St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1892-11-22
TAYLOR HAS A PLAN
For Funding the Debts OF the
Pacific Roads to Uncle
Sam.
It's General Purpose Is to EX-
tend the Debts One Hun
dred Years,
With a Certain Proportion to
Be Paid Each Six
Months.
Charges Of Rate-Cutting to
Eastern Points Made by
the 500.

WAsEINGToN, Nov. 21.-The special
report OF HIN. II. A. Taylor. the COM
missioner of railrQads. relative to Sen
ate Bill No. Isl, providing for the fund
ing of the debts of the Pacific railroads,
which he has made part Of his annual
report. has been received by Secretary
Noble. The report shows that there
were bonds issued in aid Of these roads
III the following amounts:
Union Pacific, S35, 1882; Central
Pacific, $27, 500: .. There has been
paid by the United States in interest on
these bonds to Dec. 81. 1891. in excess
or payments made by the companies Ill
reimbursement for Union Pacific. $780,
500, 9N; for Central Pacific, $27, 223, 49,.
Total samount due the United States
Dec. 81, 1891: UAion Pacific, 55.5O0.-
45S; from Central Pacific, S55,0S9, III.
The subsidy bonds begin to fall due
Jan. l, 1895. and the last are due Jan. 1,
1899. The average date of maturity is
about July l, 1897. First mortgage
bonds have also teen issued on these
roads which
Constitute a Lien Prior
to that OF the Uhited States, amounting
on the Union Pacific to $45, 762, 600, and
on the Central Pacific 10 $27, 1858, 900.
The first mortgage bonds mature at
practically the same dates as the sub
sidy bonds. The commissioner reviews
the measure at length and suggests
these amendments as follows:
First-Change the method of compila-
ton i'll aSctrtaining the present worth
of the debts by compromising the inter-
est for the time between the settlement
and the maturity of the subsidy bonds
Semi-annually, instead of with two rests
only, as provided in the original bill.
Second-Make the rate of interest 2
per centum from the start.
Third--InSert special proviso in sec
ton requiring the Union Pacific Rail-
way company to assign 10 the govern
ment all It's rights, titles, interests and
equities in certain mortgages, bondS,
stocks, notes and other securities OF any
description held in trust by DreXel,
Morgan IL Co., trustees, to secure the
payment of certain uotea given i'll settle
ment of the floating
Debts Oftiie Company.
Fourth-Section ). providing. in case
of default by said companies to make
any of the payments provi ded for by
this act, that the attorney general of
the United States shall Immediately
thereupOn institute proper proceedings
in proper court for the appointment Of
receiver" is amended by inserting
after the words United States in the
siXty-eighth line of the section the
words upon the request of the preSi-
dent SO TO do"
Fifth-Amend section 2 by adding al
the end of the section the words sub
ject, however, to the prior lien Of the
mortgages 10 the United States herein
provided for"
The general purpose of the bill is the
extension of the debt to 100 years with
interest at 3 per cent and certain por-
ton Of the principal to be paid at the
expiration of each six months during
that time. so that at the end of the 100
years the entire debt will have been eX-
tlnguished. the bill, as amended, the
commissioner believes, wonld,if enacted
into law. fully protect the interests OF
the government and secure the final
payment to it of all the mouey, princl
pal and interest, due from the bonded
roads. He does not believe that any
measure
Fixing a Shorter Period
of payment or higher rate of interest
will be accepted by the railroad compa-
MES.
1T is useless for the government" he
asserts, ITO insist upon any terms of
settlement that the railroad companies
will not agree to, and is folly for the
companies to agree to conditions not
warranted by their present financial
condition or their future prospects. No
advantage can accrue to either party by
the one imposing or The other 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
the money to pay with, and the rate of
Interest fixed should be equal with the
rate the government is compelled to
pay upon its obligations. At present
the security should be held, and such
further security required to he given as
the companies have it in their power to
| give. Upon these conditions a settle
ment would seem to be to the advantage
or both the railroad companies and the
| government"
All OF the essential features of the
| bill ATE eXhaustively discussed, as are
the alternatives presented to the gov
eminent i'll case the bill does not become
a law. | he commissioner combats the
proposition that the government fore
close its mortgages and take possession
OF the roads as wholly impracticaDle,
and closes his report as follows:
Il am OF the opinion that. in view of
| the foregoing facts, it would be sound
business judgment to settle with the
railroad companies and extend their
debts under the provisions of the accom-
panying bill, rather than to fol- eclose on
the roads and
Seek reimbursement
for their cost to the government either
through their sale or operation. | am
sure that, When the facts OF the situa-
ton are fully understood, and the al
| Tentative or settlement or foreclosure is
| sQuarely presented. as it must be, con-
gresS will decide. and the people ap-
prove the decision, that it is wise ia
make a settlement which promises to
secure the payment OF all The interest
| and part of the principal of the
| debt each six months from the date of
settlement, rather than resort to fore
| closure that involves the additional in
vestment of all account equal to the
original debt. 1t is time to be getting