The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1881-06-18
sg.OOe.s44 s6.4Ns, sss 1851 .s46

ings.............. s9,OOo,s44 s6,4Oss98 1851 946
And let me further note, I ana more
than ever impressed with the exigency,
not to say the necessity, of the consolida-
ton OF your lines with those of the Union
Pacific, so as to fulfil or carry out the
original intention Of Congress as set forth
IN the charter acts, such consolidation
being the only means to obviate the
many serious difficulties, present and
prospective, which will doubtless involve
other companies and interests, and tend
to impede in some measure the prosper
ity OF the whole country. After careful
consideration, E. 81. Miller, jr., secre-
tary of your company, and myself, have
arrived at the satisfactory conclusion IS
to a basis for prorating bust
ness between subsidized and unsub-
sidized portions of the railroads
operated by your company. But, while
the settlement of '79 was made upon the
nearest approximation to that which
was believed to be fair and equitable,
and the settlement Of 80 still more SO, we
both recognize the impossibility of fixing
any absolutely permanent basis for such
settlements, owing to changing circum-
stances aud conditions which are liable
to occur from time to time. By tbs set
Element of 80, the total amount required
from your company under the law will
be little over 81, 000,0 900. Of which $500,
600 has been alresd y paid by transporta-
tlop. This sum. and q much larger sum,
probably, for '8l, can, am satisfied, be
readily paid by yoar company, without
In any way preventing or interfering with
the payment Of dividends of at least per
cent. per snnum hereafter. The uucer-
tainty which attaches to the sscertAin-
ment OF the amount Of payment to gov
eminent annually, under the existing
law, and the vulnerability incident to
any company subject to special leEisla-
ton by Congress, indicate that at an
early day all subsidized COM
panies should negotiate loans suf-
fcient on basis of present value,
to discharge their debts to the United
States when the same shan become due,
and, TO place the fund beyond peradven-
ture. the amount might be deposited in
the treasury of the United States and in
terest allowed st such rate as may be
agreed upon.
Since my last interview with you I
have read the lease under which your
company is operating the Southern Pa
cihc Railroad. The Southern Pacific
Company enormously reported that this
lease was termiRable when eastern con-
nections were made. Your own company
failed to report the terms of the lease at
all, and no copy had been forwarded to
me as requested. Now, upon reading the
lease, it appears 1t has nearly four years
yet to run, which fact puts an entirely
different phaze upon the main question at
issue. in regard to Southern Pacific;
that of the probable cancellation of this
lease whenever the road should begin
large increase Of earnings. l have no
doubt but that the net increase Of the
earnings Of the Southern Pacific in the
next four years will exceed any losses Of
the past four years, its gross earnings for
1880 being nearly $4,000. 0p0, with con-
siderable net earnings, being above both
operating expenses and rental, so that the
lease will eventually result in large gain
rather than any loss 10 your company.
For this and other reasons, | shall
deem it my duty at an early day to com
municate with the Encouragement of
the United States with view to the dis
continuance of proceedings instituted
against your company in the circuit court
of the United States for he Southern
District OF New York.
Very respectfully,
THEo. FRENCH,
Commissioner.
Hon. Leland Stanford, resident Cen
trail Pacific Railroad, San Francisco, Cal.