National Republican., 1883-02-21


floating debt. II is question on tho one
hand, whether the deduction of all these |
items from the gross amount Of unfunded |
debt and the statement of the balance as the |
usual floating debt does not convey an orron- |
eous idea as to the true condition nf the com |
pany; and on the other hand, whether a |
statement of tho floating debt, which omits |
to present these items as offsets does not do the
company an apparent iajustico.
II is undoubtedly true that the current |
value Of the supplies, fuel, material, and stores
provided for the operation of railway di-
minish the future expenditure as usefully as
If they were cash on hand, destined to procure
such supplies, and are frequently recSoned in
railway reports rs an asset in diminutiOn of
floating debt. This item amounts to S3,007,-
SS6.5S. It is likewise true that the companys
own bonds and stock, held by the company
temporarily on hand are capable of being
converted into cash, and the proceeds applied
TO the reduction of the unfunded liabilities.
These stocks and bonds amount S2,362 042.0l.
We feel that we should be remiss in duty did
we not express our
DIsAPPRovAL OF THE COURSE OF THE CONF
Of PANY's OFFICERS
in allowing so large floating debt TO accum-
ulate The company as not only large
surplus earnings but securities of great
value, as shown by the statements already
set forth. We are decidedly of the opinion
that these securities should have been sold in
advance of the requirements of the company,
rather than that the company should be ex-
posed to tho financial danger incurred by bor-
rowing on call, and otherwise nearly
$l0,000000. .'
The saving Of small fraction in price or
rate Of interest cannot compensate for the
risk involved by such policy, although IL is
undoubtedly true that these securities have
largely advanced in value since their respect
i've issues.
Upon the subject Of
"FEEDINd LINES"
the governm ent directors say: "Upon the
merely superficial view of the working of the
system that has been permitted us, as indeed
upon obvious general principles, we heartily
approve the policy Of the company in this re-
gard, therein agreeing with the commissioner
of railways, and all of our predecessors who
have referred to the subject"
The directors thOn refer briefly, under the
head Of
"BoND ISSUES" ..
to the collateral trust bonds" of July 1,
1879, and say: "The government directors, in
their report of the transaction, raised no
question as to their validity, nor has it been
disputed since by the commissioner of rail-
ways, or any other officer of the gov
ernment. Since tho consolidation tho
Union Pacific railway company has is
sued no bonds. A bond similar
to the collateral trust bond of 1879 was at one
time contemplated, and was ready TO be is
sued as we learned through unofficial sources,
but upon questions being raised as to its
legality for that and other reasons its issue
was suspended" The directors then say that
during the pendency of proceedings contest
ing the legality of the proposed issue, they
received u large number of requests for in
formation with regard to the policy past and
present of the management, and the authority
under which bonds had been issued and GER
| Nns, N1.v ,Ns n,n.v a I,NnN hn.y
think that the questions could with any pro-
priety be addressed TO them, but that they
should have been addressed either to the In
terror department or the proper officers of the
company and they returned, in all cases, this
answer Under tho head Of
"MILEAGE ALLOWANCES"
the report SAYS: Complaint is made by the
campany's officers that the government,
against the decision of tho courts applies not
only the earnings of the main line for govern
ment service, but the earnings for govern
mcnt service of the whole system, branch and
feeding lines included, to the payment of the
government debt" Upon the subject of fast
} trains the report says "We believe the run
, ming time of the through trains should be
materially shortened, which can well be done
! with but little inconvenience and a small in
} crease of running expenses, SO that the time
: from Omaha to San Francisco may be reduced
by from twenty-four to thirty-six hours"
) Under the head Of
"DIvIDENDs'
the government directors criticise and take
exceptions to the practice hitherto observed
by the executive committee of the company
of holding meetings to declare dividends
without notifying the government director
having o place on that committee. This
method of doing business, they say, "is ex
J ceedingly lax and open to serious complaint
, although it is justified by the company on the
ground that no objection TO it has ever beer
! made by previous government directors.
Under the head Of
CONDITION OF THE ROAD
!. the directors explain that, in consequence Of
= the delay in the organization of the board
D already referred to, there has been no ofiicia
o inspection of the road, except by Messrs
: Bromley and Parrish, who went over 1t in De
: cember, 1882. From their report, as we'll a,
from that of Mr.. Hoyt, who speaks with def
: into knowledge, he having passed over tn,
Il whole line of road few months prior to hi
It appointment as government director, 1t may
t, be said that the road will compare favorably
y in all respects with any other railway line o.
: system in the country. 1t has now solid
% well ballasted rOadbod, with all steel rail
Q throughout the entire length of the main line
% the grades and curves are being reduced to a
. minimum as rapidly rs possible; the stations
% are we'll ordered and in good condition, the
N | equipment Well kept up, anu Ino WnOle man
|. agement prudent and economical, at the samt
10 that it is enterprising and progressive. o
4 the fidelity and zeal Of the officers each on,
y of whom seems to have personal pride in 1T
u successful and prosperous operation, too mucl
IL cannot be said, nor can we omit in this plac
n personal reference TO its chief executive
officer and the great service he has Rendered
tho company and the government. Abelieve
,o in the success of the road from the outset
n and one of its founders, he has steadily main
~ tanned his faith in il, invested his capital II
75 ii, and for seventeen years given it almost hi
90 entire time and the best of his abilities. Fo
81 only two Of these years has he received an
- compensation for his services. If we hav
no ever differed with him concerning any detail
Of policy or management, We have neve
" doubted his sincerity of purpose OF his earnes
devotion to the best interests of the road
M The report concludes MS follows; "1n conclu
SS SSS SION we have to say that with the oontinu
56 ance Of
% THE PREsENT MANAGEMENT,
~ which we have not hesitated TO criticise /
"a those particulars wherein we deemed il d,
serving criticism, we believe the road has be
w fore II n career so prosperous and successful
90 as to leave no doubt whatever of its ability I
- eventually pay in full all its obligations {
the government.
81 Whatever other routes 20 the Pacific Goa
v, may be opened, this must remain the mo-
10 direct line. 1t is and must continue TO |
10 the great central route, with obvious adyal
tagos over any other lying north or sout
81 of IL,
"a Ita gvstetn nr fandnys h,. n bap Il,