St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1888-01-17
THE PACIFIC ROADS.
A New Refunding Scheme Bill In
trouuced in the House.

W WASHINGTON, Jan. 16.-Mr. Out
waite introduced q bill in the house to-
day providing for the refunding of the
debts of the Pacific railroads. The basis
of the refunding scheme is outlined in
the first section of the bill. Under it
the secretary of the treasury is to aScer-
tain the Indebtedness OF the subsidized
roads, upon the same principle as ii the
bonds and interest were to be paid in
cash July l, 1888. The whole of the
the interest paid or to be paid by the
government upon those bonds, so as to
ascertain the total amounts that would
have been due the government for
principal and interest paid on the bonds
at their maturity ii no payments had
been made thereon by the companies.
From .neSe aScertained amounts shall
be deducted any payment made at any
time before July l, 1888, and the present
worthS of the amounts so ascertained as
of July l, 1888. at per cent per annum,
for the period between the date of
average maturity of said bonds and
July l, 1883. Deduct from the sums as
aScertained the amounts in the sinking
fund applicable to the companies; com
putting the value of any bonds
in the sinking fund at the mar
ket value at the time of such
computation as estimated by the Secre-
tary of the treasury. The final sums so
computed shall be deemed the amounts
that would be required to be paid in cash
July l. 1883, to discharge the government
debts of these roads. Section requires
the companies to begin the semi-annual
payment of the principal of the debt on
Jan. l, 1889, and TO continue such pay
mentS every six months thereafter in
such manner as to provide tor the pay
ment of every dollar of the debt in fifty
years. Each company, the section pro-
videS, Semi-annually for ten years, com
mencing Jan. l, 1889, shall pay, i'll addi-
ton to the interest then due on its in
debtedneSS, One-third of per cent. of
the whole sum for which it gave its
bonds and mortgages, and for period
of ten years, commencing Jan. L, 1899,
each company shall pay as aforesaid
two-thirdS of per cent, and for twenty
years, commencing Jan. l, 1909, each
company shall pay as aforesaid l per
cent, and for ten years, commencing
Jan. 1, 1929, ? per cent of said whole
sum of its bonds. Section 7permitS and
requires the companies to refund their
Indebtedness, authorized by Section
10 of the act of July, 1864,
dI lower Idlc vi iuI6IGSl,
and the lien of the United States
shall continue to be subordinate to that
securing such refunded debt, but the
eXtention shall be for not longer than
fifty years, and the lien shall be only on
the original property, and there are
other restrictions such as requiring the
maintenance of sinking fund to pay
off this extended prior indebtedness.
Section eight is an iron-clad prohibition
of the declaration of an dividends until
all the various obligations of the CON-
panieS as to all these prescribed pay
mentS are discharged. Section ten
cOmpelS the companies to empower the
attorney general to institute all such
suits as he may deem necessary against
former directors, officers or agents.
who have been guilty of violations of
duty or misrepresentation of assets of
the companies. Section eleven imposes
charge 70 per cent of the net earnings
of the road failing to accept the act or
complete its adjustment before July 1,
1888. Section twelve abOliSheS the
Office of government director and pro-
videS for the companies tranSacting
their own business and diSSOlveS the
present unsatisfactory and improbable
association of the government with
these corporations. Section fourteen is
Saring clause holding all government
rights and remedies unimpaired, and
retains the right of congress to alter,
amend or re peal.