The spirit of democracy. [volume] (Woodsfield, Ohio) 1844-1994, 1873-02-04
From the New York Tribune, January 2o.i
Interest on the government Sub
6ldieS.

BIOIcSs
The solution Of the Pacific Railroad
interest question, as made by the Senate
Yesterday, is better eian was expected.
Tie amendment provides that the Sec.
retary OF The Treasury shall withhold
from the amount clsimed for transpor.
tion.&c, by the companies enough
money to pay the interest due ON the
bonds lent BY the Government, and also
FIVE per cent. sof the net earnings, to be
applied to- a sinkin. fund, as provided
by law. The companies, however, af(
allowed to sue in the Court of Cam
with right of appeal to the Suprenle
Court for the amount which they clain1s
Perhaps the reports of the Presidents
OF the Union and Central Pacific Rail
roads, just communicated to the Senate,
assisted that -body.ia coming 10 faif
decision ON the motions to sinake pr
roads pay their debis to; tIfe Cover
ment. The act of 1852, after pfpyidin&
that the Companies should pay the sub
sidy bonds at maturity, enactedthat nll
compensation for services rendered for
the Government, should be .applied ta
the payment of said bonds and dsinteresta
until the whole amount was finally paid,
and another section prescribed that a
least 1--WE per cent of the ne. earnings
should be devoted TO the. same purposes
The act of 1864 allowed the Companie<
to receive half what they earned from
the Government, but they were not sat
Iisfed with this, and set up the plea thai
they were not required 10 pay, any in
terest until the principal fell due--tha
is to say, the Government was TO 60 OF
paying interest for them for thirty ye6ft
iiss.sta Mt tthr end or That time was to pe
| back the loan if it could Ths-Seef&
/, ,tary OF the Treasury and the Attorne1'
General overruled this pleay but
gress was induced to interGzre in h6
of the roads, and to pasS the ain1
ment to the Army bill in f57I, dire
the Government to pay tle Com
their fii.l earnings Sincdlhat til.
course, they have been reaplarly 10 g
fault with the interest, andI the u0f
States has been compelled TO Star
their place and satisfy the 5pndho|
Moreover. tits understood THAT tll9
/ requiring them to retain five per cei|
their annual net earnings al q sinEI7
fund for the payment 3: the princi6
has never been complied wit
Tls subsidy bonds LOANED by th5
United States to the Centrai and We
tern Pacific Railroad amount to ON
S55, $50, .ehd to the Union Pacific Rail
road to S27, ,as6,6is Total S55,00z
1872. They already owe The UnffS
States nearly S10,OoO' 600 fbr intefez
and it appears from a report made U
Secretary Boutwell, last May that "a
principal and Accumulated }usefea
the maturity Of the bonds viii and
according to the. present rate Of ~
ment, to Sl3l, 900, ,000-for which 4
the Compamesgare mixing <Ho pf6
ion whatever The Goxernme1t has
security but q second mortgage sand q
first mortgage bonds amount now to 6l
tween fifty sn6 sixty millions. IT a
interest is not paid as it falls due. il vii
never be paid. .sss.s ~ s.
i While the Companies are thus in de
faaltto the Government they are earn
ling large income for their stpckhol
sders. Thercceipts of the Central Ps
cifc Road during the last fiscal yea
were S9, 37as 765 and the expenses 81
81 1872, aeasing atproftEof over. So
100000. The receipts, OF the Unio
Pacific Road werea S7,962170. Th
President does not publish the expez
ses; but the Government Directors hav
recently reported to the Secretary OF th
: Interior that the road, .sif properl
managed, can be made to meet all Jun
demands upon it, including the Go,
ernment lien !" At any rate I'VE nee
not be uneasy as to the resources OF til
Union Pacific Road A Company whic
has squandered millions in Credit NJ.
! hilier contracts, which has debauche
. congress, bought up legislators, distril
, uted enormous sums 10 the lohbv,sh
: be held'to the strict lettersand spirit
its just agreements. Congress must e
act from these railroads tie full pa
ment of their debts. They have nlayt
/, too long with the forbearance of Il
country.
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