St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1888-02-25
THE PACIFIC ROADS.
Railroad Commissioners Before
the House COmmittee-Hunti
toms Letter.

=
toms Letter.
WASHINGTON, Feb. 24.-In response
to invitation, Messrs. Llttler and An
dersOn, of the Pacific Railroad commits
sion, appeared before the house com
mittee on Pacific railroads this morning
Commissioner PattisOn was not present
but is expected to appear at an early
day. The chairman presented and had
placed on file letter from Mr.. Hunt.
ingtOn. In the letter he refers to the
bills introduced in 1876 looking to the
return to the government of the unsOld
land grant in part payment of the debt
and the diversion of the earnings from
government transportation for the crea-
ton of. sinking fund. He says that
something of this kind would have
been acceptable to the compa-
MES, but no action was taken.
Mr.. Huntington then tells how
the directors OF the company in 1878 re-
solved to create sinking fund in their
own treasury to meet its debt. at is
now apparent" he says, ''that the money
could not be made to earn per cent, as
was anticipated. Nevertheless a con-
siderable fund would have accumulated
by 1888. More than half the entire debt
would have been paid, and the whole
would have been settled in the early
part of the twentieth century, after
which the whole net earnings would
have gone to the stockholders. This, of
course. put an end to the company's
own voluntary efforts, as we could not
pay the money into the United States
treasury and also invest it elsewhere.
Congress thus took the matter into its
own hands, and the result has been to
lmpound a considerable sum in the
United States treasury which ought to
have been earning to per cent, but
which has
VIRTUALLY EARNED NOTHING,
as it is doubtful whether as many
dollars will be gotten out of the fund
as have been paid into it by the COM
pany. Finally it was not possible for
the Central Pacific company to repay
the United States loan and the interest
upon it, and at the same time to take
care of the first mortgages bonds
and interest thereon, within the short
space OF thirty years, unless it had
control of the traffic of the territory it
trayersed. When it became clear that
other competing roads to the Pacific,
mole literally aided than the first road,
were soon to be completed it was evil
dent that both the first MOI tgage and
the subordinate liens must be post
poned for a long time. For reasons
which were no doubt. satisfactory the
government impaired the earning ca
pacity of the road, and thereby its
security for the debt. This was a mat
ter over which the government had
control, and in equity it ought not now
to seek to make the impairment good at
the expense of the party injured by it,,
viz, the company.
commission had filed the reports with
the presidents, its duties were sub
stantially at an end, but that if it's
members could aid the committee in
any way in reaching correct determi-
nation OF the important question before
it, they would mostwillingly contribute
their efforts. Congress had had much
to do with the question how to keep
money out of the treasury, but very
little to do with getting into the treas
ury money which
LAWFULLY BELONGED THERE.
The bill proposed by the majority of
the commission would, he thought, have
the effect of putting such money into
the treasury. Taking up the case of
the Union Pacific railroad. he called at
tentiOn to the fact that the bond-aided
portion of the road and did not embrace
the terminal facilities and property at
Omaha, Kansas City or Denver, which
was worth millions of dollars. The pro-
motors OF the scheme must have fore
seen that there would be a failure to
pay the government lien and had con-
cluded that the valuable terminal prep
critics should not be covered by the lien.
t,a
trouble in dealing with the Union Pa
and its branch lines run was wonder
fully fertile and capable of sustaining
great system of roads. The entire
country from Omaha to the base of the
Rocky mountains would produce very
large traffic and would enable the COM
pany under an economical management
to pay off its debt.
Mr.. Cultivate asked how it would do
to take all the earnings of the Central
Pacific for the next ten years, and at
the end of that time Ego for the men
who had ravished the company"
Mr.. Littler replied emphatically that
the government would not get dollar
under that plan. The Central Pacific
was leased to the Southern Pacific COM
pany, and it was in the power of the
latter company to so keep the books and
SO adjust matters that not a dollar
would get into the governments posses
sion. They could so arrange it that not
a dollar of net revenue produced In the
next ten years would reach the govern
ment. ''You will find that when the
hat is passed around on that occasion
that nothing will be taken in. We are
absolutely without remedy"
TN ancxx,ar ~ Mr. ~ -
to why it would not be well to cause
receiver to be appointed for the Central
Pacific company, Mr.. Little said that
the prospective insolvency was no
ground for the
APPOINTMENT OF A RECEIVER,
and the supreme court, unfortunately
for the government, had held that not
one dollar of the debt would be due
until 1897, SO that default could not be
declared. Suppose a receiver was ap-
pointed: the government would receive
worthless piece of property which it
could not operate without loss; a road
cut off at both ends, road without any
connection with the. great markets of
the Pacific coast. 1t would be anoma-
lOus in the history of law suits to ap-
point receiver where no part of the
interest was due. Mr.. Littler said that
lie nad round PRESIDENT Cleveland to be
a clear-headed business man, ready to
treat the subject as matter of bust
ness.
Commissioner Anderson then ad-
dressed the commissioner. There were.
he said, two points of view from which
to look at this Pacific railroad question.
One was the business question in
vOlved in the remarkable management.
and in some eases, crime of the directors
of the roads; and the other was the
business question of dollars and cents.
Looking at the question from its moral
side, if it was the object of the govern
ment to punish the men who had stolen
the money, it should pass bill with
the provision that the company accept
ing it should give the right to sue the
wrongdoerS. He did not subscribe to
the suggestion that the government
should settle with the Central Pacific