The record-union., 1892-11-22
BONDS OF PACIFIC RAILWAYS.
REPORT RELATIVE TO THE FUND
ING OF THE DEBT.
Commissioner Taylor Advocates Ex-
tending the Time Of Payment at
Low Rate of Interest.
Special to the REcoRp-UNrox.

Specldl 10 the 1GEC0RD-D MON.
WASHINGTON. Nov. 2l.-A special re-
port Of Hon. A. Taylor, Commissioner Of
Railways, relative to Senate bill 75I, pro-
viding for the funding of the debt of the
Pacific railroads, which he has made a
part of his annual report, mas been re-
ceived by Secretary Noble. The report,
after reciting that bends have been issued
in aid OF these roads, closed thus:
81 am of the opinion that in view of the
foregoing facts it would be sound bust
ness judgment to settle with the railroad
companies and extend their debts under
the provisions of the accompanying bill
rather than foreclose the roads and seek
reimbursement for their cost to the Gov
ernment either through their sale or op-
Grafton. / am sure that when the facts of
the situation are fully understood and the
alternatives, a settlement or foreclosure,
are squarely presented, as it must be.
Congress viii decide and the people ap-
prove the decision. that it is wise to make
a settlement which promises to secure the
payment OF all interest and part Of the
principal of the debts of each six months
trom the date of settlement rather than
to resort to a foreclosure that involves an
additional investment to an amount equal
to the original debt.
1T is time to be getting that money out
of the bonded railroads rather than put
ting more into them. BY the passage of
this bill the Government hazards moth
ing. 1t valves no existing rights, re-
leases no present securities and it i'm
paires no existing obligations. If the
railroads refuse to accept it, or accepting,
neglect or refuse to comply with its pro-
visions, the interest Of the Government
will not be thereby in any way put in
peril. If the railroad companies accept
and discharge their obligation under it.
as they agree to do, then would it prove
q happy solution OF the VeXed question
Careful study of all the facts in the stu
alton leads me to the conclusion that the
interests of the Government and people
along the lines of the bonded roads would
be best protected by such settlement as
provided for in the amended bills sub
mitted herewith
This matter will be discussed bv Secre-
tary Noble in his forthcoming annual re-
port, as no doubt it will be by the Presi-
dent in his annual message.
The general purpose of the bill in
question is an extension of the debt to
one hundred years, with interest at two
per cent, and a certain portion of the
principal to be paid at the expiration of
each six months during that time, so that
at the end OF one hundred years the en-
tire debt will have been eXtinguished.
The Commissioner suggests several
amendments to the bill as 1t now stands,
and thinks with such amendments it
would fully protect the interests Of the
Government and secure entire payment
OF all money, principal and interest, due
from the bonded roads. He does not be-
lleve that any measure fixing a shorter
period OF payment or higher rate of inter-
est will be accepted by the railway com
panies. lie thinks it useless for the Gov
ernment to insist upon terms OF settle
ment the railroad COMPANIES will not
agree to, and folly for the companies 10
agree TO conditions not warranted by
their present financial condition or
future prospects. No advantage can ac-
crue to either party by their imposing or
otherwise agreeing TO conditions that will
not or cannot be complied with. The
railroad companies should be made to
pay as rapidly as they can reasonably be
expected to earn money to pay with. and
the rate OF interest fixed should be equal
with the rate the Government is COM
PEELED to pay on its obligation. All pres
ent security should be held. and such
further security required to be given as
companies have it in their power to give.
The Commissioner combats the propo-
sition that the Government foreclose its
mortgages and take possession of the
roads as wholly impracticable. There
was due the United States on the 3lst of
December last from the Union Pacific
So. 500, ass, and from the Central Pacific
So, ,099, 10. The average date of maturity
OF the bonds is about July /, 1897. First
mortgage bonds were also issued which
constitute q lien prior to that ofthe United
States amounting to: Union Pacific,
S,S5, ,762 000; Central Pacific, S27, ,S53. .O00.
These mature practically at the same
dates as the subsidy bonds.
Among the amendments the Commits
sioner suggests is to change the method
of computation IN ascertaining the pres
ent worth of debts by compromising in
terest for the time between the settlement
and maturity Of the subsidy bonds semi
annually and make the rate Of interest
per cent. from the start.