The morning call., 1892-06-02
Ole RA1LRoAD sIrUATloN.

uleQI mas hGCuiuAldAG0 ~ q iaA ~ H+AiSN"Nf
as it has been the policy Of the railroad
management to place as great an indebted
ness upon the Central Pacific Railroad as
rossjble. in order 10 avoid the payments OF
| the bonds originally loaned to it By the
Government The Central Pacific Railroad
has also been leased by MeSsrs. stanford
] Huntington s. Co. of California to the
! Southern Pacific Railroad Company. which
means Messrs. Stanford, Huntington q Co.
! of Kentucky. OF course the public do not
know how much Of the rolling stock OF the
| Central Pacific Railroad Company has been
turned over to the Southern Pacific Rail
/ road COMPANY, but they expect to be told
| that all of the cars and locomotives used on
| the Central Pacific ale worn out, and that IL
is using property owned by the Southern
Pacific. No person, We apprehend, can
examine the various acts of Messrs. STAN
ford, Huntington & Co. in connection with
the Central Pacific Railroad without COM
ing TO the conclusion that fraud has been
exercised in making away with its prop
erty. The Union Pacific is unquestlonably
bankrupt, for it has not assets enough to
pay its debts The subsidy lands have
nearly all been sold, but the money re-
eeived for them has gone, no outside person
| knows where. The four or five persons
/ constituting the partnership, which claims
| to own the Central Pacific Railroad, have
/ personal property, but this is outside OF the
/ Central Pacific In fact every dollar 5
worth of property, so far as the public can
see, has been drawn out of the assets OF
! that road, evidently with the intention OF
! depreClatng its value. Indeed the subter-
! fuge of leasing the Central Pacific Railroad
! to the Southern Pacific Railroad Company,
/ has made an unfaYorable impression upon
! the public generally. The act is regarded
! far and near as fraudulent, and it remains
| to be seen whether ultimately men claiming
/ to have private assets aggregating one hun
| dred or one hundred and fifty millions Of
/ dollars, which have been accumulated oat
/ of railroad manipulation, can avoid the pay
ment Of the Government debt. The in-
| habitantS of this city and State would not
have complained, after best0Wing upon
four or five men untold millions, il the
| property had been used with ordinary fair
ness to ward the people. but it has not. The
| question properly now arises as TO what
should be done with the Government debt
against the Central Pacific Railroad Com
pany as il becomes due. In this connection
we quote the following remarks from the
| Chicago Tribune one of the most influential
| newspapers published In the United States {:
The three-years Union-P Pacific Trust, which was
/ fixed up last year, comes 10 an end In 1894.
I The following year It's Indebtedness TO the
I United States VIII begin TO become due. BY
! 1898 when the bulk Of il natures, II VIII be
called on 10 pay about S6OOOOO00. The first
mortgage bonds, which VIII mature between
1886 and 1899, amount to S33, 100000. These
are tile bonds which corrupt or imbeelle Con-
gress allowed TO lake precedence OF The claims
Of the General Government
There are other Pacific roads on which the
Government holds second mortgages, the total
Indebtedness Of all the roads, principal and IN
teresf, being about Sis, 100000 The total
first and second mortgage Indebtedness OF all OF
them IS not far from 1892 000, 600. How shall
| this indebtedness. BE- banded so as best 10 pro-
feet the interests OF the Government? The To-
peka capital makes the following suggestion:
1t appears by tie reports OF the Secretaries Of
the Treasury That the roads nave PAID TIE IN
tereSt on tie First mortgage ponds, per cent on
$4,000 600; hence. they can pay per cent on
me letuudIng OF the Az per cents last fall
/ into , per cents slows thai the Government is
able 10 get credit al that rate. What tie Capital
ventures TO suggest is that the Secretary u Ihe
1 Treasury be authorized 10 issue SlS2,UVOOuO
10 bonds OF the Uniied states al per cent 10
take W tie several elements OF Pacific railroad
Indebtedness aud 70 be statutory lien On tie
roads. Tie roads would pay Tie entire interest
/ on the debt and tie bonds would be available
Tor increasing tie circulation OK national banks
A. The bonds first mortgage, begin 10 be Que
in 1894 some plan OF paying or Tetuudlng them
should be adopted by Tie Fifty second Congress.
Tie Tribune ls unable 10 give its assent 10
this Plaza for the following reasons: FiTst-Ihe
amount Of It's Az per cent bonds, which the
| Government succeeded in refunding at pei
cent was only S25.00O,000, and Il would net have
been able TO do as well as that perhaps IL would
/ have been unable TO do anything-but Tor Inc
Tact that the banks which held the 41a per cent:
dlsliked 10 withdraw their circulation or 10 buy
/ per cents al a heavy premium Ia order 10 pre-
| serve Il.
Second-If tie Government were 10 undertake
I 10 float per cent bonds 10 the amount OF Sl92
100000 there is every reason to believe that tie
experiment would be a failure. 1t IS doubtful
whether it would succeed were ii TO endeayor &c
dispose Of 21A per cent bonds TO that amount
/ Consequently II would be j loss OF time and
prestige TO tfy 10 solve the problem in the man
ner proposed by the Capital
Third-If the scheme were carried out i
would increase the public debt by tue amount o.
the interest due aud unpaid, or about S64. OO0,-
OO0 and would be equivalent 10 loanlug 1892,
100000 at 2 per cent for an indefinite period TO
the gang which has been sucking tie substance
out Of the roads so long. The people viii not
approve OF and cannot be brought 10 consent TO
such conformation OF the mlsdeeds OF these vam-
plres. They are in favor Of cleaning them out
al the earliest possible moment.
What the government should do is TO take con
troll Of the Union and Central Pacific Railways GU
OF the clutches OF the gang whose members hay'
been milking them for the last quarter OF a cen.
fury, eYadlng the payment OF interest and thus
pOeketing the sum Of S64, 100000 which should
have gone into the public treasury. az the same
time rObbng the people stin further by charging
double rates for carrying freight and passengers
The Government should refuse to have any
I afuo f1o~ 40 srFff fab ri rta
leeches and proceed 10 act Tor Itself. Look a
The colossal fortunes which have been aceumu
lated IN 4 few years by these extoriOns prac
ticed on the public and this dishonest method 0
t | dealing With the Government.
The Union Pacific crowd profess to be ind
ferent and say that they have used The earning
Of the road TO large extent IN the constructio
, Of parallel lines, branches aud feeders, on whic
they claim the Government has no lien, and the
assert If they are ousted from the control OF th
main road they can set up an Independent sy
tenn, retaining in their hands the extensive lei
4 minals al Omaha, on which they also Insist til
D Government has no lien. The truth Of that n
5 mains 10 be seen. II may be that they have NJ
played that terminal trick as perfectly as the
imagine. The Supreme Court may not look o
the matter In Tie same light as these cormorant!
But however that may be, the first thing fC
the Government 10 do is to take possession Of til
whole liBe at the earliest day possible. Til
=, S64, 900. 600 OF first mortgage bonds can be col
verted into or 212 per cent bonds without dl
feulty, thus saving half The Interest, and The Sc,
9 ond mortgage bonds can also be exchanged 0
> the same terms. This win be a saving
K S4,000O00 year interest TO begin with. The
{ the Government can lease the road TO new an
, responsible parties Tor enough TO pay the hxe
Z charges and provide a sinking fund, stpulatlH
- at the same time that the rates charged by The
: f0r freight and passengers shall be just ana re
y sOnabl-. ii necessary the maximum rates ca
i be incorporated in the lease. Thus reductiC
)t Of charges would be secured which would g
Ill. N L. In