Evening star. [volume] (Washington, D.C.) 1854-1972, 1888-02-25

BILL WOULD Be ACCEPTABLE WITH NOTIFICATIONS
HOW COUNSEL STOREY WOULD MANAGE THE IN
DKBTKDNRss QUESTION.
The Senate special committee to which the re.
port prepared by the Pacific Railroad Commission
was referred gave hearing to-day ON that branch
OF the subject relating especially to the affairs OF
the Union Pacific Co. Among the gentlemen pres
ent were Mr. Charles Francis Adams, president OF
the Union Pactnc; Mr.. storey, the attorney, and
Gen. Johnston, Commissioner OF Railroads.
PRESIDENT ADAMS STATEMENT.
Mr.. Adams addressed the committee saying that
he had recently twice appeared before the Pacific
Railroad committee;of the House, and his state
ments there were in print, copies OF which he
would hand TO the members OF this committee. To
repeat the statements would unnecessarily con-
sumo the time OF the committee. He thereupon, In
the fewest possible words, stated what he termed
equities OF the companys case; expressed its WILL
ingness TO meet its obligations II the burden were
30 adjusted that 1t would not deprive the property
OF those returns which were necessary TO every
weli-managed property, and stated his readiness 10
ADVISE MS people 10 accept the settlement proposed
In the Outhwaite bill with such notifications as he
had already submitted to the House committee.
Ihere was general impression, which had been
repeatedly stated In the papers, that the Union
Pacific additional security amounts to nothing
that 1t was all mortgaged. This was shockingly
property would endorse the statement The ter
mlnal grounds OF the road In the three cities,
Omaha, Kansas City and Denver, would before
value, which was fully SIS 900; and before the
nfty-year extension period, which was now under
discussion, had passed he did not hesitate TO say
tneSe terminal grounds would be worth more than
the entire debt OF the road.
Senator Hearst made the point that the grounds
company s debt. inasmuch as they would always
be necessary to the operation of the road to which
Mr. Adams reJoined that the grounds would have
their value TO whOmSoever should purchase The
road, ana the purchase money for the grounds
would be applicable upon the debt.
In reply 10 Senator Frye, Mr.. Adams said he sup
posed it was true that the grounds were encum-
bered by mortgages, but he maintained that the
enormous increase In value, which was inevitable
was not subject to the incumbrance.
COUNSEL sToREY's SUGGESTIONS.
Mr.. Moortield Storey, counsel OF the road entered
upon detailed statement OF the company's in
debtedness, and suggested a remedy. In the first
place, he held that the land-grant railroads must
be ire ted separately by the Government; that the
conditions OF all are not alike, and TO legislate for
themin one illwould work injustice. He says the
Union Pacific Co. and theGovernment are partners
as It were In great property, and they are dis
cordant partners. He wants TO harmonic matters
upon basis OF safety TO the Government and sat
1Sfaction to the company. He proposed TO do this
by making a careful reckoning OF the roads pres
ent Indebtedness TO the Government. This he
said Is being done by an actuary. Then he would
have the company issue bonds to the Govern
ment redeemable at such periods will enable
the road to take them up, and as security
let the Government have lien upon all the prop
erty, including terminal property. The lien now
In existence does not cover the terminal property.
and Is said 10 be somewhat indefinite. Mr.. storey
would make the lien absolute upon all the prop
erty. He was asked many questions by members
Of the committee.
HOW THE GOVERNMENT MIGHT TAKE CONTROL.
Senator Morgan suggested that the United states
might practically take control of the Union Pacific
by increasing the number Of Government directors
to majority OF the board.
Mr.. Storey admitted that the Government might
do that but Said that II could not thereby increase
ffs ri fat-a N
fngS
Senator Morgan remarked that he made the sug-
geStlon for the consideration or The company In
his contemplation, 1t constituted reserved power
OF the government over the roads that hadn't been
apparently heretofore taken into account.
ADDITIONAL SECURITIES TO BE OFFERED TO THE Gov
ERNMENT.
Resuming his argument, Mr.. storey said that the
additional securities offered to the Government by
the Union Pacific, in the event OF an extension OF
its debt were valued at about sixty million dol
lars.
Commissioner Anderson, who was present. in.
terposed to remark that according to his calcula-
tions the Government security would be about
doubled; that the added security would be about
twenty-five million dollars.
Senator Morgan put it to the counsel as a legal
proposition whether the Government could not by
execution although without statutory lien on the
branches), and In its capacity as general cred
itOr, hold those branches as security.
Mr.. Storey admitted that at the end OF ten years
the Government might, as general creditor, sue
present security 426 miles OF road and the ter
minal facilities but 1t could not touch the 9, 700
miles OF branch lines
At the conclusion OF Mr.. Storey's argument the
committee adjourned until next Saturday, when
hearings will be given TO Commissioners Litter
and Anderson, Railroad Commissioner Johnston,
and Government director OF the Pacific Railroad
solely upon the affairs OF the Union Pacific Rail-
road Company.
General solicitor Hayward, Of the Central Pacific
Railroad Company, who was present at this morn
ings meeting will be heard at O later date touch
ing the position OF that ompany in pursuance OF
the committees plan to consider the Union Pacific
and the Central Pacific affairs separately.