Railroads -- United States; Railroads -- United States -- Finance
During 1894 and 1895 discussion was active, both in Congress and out,
while the reorganization committee worked over the scheme which Mr.
Boissevain had put forward, without making any formal announcement of
a plan. Everything depended on the terms upon which the United States
should insist. The reorganization committee hoped for a refunding of
the government debt at 2 per cent. It had suggested that it would raise
the funds to pay off the prior liens if Congress would take a 2 per
cent 50-year bond in satisfaction of the government claim, would extend
the provisions contained in the Reilly Bill to a committee charged
with the duty of purchasing the property of the Union Pacific, and
would grant the committee the power to form a successor corporation
for the general purpose stated in the Acts of 1862 and of 1864, and
with the general powers given in those Acts, together with the same
rights, privileges, and freedom of action that were exercised and
enjoyed by other railroads.[514] Subsequently it had offered to pay the
principal of the government indebtedness in cash, providing that the
Government would relinquish all claims to interest.[515] If either of
these propositions was accepted it was willing to go ahead; while if
both were refused, and no official counter-proposition was made by the
United States, it seemed idle for the general reorganization committee
or any other committee to promulgate a plan.
But meanwhile the Union Pacific system was disintegrating; partly
from the efforts of the receivers to rid themselves of branches and
contracts which had become burdensome, and partly through the action
of bondholders of subsidiary roads who refused to wait for the slow
action of Congress, and insisted on foreclosure of their liens. As
early as August, 1893, ex-Governor Evans, a prominent stockholder of
the Union Pacific, Denver & Gulf, had petitioned for an accounting
from the Union Pacific, alleging that the branch was being bled for
the advantage of the main line. When receivers for the Union Pacific
system were appointed Mr. Evans petitioned for a separate receiver, and
was granted his request. Litigation followed, and an attempt was made
to get Mr. E. E. Anderson appointed as co-receiver; but the machinery
of foreclosure and sale were duly put in motion and the line became
separated from the parent company. In October, 1893, in view of an
impending default, the Fort Worth & Denver City Railway Company was
placed in the hands of receivers, as was the same month the Denver,
Leadville & Gunnison and the St. Joseph & Grand Island. In April, 1894,
a receiver was appointed for the Leavenworth, Topeka & Southwestern;
in June one for the Oregon Railway & Navigation Company. Foreclosure
proceedings against these and other branches were instituted, and
were attended by a very considerable measure of success.[516] On the
other hand, the receivers were anxious to get rid of onerous contracts
and unprofitable branches.
Public-domain text, read in full here on John Shaqi.
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