The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1889-10-01
HOW MATTERS STAND
Between The Government and
The Pacific Railroads.
REPORT OF THE COMMISSIONER
OF Railways Rate Wars and Not Laws
Cause The TrOuble-Recommenda
lions as to Debts.

were made by the respective states in
which the roads are located and not by the
United States, and assert therefore that
they do not come within the language of
Congress creating this bureau and defining
its powers. The position taken by these
companies would seem to be technical and
evasive. The lands were owned by the
United States and granted by acts of Con-
gross to the states for the sole purpose of
aiding in the construction of railroads. The
companies receiving the full benefits of
these grants referred the matter to the
secretary of the interior for judicial action,
The commissioner says there have been
no inspections and no examinations of the
books and accounts of railroads subject to
the supervision of his bureau made by
current report since his appointment as
commissioner on July II, 1889. He is there
fore unable to make his report as full and
complete as it otherwise might have been
Since his appointment, however, an exami-
nation of several railroads in which the
government has pecuniary interest has
been made.
The total liability of the Union Pacific
to the government on June 30, 1899, was
S5l, 26g, 1872; in excess of interest paid by
the United States. Over all credits.
amounting to ST., 13O, 2S0, the total liability
of the company was 1925, 526, 159; the assets
amounted to S2T5, 304, f23.
The liability of the Central Pacific to the
government was So, 256, T3l; excess of iu-
terest paid by the United States over
credits, s24,4Ol, G54. The total debt of
the company was $l25, 2jG, l65 and the
capital stock S6s, 0O0,C coo. The assets
amounted to 1929, Isl, 3S2. There was a net
decrease in the assets during the year of
S132, S35.
The sinking funds of the Union and Cen
trail Pacific companies, delivered by the
secretary of the treasury, amount to $l3,-
5l4, 604. The Sioux City & Pacific railroad
received bonds from the United States
amounting to S1,628, 800 to aid in the con-
struction of 1917 miles. The interest paid
by the United States amounts to 81, 050, 49,,
and there have been retained by the treas
Ury on account of transportation services
1888, 500, leaving the aggregate amount due
the government s., 525, 3O3. Excess of in
terest paid by the United States over cred
it's, 81, $50 9S3. The subsidized portion of
the central branch OF the Union Pacific re
ceived in bonds $l,600,000. The aggregate
debt to the government at the end of the
fiscal year amounts to 1864, 762; excess OF
interest paid over credits, 81. 734. 1872.
The commissioner discusses the railroad
situation in the west and refers to the
ruinous rate wars, etc. He says the uu-
paralleled development of the vast re
sources of the western states and terri
tories attracted capital there and railroads
opened inviting fields to investors. As a
result, railroad building has been carried
on far in advance of the needs of the
country, With the opening of nearly
every through line new complications have
arisen and competition has been stimulated
TO the point of manipulating profits and
often producing ruinOuS losses. The rate
wars are in many, if not most, cases in
augurated without reasonable cause, and
VindictiVely prosecuted with utter diSre-
gard of their disastrous effects upon the
interests of companies engaged and business
of the public. They destroy or, impair
the value of railroad securities; impose
unjust burdens upon the commerce of COM
peting sections; prevent stability in bust
ness, and render the profits of the producer
or trader alike uncertain.
81 do not agree with the claim so per-
sistently made by railroad managers, their
organs and satellites, that the recent losses
sustained in the railroad business are
mainly due to the restrictive laws which of
late have been enacted by Congress and in
many of the western states. In some
states, notably Iowa, it is undoubtedly
true that laws have been enacted that are
unjust toward railroads and injurious to the
public interests and which ought to be
speed y mo 1ihed orrep 4aled.
Mo of the legislation for the regula-
ton Of railway trait; within the states has
been wisely conservative and was as surely
demanded for the protection of the public
against Unjust charges and discrimination
in local trade as was the Interstate COM
merce law to protect commerce between
the states. | believe in many sections of
the west, conspicuously Iowa and Kansas,
the mileage of the railroads is greatly in
excess of the legitimate needs of the carry
ing trade If this be true, then many of
the investments in railroad properties
there must fail to yield remunerative divi-
dends, or schedules OF rates be fixed so high
as to prove ruinously burdensome 10
traffic. For this unfortunate condition
of affairs, neither the people nor the rail-
road companies are wholly to blame; both
have contributed to bring it about. This
condition Of things presents a problem diff
cult of solution. 1t is safe to say the rem
edy does not lie in the levy of extortiOnate
charges or the waging of reckless rate
wars. The security of the railway system
lies in administering it with a careful re-
spect to Justice and the public welfare. If
its oppressive hand is laid too heavily upon
the people. revenge and revolt will be sure
to follow. If investors in railroad proper
ties have expended their capital in the con-
struction Of lines not dem 'nded by the
present trade, then they must share the
fate of all who invest in all productive en-
terprises. Relief can only come through
increased settlement, stimulating business
aud developing natural resources"
Both the interests OF the railroads and
the public, says the commissioner, suffer
from the fact that railroad managers de-
vote their energies too largely to securing
trade from competing centers and do not