Evening star. [volume] (Washington, D.C.) 1854-1972, 1889-09-30
THE SUBSIDIZED RAILROADS.
Annual Report Of the Government Com
Observation-Disclosures Recommended

II. A. Taylor, the commissioner of railroads,
in his annual report to the Secretary of the
Interior, states that several of the railroad COM
panies which have received grants Of public
lands to aid in the construction Of their roads
decline to report to the railroad office because
the lands were granted to the state by the
government and not to the railroad companies
The commissioner considers this point
technical and evasive, and he states that he has
referred the subject to the Secretary Of the
Interior for instructions, as it Is his duty to
certify all cases Of neglect or refusal to make
reports to the railroad officers to the Secretary
of the Interior for the institution of proceed
ings necessary to judicially enforce the forfeit
lures provided for in the law.
BAD YEAR FOR THE RArLRoAps
The report states that the past year has not
been a prosperous one for the railroads. es-
pecially in the west This is due mainly to the
failure Of crops, although repeated and ruinous
wars have had depressing influence.
The commissioner enters his protest against
the claim made by railroad managers that the
recent losses sustained in the railroad business
are mainly due to the restrictive laws which
have of late been enacted by Congress and in
many OF the western states. In many sections
Of the west especially in the states of Iowa and
Kansas, he thinks that the mileage Of roads is
great, in excess Of the legitimate needs of the
carrying trade.
LEGISLATION RECOMMENDED.
The commissioner thinks that the time has
arrived for positive legislation providing for
the funding Of the debts Of the bonded roads.
He is Of the opinion that there should be an
extension of time and a reduction in the rate
OF interest, but he thinks that regular fixed
payments should not be insisted upon, Some
arr nfshn ha do hos
BILE the companies to eventually discharge
their indebtedness to the government. He is
OF the opinion that such unwise legislation as
would oblige the government to take possession
of the roads would be undesirable. In addition
to the reduced interest and extension of time
TO PAY THEIR DEBT TO THE GOVERNMENT
the commissioner favors the requirement Of
the payment Of a certain per cent of the gross
earnings Of the roads to be applied in liquida-
ton of their indebtedness to the government.
and that the earnings from all government trans
portation by the subsidized companies in all
lines operated by them, whether aided or nom
aided, should be applied to the payment of any
interest or principal due or to become due
within the fiscal year in which the serv-
ices might be rendered; and the payment
of any dividends by either of the subsidized
companies, unless such company shall have
paid all interest on its bonded debts, be pro-
hibited. The companies should also be per-
mitted to refund their first mortgage bonds,
under such provisions as would prevent any in
crease in the debt which is allowed priority over
the debt to the United States
The commissioner recommends that the law
establishing the railroad Office be so amended
as to provide that the bonded roads transmit
all accounts for transportation service rendered
the government, including the carrying of the
mails through his Office to the proper account
ing officers of the Treasury.
rTNANcrlr srATrnrvm
The report states that the debt Of the Union
Pacific company on June 80, 1889, was
s226, ,526, "a and assets s275 ,304 72557. The
net amount of the debt Of this road to the gov
ernment was $51, ,269, ,79246.
The assets of the Central Pacific amount To
s222, Isl, ,S62 10 and the liabilities s199 296 I65
The net increase in the liabilities during the
year amounted to S732, ,8S4O3
The sinking fund Of these roads in the q. q.
Treasury June 80, 1889, was Sl35l4. .604. the
Union Pacific having to its credit 81. .298. .859
and the Central Pacific s4.215.752.