The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1892-11-22
TIME is WANTED.
The Old Cry From the
Bonded Roads.
MR.. TAYLOR MAKES A REPORT
he Says the Roads Need One Hun.
dred Years to Pay Their Debts
to the Government.
Special to THE MoRNING CALL.

WASHINGTON, Nov. 21.-A special report
OF Hon. A. Taylor. Commissioner of Rail-
ways, relative to Senate bill Isl. providing
ior the funding of the debt of the Pacific
raiiroads. which he has made part OF his
annual report, has been received by Secre-
tafy Noble. The report, after reciting that
ponds have been issued In aid of these
roads, closes thus: II am of the opinion
tnat In view OF the foregoing facts it would
De sound business judgment to settle with
tha railroad companies and extend their
ueDts under the provisions OF the accom-
panylng bill rather than forecose the roads
ana seek reimbursement for their cost to
the Government either through their sale or
operation. am sure that when the facts Of
the situation are fully understood and the
alternatives. settlement or foreclosure, are
squarely presented, as they must be, Con-
gress will decide and the people approve
the decision, that IL is wise to make a set
tiement which promises to secure the pay
ment OF all interest and part OF the
principal OF the debts Of each six months
from the date of settlement rather than TO
resort to 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 rail-
roads rather than putting more into them.
BY the passage of this bill the Govern
ment hazards nothing. 1t valves no exist
Ing rights, releases no present securities.
and II impairs no existing obligations. Ii
the railroads refuse to accept it, or accept
Ing, neglect or refuse TO comply with its
provisions, the interest Of the Government
will not be thereby in any way put in peril.
IL the railroad companies accept and dis
charge their obligations under it, as they
agree 10 do. then would it prove a happy
solution of the vexed question. Careful
study Of all the facts In the situation leads
me to the conclusion that the interests of
the Government and people along the lines
OF the bonded roads would be best pro-
tected by such settlement as provided for
in the amended bill submitted herewith"
The general purpose Of the bill in question
is the exten sion Of the time allo wed to pay
the debt to 100 years. with interest at per
cent and certain portion Of the principal
TO be paid at the expiration Of each six
months during that time. so that at the end
Of 100 years the entire debt will have been
extinguished.
The Commissioner suggests several
amendments TO the bill as 1t now stands.
and thinks that with such amendments 1t
would fully protect the interests Of the
Government and secure the entire payment
OF all the money-principal and interest
due from the bonded roads. He docs not
believe that any measure fixing shorter
period for the payment of q higher rate of
interest will be accepted by the railway
companies. He also thinks 1t useless for
the Government to Insist upon terms of
settlement that the railroad companies will
not agree to. and folly for the companies to
agree to conditions not warranted by their
present financial condition or future pros
poets. No advantages can accrue 10 either
party by their imposing on the other an
agreeing to conditions that will not or can
not be complied with.
The railroad companies should be made
to pay as rapidly as they can reasonably be
expected TO earn the money 10 pay with, and
the rate OF interes. fixed should be equal
with the rate the Government Is compelled
to pay on its obligations. All the present
security should be held. and such further
security should be given as the companies
have it in their power to give
The Commissioner combats the PROPOSE
tion that the Government should foreclose
its mortgages and take possession of the
roads as VIII oily impracticabie. There was
due to the United States on the 31st of De-
cember last from the Union Pacific S55.-
500.4 .458 and from the Central Pacific $685.
oS91l The average date Of the maturity
OF the bonds is about July 1, 1897. First
mortgage bonds have also been issued
which constitute lien prior to that of tho
United States, amounting on the Union Pa
cifc TO SIS. 762, 600 and on the Central Pacific
to S27. 1853. 900. These mature practically at
the same time as the subsidy bonds.
knong the amendments the Commissioner
suggests is to change the method of compu-
tation in ascertaining the present amount
Of the debts by compounding interest for
the time between the settlement and the
maturity Of the subsidy bonds semi-annu-
ally, and to make the rate OF interest per
cent from the start.
This matter will be discussed by Secre-
tary Noble IN his forthcoming annual report.
as no doubt it will be by the President in his
animal nnaccour