The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1875-02-12
UNION PACIFIC RAILROAD.
A Plan to Pay its Indebtedness to the
Government.

New YORK, Feb. ia letter of the Presi
dent of the Union Pacific r. r. to the Secretary
the Treasury contains the following embodying
the propositions of that company to the govern
ment relative to its obligations. The mortgage
held by the government, in its terms, and by
the judicial decisions of the U. s. Circuit Court
cannot be enforced until tie maturity of the
bonds, which is near the close of the present
century. The bonds are accommodating an IN
terest account, and are also uncolectabe until
the principal is due. The principal and inter-
est when due will amount to over 1000, 900,
though the actual amount advanced by the
government was only $27, 25O,5l2 For this
very large amount the government has only a
second mortgage, and if it is allowed to cumu-
late without any provision being made to meet
it, the company will probably be utterly unable
to pay it. At the same time it is equally man
ifest that the government will be unable to COL
lect it except upon the assumption that it will
advance money to discharge prior mortgages
and run the road on government account, a
policy which wise craftsmanship coulu not ad-
wise. By standing still therefore, the company
has a load of debt accommodating for which no
provision is made, and the government is drift
ing further and further from the opportunity
to secure a just return for its advances. 10 do
nothing is to injure both the government and
company, perhaps irretrievably to both. In
this venture to make a proposition which
offers on the part Of the company all that it
can possibly do, and secure to the government
a substantial return for its advances. 1t is as
follows:
The Union Pacific Railroad Company pro-
pose to pay 100000 into the treasury OF the
United States per annum, on each flrst day OF
July, beginning with 1875, and to continue the
payment for twenty years, and thereafter, on
each first day of July, the payment shall be
$3.50, 1000, and the money SO PAID IN snail ne
held by the Secretary of the Treasury as a
sinking fund to the credit of the Union Pacific
paslr
extinction of the government mortgage, inter-
est thereon to be reckOned at six per cent per
annum. lawful money payable semi'annualiy,
and the accruing interest each half year 20 De
carried to the account of the sinking fund, TO
the credit of the Union Pacific Railroad Com
pany; and this annual payment by the Union
Pacific Railroad Company shall be continued
without delay or default, until the amount to
the credit of the company in the hands OF the
Secretary of the Treasury shall be equal to the
full amount of the government mortgage, reck-
oned at simple interest to the same date. Ihe
government lien now existing is to remain as
security for the discharge OF this oollgatlon,,
and to be cancelled when the sinking fund
thus created shall equal the mortgage the
government, reckoDed at simple interest," at
which time said sinking fund shall be trans
ferred to and shall vest in the United States;
and this payment shall be in full discharge OF
all obligations due from the company to the
government.
Should this suggestion meet with your ap..
prevail, / would respectfully request on behalf
of the company that you lay the matter before
Congress, with such favorable recommendation
as you may deem expedient.
President Dillon urges upon the Secretary OF
the Treasury that the service of the company
in the transportation of army supplies, etc., by
official estimates saves to the government W.
OOO, 900 per year, as compared with the ex-
penses incurred in similar service before the
building of the road.