Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1885-12-19
A VITAL QUESTION.
THE PACIFIC RAILROAD SUBSIDY
DEBT.
How TO Provide for Its Liquidation
Congressional Action
Urged.

New York Financial Chronicle, December 9Th !
Various considerations are again pressing
the Pacific Railroad debt question upon the
attention of the public. The Thurman Act
of 1873 is everywhere recognized as falling
of its intended purpose, which was to pro-
vide means for meeting that debt at ma
turity. The debt is all the time growing
larger, and the day when it must be iuui-
dated is fast drawing near. Action of some
kind therefore is urgent, and cannot much
longer be deferred. Congress is about to
meet, and the Commissioner of Railroads,
in his report issued this week, renews the
recommendation contained in previous re-
ports, that in lieu Of a payment by the
companies each year of a certain percent
age Of net earnings, as now required, pro
vision be made for payments OF fixed
amounts at fixed periods-that is. extend
ing the limit of time in which the debt is
TO be paid, ana requiring the companies to
contribute a certain definite sum annually
or ni-annually, which in the course of
the specified term of years shall wipe out
the whole Indebtedness. The publication
of pamphlet (attributed to Isaac IL.
Bromley, of the Union Paci1icl setting out
the relations OF the roads to the Govern
ment since the inception Of the enterprises,
and reviewing the various Acts of Congress
in chronological order, lends additional in
terest TO the matter.
It having been decided by the Supreme
Court of the United States that the interest
Of the subsidy debt is not re-pavable till
maturity of the principal, but that Con
gress has the power to pass laws COM
polling the companies to make reasonable
provision by sinking fund for extin-
gushing the debt, there would seem but
one of two courses to pursue-either ex-
tend the debt and require fixed annual
payments, in the way proposed in the Hoar
bill, or increase the percentage OF net earn
ings under the Thurman Act from % per
cent. 10 much higher figure, as was done
in the Thompson bill. passed in the House
OF Representatives last session. 1t is clear
though, that whether the percentage be
large or small, the amount of the pay
ment, when dependent upon earnings
must vary, and as against huctugting pay
ments, the plan of fixed payments, sure to
meet the obligation in specified time, has
advantages which no other plan can pos
seSs.
Animportant consideration which should
have weight III the settlement of this cues
ton, is the greatly increased competition
that the subsidized roads now have TO CON
tend with. Of course the roads that the
public is chiefly interested in are the Cen.
trail and the Union Pacific, the others be
ing of comparatively minor importance
and we may. therefore, contine our remarks
~ mn Oo'isi''ci ~ d nloilieli' tne posi-
,:on Va SieST !" y lo@'Is a. respects cG'Apeli-
''on' ne o@iiaulil "S'llG nus ialeIy oeeh
coillpleteo ililoVPh - lhe acllic' ana iiiIs
liiaheS 10 IeSS 'HaH iiFe routes across the
Nolt'lcil' WIlholl' lec@oIlilg me Steamship
Fou'e wa f@tlaiiis,' OF tle saillnS route VIA
caPe ION. III .ile 1l"gI u luSlF nlptc-
t!Cn my d no, 'i4I oH1Oii OeiI"i u
enc seGoilo, yne ooutnerh racine; thlrd
Tue N9flheFh taIlnc IoGr'h, the Atlantic
anu anu racine nun nun, tue canadian Pac!hc.
put SeVerai o. theSe nave Iorks or uupiica-
uons along me eastern or western halves OF
tnelr mes. For example, the unlon Pa
enc nae the Kansas racine NOW absorbedl,
ana sun mas the burlington " quincy aud
the htc!ilSoh' loPeRa q santa re to con
tend WIN as lar as Denver, and be-
yond that tne Denver " RIO Grande
IS lar as SAT- Lake Again, the
southern racine mas the Texas Pacific as i
compettor as lar as vi faso, and The Atciii-
So: ROAD as lar as Dening, New Mexico,
me N"rtheth fHcihc ROAD mas no contlnu-
Gus Inc OF IT'S own 10 the Facihc coast, but
uses tue track oi tie oregon Navigation
company Tor over ~ m'les, which latter,
IN conjunction with the oregon short Line,
serves as competing me, joining the
Union Faclhc east OF Salt Lake. Other
lines, IKE the northwestern and st. Paul,
are pushing further west toward the Pa
enc; 30 WINE thcre are hve through lines
al the way across, there are lre others part
OF the way. IN WORD, there are, between
the hnndredth lheridlan ana the West
coast some lU,OJO hilies on road engagedln
tins transcontlneitai tfalhc The different
members OF THIS competitive system ind it
as diihcult 10 prosper IN their business as
do their Eastern nelghbors; and for the
same reason there Is NOT business enough
ior an, 50 tney iai 20 iiShtlng Tor what
little there Is WIN the result that through
tral1lc IS done at NIUE or no proht.
CONSIDER also the circumstances under
WWhlch me origin Il enterPriseot pudding the
frSt ROAD 10 tle racine was carriCd on. As IS
wen known II was packed by the credit OF
the then lmperlled Natlonai Government,
without whose ana II couid not have been
completed' Inc ohlon-Cen'rat line was
Dull III war uIhe' Wheh prices were m
nateu' ana :, OF even III per cent. a COM
mon rate 1or the use OF money. 1t was
pun WIN great speed worklhS from both
eloSr III spirit OF rlVairy ior the land do
nation ana oond aid. Inc result Is that,
inciuoinS the advances OF the Goyernment,
me man me between Council Blutfs and
oakland say w lllies; mas capital and
aeot OF ABOUT SlOV'OOo mile which may
be classed roughly as ~ per cent. first
mortgages, gu per cent United States sub
sloy ana interest ana the remainder ~ per
cent stock 30 long as II had the exclu-
siye service IN that country, west of the
missouri, ana me government needed to
MAINTAIN strong military posts, the road
could meet lis interest burdens, pay part OF
Its net to the United states and still leave
enough lot olVloends 10 the shareholders.
now neither the Central nor the Union
racine Is paying anything on Its stock.
ne though lfaliic mas 10 De 1ouSht Tor at
uhTemuherallVe rates, the mails, troops
ana supplies are distributed over several
lines, and there are five sets of tracks with