, 1873-11-04

holders likely to do7 Thoy bought tho nrat-
mortgage bonfla Oh tho llypotlosa that
the Government stood behind tlon aa
second mortgagoo. and was bound to
tako caro- Of tho first mortgage in Or
dor to SECURE itsolf. Are thoy llholy now to
take any mildor Wow OF thor powors, or to not
less store by tho security they hold than whom
thoy invested their money In theso bonds7 In |
othor words, arc ttey likely to forego their OK
coptionnl advantages, or will thoy insist upon
payment, and thus forco tho Govotnmont to ray |
their o1aims or buy thom out entirely, unaor |
penalty of losing ovory cont OF It's own inyoss- |
mont7 This Is an important question, aud ono |
which Is likely to oome up for deoislon worry soon.
And whom 1t doos como up, 1t will force the con-
sidoration OF another question, viz: What ia to
be done to socuro tho ultimate payment Of tho
Government lien on all tho subsidized Pacific
Railways?
Tho cost OF tho Central Pacific Railroad, with
its equipment, was about ea5,ooo,ooo; tho coat
OF tho Union Pacific WAS about tue Bame and
that Of tho Kansas Pacific Rai1road about
s12,0D0 600, making total value Of ss2o00, 900.
ThiB property is mortgagod as follows:
Trsk mortgage Central pacino so, 900 900
First mortgage Uniou Pacific. c.......... 27,OU0, 900
Frat mortgage Kaueas paciac. .......... l2,8o5,0oo
seeond % mortsase "ats t. liz United
To!al frst and second mortgages .s124, 1903 coo
Interest," duo to United 8atcs. 15'oooooo
Present debt. t..u,...................fl3 $3.50, 000
II tho United States do not enforce tho pay
t,,An d,,n tn }hn "a
Of this interest will, at the end Of thirty years,
amount to s117,o0o,0oo, which, added to tho
principal, will mako tho debt due to the United
statea s178,o00,000, for which 1t will hold
second mortgage on property costing s82, 900.
All this is on tho assumption that these Com
panieB pay the interest md principal Of tho first
mortgage but tho KnnHas Pacific has now failod
to pay interest On this debt. Whether the
othora pay tho interost on their first mortgages
or not, it ia not nkoly that they will pay tho
principal before maturity; go that ut tue end Of
tho thirty yeara the United States, In ordor to get
any portion Of thoir claim Of e178, 900, will
have to pay OF tho frat mortgages, amounting
to $65000o00 making grand total OF s241,-
100000, for property which will not be worth
then more than 00.000000.
It is a question, therefore, whethor tho United
States ought to go On In this way
any moro To abandon tho mortgages would
involve loss of the principal Of the bonds
aud interest for thirty yoars ut por cent ag-
gregating s17s,ooo,ooo. To go On IS at present
will require tho payment Of eG5. .ooo,0 600 additou
nt fart I'm ~ t11n hru&t
default Of tho Kansas Pacific Company author
izos tho holders Of tho lrst-mortgago bonds to
asll that road at public auction, thereby cutting
of the second, or United States, mortgage al
together-principal and interest. Tho other
companies by failing to pay thoir interest may
have their roads sold in the Same way, thereby
getting rid Of tho Government liens. Now ought
tho United States to wait for any such emorgen-
cy? Why should these rai!rond companies be
treated with any more confederation than pri-
/ vato individuals nro troatod who don't
! pay their debts7 They have substantially etolen
| and divided among tho managors 20 per cont
Of the money raisod on their outstanding bonded
indebtedness they hayo taken tho magnificent
grants Of land and mortgagod them either to
build branch railroads or to put dividends in
their own pockets. Whom tho Government
bonds fall due, with their accumulated interest,
1t will be cheaper for tile owners to step ous
with what plundor thoy nny havo accumulated
meanwhile than to pay thoao dcbta and go on.
Why should tho United States deal with tLoBc
| people otherwise than as q prudent merchant
would deal with debtor who was approprlating
all tho property to his own uses, aud refusing
even to pay interest on Ills debts?