While negotiations were going on, Congress passed the Act of July 7, 1897. This act appointed the Secretary of the Treasury, the Secretary of the Interior, and the Attorney-General a commission with full power to settle the indebtedness to the government growing out of the issue of bonds in aid of the Central Pacific and Western Pacific bond-aided railroads. The commission was required to submit any settlement made to the President for his approval, and it was forbidden to accept a less sum in settlement of the debt due the United States than the full amount of the principal and interest of the subsidy bonds. It was empowered to grant an extension of time for repayment not exceeding ten years, at a rate of interest not less than 3 per cent, and to accept such security as might seem expedient.[584] So far as the commission was concerned, this was Mr. Gear’s proposal of the previous year. It seems probable that negotiations had already reached an advanced stage before the Act of July 7 was passed. Mr. Griggs was later of the impression that the act was drawn and passed to fit a tentative agreement which had already been made.[585] If such were the case the willingness of Congress to entrust the matter to the executive branch of the government, after having once refused to do so, may be explained. Possibly, also, the fact that the Union Pacific had been sold at foreclosure on November 1, 1897, for $58,448,223.75, a sum sufficient to cover the full amount of both first and second mortgage bonds, had weight.[586] The indebtedness of the Central and Western Pacific railroads to the United States government as of February 1, 1899, was $58,812,715.48. These figures were reached by adding thirty years’ interest at 6 per cent to the original loan of $27,855,680, and by deducting accumulated credits resulting either from the deposits in the sinking fund established by the Thurman law, or from the operation of the bond and interest account originating in the Acts of 1862 and 1864. Comparison of the figure of $58,812,715.48 with the slightly larger amount given in the previous chapter as of June 30, 1897, will show that during the intervening nineteen months the net amount of indebtedness had slightly decreased. Plan of Settlement In view of the impending maturity of large quantities of subsidy bonds, the first essential point in the negotiations between Mr. Speyer and the government was necessarily that more time should be allowed the Central Pacific for the payment of its debt. It was agreed that at least certain portions might be extended for as long as ten years. Mr. Speyer was of the opinion that, given this extension, the Central Pacific could repay its debt in full—a striking contrast to the former statements of Central Pacific Railroad men. By paying the debt in full was meant paying with interest on all delayed balances.[587]