, 1888-02-25
WANT MORE TINE
The Pacific Railways Before a
House Committee.
Commissioners Littler and An
derson on the Stand.
The Union Pacific Disposed to
Do the FAIR Thing.
Considering the REPORTS.

Considering the Reports.
WASHINGTON, Feb. "a -Littler, mem
Der of the Pacific Railway commission,
was on the witness stand to day. He
said that when the commission had filed
its reports with the president its duties
were substantially at an end, but that if
its members could aid the committee in
any way in reaching a correct determine
ton of the important question before it,
they would most willingly contribute their
efforts. Congress had had much to do
with the question how to keep money out
of the treasury, but very little to do with
getting INTO the treasury money which
lawfully belonged there. The bill pro-
posed by the majority of the commission
would, he thought, have the effect of
putting such money into the treasury.
Taking up the case of the Union Pacific
railroad. he called attention to the fact
that the bond aided portion Of the road
did not embrace the terminal facilities and
property at Omaha, Kansas City or Dem
yer, which was worth millions of dollars.
The promoters of the scheme must have
f~oreseen that there would be failure to
pay the government lien and had con-
cluded that the valuable terminal proper
ties should not be covered by the lien.
The government would not have much
trouble in dealing with the Union Pacific.
The country through which it and its
branch lines ran was wonderfully fertile
and capable of sustaining a great system
of roads. The entire country from
tains would produce a very large traffic
and would enable the company, under
economical management, to pay off its
I. aha, N-A-, INhnvrnnnA 70 IlrIufa tho
road ran through a God forsaken country
which promised nothing in the future and
the Union Pacific would have to depend
for its resources upon its line be-
tween the Missouri river and the
Rocky mountains. The majority had
reported that the Union Pacific was solv-
ent and with a fair extension would be
| able to pay its debt. Some of its branch
lines were worthless and had been ac-
quired uader circumstances which no
| fected discredit upOn the integrity or judg-
mcnt of the persons managing the road at
the time. The acquisition of the Dcnver&
| South Park and Nevada Central roads
| had been an unfortunate one and has per
haps been actuated through improper mo-
tives. Those roads had been acquired prior
| to 1884. The Utah Northern and Oregon
| Short Line were valuable acquisitions and
with the development of the country will
add largely to the revenues of the Union
Pacific company. The estimate of value
of the Union Pacific railroad made by the
engineer of the commission, he said, con-
tradicted overwhelmingly the minority
commission. who had reported that the
road was bankrupt. The engineer, after 4
personal inspection ofevery mile ofthe road
and after making an inventory of every tic
and fish plate and every item which en-
tered into the construction and operation
of the railway, had given 1t as his opin-
ion that the Union Pacific system was
worth $3.50, DOC, 600, and that it would
cost that sun of money TO reproduce it.
The bond aided portion Of the system was
encountered to the extent of SSl 900, 900
$50, 600, 600 prior to the government
lien and the balance subsequent to it. In
the light of facts elected by the engineer,
the commission had unanimously reached
the conclusion that Notwithstanding the
great value OF the property and the cnor-
nous annual income which it received,
the company could not pay its debt to the
government in 1895, 1896 and 1897, when
it matured, and the majority had recon-
mended an extension of fifty years, the
government taking a contract mOrtgagei in
stead of perpetuating its lien. In order
to increase the government security and
get out of the company everything 1t had
in the way of security, the bill OF the
majority provided that the company
should give a plain old fashioned contract
mortgage on everything it possessed.
There was in the treasury of the Union
Pacific securities of branch lines amount.
ing to 800, 900, 600, and 1t was the inten-
ton of the bill TO retain to the govern
mcnt not only the equity remaining in
the property after the payment Of prior
lines, but also all security which the
Union Pacific held in its branch lines.
II that bill passed 1t would scoop in every
thing of value belonging to the Union
Pacific, and when a creditor gave all he
had in way of security that was all that
could be expected.
Cultivate asked how it would do to
take all of the earnings of the Central
Pacific for the next ten years, and at the
end Of that time go for the men who
bad ravished the company? ?"
Littler replied cmphatically that the
government would not get a dollar under
that plan. The Central Pacific was leased
to the Southern Pacific company, and it
was in the power of the latter company to
80 keep lnC DUOkS ANU 81 duIuob hlulNClS
that not u dollar would ever get into the
governments possession. They could so
arrange it that not a dollar of the net rev.
enue produced in the next ten years would
reach the government. You will find
that when the hat is passed around or
that occasion hat nothing will be taken
in. We are absolutely without remedy
until the maturity of this debt, said Mr..
Littler in answer to Webcr's ques-
tions as to why it would not
be well to cause a receiver to
be appointed for the Central
Pacific. Littlcr said that the prospect OF
insolvency was no ground for the appoint
ment of a receiver and the supreme court,
unfortunately for the government, had
held that not one dollar of debt would be
due until 1897, so that default could not
be declared. Suppose a receiver was APP
pointed, the government would receive n
worthless piece Of property which it could
not operate without loss. The road was
cut off at both ends without any connCc-
ton with the great markets OF the Pa.
cifc coast. 1t would be anomalous in the
history of law suits to appoint a receiver
where no part of the interest was due.
Turning his attention to COMMISSIONS