St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1884-04-15
SUBSIDIZED RAILROADS.
Another Effort to Secure or Recover
the Governments Advances.
The Thurman Bill Adopted by the Senate
Committee.

WASHINGTON, April 1.-THE sub-commit-
tee of the house committee on Pacific rail-
roads, to which was referred all bills to
amend the Thurman sinking fund act, have
prepared majority and minority report, to
be submitted to the full committee to-mor-
row. The former will be signed by Jordan
and Wilson, Iowa, and the latter by Thomp-
son. In each instance new bill will be
submitted The measure prepared by the
majority, proposes to extend the provision OF
the Thurman act to the Kansas Pacific road.
It further provides that the secretary of the
treasury shall withhold from the Central
Pacific, the Union Pacific, the Kansas Paci-
fic, the Central branch of the Union Pacific,
and the Sioux City and Pacific Railroad COM
panies all payments for services which may
have been rendered. or may be hereafter
rendered by any of said companies in the
transportation of mails, troops, munition OF
war and public stores for the government
over any and all portions of the lines owned
by the said companies respectively, notalded
or subsidized by the lands of the United
States, and that upon either of the said com
panies filing with the secretary OF the treas
ury, its written consent and agreement, that
the secretary of the treasury may withhold
said payments due, and to become
due, hereafter, for services so
rendered, and to be hereafter rendered upon
such non-aided portions OF the lines so owned
by them. The secretary of the treasury Is
authorized and directed as consideration
and agreement, to allow the companies in
terest upon the payment so withheld from
the time they become due the companies at
the rate of per cent. per annum, and al
low the same rate of interest on the payment
hereafter withheld. The secretary OF the
treasury shall keep separate account with
each of the companies of the money so with
held, anA to be withheld, together with inter
est allowed on the same, and on final settle
ment with the companies, they shall be re-
| spectively credited with the amount of
money so withheld from them, and
interest thereon. The bill provides further
that the secretary of the treasury shall be au
thorized to invest the Sinking fund any of the
companys in, first mortgage bonds of any
of the said companies, or with the consent
of the companies the secretary of the treas
ury may allow them 3 per cent. interest
| from the time of payment into the sinking
| fund.
! In the report accompanying the above, the
majority say in part, that the Thurman act
seems to us to be the best made yet devised
for the protection of interest of the govern
ment in its relations to these roads, and we
have thought it best to act upon the principles
upon which it was passed, and to apply it as
far as practicable, and just, to any amend
ments of it, which would make the
companies disposed to again test
nc financial
dition of the Kansas Pacific is such
that we feel justified in insisting that the
Thurman act be extended to it, and that it
be required to pay 25 per cent Of its net
earnings, the same as the Central and Union
Pacific, into the sinking fund. The commit
tee is of the opinion that the government
has no right to retain compensation for the
transportation Of the mails, etc. over the
non-aided portions of the road, and to settle
the controversy which exists between the
government and those companies, insert the
section, providing, that upon the compan-
les filing their consent to the retention, such
compensation, the secretary of the treasury
shall allow interest upon the amount so re-
tanned. The question of deducting the
amount paid for new equipment from the
gross earnings, is considered by the com
mittee as of judicial character, and no at
tempt is made to legislate upon it.
Of Thompson's bill, the majority say, it
would seriously cripple the efficiency Of the
roads and prevent the construction of feed
ers and branch roads, which are necessary to
the development of the country and the sue
cessful management of the roads. Railroad
Commissioner Armstrong submitted to the
full committee plan of extending the time
of payment to sixty years, principal and in
terest to be paid in 120 semi annual install
ments, the first at the passage of the bill.
Of this, the subcommittee says, it doubts
its jurisdiction to inaugurate so radical a
change in the policy of the government in
its relations to these roads. 1t is more than
probable, however, something OF this kind
may be done sooner or later.
Thompson's bill, in declaring what shall
constitute the net earnings, provides that no
deduction be allowed for equipments. II
further provides that the secretary of the
treasury shall be allowed to invest the sink
ing funds of all bond subsidized roads in first
mortgage bonds of said companies, Or in
United States bonds or securities in his dis
cretion, or he may, with the consent of the
companies, apply the same to the extinguish-
ment of interest on the subsidy bonds, the
government to refund the same at any time
on demand, if it became necessary to meet
any debt or obligations of said cor
poration, prior in lieu to said interest.
His bill proposes to require from
the Central Pacific $4,000, 600 annually,
aud 55 per cent. of its net earnings. From
the Union Pacific, 50, ,000, 900 annually and
371% per cent. of its net earnings. From
the Kansas Pacific, s5OO,OOO annually and
45 per cent. From the Central branch of
the Union Pacific, s15O,0OO annually and rs
per cent. and from the Sioux City &o Pacific,
$780, 600 and rs per cent. Thompson also
proposes to include the earnings of all roads
owned, operated, controlled or leased by the
bond subsidized roads, to the extent of their
interest therein. In his report, accompany
ing the bill, Thompson says, under the op-
erations of Thurmans sinking fund act, when
the bonds mature in 1898 there will be due
the government from all the bonds subsidiz-
ed road S102, 376,312
Rack Paw and ROuntV.