Ottumwa semi-weekly courier. [volume] (Ottumwa, Iowa) 1899-1903, 1900-06-21


to obtain larger sum, and the govern
msnt having the right to redeem the
membranes upon the property, which
were prior to the lien of the govern
nlent subsidy,by paying the sums law
fully due in respect thereof out of the
treasury of the United States, the pres
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 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,OOO. 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 fbeststo permit the sale to
proceed upon the guarantee of mini
mum 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 sim
| yielded to the government was $6,3O3,-
900. 1t will thus be perceived that
the government secured an advance of
| So, 800, 900 on account of its lien over
| and above the sum which the court had
fixed as the upset price, and which the
reorganization committee had declar-
ed was the maximum which they were
willing to pay for the property.
ssThe result Of these proceedings
against the Union Pacific system, en-
sbracing the main line and the Kansas
! Pacific line, is that the government
| has received, on account of its subsidy
| claim, the sum of 1854 ISL, 223.75, which
is an increase of $1s,997, 1876 over the
sum which the Reorganization commit
tee first agreed to bid for the joint
| property, leaving due the sum of $6,-
| 588,900.19 interest on the Kansas Pa
X ci6c subsidy. The prosecution OF a
claim for this amount against the re.
ceivers of the Union Pacific company
in 1898 resulted in securing to the gov.
eminent the further amount of 1921.
s97.7O. Z.
| The indebtedness of the Central Pa
cific Railroad company to the govern
ment became due January 1, 1898, when
default in payment was made by the
company. The deficiency appropria-
ton act of July q, 1898, appointed the
secretary of the treasury, the secreta-
ry of the interior, and the attorney
general, a commission with full power
to settle the indebtedness to the gov
eminent 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. va
E<>.. 4 l. 4 IL
this Indebtedness was entered into be-
tween the commissioners and the rail.
road companies on February 1, 1890
The amount then due to the United
States for principal and interest upon
its subsidy liens upon the Central Pa
cific and Western Pacific railroads was
l$5S,812,715.4s, more than one-half of
which was accrued interest upon the
principal debt. The agreement for set
Element provided for the funding OF
this amount into promissory notes
bearing date of February 1, 1899, pay
able respectively on or before the ex-
piration of each successive six months
for ten years, each note being for the
sum of $2,940, 635.78, or one-twentieth
of the total amount due. The notes
bore interest at the rate of per cent
per annum, payable semi-annually, 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 par,
thereof, then all of the notes outstand-
ing, principal and interest, immediate.
ly became due and payable, notwith.
standing any other stipulation of the
agreement of settlement.
"It was further agreed that the pay
ment of principal and interest of the
notes should be secured by the deposit
with the United States treasury of $751;.
$4,000 face value of first refunding
mortgage 4 per cent gold bonds, to be
thereafter issued by the Central Pa,
| cific or its successor having charge OF
| the railroads then owned by the com
! pany, such bonds to be part of an issue
of not exceeding $100,0O0,000 in all, and
to be secured by mortgage upon all
railroads, equipments, and terminals
owned by the Central Pacific Railroad
company, the mortgage being first
lien upon the property.
Elm pursuance of another provision
of the agreement, the four earliest ma.
4 turing notes were purchased by Spey.
/ er & Co., March 10, 1899, and the pro.
ceeds, amounting to $11, 1852, 543.12, and
accrued interest to the date of pay.
ment, $35,771.02, in all $11,79s, 314.14
were received by the treasury March
~, 1899. as part payment of the in.
debtedness of the Central Pacific and
i Western Pacific Railroad companies
The properties of the various compa
MES comprising the Central Pacific
system were subsequently conveyed tx
4 new corporation called the Contra
4 Pacific Railway company, which latter
i executed the mortgage and bonds pro
yided for by the agreement Of settle
j ment.
!. "On October Z, 1899, bonds were de
livered to the treasury department. b,
the Central Pacific Railway company
j to secure the outstanding notes hell