Idaho news. (Blackfoot, Idaho) 1887-1891, 1888-03-10
an EXTENSION OF TIME.
<eoo Railroad Commissioners Who Ur0s
Ihat The SovsrnBteR; Gige the Pacific
Iioads a Chance.


derson, Of the Pacific railroad commits
sion, appeared before the house commit
tee on Pacific railroads this morning,
Before asking Littler TO express his
views the chairman presented and had
placed on file letter from @. p. Hunt
ington, telling how the directors of the
company in 1878 resolved TO create
sinking fund to meet the debt and says
1t Is now apparent the money would not
be made TO earn per cent, as was antici-
pated. Nevertheless by 1893 more than
half the entire debt would have been
paid, and the whole settled in the early
part Of the twentieth century, after
which the whole net earnings would
have gone TO the stockholders. The
passage of the Thurman act followed,
and this, Of course, put an end to the
company's own voluntary efforts. Con-
gress thus took the matter into its own
hands and the result has been to inn
pound a considerable sum in the United
States treasury which ought to have
been earning 8 or 0 per cent, but which
has virtually earned nothing-as 1t is to-
day doubtful whether as many dollars
Will be gotten out of the fund as has
been paid into il by the company.
Finally, it was not possible for the Cen
trail Pacific to repay the United States
loan and interest, and at the same time
take care of the first mortgage bonds
and interest within the short space of
thirty years, unless it had control of the
traffic of the territory trayersed. When
1t became clear that other competing
roads to the Pacific, more literally
aided, were soon to be completed, it was
both evident that both the first mort
gage and subordinate mortgages must
be postponed a very long time. For rea-
sons which were no doubt satisfactory,
the government impaired the earning
capacity Of the road, and thereby its
security for the debt. This was mat
ter over which the government had con-
troll, and in equity it ought not now seek
to make the impairment good at the ex-
pense of the party injured by it-viz:
the company.
Litteler then addressed the commit
tee. Taking up the case of the Union
Pacific railroad he called attention to the
fact that the bond-aided portion of the
rohd did not embrace the terminal facil-
tiles and property at Omaha, Kansas
City or Denver, which we're worth mil
lions Of dollars The government
would not have trouble in dealing with
the Union Pacific. The entire country
from Omaha to the base of the Rocky
mountains would produce very large
traffic and enable the company, under
economical management, to pay off the
debt. From Cheyenne TO Ogden the
road ran through God -forsaken conn
try, which promised nothing in the fu-
ture, and the Union Pacific would
have to depend for resources upon the
line between the Missouri river and the
Rocky mountains.
The majority had reported that the
Union Pacific was solvent, and, with q
fair extension, would be able to pay the
debt. Some OF its branch lines were
worthless. and had been acquired under
circumstances which reflected discredit
upon the integrity or judgment of the
persons managing the road at the time.
The Utah Northern and Oregon Short
Line were valuable acquisitions, and
with the Developments of the country
would add largely TO the road S revenue.
The estimate of Ihe value of the Union
Pacific made by the examiners of the
commission contradict overwhelmingly
the minority commissioner who had re-
ported the road bankrupt. In the light
of the facts elected the commission had
unanimously reached the conclusion
that notwithstanding the great value OF
the property and the enormous annual
income it received the company could
not pay It's debt to the government IN
1895, 1886 and 1897, when it matured,
and the majority had recommended an
extension Of fourteen years. the govern
ment taking a contract mortgage IN
stead of perpetuating its lien. There
was in the treasury of the Union Pacific
securities of branch lines amounting TO
s22, 600, 900, and it was the intention OF
the bill 10 retain to the government not
only the equity remaining in the prop
ertv. after the payment of prior liens,
but also all the security which the
Union Pacific held in the branch lines
Cultivate asked how il would do to
take all the earnings Of the Central Pa
cific for the next ten years and at the
end of that time Ego for the men who
had ravished the company.
Littler replied emphatically that the
government would not get dollar under
that plan.
In answer to Weber's questions, as to
why it would not De wei 10 cause u re-
ceiyer TO be appointed for the Central
Pacific, Littler said the prospect of in
solvency was no ground for the appoint
ment Of n receiver and the supreme
court had held that as not one dollar OF
the debt would be due until 1897 a de-
sault could not he declared. Suppose a
receiver was appointed; the government
would receive worthless piece ofproper-
ty which il could not operate without loss;
a road cut of at both ends; road with
out any connection with the great mar
kets of the Pacific coast. II would be
anamolous in the history of law
snits to appoint receiver when no part
OF the interest is due.
Turning his attention 10 Commits
sioner Pattison's minority report, the
witness said il required more of a law
yer than he was 10 understand how con-
gress could forfeit charter TO railroad
company granted by state and territorial
governments.
Weber inquired what were the SUBJ
stantial reasons for granting more rea-
sonable terms TO the Central than to the
Union Pacific.
Littler replied ii was not because these
people were entitled to any considera-
ton at the hands of congress. He would,
IL member of congress, ignore for a
time the crimes and shortcomings of