Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1878-04-13

as to shock the moral sense of al
who have considered it. In orde
that we may fully appreciate tht
danger that threatens the Govern
ment and the people of the United
States of losing the hundreds o
millions of dollars advanced and tt
| be advanced in building this grea
highway of commerce, | beg to cal
the attention of the Senate to an ex
tract from a letter written by Mr.
Dillon, President of the Unior
Pacific Railroad Company, on tht
9th of February, 1875, addressed Il
Mr.. Bristow, then Secretary of the
Treasury, in which he says:
The mortgage held by the Government, il
its terms and by judicial decision of Tho
i United States circuit court cannot be enforce
1 ed until the maturity of the bonds, which il
| near the close of the present century.
| The bonds are accommodating an interest
| account, also uncollectible until the princi
pal is due. Principal and interest, when due
will amount to-the very large aggregate O
over $77, 600 00O-
And he is writing about the
Union Pacific Railway indebtedness
! alone af .e
though the actual amount advanced by the
! Government was only 81, ,236,5l2.
For this very large amount the Govern
menf M asd has only ~ second moItg9ge and II i
| vision being made to meet 1t, the company
| viii probably be utterly unable to pay II.
At the same time, It is equally manifest
| collect it except upon the assumption that
1t will advance the money to discharge pri-
or mortgages, and run the road on Govern
! meEt accounts policy which wise states
manShip could not advise.
By standing still, therefore, the company
| has a load of debt accommodating for which
no provision is made, and the Government
| is drifting farther and farther from the OPP
| portunity to secure q just return for its adj
| yances. To do nothing is to injure both the
! Government and the company, perhaps ir-
retrievably to both.
In this dilemma, venture to make pro-
position, which offers, on the part of the
company, all it can possibly do, and secures
| TO the Government a substantial return for
its advances.
This intimation of probable in
solyency of the Union Pacific Rail-
road Company, and consequent loss
to the Government, is repeated in a
communication addressed to the
Senate Committee Oh the Judiciary
on the 18th of November, 1877, by
Mr.. Dillon, and Mr.. Huntington,
the vice-president of the Central
Pacific Railway, who joined with
him in saying as to both companies
what / will ask the indulgence of
the Senate to listen to.
Nearly three years since the officers of the
Union Pacific and Central Pacific Railroad
Companies called the attention of the Sec
retary of the Treasury to the fact that con-
trary to the general expectation at the in
ception ofthe enterprise
And / ask attention to this phrase
OlOgy-
balance of accounts in his ledger was ac-
cumulating against them which, unless
some remedial legislation was soon had,
would amount, by the time it came due and
payable, to a sum which it might be embar-
RAISING to the companies to pay Simultane-
ouSly with their firSt-mortgage debt, and
greater than the value of the subordinated
lien of the Government on the properties
themselves.
But as if this deliberate declara-
tiOn was not sufficient to warn the
Senate of the danger that threatens,
Mr.. Huntington, who appeared be-
fore the Judiciary Committee, takes
occasion to say in an address de-
liVered to that committee:
By the time
Speaking of the Government debt
and the first-mOrtgage debt, equal
in amount to the principal of the
Government bonds issued to these
railroad companies
BY the time both mature and become pay
able it is not likely the property win be
worth their aggregate sum, and ifthe shrink
ing and settling of prices should continue
further it may happen that it will not suffice
to pay more than the first mortgages.
These carefully considered state
ments are accompanied by equally
Well-cOnSidered declarations to the
effect that by the terms of the acts
of 1862 and 1864 the officers of the
two companies have the moral as
well as the legal right to distribute
the earnings of the two roads to the
stockholders, and although this
course will certainly lead to the in
solvency of the corporations, as they
agree, they very plainly threaten
that unless the Government will
yield to their terms they will man.
age affairs solely with regard to the
interests of the prOprietOrs and with
out regard to the just claims of cred
itOrS.
In order to give greater force to
these extraordinary claims they
have submitted to the Senate of the
United States and also to its Com
mittee on the judiciary a proposal
for a settlement in the shape of a
bill by which each of the companies
offers to recOnvey to the Govern.
ment six million acres of land de-
rived from the government bounty
for the sum of $1.25 per acre, paya-
BILE Immediately, and making in all
$15, 100000. This money is to be car
ried into a sinking fund and the in
terest to be compounded at 6 per
cent. semi-annually until the first
of October, 1905. They propose that
to the credit of the sinking fund
shall be carried any sum now due to
them from the Government, and if
the amount shall not equal $1,000,-
600 to each company it shall be
made equal to that sum. They pro-
pose further that each company in
proportion to its deficiency shall pay
into the Treasury to the credit of
this fund on the first days of April
and October in each year COM
mencing the first Of April, 1873, and
ending the 1st of October, 1905, such
sum of money as shall be ascertained
by the Secretary of the Treasury to
be sufficient, with the interest there
on compounded semi-annually,
when added to the other sums to
the credit of the sinking fund, to
paw off and extinguish the bonds
with 6 per cent. interest thereon
from their respective dates to the 1st
of October, 1905.
That we may properly understand
the nature of this offer, the advan-
tage to the corporations and loss to
the Government to follow its aecep-
tance, it becomes necessary briefly
to refer to the contract between the
parties embodied in the acts of 1864.
BY the terms of this contract the
Government loaned to these conn
panies in its bonds to the amount of
500, 900, 900, payable thirty years
after date, and bearing interest at
the rate of 6 per cent. per annum.
These bonds were declared to be
a mortgage lien on all their property,
but the lien was made subordinate
to another lien of $50, 200, 900 bonds
issued by the companies themselves.
On their part the corporations agreed
that they would pay annually into
the Treasury per cent of their net
earnings, and that the Government
should retain One-half the sums due