Los Angeles daily herald., 1888-01-08

the expiration OF ten years the animal
requirements would be $2,030, $50
The opinion is sexpressed by the Com
mission that the railroads cannot pay
|this debt, and it is for the purpose o.
dealing with this difficulty that the
legislation before referred to Is pro.
posed by the Commission. 1t is fur.
ther stated that the assets Of the roads
have been grossly misappropriated in
times past, and thus the power to
meet the obligations to the Govern.
mens greatly impaired. Under ex-
listing laws there has been no power
In the Government to prevent such
misappropriation Of funds. The Acts
proposed will deal with this matter.
The Central Pacific is rext taken
up, and OF its affairs the report says
The Central Pacific Railroad Is
next taken up, its subsidized portion
being from point six miles west OF
Ogden, Utah, to Sacram, nto, Cal. !,
a distance Of 737 30 miles, and from
Sacramento to San Jose (formerly
known as the Western Pacific), a
distance of 1878 miles. The total
amount of the subsidy was s27, 1885,
ESQ. The additions to the company
by consultations and extensions are
explained, and its present mileage
is rlared at l357.20 miles. OF which
$50 II are subsidized, and 1862 I'M
subsidized, the subsidized portion
having no direct communication with
San Francisco. Prior to 1885 a
large number of local branch
roads were operated by the
Central Pacific under leases, these
roads running through the most pro-
ductive and populous parts of the
States and adding largely to the in
come Of the main line. In addition
to these branches complete system
Of railway extending from Cohen,
CAL, to Yuma, Ariz., thence through
Arizona and New Mexico and
through part of Texas to Ell Paso, to
Houston and thence to New Orleans,
was put into operation by men promi-
nently connected with the Central
Pacific and they secured connection
with the East from New Orleans by
water. This system, known a. the
Southern Pacific system, was operated
by the Central Pacific prior to 1885,
but then change was made. the sys-
tenn being divided into two parts, one
including the Central Pac fic and
leased lines north OF Goshen,
and the other the Southern
Pacific and leased lines south Of
Goshen, and both systems were leased
to Kentucky corporation,. known as
the Southern Pacific Company. The
latter company assumed the payment
OF all the Central Pacific obligations,
by way Of interest, and also of the
government requirements, and agreed
10 pay an annual rental, fixed at a
minimum of 1900 900. In addition
to this sum the Southern Pacific Com
pany agreed to make the entire
amount OF its payments equal to the
actual net earnings of the road. such
payments not to exceed 81, 400 900.
The net earnings OF the entire sys-
tenn is get at 5000 900 per annum.
The interest on first mortgage bonds
and necessary betterments of the
roads will take 100000 of this.
The entire value OF the system is put
at $40 00),00 The lien Of the
United States affects only that portion
Of the system lying between Ogden
and San Jose, via Sacramento.
The report goes on:
The bonded debt is figrred at .62.-
2S7 600, which, with the Government
lien of $27 $50 $50, gives total debt
OF $50 ,242 $50, which is a lien on the
Central Pacific, or some part of the
same. The only auxiliary securities
which can be looked to to bear or
tighten any portion of the burden" are
s4 $40 900 land grant bonds, and, to
some extent. the ifty-year bonds,
which are also a lien on the land
grant. There re rains, therefore,
total funded deb, of $57 .Sl7 600, ex-
elusive OF the obligations 10 the
United s ates, which amount exceeds
The estimated cost of reproducing all
.hese roads. The conclusion is there
tore reached that a present mortgage
given by the Central Pacific Railroad.
embracing the entire 1857 20 miles of
he railroad as now consolidated,
would therefore give but little ahdi-
ional security to the present statutory
len, it'has, however, as in the case
Of The Union Pacific. the advantage of
together ard placing within
III control OF the creditor q complete
mortgage of the Jltire railroad,
including the California and Ore.
zon, the San Joaquin Valley. the
San Francisco, Oakland and Alameda
branches, and the terminal facilities
It Oakland and San Francisco. The
amount Of the debt due the United
States is figured at $i60, ,2Is. .O6l .0l.
rom which is to be deducted the
amount of the bond and interest ac-
count held by the United States
e. 1873 35, and the sinking fund OF
*, ,4l3 1896 OF, making the net am cunt
of the obligation SO, SOC, ,585 SO. This
'um must not be confounded with the
present value Of the indebtness, for
he reasons stated in considering the
iebt Of the Union Pacific. The prin-
cipal OF the debt Of the Central Pacific,
including the Western Pacific, is $e7.-
S55 $50, to which is to be added 1870
per cent interest, $5C.l40 224, making
the total debt at maturity $67, 1895, ,e04
From this is to be deducted &c. .2O3..
370.35, bond and interest account.
leaving balance OF $7l, ,792, ,524 35 as
the debt at the maturity OF the bonds.
The average date Of maturity of th+.
Central Pacific is November is, 1897.
and oi the Western Pacific Septem Der
5, 1898.
The approximate present value ia
81 ,792, 524 s.. the discount at 3 per
cent is $52,750, 900, deduct amount In
funds $S,4lS, ,997 .0l; total,
s49 331 ,O03.39.
The requirements under the provis-