, 1873-10-21

informed tlat largo portion OF tho nalooi1-
ltooporo' and gamblers funds Ia to 10 n8od to 30
euro newspaper organ for tho campaign.
=.A-.e...=....@-....-@
THE PACIFIC RAILROAD n0NDs.
Tho United States, in addition 10 tho large !
grants Of land to tho Union, Contral and tho |
othor pacino nailroads. iesuod to tho sovcral
Companies United States bonds, bearing O per
cont intoroet and running thirty yoara. Tito III
teroat on tlloso bonds Ia payable aemt-annual1y.
It ia primarily to DO paid by tho Unitod Btatos,-
that Is to sny, Tho unitol Btatos arc tho mnkora
Of tho bondu, md nro bound to tho holders.
Tho Original contract was TINT tho Railroad Com
parios should pay tho interest on the bonds aH
1t fell duo. 10 aocure tho repayment of the
principal and intoroBt, tho United States
took d mortgage on tho entiro roada
and equipments. Subsequently Congress, at tho
request Of tho Companies, authorized thom to
isauo tholr own bonds to an equal amount tho
United States waiving It's mortgage in favor
Of tho Compnny's bonds, aud accepting second
mortgage In Lieu thereof. The history Of what
followed is nov known. The Company aold thcir
bonds and built tho road With the prooacds !; tho
Credit-Afobtlier Company dividing the United
Btatos bonds, and tho 1and-bonas, and 9fso,ooo,-
600 OF capital stock among themselves aa profit.
Tho suit brought by tho United States, unacr
tho act Of the lust session Of Congress, againRt
tho Orolit-Mobilter Company, It's officers and
mombore, is probab1y failure. Nothing Is like
ly to ovor to como Of 1t, and that great fraud
will probably SO unpublished. Thorois nothing
loft then but to mako tho best Of tho matter aa
| it now stands. Tho cost Of tho Union and Of tho
Central Pacific Railroata is shown In their pres-
ont Indebtedness, which is aB follows:
l. Union -Tirst-1uortgugo bonds .$27 900
United ssatSa bonds y Si5Ss' aas ~ ~
| Qther bonda.,.+.......... N,toS,oQo
| Total................t7e. oo,o19
Central Pacific Firat-rnorsgage bonds. ss5 ooo
United Unite s, States bonaB'*''': q Sasssoeo sss oo9
Other ponds.... .......,. @AtSU0o
Total. .$83, ,23s, 900
Tho grant Of land in round numbers WAS 9,000,-
600 acres. Tho Union PaclAo haa issued as
gratuity to It's ownors capital stock to tho amount
of $50, 75o, 900. Tho Central Pacifo has capital
stock to THO amount of s1oo, 100000, upon which,
no believe, dividends aro paid. Tho contract
with tho United States provided that al1 oharges
for transportation on Government account and
per cent Of tho not earnings of tho road
should bo applied in part payment Of tho interoet
accr,1ing on tho bonds For long time, and
until tho exposure Of tho Crodit-hlobilier fraudH
tloao Companies only paid into the Troasury one
half tho charges for Government transportation.
During tho Inst year, the whole Of these earnings
: Layo boen rotainod by tho Treasury, aud OIL
E:sept. 1, 1878, tho interest account Of all the
Pacific roads stood thus:
United stnsea bonds Issued. 81, ,o29, ,612
Interest collected from Companies ........ 4422111
Dalaneo q tntorest paid by aud due to - mr. an.
1nterest ass" now sccrasi anl unpaid
1t will DO seon that tho Companies haye paid
only about one-fourth Of tho interest on the
! United States bonds, and there is nov duo oyol
sixteen millions Of unpaid interest. All that haf
, been collected has boen takon from thom bJ
. Withholding their charges for transportation o.
mails and other Government business. Tit
, unpaid interest already exceeds ono-fourth O.
the principal Of tho bonds. Here, therefore, II
3 q clear case whore the Government may inter
I fore, and compel those roads to perform theI
contract. If they are unable to pay tho intorest
, thon thoy arc bankrupt. Why should they b
Z troated differently from any other insolvont por
? aon or corporation2 Didn't thoy make onougl
out of tho building Of; tho road2
n It will ba soen that tho t1obts arc Of tire
q clasees: /. The 1lrst-mortgage bonds, amount
q ing to about so4 5000; 2. Tho United State
q bonds, second mortgage, Of the sano amount
It aud, 8, Other bonds amounting to nearly $40.
100000. Tho capital stock is mythical. Til
indebtedness Of the roaas ia greatly In excoss o
- their value, and the financial condition is getin
!, worsc for tile United States every day. II til
:. United STATES wero to Heizo tho roads now, tho
would hayo to assume the amount Of tho tlra1
mortgage bonds, principal and interest. Thi
:. would make the present coat Of those road
:. 12s,00000o, ono-half that sum bearing 6 pt
- cont interest and s1e,ooo,0Oo Of arrearagos c
- interest, in all s144,0oo 900. How will 1t t
twenty-five years hence, whom these bonds b
- como duo? Tho cost Of tho roads then will bu
Principal Of hrst.mortgago bonds,
70 PRINCIPAL Of United States bonds. y 9 @
IL six uer ccut Interest On United statcs bonds,
- % years pt.ocao
tx Total cost Of road at maturity Of bonls $a35 800
IT, 1t Ia simple question wlether tho Unitt
i'll States s]lall 60 on paying ita annual proportit
25 Of this 9D5, 600 900 of interest Oh principal
sol 900, 900, aud thon pay tho principal or whet
ia or it will stop tho business now, by compolli.
2l thoso Conlpanlosto pay tho intcroat promptly,
ca taking the road aud selling It to those who vi
mt Tboeo corporations, with their interest :unpai
in and OIL tho ploa TINT thoy cannot do 80, haye p