Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1889-10-03
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.

u1eu Win Une secretary OF Jne interior MS
annual report of the operations of his
bureau for the fiscal year ending June 30,
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 In order to better protect the
interests of the government and render the
operations Of his bureau Of more
practical importance. The commits
sioner 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,
1880. 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 In 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 30, 1889, was S5l,
269, 1872. The excess of interest paid by
the United States over all credits amounts
to ST, 730, 280 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 $50. $50, 1874: excess of interest by the
United States over credits $24, 401 ,054.
The total debt Of the company was 1925,
296, 165, and the capital stock sos, 900 ,000
The assets amounted to $50, 273, 1862, and
there was net decrease in the assets dur
ing the year of 1872, 835. The
f,,,l, Of tho TTy,iOT nd
the Central Pacific companies held by the
secretary of the treasury amount to
S13,514,604 The Sioux City & Pacific
railroad received bonds from the United
States amounting to 81 ,628, 320 to aid in
the construction Of 1917 miles. The
interest paid by the United States amounts
to S2,050, 492 and there has been retained
by the treasury on account for transporta-
ton services S153, 500, leaving an aggre-
gate amount due the government of 3d.
SIS ,303 Excess of interest paid by the
United States over credits 81 1876, 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-
ficiently encourage the development of the
local traffic. The commissioners dwells at
length on the problem of securing to the
government payment of the amounts due
from bonded roads. He says that he has
come to the conclusion that the most
A., II, - In M faI tO l1lte
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
rassment thaat might come to
them were they required so pay a fixed sum
at stated periods In time of business
depression when receipts were light their
obligations to pay would be corresponding
" 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-subsldlzed lines and
traffic may be diverted either
naturally or with a 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 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
eminent. and all matured Indebtedness and
interest then due, and of such
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, 1t Is
important there be some bureau of gov
eminent 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 adj
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 IL
the West. the commissioner says: Re
heated and ruinous rate wars, destructive
alike to the interests of the railroads anC
the shipping public. have prevailed to al
alarming extent throughout the west IL
recent wears. The unparalleled devel
opment of the vast resources of the
Western states and territories has at
tracted capital there, and railroads have
opened inviting fields to investors. A
a result. railroad building has been car
ried on far In advance of the needs OF thu
country Parallel lines and unproductlv'