The Washburn times. [volume] (Washburn, Wis.) 1896-1976, 1900-06-06

amounts lawfully due upon the prior mort
cages upon the eastern and middle divisions
| Of said road.
Then the reorganization committee of the
| Kansas Pacific offered to bid for the road a
| SUM which would realize to the Government
| the whole amount OF the principal Of the
debt, Sc, 1903, 900. IT was believed that nc
| better price than this could be obtained al
| a later date if the sale should be postponed
| and it was deemed best to permit the sale tC
| proceed upon the guarantee of minimum
| bid which would realize to the Government
| the whole principal of it's debt. The sale
thereupon took place, and the property was
! purchased by the reorganization committee.
The sum yielded to the Government was
| Sc, 303, 0C0. 1t will thus be perceived that
| the Government secured an advance of 3d.
| 900 on account of it's 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 ma XII
! mum which they were 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 of it's subsidy claim, the sum of $64,
751, 10, which is an Increase of $1S997,
1853. Is over the sum which the reorganiza-
ton committee first agreed to bid fer the
joint property, leaving due the sum Of So
| oSS,900 ID interest on the Kansas Pacific
subsidy The prosecution of Il claim fol
this amount against the receivers of the
| Union Pacific Company in 1898 resulted in
securing to the Government the. further
| amount of 1921, SOTO.
The Indebtedness Of the Central Pacific
| Railroad Company to the Government be
| came due JAM 1, 1898, when default in pay
| mont mlIp nv thn ba of
cheney appropriation act of July T. 1898
| appointed the Secretary of the Treasury
! the Secretary of the Interior, and the AT
| tOrney General, Il 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.
IAN agreement for the settlement &c this
| Indebtedness was entered into between the
| commissioners and the railroad companies
| on Feb. /, 1899. The amount thcn due to the
| United States for prime pal and interest upon
| its subsidy liens upon the Central Pac .fic
| and Western Pacific Railroads was S5S, 81,
| 11o.4S. more than One-haf of which, was
| accrued interest upon the principal debt
| The agreement for settlement provided foI
! the funding of this amount into promssOry
notes bearing date of Feb 1, 1899, payable
respectively en- or before the expiration OF
| each successive SIX months for ten years
| each note being for the sum of 81, 940, 635. rs
| or One-twentieth of the total amount due
The notes bore interest at the rate of 3 pei
| cent. per annunl, payable semi-annually, and
had condition attached to the effect that
1 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 becam Z lue and payable, notwith
| standing any olner stipulation Of the agree
ment Of settlement.
1 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, 100000 face value OF
| first refunding mortgage 4 per cent. gold
bolds 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, Zoo in all. and to be secured by
| mortgage upon all railroads, equipments
| and terminals owned by the Central Pacific
| Railroad Company, the mortgage being d
| first lien upon the property.
| In pursuance of another provision of the
agreement, the four earliest maturing notes
were purchased by Speyer & Co., March 10
| 1899, and the proceeds, amounting to SILL
| 762, 343.12 and accrued interest to the date
| of payment, $780, III o. in all S11, 1913 314 l.
! were received by the Treasury March 81
| 1899, part payment Of the Indebtedness
| of the Central Pacific and Western Pacific
| Railroad Companies. The properties of the
| various companies comprising the Contra
Pacific system were subsequently conveyed
to a new corporation called the Central Pa
cific Railway Company, which latter exc
| cuted the mortgage and bonds provided fol
| by the agreement of settlement
''On Oct. Z, 1892 bonds were delivered tC
the Treasury Department by the Contra
| 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 SAT ,050 172 36
| bearing interest payable semi-annually al
| the rate or 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 3 per cent upon
| the unpaid balances. The United States
| through the settlement agreement thus en-
| tered into, will be reimbursed the fuI
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 /, 1900, from Pacific railroads on ac
count Of bonds issued in aid of their con
struction, were as follows:
|