The Rock Island Argus. (Rock Island, Ill.) 1877-1885, 1885-01-30
PACIFIC RAILW AVS.
A BILL FROM THE SENATE JUDICIARY
COMMITTEE,
Which Proposes to Extend the Time 10Y
Extinguishment OF Their Dent 10
Forty-Six Years - Synopsis
of the Measure.

WASHINGTON CITY. Jan. 30.-The bill in
troduced in the senate Wednesday TO pro
vide for the settlement OF claims growing
out Of the issue of bjnIs to aid In the con-
struction of the Pacific railroads, and TO Sc,
cure to the United States tue payment OF an
their indebtedness, Is in substance as Loi-
lows:
To fix day on which the indebtedness oil
the companies respectively to the govern
ment shall be asceTtalned upon the same
principle as il the whole debt and interest,"
we're to be paid on that day, with proper
rebate of interest at tue rate Of per centuln
Der annuln, and deduct ng from such
amounts ali payments made by the compa-
MES in money, OF tTaHspo Ftatton, or other
wi e, and extending the time at interest at i
per centum.
The period Cor the extension of payment
Of the last instaliment 7the Indebtedness is
iorty-six years beyond the Date of maturity
Of subsidy bonds, or ali average extension OF
the whole debt Of twenty three years. IN
consideration of the extension Of time thuS
granted, the companie5 are required to de-
pcsit with the secretary OF the treasury
bonds of redemption ;or the amount
Of the debt as g certaiued in specific
sums, one bond to mature every SIX months,
and all the earnings of the roads by govern
ment transportation upon any OF the roads
owned. leased, or operated by the company
shall be applied to the payment of current
maturing bonds OF redemption, and no
money shall be paid by the government for
transportation or service Of any kind over
aided or non aided roads until the bond next
maturing shall be fully paid.
1t extends to the statutory lien and secur-
ity now subsisting over all the roads owned
or operated, or hereafter acquired, or
wherever situated. by the companies, in
Guiding telegraph iine7, franchises, rolling
stock, AMI property OF every kind and de-
scriptiOn, to remain as security for the bonds
of redemption until all are paid, embracing
5000 miles not now held as security by the
government
1t also requires that the company accept
ing the prov isious Of this bill hall also &C.
cept the provisions Of I "a Thurman act,
yielding to all questions OF Tbs constitutions
atty of said act
The plan further provides that either Of
said companies may prepay and discharge
the debt in full at any tine, and, as an IN
ducement for such payment. an abatement
of 5 per cent. per annum in interest IS al
lowed. and the companies are authorized
to mortgage their franchises and property
for the purpose Of raising funds to re
deem these bonds of redemption if they see
fit to do so. The sinking fund heretofore
established il the treasury Is discontinued,
but not till the bondS and mortgages pro
vided for in the bill are executed and de.
hvered. The railroads and telegraph lines
| are required at all times to be at the service
| of the government at rates as low as the
| service. 4 failure for six months t,
pay any Of the redemption bonds
at maturity, under the provisions of thi
| bill, renders all said bonds thereupOn du,
! and payable. In order that the companie
| shall partake of The benefits of the proposed
| plan they must accept the same under thei
! corporate seals within three months Of The
! passage Of this act. In ca the companie
| fail TO accept the provisions Of the &C
within the time specified, 80 per cent. Of Tia
annual gross earnings, instead of - per cent.
! shall he collected after the 1st Of July
| 1885 and the secretary Of the treasury ma
| invest the sinking fund of the companies i
| their first mort age bonds or securities Of tn
| United States in his discretion, or he may
| with the asSan. Of the companies apply IL
! same to the eXtipg u}~hment of interest O
subsidy bonds, the governments to refund tn
| same on demand if at any time ii become
necessary in order T. meet any debts or oil
| legations of said corporations prior IN lien t,
said interest
The report accompanying the bill says:
The purpose Of tue extension proposed
| t. bring the saInj-annuai payment sufficient.
! within the ability Of tie companies as I
| render such payments entirely certain, 2n,
i can rot in the opinion of the committee
| = Of any vital consequence to the govern
| mant whether the debt be paid in fifty C
| sixty wears, 50 long as Its ultimate paYmen
| can he certainly secured. The neceSsiU
OF this extension further appears iron
the fact that the first mortgage bonds, eQua
| in amount with the subsidy bonds, matur
at the same time. and these bonds having
under the act of 1864, priority of lien owe
the government which stands in the rela
| ton of only second lien creditor, must b
paid before the government can obtai
| anything, and such payments woul
| So strain the resources Of the con
| panics that if no extension he given tn
probabilities aro that the foreclosure If tn
tirst-mortgage bonds would extinguish tn
debt of the government, unless it is prepare
TO pay for the Union Pacific, including I'll
Kansas Pacific and for the Central Pacii
sixty-odd millions of dollars 10 cover I'll
debt, with the interest Cf the mort e
which has priority over the government.
If the government became the purchaser
and thereby owner of these roads, it woul
thus fad itself engaged il railroad buSine
generally, which would be altogether no.
and very questionable policy in its history
and then 1t Is by no means certain tina
after paying this large prior debt, the go,
eminent would reimburse itself wit
the entire management and control {
the roads in It's bands. at lea
for many years beyond the time conten
plated in the extension provided for by I'll
bill; and there is scarcely any reaSonab
probability that The government could r
imburse itself for this outlay by any reSa
of the roads
Believing the plan of adjustment provide
for in the bill herewith presented,
amended, is fair and just, and will secul
the government in the payments of Il
debts due her by the roads, the commits