New-York tribune., 1877-11-13

CT part OF luc present. NoIEACNN'
THE PACIFIC RAILROADS DEBT.
ARGUMESrs or MEssRs sHELLlBARGFR AND TRUM-
BULL N BEHALF OF THg ROADs-A PLAN OF
ADJUSTMENT.
ICY TELEGRAPH TO THE TRIBCNR.l
WASHINGTON Nov12.-Thc Senate Judiciary Com
mittee resumed to-day the consideration Of the
Pacific Railroads Sinking Fund Bill. Judge Shea-
barger read from printed brief, on behalf Of the
Union Pacific, and argued mainly to prove that the
act in respect to these companies, should be divided
into Two parts one referring 10 the chartered rights
and privileges conferred, and the other TO
the contract relations of the roads to the
Government in connection with the Constitution
and maintenance of the road IN exchange for the
United States bonds lie conteuded that the great
end sought by the Government was the road.and not
to make money. and quoted literally from the su-
preme Court decisions about the grandeur Of the
work. He also referred to the enormous risks taken
by individuals in advancing money for the building
of the road. IIs labored to show the committee
that the late decision Of the Supreme Court had
practically adiudicated the whole already, and
any alteration or amendment without the assent of
the company was an infringement OF a contract
clearly unconstitutional He asserted that 1t was
an executed contract; that the Union Pacific Com
pany had fulfilled its part of the contract, and II
only remained now TO pay the bonds at maturity
and that for the twenty years vet 10 come Congress
had no right 10 question the intent OF the company
or to compel a preparation for such payment until
the bonds became due, and endeavored 10 show au-
thority for this view from supreme Court opinions.
Hespecially cudeayored 10 show that net earnings
in the language OF the law meant what was left
after paying ali claims, intending all interest due
When Judge Thurman quoted the law in section
Is, which is silent on the provision to pay interest
but specifies certain operating expenses Mr. Shclla-
barger insisted that that was not the proper con-
struction He insisted that the debt not due
fortweuty years and no act Of Congress could make
it or any part OF due before that time, and that If
the bill passed, all incentive property to operate
the road by the stockholders would be lost
and tie road might eventually fail into the hands Of
the first mortgage bondhoders, and so the Govern
mcnt might lose the whole amount claimed. Judge
Thurman insisted that the bill could not rjure the
first mortgage bonds rs their priority was uhque>-
toned. and they were really benefited by the
bill. as the sinking fund which II Is now
proposed 10 establish To secure the Govern
mont could De- drawn upon to make up any
possible deficiency 10 the first gage, even II the
Government did not get dollar: ana so FAR as there
being 40 incentive to the Stockhoders ne sad IT
unfair 10 claim the bill was run0us to them'
since by the C0mpany's own reports they were earn
ing enough 20 pay al their interest. the amount
claimed IN the Thurman bill for the Government
ket value OF the stock
Ex-senator Trumbull of Illinois, appeared specially
for the Central Pacific, but said that IN general ns
arguments would equally apply to the case of the
Union Pacific. lie urged that the fearful risks as-
sumed by the companies were only fairly compen-
stated, and that to secure the road Congress would
gladly have given much more if necessary, and only
gave bonds because they did not have the money.
He urged that the Central Pacific was greatly in
jured, because II only received currency bonds, and
was compelled to convert them into gold,
because California was on a specie basis, and so,
be asserted, lt only received about SlSoO0.OOO
gold out Of about S2j 900 900 IN United States
bonds. He indOrsed Mr. Shelabarger's position that
Congress bad no right 10 amend the
tract, OF TO insist upon any preparation for
Government business and per cent Of the net
earnings defined by the companies namely
what was left after all the interest whether pro-
perry cnafgeaDle TO the construction of the road
originally or not. He claimed that the Govern
ment and the people had already received
more benefit than they ever expected
TO receive. and gave if rs his opinio1
that the right TO alter, amend or appeal was nut
into the law so that they could make more liberal
subsidized should fan TO build the road. Mr. Irum-
bull said that Congress could not prevent the COM
pauirs from paving all debts that might mature
before the Government bOlds
Judge Tumbull said IN closing that notwith-
standing the companies derived the right from Con-
greSs 10 alter or amend or provide sinking fund,
vet the companies were anxious 10 avoid conflict,
and would submit written proposition, which Is
promised next Saturday, 10 which time the commit
Tee adjourned. Further, and final arguments Will
then be heard on the part Of both companies
1HE OFFER OF TIE RAILROAD COMPANIES.
lGENERAL PRESS DfsPArCH.l
WASHINGTON, Nov. 12.-At the meeting Of
the Judiciary Committee to-day, Messrs. Sidney
Dillon. president Of the Union Pacific and c. p. Hunt
ington yice-presdent OF the Central Pacific Railroad
also present for the purpose OF submitting propO
ston the repayment Of the Government advances Of
interest the bonds Of the companies but the argu-
meuts OF the counsel occupied The whole afternoon and
the committee deferred the further consideration Of the
subject until next Saturday The proposition which was
10 been submitted to-day is understood to sub
stantally as follows:
The two companies Offer First, 70 recOnvey to the
Government about 6OOO 900 Of the lands hereto
granted 10 them with which they prOpose 10 be
credited at the rate OF dollar and twenty Five
cents per SecOndly-TO pay into the United
be paid in semi-annual instruments and also To
pay into ths Treasury semiannualy such amounts
az added to the foregoing and 10 the earnings
for Government transportation will create In a
sinking sufficient with its accumuatiOns OF com
pound interest 10 Hquidate the total amount ad-
vanced be advanced by the Government for inter
the bonds by the year 1903 about five years
subsequent the average date Of maturity OF tue bonds
The committee expect 10 make q report upon the sub
ject at early day.