New-York tribune., 1875-02-13
THE PACIFIC RAILWAY OFFER.

may ue1eat H.
THE PACIFIC RAILWAY OFFER.
BIRD IN THE HAND WORTH TWO IN THE BUSH
THE PRESIDENT AND CABINET DISPOSED TO
ACCEPT PRESIDENT DnLoN's PRoPosAL-THE
POINTS OF ADVANTAGE AND DISADVANTAGE.
IFRoM REGULAR CORRESPONDENT OF THE TRIDUSEI
WASHINGTON, Feb. 12.-The offer of the Union
Pacific Railway to contribute half million year
to be subsequently increased to threequarters of
million year. toward the creation of sinking
fund for the extinction of its indebtedness to the
Government. was discussed to-day in the Cabinet
meeting. The general expression of views was
favorable to the proposition, although some modi-
fcaions were suggested. 1t seems probable that in
some form OF another the proposition win be sub
mitted to Congress with Executive approval. The
following facts on the general subject, derived from
official sources. will be of interest as tending to
show the nature and value of the proposition. -
The Union Pacific Railway Company derives its
existence from TWO acts of Congress- that of July l.
1862 and the amended act of 1864 By the original
act, the Government granted alternate sections of
land within limit of ten miles on each side Of the
read for its whole length, and also subsidy aggre-
eating trhe over twentyseven millions in currency
six per cent thirty-year bonds, to be secured by
first mortgage upon the railroad together with the
rolling stock fixtures, and property of every kind
and description, for the payment Of the bonds and
interest at their maturity. In the provisions Of this
act preference given to the Government in the use
of the road at all times and the compensation due
the Railroad Company for such services is to be
applied toward the payment of the bonds and inter-
est due the Government. 1t is also provided that
after the road is completed the Company shall pay,
in addition five per cent of its net earnings for the
same object.
Under these terms il was found impossible to get
enough capital invested in the enterprise TO
the completion of the road. The Government being
then involved in q civil war, the completion of the
road was considered necessity, as there was great
alarm concerning the tendency of the States on the
Pacific slope Congress was therefore asked In 1854
to give further aid, and with great unanimity 1T
passed supplementary act making material modifi-
cations in favor of the Company. The Government
hen was changed from first to second mortgage,
and the Railroad Company was permitted to guaran-
tee first mortgage equal TO the amount Of
the Government lien. Neither the first nor
the second mortgage to constitute any lien upon
the Companys lands. Both were to mature at the
came time namely, in so years from date. The land
grant of the Company was doubled. giving the
Company each alternate section within distance
Of % miles on each side of the road.
There was also the following important provision
THAT only one-half of the compensation for SER
vices rendered for the Government by said compa-
MES shall be required to be applied to the
payment of the bonds issued by the Govern
nent in aid of the construction of said roads"
1t has been held that under. this act the
Government has no claim upon the railroads
until the maturity of the mortgage, except for
onehaf the cost of the Government transpOr
The first effect of the Pacific Railroad has been to
reduce the number and greatly diminish the cost OF
Indian wars The railroad, indeed has been the great
eyzer of the frontier and as Indian wars die out
the amount paid the Government by the Pacific
Railroad in the form of transportation for troops,
supplies, &C., must annually grow less and less.
The situation then seems to DC that the Govern
ment has paid its S27OOO0OO, and has little chance
Of getting much of it back for 30 years The propo-
sion of the railroad to pay half and ultimately
three-Quarters of million year as sinking fund
has, on this account, been received with great
favor. 1t is believed that the Company
san nav this amount without impairing its
usefulness. and that it has besides now rendered
such incidental benefits to the Government as tend
largely to reimburse the Treasury outlays- Thus
the official records in the Departments show q
baying up to Aug. 81 1874, as follows:
PostJOfice Department...............@ @,oe4s79
War Department 6462'los
total saving of about $145OOo0O on at the rate OF
nearly $1,000 900 year. The Government Directors
IN their last annual report 10 tho Ceciony VI VIC
Interior saw 1.-THE Government OF 30 years Will be
positive gamer by the construction OF the racine
Railway, though not one cent should be returned
To the Treasury from the Company except
10 the modes stated" There would be
| q strong disposition to insist ON larger
annual payment from the Company save for two
reasons In the first place. 1t is believed. and the
judicial decisions all favor the idea that the Gov
eminent canuot enforce any payment from the Com
| pany until the maturity of the mortgage And, IN
the second place. it is believed that the Company
| esnnot safely undertake to pay more than 1t now
| poffers The success of the Government thus far
n getting money out of the Company has not been
such as to give much encouragement for the future,
aud there Is strong disposition, therefore, to take
sbird in the hand rather than wait for two OF three
1 birds in the bush.
i CABINET MEETING TO CONSIDER THE sUiJECI-IHE
COMPROMISE PLAN REGARDED WITH FAVOR, BUT
AIARoER PAYMENT DEsIRED-MEAsUREs lAkEN
WITH REFERENCE TO MORE SATISFACTORY
TERMS.
IBY TELEGRAPH TO THE TRIBUNs'I
WASHINGTON. Feb. 12-The Cabinet at its meet
| Ing to-day considered for sometime the proposltioh
dthe President of the Union Pacific Railroad 10
treate in payment of its obligations TO the Govern
4 neDt sinking fund by making an annual payment
btbe United States of $780, beginning next 1ufy
Md extending for period of 20 years, after wh'cn
The annual payment shall be $75oooO. The Railroad
claims that it viii not probably be able TO pay the
pnnepa and the interest OF the bonds issned oy 'e