The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1890-02-18
THE PACIFIC ROADS.
The Senate Committee Accepts
the Reports
OF SENATOR'S FRYE AND DAVIS
On tie Union Pacific and the Central Pacific
The Building of Branch Lines
is Deemed Wise.

hearings, thorough investigation and
care1ul 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 their debts.
The report on she Union Pacific reaches
the following conclusions:
THAT the policy Of building or acoair-
ing branch lines was wise and through the
the period covered by their inquiry, hon
estly and economically carried out.
2-That the main line has derived i'm
mense advantage from the branches and
there is no foundation for the charge that
the latter have derived undue benefit at the
expense of the main line.
3-That the building of the Oregon Short
Line, the subsequent requirement. of the
oregon Halfway & Navigation company
lines instead OF being menace TO the inter
est of the government have proved "a de-
Cided advantage
\ THAT the recent consolidation OF sev-
peral branches under the name Of the Ore
son Short Line & Utah Northern Railway
company simpli6es the system OF the
Union Pacific and makes possible a more
effective and economical management, and
IN no regard is there evidence of amy pur-
pose TO evade obligations to the govern
ment
5-Ihat the branches instead of being
maintained at the expense Of the main line
contribute at least three million dollars a
year 10 the treasury OF the company.
improvements have been for several
years past greater on the main line than
the branches, some Of them very import
ant and expensive.
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 q statutory lien On the
contrary there IS every reason tending to
satisfy any candid person that nc s2ch pur-
pose exists.
S.-That this road is capable, when wei
managed, and abundantly able to pay its
debts requiring only, like every other rail
road, time In which to pay.
9.-That the management is honestly try
ing to effect fair adjustment with the gov
crnment.
lO-That the interest of the government
and the railway company will Ee promoted
by settlement and that one can be made
under which every dollar owing the gov
ernment with interest will be paid.
1t flnds the present security to be salts
factory, the lien on the road commencing
three miles west Of the Missouri river and
extending to point five miles west of Og-
den; and on another road commencing hal
Z mile west Of Kansas City and extending
10 point 3G3 miles westerly, commencing
in a prairie and ending in one. is not
enough TO protect the government debt if
1t shall notbe adjusted until it becomes due,
within S50,OO0,0 600 while under the bill re
ported, the security obtained will be twice
The government debt in value and pay
ments according to the terns of the bill
absolutely certain.
The report on the Central Pacific finds
the United States has for security a statu-
tory lien on the road commencing Il point
hive miles west of Ogden and extending to
San Jose without terminal facilities at
either end made subject TO Il mortgage to
secure bonds equal iii amount to the orig
mai Indebtedness OF the company to the
United States. That portion Of the road
from Ogden TO the westerly slope of the
Sierra NevadaS is practically only a bridge
without any local business OF any amount;
that the roads reaching from the main line
into Nevada do not now pay actual ex-
penses; that the present security of the
United States upon this property IS entirely
inadequate; that the foreclosure of the first
mortgage would substantially exhaust in !
satisfaction thereof the entire property !
and that 1t would be inexpedient for the !
United States 10 redeem it from said first |
mortgage or TO become owner of the prop |
erty through redemption and foreclosure |
The report finds it is eXpe0ient, necessary /
and practicable 10 adjust and further Sc /
cure Its Indebtedness TO the United States |
upon extended time at reduced rate of |
interest within the ability OF the company |
to pay upon such terms IS to advance the |
development OF the country through which /
said roads pass and afford the inhabitants |
thereof reasonable rates of transportation (
Tor passengers and freight.
From the report it appears that the Cen !
tral Pacific has not ability to pay at all |
equal to that of the Union Pacific but under |
the terms of the bin to be reported can
make final and full payment reasonably !
certain.
The bill agreed upon includes within its !
provisions the Union Pacific railroad com
pany, Kansas Pacific railway company
which control the branches of the Union !
Pacific railway company consolidated /
under the name of the Union Pacific rail !
way company, the Central Pacific railroad /
company, successor to the Central Pacific |
railroad company Of California, and the /
Western Pacific railroad company IL pro
vldes Tor finding the present worth OF the |
indebtedness of the Union Pacific railway |
company on the ist OF July 1890, and for the |
payment TO the United States of that |
amount with per cent. interest payable I
semi annually; also portion of the prin- /
clpal seml-annually, so that the entire debt |
I will be paid in fifty years. 1t requires that |
the Union Pacific railway company shall |
give mortgageon ali It's property OF every |
Name and description. real, mixed and per-
sonSl, and also preserves TO the United /
States It's present statutory lien.
In the event OF the failure of said com
pany to accept the provisions of the act
there shau be carried to the credit of the |
sinking fund one half the compensation for
services rendered for the government and
IN addition thereto the sum of 81 coo 00O a
year or 30 per centum Of the whole net
earnings OF the Union Pacific railway com
pany and extending also the provisions of
the Thurman act to the Kansas Pacific rail
roadscompany and the central branch of the
Union Pacific railroad company. That on
q failure to pay receiver shall be ap-
pointed to take charge and manage and op-
crate said road its branches and the lines
of said company until the principal and in
tcrest OF said debt shall be fully paid
NSection provides for the ascertainment
OF the present worth of the debt of the
Central Pacific railroad company, then for
the payment of interest at the rate of .
per centum per aGnum, payable semi-an-
nually, and SO much OF the principal as
shall result in the payment of the entire
debt IN seventy five years. But in order
to relieve the road from too much burden
during the next ten years it is necessary
Tor 1t 10 make some extensive improve
ments. 1t requires for that time one-half
OF : per cent. to be paid. The bill requires
mortgage on the entire property of the
Central Pacific railroad company, includ-
ing some very important roads in Callfor
ma; and also by that section and a subse
quent one that the Southern Pacific rail
road company and the Central Pacific, shall
p1assc the present lease subsisting between
tleta an additional security to the United
States Tor the payment of the debt. Either
OF sad companies may extend the payment