Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1889-05-11
THE PACIFIC RAILROADS.
SENATOR MITCHELL On IHEIR
INDEBTEDNESS.
Some OF the History of the Action
of Congress on the Sub
ject So Far.

Following are extracts from speech de
liyered by Senator John H. Mitchell, o.
Oregon, in the United States Senate on the
4th of February, the question being upon
the adoption of the following resolution
Resoteed That the bill (s BOD to amend an
AcL entitled An Act TO aid in the construction
OF railroad from the Missouri river to the Pa
chic ocean, and to secure to the Government the
use OF the same Tor postal. military and other
purposes" approved July l. Leo; also to amend
an Act approved July 2, 1864. and also an Act ap-
proved May Z, 1873. both in amendment of said
aforementioned Act; and TO provide for settle
ment OF claims growing out of the issue OF
bonds to aid in the construction of certain OF
said railroads. and to secure to the United States
the payment of all Indebtedness of certain OF
the corporations therein mentioned, with the
accompanying report, No. 1850, first session Fiji
tieth Congress, be, and the same is hereby re-
committed to the Select Committee on the Pres
ldents Message transmitting the report of the
Pacific Railway Commission, with instructions
to include in said bill such proposed legislation
as IN the Judgment of such committee is proper,
providing for the ascertainment of the amount
of the Indebtedness to the Government Justly
payable, due and to become due, by the Central
Pacific Railway Company as the successor to the
Central tactic Railroad Company of California
and the Western Pacific abroad Company,
in respect 10 the bonds of the United States
heretofore issued to aid in the construction OF
the Central Pacific and the Western Pacific Rail.
roads, and for the proper security and funding
of the same.
Mr.. Mitchell spoke rs follows: Mr.,
President, as have no disposition to delay
action upon any proposition looking to the
funding of the Pacific Railroad indebted.
ness, propose now to offer some reasons
why the motion l have just submitted
should prevail. NY motion is to recommit
the Dill TO the select committee specially
raised by order of the Senate for the pur-
pose OF reporting some legislation looking
to a settlement of the Pacific railroad in.
debteGness, with instructions to incorpor.
ate in it provisions for the funding of the
Indebtedness of the Central Pacific Com
pany.
According to the report of the Pacific
Railway Commission, and summarized and
and repeated in the message of the Presi.
dent of the United States 10 Congress on
the 18th of January, 1888,
THE SUM TOTAL OF THIS DEBT,
Principal and interest, to November l,
1887, was $40 ,047 us So; the principal OF
the bonds which had been advanced to the
companies being about S64 OOO,0 600. The
interest to November l, 1887, according to
the authority just quoted, was SIC, 024,
206 IS, while the interest calculated to the
maturity of the bonds, some nine wears
hence, added to the principal, will at that
date $3.50, that being the average date OF
maturity of all the bonds issued, make the
aggregate of the debt then due, principal
and interest, less payments heretofore
made and which may be hereafter made to
that date. S17S ,SS4,759 So That is the
amount that would be due from both com.
panies when the bonds mature, less paw.
ments that have heretofore been made and
which would probably be made under ex-
listing law.
Against this enormous amount there has
been repaid by the companies, according to
the authority quoted, down to November 1,
1887, the sum of $50 955, 039 81; so that.
not counting any payments that have been
made since November l, 1887, to the pres.
ent date, and conceding that no further
payments will be made by these companies
until 1897, the date of the average maturity
of the bonds. there would then be due and
payable as interest and principal. according
TO the Pacific Railway Commission. the
enormous aggregate of $l47, 929. 719 SO.
1t must, therefore, be conceded that any
legislation which has for its purpose the
present security and ultimate collection Of
this almost fabulous sum, considered in its
relation as a private debt as contra-distin.
guished from a public debt, or debt owing
DS luuSl De regarded as OF
the very utmost importance
1t is not my purpose at this time to dis
cuss the merits or dement's of the pending
bill; that will be done later on. 1t is nv
purpose, however, to attract the attention
of the Senate to the general situation, and
TO inaugurate an inquiry as to the pro.
priety and justice under all the existing
circumstances, and the past history O
legislation in reference to this import
ant subject, of proceeding to the
consideration of the pending bill. which
only in part undertakes of processes to dea
with this question, and which omits to in
clude within its provisions matters relating
to nearly one-half of the whole contro
versy.
In other words, l propose to inouir,
whether 1t is not fact that it is the dut,
of Congress, if ii acts at all, to proceed a
once aad without any unnecessary DELAY
and il one piece of legislation, and not b,
duplicates or duplicates, TO consider thii
whole subject and 10 provide at the earlies
possible moment such legislation as will
in so far as possible under all the existip,
circumstances, secure to the Government
the ultimate payment of this entire debt
together with such reasonable interest a
may be proper, all the circumstances con
sidered, 10 be paid semi-annually to tn
Government on all deferred payments.
THE INVESTIGATION.
BY the Act of Congress approved Marcel
3, 1887, entitled An Act authorizing al
investigation of the books, accounts, an,
methoos of railroads which have receive,
aid from the United States, in bonds, an,
for other purposes" the Congress of tn
United States, once more after many fail
ures IN the past, entered upon the worl
with an evident determination 10 accom-
plish il, of doing two things:
First-To ascertain. after most rigid in
vestigation, the present Indebtedness to tn
Government of the United States of al
railroads that have received aid from til
Government in bonds; and.
Second-To enact such legislation in tn
shape of funding measure which woul,
In so far as possible, under all the circum
stances of the respective cases, secure ultj
mate payment to the Government of tn
whole of such Indebtedness, including suc]
interest on all deferred payments as nigh
seem reasonable and proper in each ind
vidral case, all the circumstances consid
cred.
Never before had Congress manifesto
such determination and never before in al
the many previous attempts made to &C
complish this purpose had such unanimit
of sentiment and action characterized tn
proceedings, as il will be remembered tb
Act just referred to received the vote {
every member present of the two houses {
Congress.
This legislation was intended to includ
within its grasp, and did in plain and ur
equivocal terms include within its provi:
IONS not merely one or more but all of tn
Pacific railroads which had previous I
that time received aid from the Govern
ment in bonds. 1t did not, however. il
clude any railroad, however much aided i
grants of lands or otherwise, that did nc
receive any aid in bonds.
By the first section of that Act the Pres
dent of the United States was authorized
appoint three Commissioners, and th
character of the Commissioners whor
Congress evidently expected to be appointe
was plainly indicated by the fact that b
the provisions of such Act each should r.
ceive compensation at the rate of $50 Dc
month and all necessary travelling expense
and board bills; that they should have
stenographer and the right to fix his con
pensanon: that these Commissioners shout
have the power TO examine all books, p,
pers and methods of all such railroad CON
panies, employ experts, if necessary, an
they should at all times be under the i'm
mediate direction and control of the Pres
dent of the United States.
Section 2 of the Act prescribed in detail
with much exaciness, the duties of sue
Commission, and is as follows:
T1,off ,,n