Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1875-11-20
HOW THE PRINCIPAL OF TIE BONDS
IS TO Be PAID.

Ing thirty tnOusaud doll arS per mile, ana de-
liver the same 10 the company earning the
How THE PRINCIPAL OF TIE BONDS
IS TO Be PAID.
For the purpose OF creating a sinking fund
to pay the principal OF said bonds at maturity
it l. provided that, commencing with the
year 1888, and continuing until the year 1870,
an amount OF the earnings OF the road, equal
70 one per Centum OF the whole amount of
1 onds Issued and outstanding, is 10 be set
aside as a sinking fund. After the year 1900,
an amount OF the earnings OF the road, equal
TO two per centum of the whole amount Of
bonds issued and outstanding IS 10 be set aside
as a sinking fund, and continued until a sun
equsl to tue face value Of the bonds is OBJ
taiued. The sinking fund thus raised is 10 be
deposl ted with the secretary of the treasury,
and by him used in the purchase of bonds OF
chased at par in gold, and when 1t cannot be
so invested. the sinking fund Is TO be invested
in the bonds of the United states.
HOW THE INTEREST IS TO BE PAID.
AS has been stated, no portion of the rev.
enue Of the company is 70 be used as sinR-
OF paying the f1tterest on tire bonds, which is
but seventeen hundred and fifty dollars per
mile, the entire net proceeds OF all sales { (
lands granted by congress to aid in the con-
structiOn Of the road are pied sed; next, the
whole amount that shall be earned and be due
from the United States for The transp Jrtation
Of troops aud supplies, and for its postal and
te leg raph service. is pledged; next, an amount
of the earnings of the road sufficient 10 make
pledged. But to make the payment of the iu-
UeIest certain and beyond all question, and
for the purpose of putting the United States
nsuch condition that failure ofthe comp
nies to provide money to pay the interest as the
same becomes due, would not necessitate the
taking Of one single dollar from the treasury
of the United States, the secretary of the
treasury is required 10 retain bonds of the
companies, at the rate of five thousand dol
lars PER mile, and If from the sources have
mentioned a sufficient sum is not obtained to
meet the interest, the secretary of the treas
ury is authorized to sell a sufficient number
and amount of said bonds, which by the act
are left In his hands, to meet any deficit in an
interest payment.
NOLOAN ASKED FOR.
The general government as will be seen, is
not asked 10 loan its bonds las was done in
the cas- e of the Union and Central and KAN
sas Pacific roads, to aid in this enterprise;
nor is the general government asked to be-
come responsible for one cent of the principal
Of the bonds issued by these railroad cOmpa-
nies. Nothing is asked of the government
which by any means can be called gift, sub
sidy or Donation. All that the roads want is
an indorSer whose credit is established, and
10 secure that indorser from loss, they place
The bonds and assets of every character and
description in pledge. With government
guarantee Of interest, the bonds can be dis
: osed of at par. Without IL the building OF
Southern Pacific railroad will be delayed for
years, as money cannot now be obtained in
Europe or elsewhere on the bonds of any un-
completed road. The only thing whicn the
government is asked to guarantee Is, that if
the companies fail to pay the interest,
the government will pay it for them.
in which II is proposed to raise the money TO
build a Southern Pacific railroad, how the
principal and interest is TO be paid, and what
liability, If any, the government is asked TO
assume. 1t is plain business proposition,
and enc which the feebleSJ mind can compre-
hend. Notwithstanding this, the Chicago
Tribune chara cterizes 1t as the grandest steal
of the age, and destined TO sink the credit mos
bilier and Pacific mail subsidies into compare
tive insigDifcance.
WHAT RISK THE GOVERNMENT AS
-UMES IN GUARANTEEING AN INTER
The Union and Central Pacific roads have
an aggregate length of 225i miles, and accord
ing 10 its last published report made an av-
eIsge net earning of S6279 per mile, a sum
sufficient to pay coin interest on an indebted
ness of more than $4,000 per mile. II the
Union and Central Pacific roads earn an
amount sufficient to pay gold interest on
debt of 100000 per mile, 1t is not unreasona-
be to suppose that southern Pacific road
would be able to earn sufficient amount TO
pay coin interest on $4,000 per mile. lift can,
The government assumes no risk in guaran-
teeing the interest. During the years 1870, II,
~, 73 and "a the secretary of the treasury
paid on bonds issued to the Union and Cen
tai Pacific railroads Sl6,936,4S5, and
during the same period OF time the govern
ment became indebted to these two roads
for transportation of troops and supplies and
for postal and telegraph service, in the sum of
S24 9O6llO Instead of the roads being in debt
to the government on account of interest dur
ing the period stated. the government is in
debIed to the roads in the sum of 81, 1863 620. 1t
is true tina these companies, at me close o
the year 1874, were indebted to the United
states, on account OF interest paid. in excess
of receipts in the sum OF l5,496,775, but this
arises from two facts: First, because but fifty
per cent. of the amount due the companies
from government can be retained; ana Sec
ond, because but ten per cent. of the earnings
of the road, under the act granting AID, can @ De
u ed by the government. Neither OF these
causes can exist under The bill proposed by
the friends of the Southern Pacific; first, be-
cause the government Is authorlzed 70 retain
not only fifty per cent. of the amount which
may be due the companies on account OF
transportation of troops and sup
plies and pfs6aI ntire and teegIaRn dnnt sefS3 so
earned; and second, the government has the
right to take not only ten per cent. OF the
earnings of the road, but q sufficient amount
thereofto nav the Interest on the bonds i. sued
and guaI anteed. 1t may be said that the
showing made by the Union and Central Pa
these are through lines, and being such are
doing q much better business than the
branches. Well, let us consult the facts. The
entire amount OF bonds issued by the United
states in construction of the different Pacific
railroads and branches Is S64 ,623 5l2. The in
terest on this sum for the years lS70-l-2 3-4
was Sl93i0,549, and the amount due the roads
from the government on account of transpor-
tatiOn of troops, supplies, mails, etc during
the same period, Was S34, ,63S,9SO, being Sl0, 0,293-
437 more than the interest payments made by
the government on account of its a ID OF rail
roads. These facts demonstrate beyond all
dispute. fist, that the government is not like
ly to loose anything by reason OF the 1ndorSe-
ment already made; and second, that over all
the Pacific rOaiS and branches the earnings
of the roads, in the service of the government
alone, during the hve years menuonea, was
over s. 900 90 per annum more than the an
nual liability of the same. The total earn
ings of these roads during the year 1870,
on account of the government alone was 81,
nD6 ST. In 1871, 1t was increased over this sum
thirty-five per cent. in 1872 the increase over
the preceding year was thirty per cent; In
1873 the increase over the preceding year was
seventeen per cent; in 1874, the increase over
the pre- ed ng year was twenty-one per cent.
Taking these years together the average an
nual Increase was at the rate OF twenty-slX
per cent. SO that in the year 1914 the earning gs
Tor the year S9,9lS O90, against 4O06S1I IN
1870 The average earnings of the Texas Pa
1t is new road, and owing. to the fact
that IL had to be completed % certain
points within limi'ed period o.
time or incur foTfeitures, the attention OF It's
officers and the employment OF It's rollins
stock was directed more 10 bodybuilding thar
| tue solicitation of freight and passengers
| The secretary of war, in 1865, in compliance
| with senate resolution, reported that tht
/ cost of maintaining troops in New Mexico
| and Arizona, for the three preceding years
| was SIS l27, ,992, and more than $500 600 an
| nually. This-sum did not include the cost o
! Indian agencies and supplies, or the trans
| portatiop OF The mails The cost Is no les
| now than thsn. In addition to supplying
| New Mexico and ARIZONA, this line would als'
| Greatly aid the overnment In the transporta
! ton of troops and supplies and in the transpor
| tation of mails in The Indian TERRITORY, norm
| ern Texas and southern California. Within
| the Territory and along the lines mentioned
| in the bills are sixty different posts and on
| hundred and five companies OF infantry an
| cavalry. The cost OF maintaining an lnfan
try regiment at these different posts Is 81 OOO,OO
| per annum, and cost of maintaining caVLIr,
! regiment at these points Is twice that OF 81
| iufan Try regiment. With the Texas Pacln
| completed and its branches. passing as IL zoe
! through a much more desirable country thai
| does The Union and Central Paclhcs, IN
| eatnings OF the one ought to equal the otneI
| The Texas Pacific has 9,OOO,OOO acres OF Ian
! in Texas New Mexico, Arizona and Califol
| mia, The proceeds OF this are pledged to tn
payment of the interest which the govern
ment is asked TO guarantee. In ADDITION !
this the entire earnings oil road which mus
on completion, be equal to that of the Unio
| and Central Paclfics, and which now nei
SS2I7 per mile per year, is also pledged. In &C
dition to this, the ponds which are lett In IN
hands OF the secretary OF the treasury ar
SUFFICIENT to pay the interest on the who
number OF bonds that may be issued for thre
| Vearsif nothing was derived from any othe
source. Having shown you that Ihe ~
] earnings of the road Tor the past year WS
g1265 per mile on the portion finished, real
fbs oTIy question for consideration is, Wh'
| Tisk does the government assume In guara,
| tkEInG lie difference? If nothing should
| derived from .hE sale Of lands, and not OF
| dollar should be received or earned from u
| government and the earnings OF the ros
! Should not increase any during The next I'll
| teen years, the 5000 per mile Whlch tne 90
ernment holds, would pay the interest VII
! out taking one oollar lron TIC ueh9uiJ VI u
| United States.
WHAT THE TEXAS PACIFIC HAS Z
EARN TO PAY THE PRINCIPAL AN
INTEREST on ITS BONDS.
It's debt will be 500 per mile, and on "a
sum ali thai is required OF It is TO earn Sl'