St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1890-11-07

grant roads. As to the improvements
on bonded roads. the commissioner saws:
lam able TO report that many improve
ments have recently been and are continual
~ being made. These improvements, where
lney are made upon The bonded roads, are
OF especial value to the government, as they
not only increase the earning capacity of the
roads and thereby the amount of net earn
lhgs 10 be paid In Liquidation of the govern
ment debt but they add largely to the value
Oh the property, and SO increase the govern
ments security and render full final pay
ne!st OF the claims OF the United STATES more
certain.
The report of the commissioner shows
tnat the amOuntrecelved from the bond
ed roads this year was slightly below
the amount received for the preceding
year. This, he says, is not owing to
decrease III business, but to the fact of
unusual expenditures by the Union Pa
chic company in the purchase of new
rolling stock. AS to the present finan-
clal relations between the bonded roads
and the government, the commissioner
says:
The same unfortunate condition of things
exists now that has always existed since the
ponds granted in aid of their construction
were issued, viz: That the amounts annually
received from the roads fall largely below
the amounts of interest annually accruing
upon the subsidy roads. The debts, there
lore, due the government from these roads,
instead of being reduced as it was the evi.
dent expectation of congress that they would
pc, are rapidly increasing year by year. This
increase. however, is not due to any failure
OF the railroad companies to comply with the
provisions Of the existing laws. The fault
rests i'll the laws themselves. The per cent
OF net earnings required by law to be paid in
discharge of the government obligations is
not great enough to meet the interest which
annually accrues upon the bonds issued 10
ana Ill the construction of the roads.
Tho Too "A
siderable length the causes which have
operated to so largely rsduce the net
earnings of the bonded roads. the most
conspicuous one being the building of
numerous competing lines and the con-
SeQuent reduction in both the volume
and rates of traffic. In the last few
years there has been a craze for rail-
road building in the West, and many
investments in railroad properties have
failed to yield even the smallest divi-
bends, He predicts, however, that this
condition OF things. owing to the rapid
development of the West, will not long
exist. The commissioner adheres to
the opinion given in his last report that
twill be necessary to extend the time
in which the railroads may meet their
obligations to the government. He sug-
gests that III no event should the gov
eminent be loser by granting the eX-
tCDolOH anu tIidt HO iuuulllS Dlll SHOULD
be considered that does not provide for
rate of interest at least equal to that
which the government Is required to
pay upon its obligations. The total net
liability of the Union Pacific road to the
government on June 80. 1890 was $5l,-
1862. The gross earnings of the aided
portion of the road amounted to SIT, 49,
977, and the expenses S12.766. 500, leav-
ing 81, 1885, 07 as net earnings. subject to
the requirements of law. The amount
found due the United States for the
fiscal year 1889 was sl,O76. 139. The
debt of the company on June 80. 1884,
was SITS, S4S, 029, and its capital stock
S60.S6S,5l0, making total liability of
$3.50, TIC, 500. The assets amounted to
s274, 343,4 AL. The liability to the gov
eminent of the Central Pacific road is
given as S53, 326. 765. The gross earnings
of the aided portion amounted to SS,971,-
GA and the expenses S7,662, 491, leaving
ST ,307. 122 as net earnings subject to the
requirements of law. The Sioux City SS
Pacific railroad company's Indebtedness
to the government is given as S2,6ll, 464,
and that of the Central branch OF the
Union Pacific as So 33c3S 1O3