The morning call., 1890-12-11
THE UNION PACIFIC RAILROAD.

A few weeks ago it was stated that the
fl eating debt of the Union Pacific Railroad
was over ten million dollars, and that it was
larger than the Directors could handle. A
receiver was openly talked of. 1t was I'M
derstood that this financial embarrassment
was the secret cause of the retirement OF
Charles Francis Adams. and the restoration
of Jay Gould to the control of the company.
Shortly afterward q story was current in
Wall street that the Boston friends OF
Adams who had been indorslng the COM
pany's paper refused to renew their in
dorsements, and that much inconvenience
had resulted Now we have Mr. Gould'S
statement that So the company had to pay
So, co., COO for a new equipment, and then
the people wanted their money. That has
now been arranged"
1t is unfortunate that Mr.. Gould's state
ments of facts do not carry conviction TO
tn e average mind. he is gentleman of the
hi CHEST honor, but he is also n believer in the
doctrine that it is not always best to let the
public into secrets. There is a feeling in
financial circles at the East that, despite his
statement to the contrary, all has not yet
been arranged, and that the Dillon admins
tration is at its wits ends to meet the ac-
ceptanees which are maturing from day
t o day. The plaintiye moan of Oliver Ames
over the earnings Of the road is very sug-
gestive.
Tie Union Pacific is one of the great rail-
roads which have paTceled out the country
between them. lis territory comprises the
States of Nebraska and Kansas, with slices
of Wyoming, Idaho, Oregon, Utah and the
Dakotas. IL holds in absolute property, or
by virtue of leases, some COCO miles of line.
Part OF the country which is tributary to it
is very good indeed. There is no better land
anywhere, outside of California, than the
valleys which are supplied with transrorta-
ton by the two parallel lines of the Union
Pacific in Kansas and Nebraska. But much
Of the roads territory is as unfruitful of
traffic as the alkali plains of Nevada. For
hundreds of miles in Idaho, Eastern Ore
gon, Idaho and Wyoming the cars run
throughout desert which furnishes neither
freight nor passengers. 1t has been the
policy of the Adams administration to stretch
forth into the north and west long lines, in
the hope that they would catch some busi-
ness at their terminals. The calculation was
just. But its success depended on the abil-
ity of the company to carry these new I'M
productive extensions until such time as
they built up self-supporting traffic, and
that ability was necessarily contingent upon
the preservation of confidence in monetary
circles and upon continued ease in the
money market. Such crisis as the one now
prevailing in Wall street was not contem-
plated by Mr.. Adams when he embarked in
his policy of extension, for the first condition
of his scheme was monetary situation
which would at all times permit him to Dor
row large sums of money at moderate rates
OF interest.
Whether Mr. Gould and his friends have
ready money enough to shoulder the COM
pany's obligations until confidence is re-
stored time will show. In the meanwhile it
is noteworthy that each of the great COM
mercial crises of the past has either started
from or eliminated in the collapse of great
railroad enterprise. The crash of 1857 was
precipitated by the assignment of the Illinois
Central. and this was followed in short
order by the bankruptcy of the Michigan
Southe IN, the Prairie du Chen and a lot Of
other railroad companies. The crisis of
1873 started from the failure of the Northern
Pacific and its banker Jay Cooke In both
cases the disasters arose from the same
cause. The companies had more paper
afioat than they could handle. They went
to the wall when the paper matured and
they had no funds wherewith to meet it.
1t is 10 be hoped that the Union Pacific.
which appears TO be in strait now, will not
repeat history so far as to fall into the hands
of a receiver. 1t is an important factor in
the commerce ot the country, and any mis-
fortune which befell it would react upon the
States and Territories which 1t crosses. But
it must be remembered that there is a close
affinity between railroads and the people
who furnish them with traffic. When a
community is prosperous its railroad lines
make money; when the community goes
through hard times the railroads suffer. 1t
is not pleasant to recall the fact that for two
or three years the ruling prices of grain
have rendered farming in Kansas and Ne
braska Improbable.