The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1890-02-20
REASON AT LAST.

roads has finally agreed upon plan for the
adjustment of the financial difficulties bet
ween the government and the subsidized
Union Pacific and Central Pacific com
panies. The investigation and inquiry
have been pretty thorough, covering two
years of time, personal inspection of the
roads and books by the committee and full
representations of the status of things pre-
sent and prospective by those familiar
with the companies affairs. AS a result a
plan of settlement has been devised, and
it seems a fair and equitable one. Briefly
stated, the scheme is this, as to the Union
pacific: That company's debt is to be con-
tinued fifty years, the interest being per
cent per annum, to be paid semi annually,
together with such semi-annual payments
on the principal as will extinguish the en-
tire debt at the end of the time
secured by mortgage on all the
property Of the company, including the
various branch lines or which there is now
no government lien.
As to the Central Pacific the time for the
eXtinguishment of the debt is extended
seventy five years, the interest being re-
duced to 2 per cent. The payments of in
terest and principal are to be semi-annual,
though for the first ten years payments on
the principal need not be made, as it is
thought the company will require all its
available money with which to construct
feeders and develop business. The debt is
to be secured by mortgages on other
property belonging to the company than that
upon which the government now has Lien.
In all probability both companies will ac-
cept the terms offered, in which event we
may expect great Improvement in the
roads The war which Congress has waged
against these railways during the past
ten years has been inspired and managed
by anything but craftsmanship or financial
wisdom 1t has been so indicative and
unreasonable that the companies were
compelled to protect themselves by meth
DDS that would otherwise have been ques-
tionable. The Central Pacific people, if
they did not make the road improbable,
came very near doing so, and the Union
Pacific folks managed to make no money
on the main line. This course was neces-
sary 1t has long been apparent that the
subsidized roads could not meet their pay
nents to government as they became due,
and if the creditor had been reasonable he
would have been lenient. Congress, how
ever, kept insisting on the bond, knowing
all the time that to press the matter would
not only bring bankruptcy to the debtors,
but fail to get the money due to the gov
eminent. The companies were handicapped
and bound by the laws under which they
,ot ,,.,t
out and create business as if they were
independent. Competition came along,
and being free and footloose it could take
advantage of commercial laws and the
laws Of trade and development which were
denied to the subsidized lines. The perse-
cution went on until the Pacific roads be-
came disguised if not disheartened, and il
is believed that both were ready year OF
two age to surrender the property in pay
ment of the debts. Having reached this
conclusion the companies, it seems, finally
induced Congressman to do little intelli-
gent thinking, the result being the scheme
for adjustment outlined in the Washington
kilograms the other morning.
Being free to manage themselves in their
own way and according to business princi-
pies, the roads will be able to make money
and satisfy the requirements upon them
We may confidently look for the develop
ment Of business and the improvement O.
the lines so as to compete with other roads
II it shall appear that it will be to the ad
vantage Of either road to construct
branch as feeder, Congress will not sd,
nay. In fact, it will be to the interest o
the first overland road to make its line tn
popular one that it once was and Away.
would have been had it not been for the un
reasonable interference on the part of poll
ticians.
As matter of course the bill framed il
accordance with the Senate committee
report will pass, and before the end of thu
year the country out this way will expert
ence beneficial results from the cessation
of the quarrel between the government an
the Union and Central Pacific roads.