The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-05-24
ONE oFJ1r GOULD's JOBS.
The Union Pacific Railroad and the Money
IL Owes tho government.

To THE EDITOR OF THE SUN-Sir: The
resolution adopted by the Judiciary Committee
OF the House, demanding the original bill offered
by Judge Lawrence, relative to the sinking fund
to be created to provide for the payment Of tue
principal and interest Of tho ponds Issued by the
Government In aid Of the construction Of the
Pacific Railroads. Is likely to encounter consd-
cradle opposition when 1t comes before the
House for nnal action.
1t Is maintained that the au cunts proposed to
be demanded OF the several companies annually,
with the accumulated interest thereon, are
wholly inadequate to provide an amount at the
maturity OF the bonds sufficient to llquidate the
Indebtedness of the companies TO tho Govern
ment. The sum required to be paid annually by
the Union Pacific Railroad, according to the
provisions OF the bill, is t11o,00O which payments
are to continue for ten years, and thereafter
until the first Of July, 1895, when the bonds ma
ture. Nine annual payments are required to be
made Of one million dollars each. These several
payments are to be credited to the company, to-
Retber with compound interest at the rate Of SIX
per cent. per annum. A simple mathematical
tive fund to be little less than twenty-five mil
hons OF dollars, or Hfty-nve millions less than
paid on account Of this road In thirty ~. r..
The amount OF the principal OF the Govern
ras,,r or iii Sa renm,red 20 reJee,, 4, shaut
nineteen years il 2i,2BO0O. Tue interest paid
and TO be paid until the bonds become due and
payable will exceed 1tty millions, making the
Total sum contributed by the people to this cor
Grafton little above the amount which has
been stated From this sum tnere sh 20 "a. n2w y
eminent on account Of service rendered by the
company. which l. officially reported to be S3.-
H5OOc 10 rch l, 1875. Adding this amount to
the sinking fund proposed, and the earnings on
Government account for the next nineteen
years at the rate OF 10000 per annum. IL will be
readily seen that there will exist n deficiency Of
IA ed hp ha fux q
fve Ter cent. on the net revenues Of th3 com
pany.
company have increased at the rate Of fifteen
per cent each year so that II this rate Of Increase
Is Maintained without any Interruption during
the period mentioned. the net receipts OF the
road would be augmented TO the enormous sum
Of SG0ON,nO In ls95. Even assuming such a
growth Lossiole, the five per ceLt. tax on the net
income for each successive wear would not az.
greeate more than $300O,OOO, leaving still de.
nciency OF Sll,OO.OIO. But. Of course, such an
Increase IN nings WOULD be unprecedented
and unreasonable TO expect, even II no other line
OF road Is opened 10 the Pacific coast during
The question is therefore asked by all who
have considered the subject. How can the
government secure the payment of Its loanI"
In view Of all tina circumstances, IL would seem
10 be dimcult question to answer; but II Is
nevertheless susceptible OF practical solution.
htQuire the company to pay an amount annual
" winch, when compounded al six per cent. IN
terest, vi IN nineteen years amount to tue ex-
act sum for which the road Is liable. viz. az
VOUD. he sum required for this purpose 10
about sl,'JO,OOO, or one million more than that
proposed by the Judiciary Committee. or
course, such payment would preclude the
company from making any dividend gu their
81 OK Tor several years. AS the annual interest
charge ON the b lnus OF the company outstAnd-
ing. together with this amount, would about
absorb the net revenue; but IL Is serious ques-
lion for Congress to consider whether the in
terests OF Jay Gould and his gang Of rec Rless
CANT lers are 10 De fostered to the detriment Of
the Government, especially when IL Is remem-
bered that IN the one Case the good money Of
the Government WAS loaned to tue builders Of
tins road, Tor which the psople are taxed to pay,
and In the other case the STOCK OF tne Union
Pacific Company WAS issued with only uOmi-
mai conside alton pad therefor.
Goulu's well-pald agents are here In force, and
more are coming 40 secure favorable action by
Congress on TINS subject, and unless pu lie at
tenton is called 10 tue schemes winch he Is
seeking to promote bY the lavish use Of per-
suasiye cash or doubtful "puyioges' on the
narket, lie may succeed in hoodw mixing several
motion II his ulslls. INDEX.
WASHINGTON, May q, 1870.