Sacramento daily record-union., 1888-08-01
RA11go INDEBTEDNESS.
The Senate Report on the OuthwaIte
Funding Bill.

The Senate Report on the OuthwaIte
Funding Bill.
JCcpyigh, 1885, by tie California associated Press;
WASHINGTON, July 31st.-Senator Frye
from the select committee appointed to in
vestigate Pacific railroads reported back
favorably the bill reported in the House
for the adjustment of the Pacific railroads
Indebtedness, known as the Cultivate bill
Mr.. Frye said in making the report that
there was no difficulty in investigating the
Union Pacific and the Central Branch
thereof; but it was not so with the Central
Pacific. which they had not yet reported
on. They found the present amount of
these debts to be nearly $4,000 600, and on
which about $15000,000 interest he'd been
paid at five per cent. per annum on their
receipts. The subject had been referred to
certain insurance actuaIies and on their re
port, Mr.. Frye said, the committee might
offer an amendment to this bill, including
the Central Pacific road in It's provisions
The report is signed by every member of
the committee. Accompanying the report
were numerous memorials from Boards of
Trade in the West asking for the passage
of this bill
The report cites the history of the finan-
cial operations of the road in its dealings
with the Government and saws the bill
seems to be a very satisfactory settlement
CT the debt due from the Union Pacific and
the Central branches of the Union Pacific to
the Government. The report says: Itfixes
the amount of money which, ii out at in
terest on July l, 1888, at per cent per
annum, the simple interest would be equal
to the entire sum due from the corporation
when the debt natures.
After making proper allowances for the
payments already made, it takes the sink
ing fund in part payment of this sum and
makes the companies give their bonds for
the balance bearing interest at the rate OF
3 per cent payable semi annually, and re-
quires them to pay portion of these bonds
every six months, so that at the end of fifty
, ears the entire debt will be paid 1t re-
quires the companies to give contract
mortgages upon all their property of every
kind to secure these bonds. and makes
proper provision for foreclosure, while ii
permits the companies to take up and pay
/ the whole or only part of the bonds at any
time if their financial condition makes il
possible for them to do so. Without fully
analyzing all its provisions in this report,
your committee thinks that the bill fully
protec the interests of the United States.
If this sentiment is adopted the following
advantages are secured
First-All controversies between the
United States and the companies, such as
have occurred under the existing laws, are
| terminated.
| Second-All questions as to the invest
| ment of the sinking fund are ended. as the
United States at once receives this large
| sum on account of the subsidy debt, and is
relieved from all trust obligations to the
company.
Third-The United States will receive be.
| foie the debt natures, in addition to the
| sinking fund, which at the valuation Of
November l. 1887, was S7,734, ,083, not less
than g 647 500, making total payment
on the principal before maturity of $40, $751;.
| 5S3, and will also receive interest on the
entire debt every six months, the total pay
ment of interest during the same period
amounting to SIPS ,767.
Fourth-The United States will receive g
very large amount of additional security
which insures the ultimate payment of the
whole debt.