Los Angeles daily herald., 1888-03-18
THE CENTRAL PACIFIC.
Senate Committee Investigation
of Its Affairs.

SehNte COlnmlttee lmVeSt1RatlOm
of Its Affairs.
WASHINGTON, March 17.-Senator
Stanford appeared to-day before the
Senate special committee, to which
was referred the reports Of the Pacific
Railway Commission. He said that
the Government had reaped from the
Central Pacific all the advantages any
one ever expected it would reap, and
it had poor debtor to deal with. 1t
was question now whether the Gov
ernment would deal as generously as
individual creditors would under the
circumstances. There was an impress
sion that the road was having it's land
grants surrendered in order to evade
taxes. AS a matter of fact, there has
been no time when the road was not
pleading for surveys and when it was
not ready to pay for them, but the
Land Department would not survey
them. Any burden now put on this
road must fall upon the people OF Ne
vada and Utah, who are already pay
ing fair percentage for services.
THE EXPENSES ENUMERATED.
The Senator told graphically the
familiar story Of the construction and
completion of the line. He said that the
Government had loaned its credit to
the extent of $27 100000 and the
company had issued bonds to like
amount. The Government bonds
had been sold at discount, bringing
in but little over 100000, 900, and the
company's bonds had brought little
less than that sum. All the money
so realized had been expended in the
construction of the road. 1t would be
seen that the wild stories that hum
dred millions had been made out of
the Government were without found
alton. The road had seven years be-
fore the limit in time was reached,
and before that limit was reached the
Government had saved more in re-
duced charges for transportation of
it's mail and troops than the en-
tire investment. The road was q
conspicuous success and it could easi-
ly have paid off its Indebtedness to
the Government, had not the latter by
its own act, fostered the competing
lines which divided the business and
charges. He did not suppose that
anyone expected the government
bonds to be paid at maturity. The
first mortgage bonds were due at the
same time that those of the Govern
ment were due. The company's sink
ing fund to meet the first mortgage
bonds, now amounted to $4,000, 900,
and every dollar of this made the
Government security SO much the bet
ter. The amount standing to
THE CREDIT OF THE ROAD
Now in the treasury was actually
5000 900 less than the amount paid in,
by reason Of investment in Govern
ment bonds at high premiums. The
Government in all its other dealings
had sold its bonds for what it could
get, losing itself whatever might be
discount, yet the Central Pacific had
sold Government bonds at discount
and was now asked to pay face value.
1t might be said that the road issued
large amount of stock. So it did,
but this did not affect anybody but
the stockholders. If the Government
debt were paid the Government would
have saved over 5000, ,0QRO0O. The
pr fits of the road were derived not
from the Government, but solely
from the values the road had created.
CREED HAYMoND ARGUES.
General Counsel Raymond, Of the
Central Pacific, followed Senator STAN
ford. He said that the Central Pacific