Morning journal and courier., 1892-11-22
THE PACIFIC RAILROADS.
Special Report on the Bill Providing
for the Refunding ofthe Debts-Sug-
Regfed Amendments

for the Refunding ofthe Debts-Sug
gested Amendments.
WASHINGTON, Nov. 21.-The special re-
| port of Hon. 81. A. Taylor, the commits
sioner of railroads, relative to separate bill
No. 751, providing for the funding of tn,
| debts of the Pacific railroads, which he ha.
made part of his annual report, has beer
received by Secretary Noble. The report
shows that there were bonds issued in aid
of these roads in the following amounts
Union Pacific $35, 139, 512, Central Pacific
S27, 1855, $50. There has been paid by the
United States in interest on these bonds tc
December 81, 1891, in excess of payments
made by the companies in reimbursement
for Union Pacific, $50, $50, GAG; for Central
Pacific, $27, 233, 432 Total amount due the
United States December 81, 1891, from
Union Pacific s55, 800, 45s, from Central
Pacific $50, 0S9, 112. The subsidy bonds
began to fall due January 16, 1895, and the
last are due January /, 1899. The average
date of maturity is about July l, 1897.
First mortgage bonds have also been issued
on these roads, which constitute a lien
prior to that of the United States, amount
ing on the Union Pacific to S35, 762, 900 and
on the Central Pacific to $27, S53, 600. The
first mortgage bonds mature at practically
the same dates as the subsidy bonds.
The commissioner reviews the pending
measure at length and suggests amend
ments as follows:
1-Chapge the method of computation
in ascertaining the present worth of the
debts by compromising the interest for the
time between the settlement and the ma
turity of the subsidy bonds semi-snnual-
ly, instead of with two rests only, as pro-
vided in the original bill.
2-Make the rate of interest percentum
from the start.
3-1Dsert special proviso in section two
requiring the Union Pacific Railway COM
pany to assign the government all its
rights, titles, interests and equities in GER
tain mortgages, bonds, stocks, notes and
other securities of any description held in
trust by Drexel, Morgan & Co., trustees, to
secure the payment of certain notes given
in settlement of the floating debt of the
company.
4-Section providing, in case of de-
fault by said companies to make any of the
payments provided for by this act, that
1.-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 sfter the words United States
in the sixty-eighth line of the section the
words "upon the request of the president
SO to do"
5-Amend Section 20 by adding at the
end of the section the words Subject,
however, to the prior lien of the mort
cages to the United States herein pro-
vided for"
The general purpose of the bill is the
extension of the debt to 100 years with in
terest 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 the 100 years the entire
debt will have been extinguished. The bill
as amended, the commissioner believes,
would ii enacted into law fully protect the
interests of the government and secure the
final payment to it of all the money, prin-
cipal and interest, due from the bonded
roads. He does not believe that any meas
ure fixing shorter period of payment or a
higher Fate of interest will be accepted by
the railroad companies. "It is useless
for the government" he says, "to insist
upon terms of settlement that the railroad
will not agree to, and folly for
the companies to agree to conditions not
warranted by their present financial condi-
ton or their future prospects.
mo advantage can accrue to either party
by the one imposing or the other agreeing
to conditions that will not or cannot be
with. The railroad companies
should be made to pay IS rapidly as they
can reasonably be expected to earn the
money to pay with, and the rate of inter
est fixed should be equal with the rate the
government is compelled to pay upon its
obligation. At present securities should
be held and such further security required
to be given as the companies have it in
their power TO give. Upon these condi-
tions settlement would seem to be to the
of both the railroad com anies
and the government"
All the essential features of the bill are
discussed, as are the alterna-
tives presented to the government in case
bill does not become law. The commits
sioner combats the proposition that the
government foreclose its mortgages and
take possession of the roads as wholly i'm
and closes his report as fol-
lows:
''By the passage of this bill the govern
ment hazards nothing. 1t valves no exist
ing rights, releases no present securi-
legations. If the railroads refuse
to accept it, or accepting neglect or
refuse to comply with It's provisions, the
interests of the government will not be
thereby in any way put in peril. It the
railroad companies accept 1t and discharge
their obligations under it as they agree to
do, then would it prove happy solution
of this vexed question. A careful study
of all the facts of the situation leads me
to the conclusion that the interests of the
government and of the people along the
lines of bonded roads would be best pro-
tected by such a settlement as is provided
for in the amended bill submitted here
with"