The New York herald., 1875-12-06
What the Pacific Raflroad Costs the
Government.

The recent decision of the Supreme Court
that the Pacific Railroad is not bound to pay
interest on the bonds issued to it by the gov
eminent until the principal of the bonds
shall have matured enables the country to
see what kind of bargain was made with
that rapacious corporation The enormity
of the swindle will appear on the application
of little arithmetic. Had the road been
required to pay the interest on the bonds
semi-annually, as the government pays it
to the holders of the bonds, there would have
been saving to the national Treasury, in
the course of the thirty years, of about two
hundred million dollars This is stupen-
dous sum, but any person competent to COM
pute the interest will say that it is not an ex-
aggeration. III the interest were paid regu-
larly the government could employ it in such
manner as to get six per cent on its con-
stantly accumulating amount, and at the end
of the thirty years the compound interest on
the accruing interest of the bonds would
have risen to two hundred million dollars.
We insert from the official debt statement for
the first of the present month the account of
the Treasury with the Pacific railroads, as it
stood at that date =
Principal outstanding s..................$6 $6i 6235l2
Interest accrued and not yet paid -.... 1915 5s7
Interest paid by the United States 2S 202 S07
Interest repaid by transportation Of mails &c 6575S Sj4
Balance Of interest paid by United States 81 626 953
From the data here furnished we can easily
compute the cost of these roads to the gov
ernment at the expiration of the thirty years
in 1894. About two hundred million dollars
of the money retained by the government for
transportation will have to be paid back under
the recent decision, reducing it to about four
and half millions; but we will lay that out
of the account for the present. The general
account now stands as follows:-
Principal OF the bonds Observation-Disclosures $64 623 5l2
Accrued interest paid ................ I6l55S7
Balance Of interest paid by United states 2i 05s
Now due the government. $S7, 500 o52
The simple interest on the principal for
the eighteen remaining years will amount to
$69 791 $3.50, making the Indebtedness of the
road to the government in 1894 $157, 657, 431,
No rational creature can suppose that the
road will discharge this colossal debt when
it natures. In that event what will the gov
ernment do2 1t has second mortgage on
the road, and can take possession of it by
paying the first mortgage, which amounts to
S59 119, ,000 The cost of the road to the gov
eminent will therefore be:-
Present Indebtedness $S7, 500 052
Interest for eighteen years. 69,97l $50
First mortgage. ....-................... b9ll9000
Total. f2l6, 900 f32
To this sum must be added the
$200, 100000 which the government will
have lost in compound interest, making the
actual cost of the road to the government, if
it should take possession Of it in 1894, the
stupendous sum of $416 956, 432, or 1921, ,542
per mile, which is more than four times
what it could have honestly cost TO build it.
We do not deduct the small abatement for
transportation, because there is set-off
which greatly exceeds it. We refer to the
land grants, amounting to 12,800 acres to
the mile. The government mortgage does
not include these, but only the road and its
equipments. The foregoing statement Of
facts proves that the Pacific Railroad Is the
most gigantic swindle ever perpetrated in
the history Of the world.