The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1892-11-22
RAILROADS.
The Commissioners Report on
Funding Their Indebtedness.
A FORECLOSURE lMPRACTICABLE.
lie Recommends an Exttns on of Time to
One Hundred Years ana Rate of
Interest of Two Per Cent.

WASHINGTON, Nov 21.-Tne special re-
port of Hon. A. Taylor commissioner of
railways relative to Senate bill Isl provid-
ing for funding the DEBT of the Pacific rail :
road which he has male a part OF his an
nual report has been received by Secretary
Noble. The report after reciting that bonds
were issued in aid OF these reads, closed
thus: 81 am of opinion that in view of the
foregoing facts it would be sound business
Judgment TO settle with the railroad COM
panies and extend their debts under tae
provisions of tue accompanying DILL, rather
than to foreeiose GU the roads and seek re-
imb rsement for their cost TO government,
either through their sale or operation.
am sure that when the facts OF the stLua-
tion are fully understood aud the atterna-
tive, a settlement or foroclosure, are
sQuareiy presented as IL must be- Congress
VIII decide and the people approve the de-
cision, thai it is wise TO make IA settlement
which promises TO secure the payment OF
all interest and part of tn5 principal of the
debts eacn six mon tbs from date of settle
ment, rather than to resort to foreclosure
that involves an additional investment OF
an amount equal to the original deot. 1t is
time to be getting that money out of bonded
railroads rather than putting more into
them.
'sBy the passage Of this bill the govern
ment hazards nothing. 1t valves no
existing rights, releases no present security
and IL lmpairs no existing obligations. If
the railroads refuse to accept it, or accept
ing, neglect or refuse 20 comply with It's
provisions the interests Of the government
viii not be thereby in any way put IN peril.
If the railroad companies accept and dis
charge their obligations hnder it, as they
agree to do, then would it prove a happy
solution OF the vexe0 question. careful
study OF all facts regarding the situation
leads me TO the conclusion that The interests
of the government and people along the
lines of bonded rosds would be beat pro-
tected by such settlement as is provided for
iu the amended bills submitted herewith.
This matter viii be discussed by Secretary
Noble in his forthcoming annual report, as,
no boubt it viii be by the president in his
annual message.
The general purpose OF the bill in ques-
ton is an extension OF the deb; 10 100 years
with interest AT 2 per cent. and certain
portion of the principal 10 be paid aI The
expiration of each six months during that
time, SO that at the end of 100 years the
entire debt will have been exunguished.
The commissioner suggests several amend
merits TO the bill as 1T now stands and
thinks with such amendments it would
fully protect the interests of the govern
ment and secure the entire payment of all
money, principal and interest, due from the
bonded roads, He does not believe that
any measure fixing a shorter period pay
ment, or higher rate OF interest, would be
accepted by the railway com par les
and thinks il useless for the government
to insist upon terms OF settlement
that the railroad COP Fanie8 will not
agree so. aud folly for the companies to
agree TO conditions not warranted by their
present tinancisl condition, or future pros
poets no advantage can accrua to either
party by their ina posing, or other agreeing
10, conditions that viii not or cannot be
complied with
The railroad COMPARES should be made
to pay as rapidly as they can reasonably be
eX pected 10 earn the money 10 pay with
and tbs rate of interest fixed should be
equal with the rate the government is com
PEELED TO pay Cd its obligation. All present
sscurity Should be held and such further
security required to be given as the COM
psnes have II in their power to give. The
commissioner combats the proposition that
tbs goyerumenl should forclose its mort
ga ges and take possession of roads, as
wholly impracticable. There was due the
United States on the 3lst Of December
last from the Union Pacific, 500, 800, ASS:
from the Central Pacific, S55,0S9,1l2. The
average rate OF the maturity of bonds is
about July L. 1897. First mortgage bo1ds
were also issued, which constitute loan
prior to that OF the Uuited States, amount
ing to, on the Union Pacific $50, 762, coo;
Central Pacific, s27, S53, 600 These mature
practically at tue same dates as the subsidy
bonds. Among the amendments the COM
missioner suggests is TO change the meth
obs of computation in ascertainiug the
present worth OF The debts by compound
ing the interest for d time between the
settlement and maturity of the subsidy
bonds semi-snnualjy and make The rate of
interest 2 per cent. from the start.