, 1888-03-01
WASHINGTON NOTES.
PACIFIC RAILROADS.

PACIFIC RAILROADS.
WAsuryoros, Feb. 25.-The senate spec
ial com mittee to which the report prepared
by the Pacific railway commission WAS re-
ferred, gave a hearing to-day on That
branch of the subject relating especially to
the affairs Of the Union Pacific Company,
Among the gentlemen present were Chas'
Francis Adams, president of the Union Ia.
cihc; Mr. Storey, It's attorney, and General
Johnston, commissioner of railroads. Ad.
ans addressed the commission. He had
what he termed the equities OF the COM
panies case, which expressed It's Willingness
io meet it's obligations IL the burden be so
al ijusted that IL would not deprive the prop
erty Of those returns which were necessary
to every well managed property, and de-
clared his readiness To advise his people to
accept the settlement proposed III the
Cultivate bill. with notifications rs had
been already submitted to the house com
mittee. There was general impression
which had been repeatedly stated In the pa
pers that the Union Pacitics additional Sc
curity amounts to nothing. that u
was all mortgagcd. This was
shockingiy erroneous. and no
person who would examine the property
would endorse the statement. In order To-
show how gross was the error he would
state a single proposition. So far as the
Union Pacific was concerned the ter
minal grounds In three cities-Omaha,
Kansas City and Denver-long before ma
tured. would be twice their present value
which was fully fifteen millions, and be-
the iilty-years extension period, which was
now under discussion, had passed he did
not hesitate to say that these terminal
grounds would be worth more than the EN-
tire debt OF the road
Hearst made the point that the grounds
could not be made available To extinguish
the debt inasmuch as they would always be
tI..H. lion nt
which Adams rejoined that the grounds
would have their value to whomsoever
should purchase the road and the purchase
money for the grounds would be applicable
upon the debt.
Upon reply to Frye, Adams said that he
encumbered by mortgages, but he
maintained that the enormous in
crease in value which is inevitable
is not subject to incumbrance. Those prop.
critics were not now included in the United
States security They were subject to u
mortgage which expires In five years.
Wood. Field and Storey, counsels Tor the
Union Pacific railroad, followed President
Adams with brief history Of previous leg.
islation relating to- the Pacific railroads and
pointing out its defects. He said that the
additional security offered to the govern
ment by the Union Pacific in the event OF
the extension OF its debt, was valued at
about sixty millions.
Commissioner Anderson, who was present,
nterposed to remark that according to his
calculation the government security would
he about doubled, and that the added Sc
cnrity would be about thirty-tive million.
Senator Morgan put it to the counsel NJ a
legal proportion whether the government
could not, by execution, although without
statutory lien on the branches, and in
its capacity as general creditor,
hold those branches as security. Storey
admitted that at the end of ten years the
government might as Il general creditor sue
the company aud ruin it. 1t might add to
its present security Dag niles of road and
terminal facilities, but it could not touch
the 1000 miles OF branch lines.
Adjourned
APPLICATION REJEcTED.