4,000 on account of Its lien, over and
| above the sum which the court had fixed as
| the upset price, and which the reorganiza-
ton committee had declared was the maxi
mum which they were willing to pay for the
property.
1.-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 $64,-
| 751 223.75 which is an increase OF Sic, 991,-
76 over the sum which the reorganlza-
ton committee first agreed to bid for the
joint property, leaving due the sum OF $6,-
58S SOC. 10 interest on the Kansas Pacihc
subsidy. The prosecution of a claim for
this amount against the receivers OF the
Union Pacific Company in 1893 resulted in
securing to the Government the further
amount of 1921, S97.70
1.-The indebtedness of the Central Pacific
Railroad Company to the Government be-
came due Jan. /, 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 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 construction OF the
Central Pacific and Western Pacific Roads,
subject to the approval of the President.
"Ap agreement for the settlement OF this
Indebtedness was entered into between the
commissioners and the railroad companies
on Feb. l. 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 SOS, S12,-
715.4S, 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. 1, 1899, payable
respectively, on or before the expiration Of
each successive SIX months for ten years,
each note being for the sum of s., $40, 635. IS,
or onetwentieth of the total amount due.
The notes bore interest at the rate of per
| cent. per annum, payable semiannually, 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 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.
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 $57 ,S20O0Osface value of
first refunding mortgage 4 per cent. gold
holds, to be thereafter issued4by 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 understanding
500, 100000 in ALL anfis@to be secured by
mortgage upon all railroads, equipments
and terminals owned by the Central Pacific
Railroad Company, the mortgage being a
first lien upon the property.
I'm pursuance of another provision of the
agreement the four earliest maturing notes
were purchased by Spayer & CO., March 10,
1899, and the proceeds, amounting to $11,-
762, 543.12, and accrued interest to the date
of payment, $35, 771.02, in all $11, 79S, 314.1 a.
were received by the Treasury March 81
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 new corporation called the Central Pa
cifc Railway Company which latter exc
cutad 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 Railway 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 47,O5O To 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 in 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,S12, 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:
AMOUNT DUE THE UNITED STATES
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