, 1890-02-20
The Reports of Senators
Frye and Davis
ACCEPTED BY THE COMMITTEE,
The Union Pacific Much Better
Able to Meet Its Debts Than
the Central.

reaches the following conclusions
FIrst-That the policy OF building or
acquiring branch lines was wise policy
and has been honestly and economically
carried out.
Sooond--That tho main line has de-
rived immense advantages from tho
branches and that there was no founda'
ton for tho charge that the latter have
derived undue benefit at the expense ol
the main line.
Third-Tho building of the Oregon
Short Line and the subsequent acquire
ment OF the Oregon Railway and Nayi'
CATION Company's lines, instead of being
a menace to tic interests OF the govern
ment. have proved q decided advantage.
IOurth-That the recent consolidation
of the several branches under the name
of the Oregon Short Line 4 Utah North
crn Railway Company simplilies the
System OF the Union Pacific, makes pos
sible more effective and economical
management. and In no regard evidences
amy purpose 60 evade the obligations to
the government
Finh--That the branches, instead OF
being naintained at the expense ofthe
main line, contribute at least $500 COZ
a year to the treasury Of the company,
SIxth-That the improvements have
been for several years past greater on
the main line than on the branches,
some of them being very important ami
expensive.
scyenth-That there is no evidence OF
any purpose on the part Of the company
to surrender that portion of their road
over which the government has stalu-
tory lien; on the contrary, every reason
tending TO satisfy any candid person
that no such purpose exists.
Eighih--That this Is u capable. we'll
managed company, abundantly able To
pay its dobts, requiring only, like every
othor railroad, time on which To pay.
Ninth--Ihat the Management is
honestly trying 10 affect fair adjust
meut with the government.
Icnth-That the interests OF the gov
crnment and of the railrca al company
will be promoted by a settlement. and
that one can be made now under which
every dollar OF the government with
interest, will be paid.
TIE cFSTHAL rAcirfc HrroRr.
The report Of the Central Pacific finds
that the United States has for security a
statutory lien on the road, commencing
at u point five miles west OF Ogden and
extending to san jose, without terminal
facilities at either end, made subject TO
mortgages 10 secure bonds equal In
amount TO the original Indebtedness OF
tho company 10 the United States that
that portion oft the road from Ogden 20
the westerly slope OF the Sierra Novudas
HH HaMaHN L. IL A..
local business OF any amount; that tic
roads reaching from the main line into
Nevada do NOT now pay actual expenses
that the present security OF the United
States upon this property Is entirely in
adequate; that the foreclosure of tho first
mortgage would substantially exhaust
In satisfaction thereof the entire prop
oriy, aud that IL would be incxpedient
. for the United States TO redeem It's debt
from said first mortgage, or to become
owner OF the PROPERTY through Tedemp-
tIon aud foreclosure.
Tho report finds that II is cxpodicnt,
necessary. and practicable to nd lust and
| further secure the Indebtedness to tho
United States upon extended time at a
reduced rate OF interest, Within the
ability of the company to pay.
From the report II appears that the
central Pacific has not an ability to pny
at all equal 10 that Of the Union Pacific.
but, under the terms OF the hi To- he re.
ported, can mase final and full payment
reasonably certain.
PROVISIONS oY THE NIL.
/ The bill agreed upon includes within
its provisions the Union Pacific Railroad
Company, the Kansas Pacific Railway
Company, the central branch Of tho
Union Pacific Railroad Company consol.
idatch under the name of the Union
Pacillc Railway Company, the Central
/ fnciiic Rnilrond Company, successor tC
the Central Pacific Riilroad Company o
California, and the Western Pacific Hail
road Company. Ii provides for the find
ing Ol the present worth of the indebted
ness OF the Union racidc Railway Com
/ pnny Oh july l. 1900, and for payment
TO the United States OF that amour,
with per cent interest, payable semi
annually, also portion u tho principa
semi-annuaily' so that the entire deb
be paid IN MY years. II requires tha
the Union Pacific Railway Compan,
shall give mortgage on all OF its jrop.
crty Of every name and description
real, mixed and personal, and also pre-
serve to the United States It's prcscn
statutory lien. In the event of the fail
urc oi said company to accept the pro
visions of the act, there shall he carrict
20 the credit Of the sinking fund one
hall OF the compensation for servcel
rendered the government. and, In ad
dition thereto, tho sum o
S2,oOD,0O0 a year, or seventy -hv,
per cent. OF the whole net earnings of tn,
Union Pnciilc Railway Company, cx
tending also the provisions OF the Thur
man aCt TO the Kansas Pacific Kailwa,
company, aud the Central Branch o
the Union Pacific Railroad Company
and that on failure to pay, a receive
shall bc appointed to take charge an,
manage and operate The main road an,
all the branches and lines OF said com
pany, until tho principal and interest o
the debt shall be fully paid.
Section q provides for the ascertain
mcnt OF the present worth OF the debt %
the Central Pacific Railroad COMPANY
and for the payment OF tho interest a
the rate of . per cent. per annum, pay
ahlc emi-annually, and 30 niucI
OF the PrinciDai as shall result
IN the payment OF the entlr
der TO relieve the road from too mucI
burden during the next ten years II |
necessary for It 10 make some oxtensiy
Improvements, and II capitalizcs for tim
time one'half OF the 2 per cent. TO
paid.
The bill requires mortgage on tn
ontiro property Of tho Central Pacih
railroad company, including some yer,
important roads In California, and ais
that tho Southern Pacific railroad com
pany aud tho Central Pacific shall max
the present lcnse subsisting betwoo
them additional security to the Unite,
States for tho pay mcnt of the debt.
In the event Of any default for ninet,
days In payment of the interest or prin
cipnl as required by the act, the entir
deb: shall Immediately mature. A rec
ord OF mortgages by the secretary of tn
J treasury, In con tormity with the laws o
the various states and territories wher
the property is situated, is provided ior