Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1888-02-11
THE SETTLEMENT OF THE MATTER

! the Government and the railroad company
which is so heartily desired by all.
THE SETTLEMENT OF THE MATTER
The Omaha Republican, remarking upon
the question Of the relations of the trans
continental railways to the Federal Gov.
eminent concerning their debt, approves
| the Presidents recommendation that Con.
gress should do nothing to precipitate
bankruptcy upon the roads, but rather la
Dor to guard the rights of the public "by
helping the companies" And with this
Judgment the best thought of the country
IS concurring. The charge that great
wrong has been done to the Government
by the railways is senseless, and is uttered
now only by those who are morbidly an
tagonistic to the roads.
In all the railroad debate we cannot re-
call that anyone has ever placed his finger
upon line of the original compact be-
| tween the Government and the aided roads
that the latter has not kept to the letter
and in the spirit, nor is there reason to
| believe that their future course will differ
IN that respect from the past. The origi-
nal intention of that compact has been
modified by harsh and exacting legislation
relating to the payment of interest but of
that there is no more to be said, since it
has passed into history. But it cannot be
lost sight of that the acts of the Govern
ment have been of character that tend to
cripple the ability of the roads to meet the
debt when the principal shall fall due :;
and yet it is not contended by any that
the Government should not be paid
every dollar equitabIy its due. The Phil
adelphia Press well remarks:
It is worthy of notice that these are the only
railroad companies of which it is expected that
they Will pay the principal of theil bonds out of
earnings. 1t has always been thought not only
Suihclent, but remarkably good management,
when a railroad corporation has been able to
pay the interest on its debt out Of current earn
ings, leaving the principal to be provided for
when II became due, out of new loans. The
New York Central Company has ELY paid off
loan 1t lower rate OF interest.
The railroad companies in this conten-
ton have equities TO prefer that ought to
command the sincere attention of every
lover Of Justice; but it appears to us that
they cannot be presented or considered in
the right spirit except before Il Court or
Commission that has power to fully treat
them, and render a judgment which will
form a basis for ultimate, conclusive and
satisfactory adjustment. 1t is growing
upon the country that these equitable
claims cannot be put aside with the sweep
Of the arm, because they have the inherent
virtue that commands respect.
Prior to the building of the lines the
Government was expending something
like SS000,000 year for transportation
that now, with vastly increased need forit,
does not reach half that figure To-day
the roads receive practically nothing for a
heavy Government service performed.
They certainly did receive public lands to
aid the construction of the lines, and it is
also true that the debates of the period
disclose the fact that at the time of the
grants it was generally conceded that the
Government was more to be benefited by
them than the roads-indeed, the outcome
has shown that it has not been out of
pocket dollar on this account, since all
the public lands contiguous greatly appre-
ciated in value in consequence. The land
sales by the Government in the Terrific
ries since the roads were completed, gave
to its treasury millions that otherwise it
could never have received.
One of the subjects into which the Rail
road Commission was instructed to inquire,
was the loss to the road by reason of the
aid granted TO competing parallel lines.
We have the statement made before the
Commission by the counsel of the Central
Pacific Railroad, that the testimony dis
closes loss of about S17,000,000 on this
account between the years 1881 and 1886.
Il
commerce, since it represented diversion
and distribution of business, which
the projectors of the roads were not
led to contemplate. These considerations
might be greatly extended they have
grown upon Us unconsciously in rejecting
the approving remark of our Omaha con-
temporary. They might well include
statements Of the vast outlay saved TO the
Government by the completion of the
roads years in advance OF the date men
toned in the contract, and the consequent
unreasonable benefits - the whole coun-
try; the unparalleled and unforeseen out
lay necessitated by the building of the
roads; the diseouraging obstacles they met
and oyercame: the involved financial con-
diiion Of the country during the period Of
the construction, and the enormous sacri-
fees it rendered necessary in order to
command means for the completion of the
lines the fact that on the completion of
the Central Pacific road the Government
refused the percentage payments for serv-
ice performed and then being availed OF
by the Government, upon the plea that the
line had not been finished in exact accord
ance with the reports Of engineers; the
exaetion by the Government, as a condi-
ton precedent to keeping the letter of its
obligation, that new securities should be