The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1888-02-25


OF the branch lines were worthless. and
had been acquired under circumstances
which reflected discredit upon the integ-
rity or judgment OF the persons managing
the road at the time. The acquisition OF
Denver x South Park and the Nevada
Central railroads had been an unfortunate
one, and had perhaps been actuated
through improycr motives. These roads
had been acquired prior TO 1884.
The Utah Northern and the Oregon
Short line were valuable acquisitions and,
with the development OF the country, add
largely TO the revenues of the Union Pa
cific company. The estimate OF the value
Of the Union Pacific railroad made by the
engineer of the commission, he said, con-
tradicted overwhelmingly the minority
commissioner who had reported that the
road was bankrupt. The engineer, after
making personal inspection OF every mile
OF the road, and after making an inventory
of every tie and fish-plate and every item
which entered into the construction and
operation of the railway, had given II as
his opinion that the Union Pacific system
was worth $3.50, 1000, 900, and that it would
cost that sum Of money TO reproduce it.
The bond-aided portion OF the system was
encumbered TO the extent OF sSl, ,000, 600
$50, 600, 900 prior TO the government lien
and the balance subsequent to 1t.
In the light OF facts elected by the engi-
ncer, the commission had unanimously
reached the conclusion that notwithstand-
ing the great value OF the property, and
the enormous annual income which IL
reached the company could not pay its
debt TO the government in 1895, 1896 or
1897 when il matured, and the majority
had recommended an extension Of fifty
years-the government taking contract
mortgage instead OF perpeiuating its lien.
Ii that bill was passed, il would scoop in
everything OF value belonging 10 the
Union Pacific, and when creditor gave
all he had in the way OF security, that was
all that could be expected.
Mr.. Cultivate asked how II would do TO
take all the earnings OF the Central Pacific
for the next ten years and at the end Of
that time go for the men who had raw
ished the company"
Mr.. Lttler replied, emphatically, that
the government would not get dollar un-
der that plan. The Central Pacific was
leased to the branch lines when Congress
had nothing TO do with granting OF those
charters.
Mr. Weber inquired what were the sub
stantial reasons for granting more reasona-
BILE terms 10 the Central Pacific than TO the
Union Pacific.
Mr.. Iittler replied that IL wasn't because
these people were entitled TO any consider
alton at the hands Of Congress. lilo was
here 10 represent the government He
| would, II member OF Congress, ignore
for time the crimes and shortcomings OF
these men; lac would treat the debt rs n
business matter on business principles.
He didn't believe that the people of the
country were crying Tor the blood OF the
managers so much Us for the money they
owed the government. IL was the
duty OF the committee 10 recover this
money, and II they acted wisely IL would
be able 10 do so, Notwithstanding the sor-
rowful picture he had drawn Of the present
condition OF the roads. lie didn't know
whether the companies would accept the
provision requiring them 10 institute suits
| against their former managers Tor malieas-
ance, but any bill reported by the commit
| tee should include n provision.
Unless the committee settled this matter
on business principles, the government
would in 1897 lose $50, ,0O0, 900 through the
Central Pacific. II II acted wisely, in ten
years $40, ,000, 900 would have been paid TO
the government, and IL could rest in the
| Southern Pacific company, and though IL
was in the power OF the latter company 10
so keep the books that not dollar would
ever get into the governments possession,
they could 40 arrange IL that not dollar
OF net revenue produced in the next ten
years would reach the government"
"You will find that when tho hat Is
passed around on that occasion that moth
ing will be taken In. We are absolutely
without remedy until the maturity OF the
debt" said Mr.. Littler.
In answer 10 Mr.. Wcber's question rs 10
why II would not be well 10 cause re-
ceiver 10 be appointed for the Central Pa
| cific company, Mr.. littler said that pro-
spective insolvency was no ground for the
appointment OF a receiver, and the su-
prcme court, unfortunately for the govern
mcnt, had held that not one dollar OF the
debt would be due until 1897, 10 that a de-
fault couldn't he declared.
Suppose n receiver was appointed; the
government would receive worthless
piece OF property which Il could not opcr-
ate without loss n road cut of at both
ends, road without any connection with
the great markets OF the Pacific coast. II
would be anomalous in the history OF wal
suits 10 appoint receiver where not part
Of the interest was due. Turning his at
tcntion TO Commissioner Patiison's minor.
ity report, witness said II required more oi
lawyer than he (witnessl was 10 under
stand how Congress could forfeit charter
10 a railroad company granted by State and
Territorial governments. lio could moi
understand how Mr.. Paiiison would forfeit
the charters OF tho Pacific Railroad com
panys belief that the entire debt was in
course Of extinction. II was a matter o.
no consequence whether Il gave the com
pany fifty or 100 years, the government
had money enough In the treasury nj
present and found Il impossible 10 keel
the revenues down TO the expenses.
Mr.. Littlor said that he had found Pres
ident Cleveland 10 be n clear-headed bus
iness man, ready 10 treat the subject ~ |
matter OF business.
At this point n recess was taken.
After recess Mr.. Littlcr said he desired
10 reply 10 a question which had been nd
dressed 10 him rs 20 whether the fraud
eomitied In the management Of the Pacific
railroad wouldn't furnish basis for thu
appointment OF a receiver. lie though
that II those fraudsdid furnish such basi
the right 10 n receiver existed indcpenden
Of any action on the part OF Congress, an,
that nothing remained 10 bo done excep
for the Attorncy-General 10 proceed will
his application.
Commissioner Anderson then addresses
the commission. There was, he said, tw,
| poinle OF view from which 10 look nj thi