Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1875-02-26
New MAY 10 Pay Old Debts" |"

The government issued bunds in aid of the
Union Pacific. You will remember, to the
amount Of twenty-seven million dollars In
the first instance il was to have a. security
a first msrtgage ON the road. Afterwards
it appeared tina, the builders could not pro-
ceei with the construction OF the road
without the disagreeable necessity Of using
some of their own money, unless they could
rai-e some more outside So they modestly ask
ed the government to take j second mortgage
instead of a first, and that would enable the
company to get as much more money by SELL
ing an equal amoan: Of first mortgage bonds.
Congress was c0mpial-ant, and On being
assured that ii second mortgage was really
lust as good is first, though it didn't
sound quite 50 well, it did the required
thing. The twenty-seyen millions was iur-
nished On 4 second mortgage, and one day
when the Secretary of the Treasury asked for
the interest due, his pretentions were regard
ed bv the managers ot the company as act
ually Indecent lie WIS assured that there
was no provision or requirement IN the bill
that the company should pay any interest
until the maturity of the bonds, thirty years
from their date This was a puzzler to Sec
retary Boutwell,, who then brooded over the
Treasury Department, and he never fairly
got the matter through his head, though it
strongly reminded him Of n hole in the sky.
The company Is now in arrears ON the inter
est over eight million dollars, and the gov
ernment has brought a suit for the amount.
1t has good case, and the general opinion
is that it would win it If 1t had somebody
else to manage it besides Attorney General
Williams. But. pending a trial, the COM
rany makes that proposition which Will Tor
ever cast Wilkins Micawber into the shade
among the prosiac people who don't know
how to make money by paying their debts.
The President of the company, Mr.. Sidney
Dillon, begins his proposition to Secretary
Bristow BY pointing out the fact that the
government has only second mortgage, and
the company will probably never be able
to pay it; that the government
yill never be able to collect its duas
except BY paving of the first mortgage and
running the road lie then comes TO the
most interesting part Of the proposition,
which is in substance as follows: The debt
due the United States is to lie at simple
interest. For twenty years from July l.,
1875, the company is to pay into the
United States Treasury $500, 600 year, or
less than one-third Of the annual interest.
After July l, ls95,it proposes to pay Sl5O,-.
900 year. or about one-half cf the annual
interest. When these payments, reckoned
at compound interest, equal the original
loan, reckoned at simple interest, the debt Is
to be considered paid. ln other words the
company proposes to pay something less
than t,ro per cent on the bonds for twenty
years, then something less than three per
cent for number of years until its object Is
accomplished. Meanwhile the government
pays six per cent interest on the bonds and
must pay the principal in 1895. II we
could ali paw orr debts in this way. how
easily we could get along. 1t beats Andy
Johnson's plan for paving the national
debt, which was to repudiate it after inter.
est enough should have been paid to equal
the principal Boston Herald.