Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1878-04-12
The Pacific Railroads.
Extract from tho speech of Senator morrill,, O
Vermont, in the L. s. Senste, April "a.

vermont, m the l. y. senate, April II.
Have VIC been liberal or not with tie
Pacific Railroad Companies
First. We have given to them, as estrna;-
ed at different times by the General Land
Office, from twenty million to thirty million
acres of public lands, not wholly Of mach
present value. but with abundant cal iieI-
OF priceless value, exceeding even the mex
haustiblc anthracitc-coal fields of Peun>yl-
yania, and affording large and marketable
product as well as supreme element in the
cheap operation of the road.
Second. We aided BY lending the comTa-
mics our per cent bonds for thirty years to
the amount of $50 ,0G2, 1872, secured at the
outset by a first mortgage, and these bonds
now bring in the market over Is per cent
premium. We gave our security and took
theirs to cover an exactly equal amount.
Third. We consented to change the place
of our mortgage security from the fr-t
place to that Of subordinate, and gave to
the companies the privilege Of Issuing an
equal amount with a prior lien.
Fourth. The whole of their charges for
services in carrying the mails and other
transportation accounts by the act of lSt2
were to be at once applied on their indebted
ness, but by the act of 1861 only Cno-hali
was to be so applied.
Fifth. IL the first act all coal mines were
reserved to the United States. but in tie
last they were wholly surrendered to the
railroads.
Sixth. We have thus far paid the accruin.
interest on the second mortgage bonds (lc>~
the amount reimbursed 10 the extent of
S2i ,3is3 .Sl2.36. We must continue the
payment of this interest as it fails due lor
twenty years longer, or a further sum o.
500, ll0, G20.40. Nothing of this will be
due, according to the decision Of the Snpremc
Court, until the PRINCIPAL is due. Simple
interest upon these payments ut per cent
will amount to nearly or quite so ,Oo0, 600.
II this also is not a debt, when VIC are pay
ing i per cent upon a loan of millions, then
it il gratuity largely in cxoes- of the
original bonds, and one Of those thing
never dreamed Of in the philosophy of Cor
gress.
The account stated "a between merchant
and merchant, or between man and man would
show that besides lands, besides cIIl minC-.
besides credits, up to the year 1904, We shall
have aided these companies, a. already in
dicatcd. to the extent of not les than
S2l7 $40 ,G2i.7G From this sum there
should he deducted whatever sum has or
shall have been repaid; but, if that should
reach no higher figure than for the past ten
years, it will be comparatively rather insig
nifcant in amount. Through the aid of the
United States these companies have issued
certificates of stock representing for the
Union Pacific, $50, 7G2,3o0, and for the
Central Pacific, sal, 2l5, 500, or sol ,o37 =
500 Of capital in all. upon which it would be
q prcrlsterous exaggcrati0n To suppose that
even 10 per cent was ever paid at par in cash
as capital and upon this very rotuni iic-
ton the fortunate stockholders have been
receiving dividends Just the same As they
would have done on capital fully paid up
p one hundred cents on the dollar. And
get, my friend, the Senator from Ohio (Alr.
Matthew'S, is cloqucntly distressed ut the
idea of interference by Congress at any
time before the dividends shall exceed 10
per cent, when, if they were to he restricted
to 10 per cent dividends upon the ra-h
originally actually paid for each share Of
stock, one dollar per share instead Of ten
would be altogether too much for even a 10
Ter cent dividend.
ground for an equitable arrangement between
the United States and the managers Of these
gigantic corporations. The stockholders
must see thar it will lie for their interest in
the long run to accept smaller diyidcnGS
rather than to receive larger at the risk and
cost of the United States, already perhaps an
exaspcratcd creditor. They might dstri-
butte or possibly even 6 per cent dividends
and preserve their plant. SIX dollars
annually On shares costing even sixty or
seventy dollars ought to make the owners
con,entcd. They have their choice big
dividends absolutely tcrminabe after Il bricl
period or moderate dividends for brief
period and then larger ones in pcrretuity.
The Union pays per cent and the Central
Sper cent, with II very heavy and Increasing
surplus. The net earnings of the Union,
after deducting operating expenses, IN lSi,,
were IS, 3l7 ,09l So. and those Of the Cen
trail IN 1876 were S9,l37 ,00l.73. Such
net revenue makes its own argument.
But what Is it that the bill Of the Rail
road Committee proposes to do. and which
has been urged with 50 much pcrtinacity?
First. They propose that the United
States shall pay, as we have paid, the cou-
pom interest, and wait without interest until
the whole debt natures.
Second Instead of applying to their
credit annually, as the law now compel
them to do, the pledged per cent. oi their
net earnings and the one-half Of the tran
portation accounts against the Government,
they propose tc add pcr cent. interest,
semi-lnnually, to the several
SUM, though the .rgc.t would be interest
on the actual money Of the Government, and
then twenty years hence to apply it with all
the accrctions to their credit. With that
rcthod Of borrowing and Of payment, Tat
dividends might he paid by the railroads
without any other business, although it
would be much simpler and far more adynr
tageouS to the United States To provide that
for every dollar paid by the railroni COM
panics they should have credit of 3.
by the mode Of computation proposed the
for Government services tothc
amount of sav SGO0, 900 in 1876 would eli
title the railroads in the year 1900 To an in
tlatcd credit Of more than four times that
amount, or to 81, 10, $50 %, being : 80,
1909 in excess of what they would he e.
titled to under existing law. This is not
wipng ont their debt with sponge, hut 1t
Is the mode of wipng it out by the bill OF
the Railroad Committee. and entirely new
and rare gift to the companies. The Scna
tor from Ohio on my right Mr.. Matthew
has no doubt they will accept oi it. Ii he
ing new and very large subsidy, d" not
think he - any too confident.
Third. 1t is finally proposed that the rail