Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1889-05-18

| held by the United States
f. But when We pause TO consider that this Inn
mense debt is not yet due the United States and
will no. be Tor some nine or ten years to come:
that it will then, priL cipal and interest ess The
amount that Will in a probability then be
paid, amount to more than S125 0J0 900, and
when it is further remembered that the prop
eIty on which this amount Is secured to the
Government is subject TO a prior mortgage lien,
the principal of which alone, assuming that the
interest will be paid by the companies Us it falls
due, will at maturity amount TO S6i 6l5, 900, and
all of which enormous amount has priority, and
must be paid first before the Government can
expect dollar, We can then realize the inn
portance OF prudence in whatever step may
now be taken looking TO the creation of sep.
| arate fund and obtaining additional security to
meet the Obligations of these companies to the
Government. Continued, persistent and malig-
nant controversy, legislative, judicial, de-
partmental and political, may expedite
on the contrary such policy may, and in my
Judgment i'll all probability will, result in ils
ultimate loss, either in whole or in greater part
The sum total OF the two debts at maturity
that is, the first and second mortgages granting
that ali interest on the first mortgages will be
paid To maturity by the companies, will, as mat
tiers are now running, be, exclusive OF ali Ger
tain and all probable payments, about Slg3 900
CO, a sum doubtless more than double as stated
by the Commissioner of Railroads, what il
would now cost TO build these roads. If, there
fore, as stated by him, the controversy proceeds
or II the Congress fails TO create fund by
providing for the repeal of the Thurman
Act ana the enactment of law recurring
payment of certain fixed semiannual amounts
by each company, and the property should
be sold on a foreclosure of either tile first or
second mortgage, what would be the result?
purchaser, and the properly sold for less than
this enormous amount of SOB eco UO0 the Gov
ernment would lose the full amount OF the de
felt. whatever II might prove TO be-
But If. on the other hand, the Government
were to become the purchaser, as it would IN
doubte dly be compelled TO do IN self defense
and seifpreservaiion, then, IN order TO have d
clear and unincumbered property il would be
compelled TO go down into its treasury for the
sum of at least sol OILS. eco with which TO cancel
the PRIOR mortgage. And this estimate of
the total Indebtedness at maturity of $685.
00O.C00 is on the assumption that the
companies will in the future be entitled to Il e
average of past annual credits: also, that the
companies shall keep down all interest to ma
turing of principal of first mortgage bonds. and
assuming. also, that the increase III the debt IN
the future would average about the same as in
the past, which for several years few " airs
ago amounted 10 about u 600 900 annually: per-
haps not SO much now. but suppose no further
payments should be made before the maturity
of the bonds, what then? How would the ac-
count then stand?
According to the letter of the Secretary of
the Treasury of January is, 1ss7-and this was
the claim of the Treasury Department at that
time as TO the then state of the ACCOMPLISHMENT
was due from the several Pacific Railroad Com
panies for interest paid by the United States to
January J. 1887, the sum of S70,S54 325 g. OF
which amount there had been repaid by the
companies at that date the sum of 81 $50 IA H.
leaving due on account of interest the sum of
si9, 302, Isl IS: and further, that there will be
due on the same account at maturity on the
subsidy bonds September IL, 1897, the average
date of maturity. the sum of si3. iO6,9ll S.
making total of S92, 109, l03 So due and TO be-
come que on account OF interest alone, which
with the principal of the bonds added of s6l,-
623, 5l3, would !reach the enormous aggregate
OF S'57 els &c, 10 which we must add The
principal of the first mortgage bonds of Ssh
6l3,OO0, which must first be paid before the
government can come in, and we have Ia that
view an aggregate Indebtedness on this basis o!
calculation, all falling due nine years hence
according 10 the Secretary OF the Treasury of
Is the Government of the United States. in
quire. in the presence of these appalling figures
and in view of the unreal and inadequate char
acter OF the security it holds in position either
70 postpone consideration of the entire contro-
versy or to inaUgurate such measures as will
result in throwing these roads, or either of
them, into the hands OF receiver? Once in
that condltion, what becomes OF the enormous
debt owing and in eight years hence to become
due from these companies TO the United States
With the payment of all those eXtravagant
charges incident to Court management of rail
read properties the depreciation in condition
aud value of assets which Invariably follow in
the train of procee diugs of that character and
finally the payment of prior lien OF S64 6l3 900
to preferred creditors, what could we hope or
expect would remain to apply in discharge of
the companies indebtedness to the Govern
ment?
In conclusion, Mr.. President, whatever may
be said in just criticism on the management Of
the Pacific roads that received aid in bonds
from the United States, and whatever may be
said to-day as 10 the liberal character of the
legislation through whose beneficence it was
made possible to connect with bands of steel
the Two grand civilizations of the Atlantic and
Pacific coasts some twenty years ago | have
never been among the number, and am not
now, who believe, and never expect to believe
that any very great mistake was made upon the
part OF the Congress which extended this gra-
cious bounty i'll behalf of one of the grandest
and most herculean of business enterprises ever
| conceived by the genius or contaminated by the
energy, perseverance and skill OF man or gov
eminent
And even were the United States so unfor-
tunate, Ell her through its own mistakes de-
lays, and mismanssement, or the failure
or refusal of these Companies to do their du-
ty, as to lose every dollar of the gigantic
debt which is its just due and now
| under consideration, still this great Gov
this grand citizenship of America humanity in
its every aspect. science, art, religion; com
| merce, national and International: internal and
foreign trade, transcontinentai and trans
oceanic aud civilization itself in this and other
heml,p n eres, all have been promoted and their
best and most sacred interests advanced in a
measure and to an extent beyond all compre-
nenslon or computation IN value by the con-
structlon across the american continent, over
rugged, rock ribbed" mountains and sterile
pains, OF the pioneer transcontinental roads Of
this country.
The saving to the Government in the cost of
| transpo,tat of mails and of Government
supplies. and for military protection on the
overland, TO say nothing of the infinite number
| of other important considerations would of it.
self justify the expenditure of every dollar the
Government has ever invested in these roads
But when we come to consider all the various
other benefits accruing 10 the Government, to
J say nothing Of those inuring to It's individual
| citizens, to commerce, trade material develop
ment, and the general welfare, we find they are
almost beyond conception.
| The cost OF transporting United States through
mails alone for the year ending eighteen months
prior to the opening of the Pacific roads, Union
| and Central Pacific, between the Missouri river
and Placerville, in California, reached the enor-
nous sum OF 81 i29, ESQ., From June So 1861 to
June 80, 1864, period of three years. this
through mail service overland cost the United
| states the sum of S. DC, 900. or an average of
100000 annually, not including the sum OF
s2oOOoO per aunnm paid by the Government
| duting this time for steamship mail service via
| the Isthmus, and the further sum of $50 600 per
annum paid from Placerville to San Francisco;
so that the average cost of mail service for the
four years previous to June So 1864, between the
Missouri river and the Pacific coast was 81 1885,
| 2l3 per annum And in like proportion was the
cost OF this service during the whsle period be-
tween the time when the mail service was first
established between the two extremes OF this
continent. east and west, up TO the opening of
! the Pacific roads in 1869.
| But what was the RESULT on the completion OF
the railroad? The whole cost of this same mail
service or rather very largely liner ased serv-
ice, for the year ending June So 1870, the first
| year after the completion of the road, was, in
Guiding the sum of 500, 900 paid the steamships
for twenty -four trips by the isthmus only $780,
| 30, a saving of 81, 60, 500 in single year
| over that paid the same service for the year
ending June 30 1o6S. But this saving in actual
cash TO the Government is mere bsgatelle
compared with the untold advantages that Ie-
| suit, not alone to the Government, but all the
| people interested and every department of bust
ness life by reason OF the expedition in time
| and manner of service as now performed on
| these and other Pacific roads, compared with
| the service by the old stage-coach. Who can
estimate the vast superiority in the value of the
mail service performed in four days in splendid
railroad coaches with promptness aud dispatch
| and without delays, with that of service by
wagons occupying from three to four weeks in
single trip, and subjected 10 all the decays OBJ
| stacles, inconvenience and dangers incipent to
| travel across wilderness inhabited by hostile
savages?
| But, Mr.. President, not only so. While it is
| true the rates charged by these roads for Gov
eminent transportation may seem extravagantly
high, averaging, perhaps, on the whole time
since these roads were opened as much as from
is TO % cents per 100 pounds for each 100 miles
and up to the year ls72 it average fully 70
cents per 100 for that distance; yet the rate paid
by the Government before the roads were built
before the war, was over five times this latter
tation in the West 81 90 per 100 pounds for each
100 miles.
The amount charged by these Pacific roads
for Government tfansportion at the average
rate of % cents for lG0 miles from the beginning
IN tn October 1870 less thop two Voc -