St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1890-02-17
Reports Of Senator'S Frye and
Davis Accepted by the
Committee.
A Bill Providing for a Refund
ing Of Their Debts Agreed
Upon.
The Measure Provides That
the Debts Shall Be Paid in
Fifty Years.
A Mortgage on It's Property
to Be Given by the Union
Pacific.

WASHINGTON, Feb. 16.-The senate
special committee of Pacific railroads,
after many hearings, thorough investi-
cation and careful consideration, have
finally accepted the reports of Senator
Frye on the Union Pacific and Senator
Davis on the Central Pacific, and agreed
to bill providing for refunding of
their debts. The report on the Union
Pacific reaches the following conclu-
sions:
First-That the policy of building or
acquiring branch lines was wise and,
through the period covered by their in-
quiry, honestly and economically car
ried out.
Second-That the main line has de-
rived an immense advantage from the
branches, and that there is no fOunda-
tion for the charge that the latter have
received undue benefit from construct
i've mileage, or otherwise, at the eX-
pense of the main line.
Third-That the building of the Ore
gOn Short line and the subsequent ac-
quirement of the Oregon Railway and
Navigation cOmpany's lines, instead of
being a menace to the interest of the
government, have proved to he a decided
advantage.
Fourth-That the recent consolida-
tion of several branches, under the
name of the Oregon Short Line d Utah
Northern Railway company, simplifies
the system of the Union Pacific, makes
possible more effective and ecOnomi-
cal management, and in no regard evil
dences any purpose of evading the Obli-
cations to the government.
FIfth-That rhp branches instead 0f
being maintained at the expense of the
main line, contribute at least $4,000, 600
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 very important and ex-
pensive.
Seventh-That there is no evidence of
any purpose on the part of the company
to surrender that portion of the line
over which the government has statu-
tory lien; on the contrary, every reason
tending to satisfy any candid person
that no such purpose exists.
Eighth-rhat this is a capable, we'll
managed road, abundantly able to pay
its debts, requiring only. like every
other railroad, time in which to pay.
Ninth-That the present management
Is honestly trying to effect fair adjust
ment with the government.
Tenth-That the interests of the gov
ernment and of the railway company
will be promoted by settlement, and
that one can be made now under which
every dollar of the government debt,
with interest, will be had. 1t finds the
present security to be statutory lien
on road commencing three miles west
of the Missouri river, extending to a
lc nf nrIn
another road commencing One-half mile
west of Kansas City and extending to a
point 1893 miles westerly, commencing
in prairie and ending in one; not
enough to protect the government debt,
Ii it shall not be adjusted until it be-
comes due, within $50,000.000; while
under the Dill to be reported, the secu-
rity obtained will be twice the govern
ment debt in value, and the payments.
according to the terms of the bill, abSo-
luteiy certain.
THE CENTRAL PACIFIC.
The report on the Central Pacific
finds that the United States has for Sc
curity statutory lien On | COM
mencing at point five miles west of
Ogden and extending to San Jose, with
out terminal facilities at either end,
made subject to mortgage to secure
bonds equal in amount to the original
Indebtedness of the company to the
United States: that that portion of the
road from Ogden to the westerly slope
of the Sierra Nevadas is practically
only bridge, without any local busi-
| ness OF any amount; that the roads
reaching from the main line into Ne
vada do not now pay their actual ex-
penses: that the present security of the
United States upon this property is en-
tlrely inadequate; that foreclosure of
the first mortgage would substantially
exhaust, in satisfaction thereof. the en-.
tile property; and that it would be IN
eXpedient for the United States to re-
deem it from said first mortgage, or to
become the owner of the property
through redemption and foreclosure,
The report finds that it is expedient,
necessary and practicable tO adjust and
further secure the Indebtedness to the
United States upon extended time at a
reduced rate of interest within the abil-
lty OF the company to pay, upon such
terms as to advance the development of
the country through which said roads
pass, and afford the inhabitants thereof
reasonable rates of transportation for
passengers and freight. From the re-
port it appears that the Central Pacific
has not an ability TO pay at all equal 10
terms of the bill to be reported can
make
FINAL AND FULL PAYMENT
reasonably certain. The bill agreed
upon includes within its provisions the
Union Pacific Railroad COMPANY, the
Kansas Pacific Railway company, the
Central branch of the Union Pacific
Railroad company. consolidated under
the name of the Union Pacific Railway
company, the Central Pacific company.
successor to the Central Pacific Railroad
Company of California, and the West
ern Pacific Railroad company. 1t pro-
vldes IN the first section for finding the
present worth of the indebtedness of
the Union Pacific Railway company on
1st day of July, 1869, and for the paw
ment to the United States of that
amount, with 3 per cent interest, pay
able semi-annually; also portion of
the principal annually, so that the en-
tire debt shall be paid in fifty years.
1t requires in section two that the Union
Pacific Railway company shall give a
mortgage on all its property of every
name and description, real. mixed and
personal. and also preserves to the
United States its present statutory
lien. 1t provides in section five that, in
the event of the failure of said COM
pahy 10 accept the provisions OF the act,
there shall be carried to the credit of
the sinking fund one-half of the com
pensation for services rendered for the
government and in addition thereto
the sum of S2,000.000 a year, or seventy
live per cent of the whole net earnings
of the Union Pacific Railway company /:
extending also the provisions of the
Thurman act to the Kansas Pacific