Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1886-02-16
MIR. HUNTINGTGN'S ARGUMENT.
The Central Pacific Asks for a Renewal
of the Bonds.

San Francisco Post. |


In his letter to the Chairman of the Cen
tral Pacific Railroad Committee of the
House of Representatives on the relation of
the Pacific railroads to the Government
growing out of the aid given by the latter
for the construction of the roads, Coils 2.
Huntington, after brief sketch of the state
OF affairs which led to the inception of the
enterprise, says, in speaking of the repay
ment of the advances 1.-THE net earnings
have so fallen of, and the obvious fiscal
precautions we have recommended have
been so long ignored by the representatives
of the Government. that il is now apparent
that it will be impossible to discharge the
debt at maturity between 1895 and 1899.
The alternatives before the Government
will be either to let the first mortgage hold
ers take the road, or to assume the prior
mortgage and take possession of the aided
portion and operate it, or to extend the
time for reimbursement for a further period
of years
As to which of these three plans was the
best for the Government TO adopt, he urges
that the extension of the time for the pay
ment of the Indebtedness should be pre-
ferred, first, because it can be demon
strated that the taking of the roads would
only entail other losses upon the treasury,
also, that the companies as the owners.
can do better with it than either class of
creditors. Among the reasons given why
the indulgence suggested should be extend
ed to the companies are that there was an
oversight in making both classes of bond,
payable in the first thirty years; that the
aid promised was of greater value that the
aid received, through the depression of the
value of the currency and the appreciation
of gold; that the road was built in half the
time allowed by the Government by which
the, Government was greatly benefited.
and the companies put to great additional
expense; that no allowance has been made
by the Government for the great saving in
transportation OF troops and stores over the
| former method of transportation by wag-
ons; that greater encouragement has since
| been given 10 rival roads that it withholds
Government transportations and the earn
| ings for such as is given, and that the reve-
| nues so withheld have been wasted and
| squandered by iudicious investment; that
| the terms of the contract have been changed
| by Congress to the detriment OF the roads,
| and finally that " Congress pushes the al
| legged right of alteration, amendment or re-
peal in respect to matters of contract in
| the charter to an unreasonable extent.
| which would have defeated the building of
| the road itself, and now impairs its credit.
Mr.. Huntington furnishes tables show
| ing the great saving to the Government by
| the construction of the roads. and con-
! tends that the deficiency in the interest
| should have been written off each year on
| account of this saving, instead of having
been allowed to accumulate and be added
to the principal. He says: " 1t costs the
| United States one million dollars a year 10
maintain regiment of cavalry on the
| frontier, and about half that for a regiment
of infantry. As many as thirteen regi-
ments have been engaged in this service at
one time. After the completion of the
road less than half the former force was
abundant to maintain a better state of
peace and order. This economy is one the
company deserves credit for eieeting. as
well as by Fastening it by at least seven
years of time, bat il nowhere appears on
the ledgers."
He speaks of the Thurman Act as fail
ure so far as securing the debt due the
Government is concerned, and urges that
lenicncy and even generosity on the part
of the Government would not only aid. but
hasten the repayment of the debt due on
the subsidy bonds.