The new dominion. [volume] (Morgantown, W. Va.) 1876-1904, 1878-05-04
SOUTHERN PACIFIC RAILROD.
Emphatic Condemnation of Subsidies.
The Thirty-second g'araiIsI Road can be
Constructed without PIedging the
Public Credit.
The Texas and Pacific Railroad.
SYNOPSIS OF THE MINORITY REPORT

Ihe racine Railroad Committee of the
House having by a vote of seven to six
agreed to report the Texas Pacific Bill
favorably-two or more of the seven ex-
pressing their desire to amend it, or defeat
1T on the hoor-the minority members
Messrs Morrison, Landers, Luttrell Blair,
Rice and Hewitt have stated their views in
report of which the following are the
material portions:
We are unable to concur in the views of
the majority of the Committee, but desire
the adoption by Congress of such measures
as Will secure the early construction of a
transcontinental railroad for the special
use ana development of the Southern and
southwestern States and Territories. We
believe that this important object can be
accomplished without subsidy from the
government, and submit the following views
and the accompanying bill for the considera-
ton of the House:
THE PRESENT CONDITION OF THE SOUTH
ERN LINE.
The Texas and Pacific Railway Company,
a corporation of the State of Texas, in the
year 1871 was authorized by Congress to
construct its road and telegraph from Mar
shall, in Eastern Texas, along and near the
thirty-second parallel of North latitude,
through that State and the Territories of
New Mexico and Arizona to San Diego
small city on the Pacific coast, on the bay of
the same name, supposed to be well adapted
to commercial purposes, and having popu-
lation of 1000 to 5000 people. The distance
1874 miles by the authorities of the Texas
and Pacific Company, while those of the
Southern Pacific Company believe it to be
about one hundred miles greater.
Failing TO meet these provisions, the Texas and
Pacific Company has obtained by construction and
n ion mil nf
road, which enclose paralleogram in Northeastern
Texas, having base of 1873 miles, extending from
Of the road. which only is part of the trunk line
The remainder of the 443 miles is so located as to
secure the more valuable land grants by the State
of Texas, probably because the pecuniary embarass
ments OF the company were such that its credit
based chiefly upon the granted lands. There is
thus remaining of the trunk line between Fort
Worth and San Diego, distance Of 491 miles upon
which nothing has been done.
OF the ten years allowed by the charter within
which to complete this great work only four remain
and considerable portion of one of these must
elapse before the enactment of the desired legsa-
ton is possible. Six-tenths of the time has been
consumed in the construction of less than one
eighth OF the trunk line and that at the Easterly
terminus, in close connection with the great middle
system of roads and the central belt of States.
rather than with the Southern system of roads and
the southern States.
The corporation has fallen thus far short of the
performance of its undertaking, although 1t received
from the State of Texas the magnificent grant of
the alternate sections of land for forty miles In
width along each side of its line eighty miles in
all, through the state Of Texas, and the from
the United States through the Territories and in
California, contingent upon its compliance with the
conditions OF the grant.
THE SUBSIDY DESIRED MORE THAN THE ROAD.
The credit of the Texas and Pacific Company was
seriously impaired before the panic of 1873 and
under its influence has still further declined 1t
admits its pecuniary ability, and assigns that
for its failure to comply with the conditions
imposed upon it by law.
In 1873 it applied to Congress for a subsidy of
over $50 900 900 in addition to it's land grant of o.
10000 acres in Texas and $4,000 900 in the terrific
ries, being money subsidy of twice the probable
cost of building and eq9ipping its road.
The application failed 1t now changes the form
rather than the substance of it's request and asks
for gu 'ranty of interest $25, 900 mile for the
easier and $40 900 for the heavier ortions of the
road amounting in all to 600 at five per cent
annually, for fifty years.
The bonds of the government bearing four and
half per cent interest have recently been sold at
par in refundiDg the national debt If the public
faith is kept and its credit unimpared the time is
not remote when the government will be able to
effect loans at the rate of three and three and a
half per cent, as now paid by England. The diff
ference between the interest these five per cent
Texas and Pacific bonds for fifty years and the
ordinary rates which the government will have to
pay on the same amount for the same time, if in
vestigaed as 1t might be by the government for the
payment of its own debt, would amount to much
ment would be far better off to build the road and
give it to the Texas and Pacific Company outright
than to guarantee the interest on its five per cent
fifty year bonds, according to its request.
The total amount of interest guaranteed by the
government would if paid into sinking fund
amount to more than 500 900 600 in fifty years, and
called upon to guarantee the payment of this
sum in addition to the proceeds of the land grant
in order to enable the Texas and Pacific Company
to complete Its road
We are opposed to all pecuniary subsidies and
guarantees by the government in whatever form for
the benefit of railroads at this time however desra
bic their construction. In time of peace private
al tohlo
promote commercial development quite as fast as is
consistent with safety and permanent prosperity.
If the men in charge OF a meritorious enterprise
command the confidence Of capitalists, or even the
tooeasily trust of the middle classes there is
need of calling upon the nation for subsidies or
guarantees.
THE SOUTHERN PACIFIC RAILROAD.
The Southern Pacific Railroad Company is a cor
poration of the State of California
This corporation has constructed its road to Fort
Yuma, on The Easterly bank of the Colorado River,
in the southw esterly corner Of the Territory Of
Arizona, which it claims to be the authorized point
of connection with the Texas and Pacific Road, a
distance of about 720 miles Its track has been laid
through and extraordinary natural obstacles
its Southern portion passes through desert and for
164 miles nearest Colorado without an oasis. This
road built to preserve the charter is of little value
except for its anticipated connections with the
Southern States from which, owing to the failure of
the Texas and Pacific company to comply with the
acquisitions of law, it is now more than 200 miles
distant
The road is already there with its millions of
money invested a sandy waste, upon the good
faith of the government that the Texas and Pacific
Road should be constructed so as to meet it at the
Colorado River in the event OF the failure of that
corporation to do that Congress should take such
measures as should enable 1t to connect with the
Southern States of the Union.
POSITION OF THE SOUTHERN PACIFIC COMPANY.
The Southern Pacific Railroad, by force of the alb
solute necessity of its securing Eastern connections
possible in order to preserve its capital is
the only party which has both the power and the
disposition to build this road.
The Southern Pacific company interposed no OPP
position to the guarantee asked by the Texas and
Pacific east Of the Rio Grande; but contemplating
the contingency of the denial of guarantee of bonds
to the Texas and Pacific company, and the coDse-
quent total collapse of its undertaking, strongly in
sisted that justice required that they should not be
held in check awaiting the result of continued ap-
money credit of the nation with which to perform
what the Southern Pacific was ready to do immedi-
ately for the land alone.
To this bin the Texas and Pacific company OBJ
jected. The only argument entitled to weight, in
our opinion, was that the Southern Pacific connect
ing with the ocean at San Francisco, and having in
innate business relations with the Central Pacific
Railroad, might enter into combinations with that
corporation against the public interest," and that the
ad vantages Of competition and of occasional
nection at San Diego would then be lost.
COMPETITION AND COMBINATION.
We believe that any competition between rival
parallel lines of railroad for the same business which
results in loss to the companies is sare to end in
one of two ways, either in a combination by which
the public will lose far more than 1t has ever gained
runous cutting of rates persisted in until the weaker
corporation is ruined, the public is left to the
Tapacitv Of the survivor There is real protection
to the public but the enforcement of the law Of the
land Competition which takes from corporations
just ompensation is quite ruinous combination
which gives them too much.
No one can believe that the Texas snd Pacific
Qa.