The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1873-01-04
What 1t Cost to Build the Pacific
Railroad.


now over twelve millions and a half dol
lars. Two millions more are due and
unpaid. Ten years ago Congress passed
an act to aid the construction Of rail
way to the Pacific. 1t now looks as II
the effect Of the act had been to build the
railway and give it to the persons who
engineered tho scheme through Congress
That act gave the Companies engaging to
build the road enormous grants OF public
land, and In addition to that loaned them
the bondslSoi the United States run
ming thirty years, at the rate Of $4,000
$4,000 or $4,000 per mile OF road, &C.
cording to difficulty Of construction. The
aggregate Of bonds issued is over SG4,-
100000. That oct made these bonds
frat mortgage on the entire property OF
the roads. Two years later another act
was passed relinquishing this iirst mort
gage and making these bonds a second
mortgage, giving priority tothc mortgage
bonds issued by the Companies. The
Companies are required to pay the bonds
at maturity, and, 1t is inferred, to repay
interest at same time; but they are not
required TO pay the interest on the bonds
as it accrues; ind against the debt thus
accomplishing they are required to pay
but five per cent annually of their net
earnings on the principal, and TO take
u credit for transportation Of mails,
troops and supplies on their interest
account. The bonds arc full Gov
eminent obligation, and the United
States are as completely bound Tor
principal and interest as for any other
loan. The interest that has accrued on
these bonds is $1S,5OO,OOO. OF this &c..
100000 has been paid, on which the Com
panies have a credit off littleover $4,OOO,-
600 for transportation, leaving the United
States now out Of pocket twelve millions
and a half with two millions more due
on account OF this interest. Owing to the
uncertainty Us to the amount Of transport
tation that will be charged to the Govern
ment from year to year and the irregular
ity OF net earnings, the amount OF pay
ments on the debt before maturity cannot
be closely estimated; but the interest
alone on this debt by the time it is due
will amount to over $115,OOO, 00O-making
the whole debt on account ofthis loan one
hundred and eighty millions. The re-
payment by transportation has thus far
been ut the rate of about o halt million
per annum. The five per cent has notyet
amounted to much and probably never
will-for even if the business of the Com
panies should improve the art OF book
keeping has been brought to such pertec-
ton that the met earnings" WILDE small
We have seen it estimated that at the ma
turity OF the bonds these Companies will
owe the Government come one hundred
and thirty millions.
Nobody now expects, we believe, that
the Companies will ever redeem the bonds
atmaturity or reimburse theinterest then
unrepaid, nor does anybody suppose the
second lien held will then enable the
Government to recover anything to reim'
bufse the treasury. The holders of the
Company's own mortgage bonds would
come in first; and when we bear in mind
that they have given mortgages for enor-
nous sums on tho road, on the land
grants, and on their income, it does not
appear probable thatatter those are sat-
isfed there will be lett even bone for
the United States to pick. 1t thus begins
to appear pretty clear that save what 1t
gets back in transportation and out OF
the annual 70 per cent of net earn
ings," tho Government will have abso-
lutely given to these Companies the whole
cost Of this loan, principal and interest
besides the munihcent endowment in pub
lie lands sufficient in itselfto have built
the road.
The Credit MObilicr, US We understand
was a ring within ring, not unlike those
that exist on the inside of nearly all the
great railroad companies in the country. II
absorbed the immense resources OF the
Union Pacific, and having secured the
construction of the road for small pro-
portion Of them, pocketed the balance in.
stead Of dividing with the other stock.
holders. Hence tho report of Contem'
plated suit by the company 10 recover
$s0OOO,O 0O-a sum that is suggestive Of
the profits realized by few shrcwd men
out Of tho Pacific Railroad legislation oil
Congress. The bonds loaned by the Gov.
ernmcnt were sufficient to build the road,
The harvest Of the Credit Mobilier, there.
fore, consisted OF the vast sums borrowed
on the bonds oil the company, these be.
ing, as we have eaid of three classes. In
this way the magnificent subsidies were
converted into ready cash, which was di.
vidcd among those who held the stock OF
the Credit AIobilier. When the CompOny's
bonds fall due, the holders will have to find
the property as best they can on which
to foreclose, The act Of Congress relin'
gushing the first mortgage was the Que
that did .themost mischief, The money
could not be realized Immediately on the
land grants. Congress was told that the