The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1888-02-25
THE GREAT RAILWAYS
The Investigations Into Their
Affairs.
THE UNION PACIFIC'S DEBT.
Enormous Figures-The Prospect of
LiquIdatiOn-A Contract Mort
gage suggested-Etc.
Debts of the Pacific Roads.

Investigation of the affairs of the
Pacific roads to-day, Litter wa.
the first 10 take the stand
He said that when She commission had
filed reports with the President, its
duties were substantially at an end
but that if its members could aid the
committee in any way in reaching q
correct determination of the I'M
portant question before it, they
would most willingly contribute
their efforts. Congress had had much
to do with the questions of 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 ma
jority 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 attention to the fact that the
bond-aided portion of the road did not
embrace terminal facilities and prop
erty at Omaha, Kansas City or Denver,
which was worth millions OF dollars
The promoters of the scheme must
have foreseen that there could be
a failure to pay the govern
ment lien, and had concluded
that the valuable terminal property
should not be covered by lien. The
government would not have much
trouble in dealing with the Union
Pacific. The country through which 1t
and its branch lines ran was wonder
fully fertile, and capable of sustaining q
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 economical management.
to pay off its debt. From Cheyenne to
Ogden, the road ran through God
forsaken country which promised moth
ing tor the future, and the Union Pacific
would have 10 depend for its resources
upon its line between the Missouri River
and the Rocky Mountains. The
majority had reported that the
Union Pacific was solvent, and
with fair extension would be
able to pay its debt. Some OF its
branch lines were worthless and had
been acquired under circumstances
which reflected discredit upon the
integrity or Judgment of the persons
managing the road at the time. The
acquisition of Denver & South Park
and Nevada Central roads had been
unfortunate ones, and has perhaDs been
actuated:througha an improper motive.
Those roads had been acquired prior to
1884. The Utah & Northern and
Oregon Short Line were valuable
acquisitions, and with the deve opment
of the country, will add largely to the
revenues of the Union Pacific Com
pauy. The estimate of the value OF the
Union Pacific Railroad was made by
the engineer OF the commission, and
he said. it contradicted over whelmingly
the minority of the commission,
who had reported that the road
was bankrupt. The engineer. after a
personal inspection of every mile of the
road, and after making an inventory of
every lie and fish-plate, and every
item which entered into the construc-
ton and operation of the road. had
given it as his opinion that the Union
Pacific system was worth $l50, GOO, 900,
and that it would cost that sum OF
money TO reproduce it. The bond
aided portion of the system was en-
numbered to the extent OF $Sl COO 00J;
S33 ,000,0 900 prior 10 the government
lien, and the balance subsequent to it.
In light of the facts elected by the
engineer, the com mission had unanim.
ously reached the coGcius'on that,
SAlO SoAOhb NokhC VI llG
property and the enormous au-
nuai income which it received,
the company could net pay its
debt TO the government in 1895, 1896
and 1897, when it matured; and The
majority had recon- mended an extern
sion OF fifty years, government taking
a contract mortgage instead of per-
petuating its lien. In order to increase
governments security and get out of
the company everything it had u the
way of security, the bill of the majority
provided that the company should give
a plain. Old fashioned contract mort
gage on everything it possessed.
There was 10 the treasury Of the Unian
Pacific, securities of its branch lines
amounting to $4,000 600, and it YVES
the intention of the bill to retain 10
government, not only the equity re-
naming in the property after the pay
ment of prior liens, but also all securl-
ties which the Union Pacific he'd in its
branch lines. If that bill passed, il
would scoop in everything of value be-
loaging to the Union Pacific; and
when the creditor gave all he had in
the way OF security, that was all that
could be expected.
Cultivate asked how 1t would do to
take all of the earnings of the Central
Pacific for the next ten years, and at
the end of that tune, Ego for the men
who had ravished the company"
Littler replied emphaticalIy that the
government would not get dollar un-
der 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 dollar
would ever get into the govern
ment's possession. They could so
arrange it that not del
lar of the net revenue produced
in the next ten years would reach the
government. "You will find that when
the hat is passed around on that occa-
sion, nothing will be taken in. We are
absolutely without remedy. "said Littler.
In answer to Weber's questions rs to
why it would not be well 10 cause a re-
ceiver to be appointed for the Cent rsl
Pacific, Littler said the prospect of in
solvency is no ground for the appoint
meut of q receiver, and the Suprem