Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1878-11-17
PACIFIC RAILROAD ACCOUNTS.
Report OF Auditor French-One Com
panY which hns Thus Far Refused
to Comply with the Law A
Chance for our Congress tc
show what it Can DO.


panY which hns Thus Far Refused
to Comply with the LAVA
Chance for our Congress tc
show what 81 Can DO.
WASHINGTON, November 1.-THE follow
ing is an abstract of the principal points in
the report of the auditor of Pacific railroads.
The act creating the bureau Of railroad &C
counts did not go into operation Until the first
of July last, and the report of the auditor, so
far as it refers to the practical operations of
the act in connection with the Pacific roads,
is confined, for the most part, to an illustra-
ton of what its operations would have been
had the act applied to the fiscal year ending
June 90, 1873. Some of the companies in
cluded in the act have made no printed, or
even written, reports to their stockholders,
and the reports of iother companies which do
so are bare of the requisite information, SO
that, at this comparatively early date, it is
next to impossible TO give that exact and COM
plete statement Of the affairs of the compa-
MES affected which it is ultimately de-
signed to do. Much patience and forbear-
ance have been exercised, in the hope that
the companies affected would comply with
the law without resort being had TO the pen
alties prescribed therein. The Union Pacific
company has begun to render the reports
called for, but under a reservation, by the
duNlCG Vi IutlE law OluCGI, WulCu CANNOT NC
accepted by the auditor. The directors have
consented to submit the books and records of
the company at Boston, and none Of the In
formation given in the report has been veri-
fed. The questions regarding the constitu-
tionality of the sinking fund act and the act
creating the bureau of Pacific railroad &C.
counts, the rate of compensation for carrying
the mails, the disposal of their lands in con-
nection with the Dudymott decision, a dis
eliminating against the Pacific company,
date of the completion OF the road, the con-
struction o. met earnings" in connection
with the five per cent. thereof payable to the
United States, and matters connected with
the credit mObilier, and the contracts under
which the road was built, have been and
might be still, 2 source of much expense and
some hardship to the company, not only from
the cost ct litigation and the locking up of
large sums of money, which they may be
equltably entitled to, but much more so from
their general influence upon the valuable
property underits control, and the uncertainty
much more the company must blame
their own litigot Gus spirit. cribs company"
says the auditor, ''being fully able to comply
with the requirements of the law establish
ing the sinking fund, and having nothing to
conceal from its present management of af-
fairs, its accounts, as now kept, being in ex-
cellent condition, and its affairs under the
management Of able officers, would do itself
much more Justice by acquiescipg in all the
requirements Of the law, than it will by IN
terposlng litigation at every step; while, on
the other hand, the government, in a spirit
OF equity and fairness, as well as of self-in-
terest, cannot well do anything that shall
tend to disrupt or not conserve this property
for the use of the United States, and for the
great advantage IL confers upon the nation,
and fer the benefit or reward of its enter
prlslng owners. Litigation is waste. Prac-
teal business settlement of business ques-
tons should be the rule" Concerning the
advance in the rate for carrying freight, the
auditor says; "As soon as it was known
that the rates between New York and San
Francisco had been advanced by the Union
and Central Pacific companies, communica-
ton was had With one Of the government di-
rectora as to the facts in the case. From in
formation furnished in reply, it appears that
the rates were advanced by the freight agents
OF the companies, acting upon their
own ideas of what was best for the COM
panles lnterestedy that the executive COM
mittee Of the Union Paclfc had not taken
any action In regard to it; and that the Off
GERS OF the companies had dissented from the
action OF their agents, although it was done
by their express direction. The reason as
signed fer the advance is that many shippers
sent their valuable goods to San Francisco
ny AdllIOdttJ anu Inelr coarse gOOuS by SllpS
around Cape Horn, and that it was found
necessary to increase the rates in order to get
shippers to make contracts covering all classes
OF goods at reasonable rates. This appears
to have been a matter entirely within the dis
cretlon of the officers Of these companies
and the government cannot interfere until it
is found that the net earnings of these COM
panles exceed ten per cent. upon the cost of
their roads. OF the Central Pacific road the
report says: The Central Pacific company
has not complied with the law, and cerLif-
Gates OF their neglect to do so have been sub
mltted, and wilt be hereafter submitted. from
time to time, to the secretary, for proceedings
to be instituted accordingly. A report rem.
dered under the acts of 1862 and 1868, which
have been repealed, was received by the de-
partment October 3, 1873, and referred to
TINS office, and great discrepancy appears
between the sworn statement Of the pres-
dent OF the company and the one made from
hgures given in a printed report to the
stockholders. question arises in re-
gard to this company as to the right
they may or may not have to lease hun
dreds of miles of another road in which their
own stockholders are the principal owners,
and pay out millions Of dollars for the priv
lege of operating the same, to the great detri-
ment and insecurity Of the rights of the gov
eminent. The printed report Of the company
for 1877 does not furnish information as TO
"hSIhCi IAC COulpduy uidue or lOsG anything
by the lease of a portion of the Southern Pa
cihc road. Dividends paid by this company
for the year ending December 81. iS77,
amounted to four million three hundred and
thousand and forty dollars; the total
amount of dividends paid up tothat time was
eighteen million four hundred and ffty-three
thousapd six hundred and seventy dollars.
This company's floating debt appears to be
increasing over what it owes to its legitimate
business. During the year ending June 30 |
loG, the net increase of its floating debt, or |
bills and accounts payable, over the amount
OF bills and accounts receivable, was five mil |
lion three hundred and ten thousand one hum |
dred and sixty dollars, in spite of which the |
directors saw fit to pay out over four million |
dollars in dividends, and the annual interest |
charge, as shown by the income account, in
creased over nine hundred thousand dollars" |
The remainder of the report consists of dis, |
,ussion of the affairs of various smaller roads |
which have received government aid, and to |
questions of policy relating to government |
,ontrol, none OF which is Of general public |
interest.
The Lords Hotel