Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1884-02-01
THE GOVERNMENT AND THE PACIFIC
RAILROAnS.

What is pronounced by the Washington
correspondent OF the New York HeyaM one
of the most important measures of the pres
en session of Congress was introduced by
Senator Edmunds, the other day. The bill
in question is one to secure 10 the govern
mcnl the indebtedness of the subsidized Pa.
cifa railroads. This Indebtedness amount
ed, on tic 3).h If June last, To tue immense
sun Of Sl09, $40 3l2 For this amount the
government has ~ fixed Obligation, but only
a general lien created by the terms OF the
charters, aud payment has been arranged
thus far 10y a mcs running book account
Cuder the provisions of the Thurman act
the government dcducts 1--WE lty five per cent
OF the net earnings If the roads and applies
ii Oh the payment Of the debt. According
TO careful estimates this method of payment
viii leave the companies indebted, at the
maturity OF the bonds given by the United
States to eight Of tn, railroads, in the sum
Of not less than $7j,OO0,0O this, too,
after crcdiung them with all the sums,in
The sinking fund and all transportation
accounts. The great bulk of the
bonds were issued ia 1867, 1868 and 1869, to
mature in thirty years BY an act passed in
1854 the government authorized the com
ranlcs t. issue first mortgage bonds to an
amount equal TO the bonds issued in their
behalf and subordinatcd the government
bonds 10 these first mortgage bonds. Should
the companies default in payment of the cur
rent interest or in payment of the principal
at maturity the government would be com
PEELED TO become a purchaser at any sale OF
foreclosure or el allow tue properly to pass
into The hands of the purchasers, relieved of
all incumbrance, which would operate to ex-
tinguish all the indebtedness due 10 the
United States.
To change the method of book account
payment into bonds of fixed obligation for
definite amounts, payable at fixed periods, is
what Senator Elmunds's bill proposes TO
DO.
The First Comptroller, following dec
sion of the Court Of Claims, held that the
government could not withhold from the
railroads thcirearnngs for government trans
portation over more than the subsidized por-
tons OF their lines, AMI this decision was ap.
proved by the secretary of the treasury. This
leaves the government liable to pay large
sums TO the companies notwithstanding their
Indebtedness. The bill just introduced
provides That The earnings of the
companies for government transpor-
,ation oyor all lines owned. leased
or operated by them shall be withheld
by the government and applied to the pay
ment OF the suitably bonds as they mature.
The Eject OF this will be not only to save
The government The payment of large
amounts every year to the companies, but
to create Il fund specifically pledged by the
consent Of the companies TO such payment,
aud which, under the decisions Of the court.
NJ act Of Congress could Otherwise control.
IDo Uiil also requires the companies to accept
tha provisions Of the act under their corpor-
ate seal, and anon lis provisions isa section
which reqniros them. in terms, 10 accept the
provisions If the Thurman act, the constitu-
tioaality Of which ,hp companies have always
contested.
The requliomen, Tor the asceItaiuncnt Of
the total indebtedness on October l. 1884
provides that The ind-b,ciuess shall he found
by adding the total amount Of the bonds
issued for the companies al interest accrued
aud to accrue TIL the maturity IF the bonds
at the rate OF six per cent, the present inter-
est, Geducting from such amount all paw
meuts previously made and dividing the re.
suit into 1870 semi.annual payments, to bear
interest at three per cent, whereby the total
debt Will be paid in sixty years The bill
als) authorizes the companies TO mortgage
their property for the purpose of anticipating
payment on the first mortgage bonds and the
debt to the government if possible.