Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1888-01-25
Thu PACIFIC RAILROADS.
President Cleveland Sends a Mes
sage to Congress,
A REVIEW OF THE SITUATION.
A Speedy Disposition of the Troublesome
Matter Advocated-Vhe Effect OF
the Adoption of Either One
of the Commissions
Reports.

Is the s6SlQ6uG
the Pacific railroad reports to Congress:
''To THE SENATE AND HOUSE OF REPRE-
sENTATIyEs: On the Sd day Of March last
an act was passed authorizing the APP
pointment of three commissioners VINO
should investigate the affairs OF such
railroads as have received aid from the
United States government. Among
other things the contemplated lnvestl-
CATION included q history OF the con-
struction of these roads, their relations
and Indebtedness to the government,
and question whether, In the interest OF
the United States, any extension OF tune
for the performance of the Obligations OF
said roads to the government should be
granted; and if so the said COM
missioners were directed to sub
NIT a scheme for such extern
sion. The commissioners were further
directed by said act to report in full to
the President upon all the matters sub
mitted to them, and he was by said act
required to forward said report to Con-
gress with such recommendations or
comments as he should see fit to make
in the premises.
tsThe commissioners, Immediately
after their election, entered upon the
discharge of their duties and have prose-
cuted their inquiries with commendable
industry, intelligence and thoroughness.
A large amount of testimony has been
taken and all the facts have been devel-
Oped which appear to be necessary IOr
the consideration of the questions arising
from the condition of these aided
railroads and their relations to the gov
eminent. The commissioners, how
ever, have been unable to agree upon
the manner in which these railroads
should be treated respecting their IN
debtedness to the United States, or to
unite on the plan best calculated to Sc
curethe payment of such Indebtedness.
''This disagreement has resulted in
the preparation OF two reports, both OF
which are herewith submitted to the
Congress. These reports exhibit such
transactions and schemes connected
with the construction of the aided
roads and their management and sug-
gest the invention of such devices
on the part OF those having them IN
charge for the apparent purpose OF de-
feating any chance for the government S
reimbursement, that any adjustment or
plan of settlement should be predlcated
upon the substantial interests OF the
government rather than any forbear-
ance or generosity deserved by the COM
panies.
1.-THE wide publication which has al
ready been given TO the substance OF the
commissioners reports obviates the ne
cessitv of detailing in this communlca-
ton the facts found upon the investiga-
ton. The majority report, while con-
demning the methods adopted by those
who formerly had charge of
the Union Pacific Railroad, de-
clares that since its present man
agement was inauguraJed IN 1854 Its
affairs have been fairly and prudently
conducted, and that the present admin
istration, has devoted itself honestly and
intelligently to the herculean task OF
rescuing the Union Pacific Rail
way from the insolvency which
seriously threatened it at the incep-
ton OF its work; that it has devoted
itself by rigid economy, by intelli-
gent management and by an application
Of every dollar of the earning capacity OF
the system to It's Improvement and bet
torment, to place that company on a
sound and enduring financial founda-
ton
1.-THE condition of the present man.
agement of the Union Pacific Company
has an important bearing upon its abil-
ity to comply with the terms Of any set
Element of its Indebtedness which may
be offered by the government. The ma
iorIty of the commission are In favor OF
an extension of the time for the pay
ment of the government indebtedness OF
these companies upon certain condi-
tons. But the chairman of the commits
sion, presenting the minority report,
recommends both upon principle and
policy, the institution of proceedings Tor
the forfeiture of the charters of the cor
poratiOns, and the winding up of the af-
fairs.
Ct have been furnished with a state
ment or argument, in defense of the
transactions connected with the con-
struction of the Central Pacific road and
its branch lines from which it may not
be amiss to quote for the purpose OF
showing how some OF the operations OF
the directors OF such road, strongly con-
demned by the commissioners, are de-
Tended by the directors themselves.
CATER speaking of a contract for the
construction of one of these branch lines
by corporation, called the Contract
and Finance Company, owned by GER
tain directors of the Central Pacific Rail
road, this language is used: 1T may be
said of this contract as of many others
that were let to the different construc-
ton companies in which the directors
of the Central Pacific have Oeen stock
holders. that they built the road with
the moneys 1urnlSheo Dy themselves
and had the road for their out
lay. In other words they paid to the
construction company bonds and stock
Of the railroad SO constructed and waited
until such time as they could develop
sufficient business on the road built, to
induce the public to buy the bonds or
stock. If the country through which
the road ran, developed sufficient bust
mess, then the project was success; II
it did not then the operation was loss.
Those gentlemen took all the re-
spOnsibility any loss occurring
was necessarily theirs, and of
right the profit belonged to them. But
it is said that they violated well-known
rule OF equity in dealing with themselves;
that they were trustees and that they
were representing both sides Of the con-
tract. The answer IS that they did not
find anybody else to deal with. They
could not find anybody who would take
the chance of building road through
what was then an almost unIn-
babited country, and accept the