Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1889-10-04
HOD TAYLOR'S FIRST REPORT
He Discusses the Railroad Situation in
the West.
Offers Some Suggestions for Better
Legislation.
Gives the Public and Railroads a Few
Private Tips.

WASHINGTON. Sept. S0.-Horace 4.
Taylor. commissioner of railroads, has
filed with the secretary of the interior his
annual report of the operations of his
bureau for the fiscal year ending June 80.
1889. The commissioner discusses the
railroad situation in the west and north
west making some suggestion as to eX-
listing evils and their remedies, as well as
some recommendations as to necessary
Legislation LII order to better protect the
interests OF the government and render the
operations OF his bureau of more
practical Importance. The commits
Sloner says there have been no
inspections and no examinations of books
and accounts of railroads subject to the
supervision of his bureau for the current
year covered by this report previous to his
appointment as commissioner July Il,
1SS9). He is therefore unable to make the
report as full and complete as it otherwise
might have been. Since his appointment,
however, an examination of several rail
roads III which the government had a
pecuniary interest has been made The
commissioner then gives the result of his
examination
The total liability of the Union Pacific
to the government June 80. 1899, was S51,-
269, 1872. The excess of interest paid by
the United States over all credits amounts
to SIT, ,730, $50. The total liability of the
company was 1926. .526, 159; and the assets
amounted to S275. .304.723 The liabilities
of the Central Pacific to the government
are So. .256, 734: excess of interest by the
United States over credits S24 ,40l ,O54.
The total debt of the company was S125,-
296. l65, and the capital stock S6S, 900 900,
The assets amounted to so, ,273. .362. and
there was net decrease in the assets dur
ing the year of 1872, ,S35. The
sinking funds of the Union and
the Central Pacific companies held by the
secretary of the treasury amount to
S13,5l4,604. The Sioux City Il Pacific
railroad received bonds from the United
States amounting to 81 62S, 800 to aid in
the construction of l0115 miles. The
interest paid by the United States amounts
to s2,050, 492 and there has been retained
by the treaSurg on account for tanspOrta
ton services S153, 500 leaving an aggre-
gate amount due the government of So
525,303. Excess of interest paid by the
United States over credits 81 1896. 1888. The
subsidized portion. the central branch of
the Union Pacific received bonds to the
value of 81 100000 The aggregate debt
to the government at the end of the fiscal
year amounts to 1884, 1852; excess of
interest paid over credits, 81, ,734,762.
Both the interests of railroads and the
public says the commissioner. suffer from
the fact that railroad managers devote
their energies largely to securing trade
from competing centers and do not suf-
fciently encourage the development of the
local traffic. The commissioner dwells at
length on the problem of securing to the
government pay yment of the amounts due
from bonded roads He says that he has
come to the conclusion that the most
feasible plan to be adopted is to grant
reasonable extension of time with a re-
duced rate of interest, and require the
payment of certain per cent. of the gross
earnings of the roads to be applied in
the liquidation of their Indebtedness to
the government This would relieve the
railroad companies from embar-
them were they required so pay fixed sum
at stated periods. In time of business
depression when receipts were light their
obligations to pay would be corresponding
ly reduced, while In prosperous years they
could afford to make increased payments
All these companies own or operate various
lines in addition to those subsidized. The
government has no claim upon the earn
ings of these nOn-subsidized lines and
traffic may be diverted either
naturally or with purpose from aided to
non-aided lines. and various charges In
expense accounts may be entered up against
aided portions that should be chargeable to
non-aided portions. 1t is apparent that
the subsidized roads cannot discharge the
obligations to the government at maturity.
1t Is the commissioner s opinion that 1t
would be wise for congress to pass an act
giving a reasonable extension of time;
reducing the rate of interest to three or
four per cent; requiring that earnings
from all government transpOr-
tation by subsidized companies
on all lines operated by them. whether aid
ed or non-aided, should be applied to the
payment of any interest or principal due
or to become due within the fiscal year in
which services might be rendered prohib
iting the payment of any dividends by the
subsidized companies unless such company
shall have paid all interest on its bond
ed debt having lien prior to the gov
ernment. and all matured Indebtedness and
interest then due, and of such
a percentage of the gross
earnings of subsidized lines as
by careful estimates would realize sums
sufficient to pay the accruing interest and
raise the sinking fund that would meet the
principal of the debt at their maturity
The said companies should also be per
mitted to refund the first mortgage bonds
under such provisions as would prevent an
increase in the debt which is allowed
priority over the debt due the United States
The commissioner makes the recommended
ion for amendments of various kinds,
among them one that all accounts of these
railroads be rendered through his office
instead of going direct to the different de-
partments as in the past, as. says he, it is
important there be some bureau of gov
ernment in which can be found full
information as to the accounts
between the bonded railroads and
the Uuited States. There are now millions
of dollars of unsettled bills pigeon-holed in
the various departments of the treasury,
and it is due to the railroad companies
that all these accounts be promptly ad-
iusted and that such sums as are legally
their due be credited or paid them, 1t is
also to the interest of the government to
know the exact condition of its accounts
with these companies.
In regard to the railroad situation in
the West, the commissioner says: Re
peated and ruinous rate wars, destructive
alike to the interests of the railroads and
the shipping public, have prevailed to an
alarming extent throughout the west in
recent years. The unparalleled devel-
opment of the vast resources of the
Western states and territories has at
&.l .,H Il tr,--a
opened inviting fields to investors As
a result. railroad building has been car
ried on far IN advance of the needs Of the
country. Parallel lines and unproductive
feeders have been constructed and expen-
sive terminal facilities secured. With the
opening of nearly every through line. new
complications have arisen and competition
has been stimulated to the point of an
initiating profits and often producing
ruinous losses.