The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1877-05-09

UlldDCt IN well az common sense. lHdI Way Il
have embodied in the substitute, which L
have submitted for the consideration of this
house, and shall now proceed TO discuss its
merits in the briefeSt manner pOsSible:
The first section of the substitute provides
from its present terminus at Fort Worth 10
San Diego by the shortest practicable route
The branches provided for i'm the original bill
are, for the reasons already given, not en-
made to authorize the Southern Pacific of
California to build the west half of the road.
The second section, relating to pro rata
Engagements with connecting roads and like
questions, is almost identical with the same
section in the original bill, and affords think
all the safeguards required to secure the end
aimed at.
The third section provides that the company
shall execute and deposit with the secretary
of the treasury bonos of the company, prop
erly secured by mortgage on the road, lands
and franchises of the company, to the amount
of $4,000 per mile of road to be constructed,
said bonds to be paid in lawful money fifty
years after date, and to bear interest at the
rate OF 2 per cent. year; interest not to begin
to run until three years after date.
The fourth section provides that on the con-
StJuct1On OF ten or more miles OF road and
their acceptance by the government on the
certificate of commissioners given under oath,
the secretary of the treasury shall deliver TO
said company non-interest bearing treasury
notes of the United States to the amount of
the actual cost of the road, not to exceed the
average rate of $50, 900 per mile.
The proposition embodied in the two last
sections is simply this, that, instead of the gov
eminent lending the company its credit in
the shape of a guarantee of the interest on the
bonds OF the company to the amount of $780,
OOO,0e0, IL shall lend its credit in the form OF
non-interest bearing treasury notes to the
amount of about SO, 100000 This proposition,
simple and plain as 1t is will lead to results as
different from those which would follow the
night.
If the bonds of the company are guaranteed
as to their interest by the government, the
company could not use them directly in the
construction of the road, but would have to go
SHINING around the msrkets of the world at
a great expense and stand a heavy discount,
in all probability, to obtain capital, represent
ing past labor, to use as tool of exchange in
order to avail itself of the labor and resources
of our own people in the construction of its
road. This is not only entirely unnecessary
for, as already suggested, IL is not past LABOR
to render available present labor and resources
on hand-but ii is worse. IL entails upon the
people burden equal to the interest paid for
foreign capital used in the construction of
the road, and in case the company becomes
delinquent and the road passes into the hands
OF It's foreign mortgages 10 VIII prove drain
upon the country to the extent of the profits
OF the road forever, unless the road Is repur-
me ean az 0neI Jus1pe
tinues to be instituted as at present.
The interest on $1,000 900 at 5 per cent.
year would be S35O0,00O, the amount which
would have TO be sent abroad each year in
products or bullion to pay for The use of capt.
al needed to serve the purpose of money. If
taken as a criterion, this amount is larger than
the Texas and Pacific company can hope to re-
alize from the profits of its road for many years
to come, and would lead to embarrassment to
the company, high rates OF transportation and
TO further taxation on the part of the govern
ment; and in the end, as already suggested
would render the road tributary solely to for
eign capitalists. We have now too many roads
built In this manner, working solely for the
advantage of foreigners, and IL is time for us 10
look little more closely TO the interests of our
people The cry of reform was heard through
out the land last fall, and was Endorsed by the
ILL.
indicated by the election of Mr. Tilden. II ref
ormation is needed in anything more than an
other-more even than turning out the thieves
and plundererS of the people now in office-it
is in the present financial policy of the gov
eminent, which tor years past has been skill
fully nodded TO enrich the capitalist the
money lender and the bondholder at the ex-
pense of the industrial and business classes of
the country.
Let us now contrast this with the results to
which the principles embodied in the substi-
tute will lead. The company I'm the first place
would be furnished with precisely what is
needed. a tool OF exchange, ready money,
without iucuring any ruinous expense 10 OBJ
tain IL, to prosecute its work and construct
the road. Intert st does non begin to run on
the credit of the government, lent in this
form to the company for three years, giving
ample time, with the advantage of ready
money, to complete the road and begin TO earn
money required TO meet IL. The interest
which the company will be called upon TO pay
to the government is fixed at the low rate OF
per cent. in order to, enable the company to
consequence to carry cheaply. This fact
of itself involves results of the most
nHp alo onSh tSe inG ne
of road and securing the rapid development of
the region Ised by IL; and also insuring
cheap transportation to the Pacific ocean by
a competing line 10 the route already estab-
lished. The low rate of interest will place IL
within the power of the company TO meet its
obligations as they fall due; for If IL can hope
TO pay per cent. 10 foreign capitalists Ii can
certainly pay 2 To the United States govern
ment, so that no embarrassment to the CO a.
pany or high rates of transportation need toe
apprehended, and instead OF proving a. dram
upon the country, tending to enrich foreign
ers, IL Will prove source of revenue to the
government, and relieve to that extent the
burden of taxation. II the federal government
is to lend It's credit TO a corporation for the
purpose of constructing work OF this kind, TO
be owned by the corporation and operated
solely for its private gains, IL is but fair and
proper that, until this credit In the form Of
the roai should be applied TO the payment of
interest to the government. 1t certainly is
better all round. for both the government and
the people, as well as the company, that IL
should pay per cent. interest TO the govern
Eent than per cent. abroad.
In order TO meet the interest on its bonds
and for the purpose of providing for their
gradual redemption the company is re-
p nted s. sta ps every six months rst
the net earnings of the road second, the net
proceeds OF the sale of lands; and third, the
amount due from the government for trans
portation and mail and Geographic service,
and ample provision is made by the substitute
to protect the government againss fraud in
these particulars. The whole amount of the
revenues of the road is required TO be turned
over TO the government in order that IL may
be secured to the utmost extent for the loan of
its credit until the whole is repaid. 1t will not
be possible under these provisions for anybody
to misapply, under any circumstances, the
justified in exacting these conditions, think
can not be disputed, when the object to be at
tainetl as well as the responsibility of the gov
eminent, is fully considered.
As the company can not control one dollar
of the revenues of the road, over and above
operating expenses, until the entire debt Is
paid, u would naturally desire to pay IL of as
rapidly as possible in order to acquire absolute
control of the road at the earliest day possible.
To accomplish this end, the highest obtain
| able rates for freight and travel would be i'm
| posed, depriving the people of cheap transpor-
fation and defeating one OF the main objects