Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1891-09-25
The Directors File the Annual Report
With the Secretary Of the
Interior.
a DECREASE IN rHC Nat EARN.
tNos.
Dy telegraph TO tho news
a nEvIEw
OF the Finance OF ihe Union Pacific
knitrond.

81 Tue Union Fufiug
kniirond.
WAsuTSoros, Sept. g4.-Georec +.
Leighton, John r.. Piummcf, Joase
Hpaulding, Rufus u. Bullock and
Joseph w. Paddock, government dl.
rectora Of the Union Pacific Railway
Company, filed with the secretary VI
the interior their annual report, ne fol.
low;
"For tho year 1900, NJ compared with
1852, the giUts earnings OF tho railway
Increased S1j2, whilst the net earn.
ingH decreased " ,Oi2,A20 for the same
period. Tho grosa earnings OF ali the
loads, c0mpoains the system, increased
$3.50, Ois, whilst the net earnings dc.
CREASED ~ ,i51,062. The causes u this
timinutiun In net earnings wey most.
ly VI general character, common to
all tho railways In the West, and arose
chiefly from the exceedingly low rates
prevailing over the greater part Of tho
territory covered by the system. From
the fact that an Increase ~ about three
aud one half millions IA tho gross earn.
ings was effected ut an increased cx.
pruse Ia the cost Of operating and
maintaining Of about Ave millions of
dDllar-, the conclusion l. inevitable
that, after making full allowance for all
/ local and exceptional requirements for
| Increased expenditures, that large
/ portion of the business Of tho year was
secured nj rates Involving AN absolute
lsss.
The event Of the year, 10 which We
feel called upon 10 direct the attention
Of tho department has been tho
FiSANCiAL EMBARRASSMENT
Of the company, brought about by ius
condition, impairing the ability Of tho
company TO carry It's large noating
debt. The gross floating debt Of tho
company on the alst Of December, 1850,
was s20, l6l 900, aud although Mt times
materially less during the year, II
reached ON Docembcr3l, 1890, sal 400
uJ1. OF this amount about SO, 10000
was the result Of expenditures advanced
Ia the construction OF branches or the
purchase Of stock la such lines Tor the
purpose Of control, anu wnA fully repre-.
scented 10y securities NJ an equivalent
or greater value la the treasury OF the
company. Hut, under tho conditions
OF the money market In tho autumn Of
~, brought about primarily through
the embarrassment VI financial houses
ia London, the market for investment
securities Of all kinds, both In this
country and Europe, was seriously
Impaired, and the company was unable
TO dispose Of them. A floating debt Of
such magnitude, however well repre-
scented OF secure, IL always TO be de-
plorod as sublecting the company To
embarrassment from great monetary
disturbances.
company, In acquiring control OF the
i HHllaaNuFt lmass Ina ls...aft Al
! cursed. We have no hesitation in
saying that such policy was absolute
ly necessary TO the prosperity Of tho
system. IL IA doubted II the company
could nave maintained IT, solyency,
except through such "a policy. Every
mile OF rad constructed or purchased
has brought
ADpITIoSAL TRIBUTE TO THE TRUNK
LINE.
In the year 1900 about 100 miles of new
road, exclusive OF Hldings, had been
added to tho system. In November
there was under construction In Utah
about 100 miles, upon which nearly
si,Og0,O 900 had been expended.
Tho government directors say they
reluctantly concur Ia this course OF
action Us adopted, Us presenting appar-
emily the only means of relieving tho
company, but regret tho temporary
character OF the provision Tor RELIEF,
aud the additional fact that II Is nsces-
sary 10 hypothooaie not only bonds
but stocks held by the company. The
report then continues: "Thu conditions
prevailing Mt this time emphasize
the recommendation 10 often made
10y congressional committees and by
government directors. No one eau
oome into close knowledge ofthe Union
Pacific Railway system without being
impressed with the necessity Tor relief
from the exactionr and limitations now
, imposed by law, IL IL vitality essential
that this company should be- freed from
these 10 enable II to maintain Itself in
fair competition with other systerls not
~ hAmpered aud restrained. This
whole financial system Is one OF eN.
pedlants rendered necessary by tho
limitations Of various statutes having
In view the security OF tho govern.
ment lion. The complex and involved
methods arising from branches, guaran-
teed collateral trust, and endorsed
bonds has cost the company vast
amount Of money, fairly stated Ia
millions, which might have been In u
large degree saved II 1t had been per-
mittcd 10 issue It's own direct obligR-
ton secured by direct mortgage upon
us own property. We cannot per-
. ceive that he government Is In amy
way benefited by these Limitations or
that the security OF It's own lion would
DO IN the least impaired by their ro-
mOval. Their only effect seems to be
10 ADD 10 THE burden OF THE con-
pANY
In ordinary financial administration,
( ! andtO shat extent 10 impair It's liability to
meet demands upon IL. a sound pub.
/ lie policy should In our Judgment
! prompt the government as creditor 10
make provision ~ 10 the tlmo and date
! Of payment Of principal aud the rate
u Interest 10 bo paid a. may he within
the ability Of the company to meet,
, and just gud equitable under all cir.
cumslances, but having done this tho
. Union Pacific should be as free aud
. uutrammolei as other lines 10 develop
; aud extend lie system; In iGot,it should
; hy freed from every restriction except
! those which tho law impose, upon III
] nilways similarly engaged In inter.
state Igaillc. Under AL conditions sur.