Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1885-01-10
THE UNION PACIFIC RAILROAD.
Annual Report of the Board of Govern.
ment DirectOrs-The Perilous Sit.
uati0n of the Road.
WASHINGTON, Jan. 9.

WASHINGTON, Jan. 9.
The annual report of the board of govern
ment directors of the Union Pacific Railroad
Co. was submitted TO the secretary of the in
interior today. The directors criticise with
considerable severity the former manage
ment of the road in many particulars. The
n9w management Of the road is credited
with making honest effort to eradicate the
evils heretofore existing.
This effort they regard as promising sub
stantial and felictous results if the execution
of the presently declared plans and policies
of the administration are not in somesway in
terfered with or prevented. Stress is laid on
the Importance of having responsible execu-
tive management of the road.
| The government directors feel confident
that the Union Pacific directors immersed in
private affairs have not sufficiently, in a
practical manner, acquainted themselves
with the interests in their keeping. The
management is at present employing and ap-
plying every possible device in the way of
economy. Great reductions have been made
IN the number of passes issued. The present
managers of tina road are endeavoring to re-
move the feeling of unpleasantness which ex-
lists Ill the country through which the road
passes.
The report shows that the great bulk OF
the stock is held by investors, as out of the
1000 stockholders 5000 or more have from
to 10 shares only. showing the investment
demand has largely increased over last
year.
The Indebtedness of the company to the
government is assuming enormous proper
tions Nearly every conceivable question
connected with the transportation problem,
SO called, is coming to be involved in this is
sue between the company and the govern
ment.
The questions involved are: The extent to
which the liabilities and revenues of the
company are and will be affected by compe-
tition; whether all of the several exteutions
and branch lines are or are likely to be
profitable or otherwise to the company
whether their ownership or right to operate
them has been acquired upon equitable terms
whether any of them has been acquired at a
cost materially beyond their real or fair
value; whether the condition of the com
panys lines with those of other companies
are and will continue to be such as its inter
ests and profitable government demand
whether present or future competition may
or may not eliminate an item of profit from
what is k lown or thought of the traffic, or
has not done so; whether the local traffic
can be made to stand the strain that will be
imposed on it in the process of opening the
TOdu, So as " duOTu TcdsUudDit pTout, diu al
the same time, liquidate its indebtedness, es-
pecially to the government whether the coun-
try it traverses will afford resources commen-
surate or necessary TO this; to what extent
the solution of these questions will tend
further to complicate the relations between
the company and the government, and Jeop-
ardize or retard the payment of a debt or
place the company in position to pay itf
Each of these is serious question which
addresses itself to a careful legislative con-
sideration.
: On June 80, 1884. the floating Indebtedness
was $l3, 10000. Assets to meet this left net
debt of S6,900,177. By the operation
policies inaugurated by the new administra-
ton, this net was reduced up to Sept. 30 to
S., 1877 009.
large portion of the items, which serve
to swell the aggregate of the floating debt,
was of expenses incurred in the new construc-
tion and advances on that account. The Pa
cifc holds the majority of stock and bonds
| of nearly all the branch lines. The compile
tion of the Oregon short line is noticed and
the belief expressed that it will soon be not
only self sustaining, but a source of income
to the Union Pacific Co., respectfully pro-
tests that the investment of the sinking fund,
for the benefit of the government or credi-
tors, as has been accumulated, is unjust to it.
The fund is not so invested as to earn the
full measure of its ability if properly invest
ed. Ii tends therefore, in no practical de-
gree to relieve the debt of the staggering
portions it will have assumed when the time
arrives for its payment. A suggestion, that
seems most feasible and would settle most
speedily and permanently the whole question
and obviate all the difficulties which surround
it, is that instead of the present requirement
of the government of certain percentage of
the net earnings, fixed sum be agreed on,
which the company would be compelled to
paw at intervals, towards the interest and
principal of the debt, to the govesnment In
fixing such stated sum the law making power,
can resolve on just and intelligent figure,
with or without the consultation of the com
pany, keeping in view of the financial con-
dition and abilities of the company and hav-
ing due regard to the interests of the com
munites and of the commerce that will be
affected.
This plan would necessarily effect an mme-
diate and complete suppassion of all the
present controversies and pending litigation.
as well as remove anv and all cause for the
same.
The directors recommend the establishing
of a railroad commission for the settlemen,
of contingencies. In conclusion, the rep0r,
says:
Perhaps about all the things that are to be
avoided in legislation is the contingency OF
such terms being imposed on the company as
to render its stock practically and permanent
ly non-dividend paying, thus giving it un-
certain and purely speculative value. The
result of this would be to utterly discourage
all bonafide investors and holders and force
the entire volume of stock into Wall street
and finally into the hands of pure speculat
ors to whom the control is better than owner
ship, because cheeper and affordng all the
necessary means to wreck, and prey upor
the resources of the corporation.
Ii is difficult to conceive to what an uB
fortunate end the road would come in such ar
event. 1t would be ruinous TO the road. II
would be restriction of the claims of the
government upon it, If the government
would take securities of the branch lines oil
require that they be deposited as security
additional to that it now has, and fix on
stated sum to be paid at stated periods, such
as would in time liquidate the debt, bu
which would not compel the company to i'm
pose unjust terms on its patrons, and would
justify the government in prohibiting it from
doing so, this controversy might be regarded
as virtually settled.