The advocate and Topeka tribune., 1893-10-25

Land grant bonds. ds..................... 9,224000
Income bonds. s................s......" 9yS05,OOO
STOCK .......,s..s...ss..s..s.. 5O,IOZOUO
Total. .$1O9. 812
Cost Of construction. .................. 38,8240OO
Fictitious capital. al.................."$ 7O,99O8l2
Ono thing is evident. After allowing for
discount, the road was built for less than
the proceeds Of the first mortgage and
government bonds, which had face value
Of $54,465,572, the builders taking as profit
part of the proceeds Of the sale Of those
bonds, as well as the income bonds, the
land grant bonds, and the stock, and
charging up on the books Of the company
as cost of construction $1O9,814, ,sI2.
The congressional committee, known
as the Wilson committee, which in
vestlgated the construction of the
Union Pacific in 1873, in its report,
said:
Every precaution that congress had taken
for the proper management of these great
properties had failed Of it's purpose. Con-
Rress had demanded that money be paid
in, and that this money should be subor-
dinated to the government hen. Il had
provided for the presence of five directors
representing the government in the meet
ings Of the directors Of the company; for
the appointment of commissioners to pass
upon the work of road construction as it
progressed; and it had held the reserved
power to alter, amend, or repeal; and yet
the road wac subjected to the most scan-
dalous mismsnsgement.
Large sums Of money were borrowed by
the corporation apparently to provide for
the necessities Of construction, but which
were distributed in dividends among.the
Oorporators. Stock was not paid for in
money some Of the government directors
neglected their duties and others were in
terested in the fraudulent transactions Of
the company. One Of the commissioners
appointed to pass upon the condition of the
road was paid $4,000 in consideration OF
his signing officially a report accepting as
first class section of 12O miles Of the road.
The chief engineer, Peter A. Dey, resigned
because the Hoxie contract was fixed al
$4,000, though his estimates were for $780,
600 per mile.
There is not a line or q syllable oi
the report Of the railroad commission
ers that should not be published SC
that the American people everywhere
could read it; but we will limit the
present extract from it to a few sddl'
tional paragraphs under the sub-head
The management contemplated by
congress and the method actually pur
sued," as follows:
Had the Pacific railroads been built ant
managed upon honest methods, had thr
government loan been properly applied
these companies, regarded as whole, cOult
have declared dividends at the rate Of 6 pc
cent. per annum, for eighteen years, from
the date of actual completion TO the pres
emit time, upon all the moneys that the
would have been required to pay in to com
plese and equip the roads; they would hav
owned 2,495 miles of roads free from a
debt, and worth $l24,6O0,0OO upon q
original outlay of less than $35, ,490, ,3S1 A
three Of them, the Union Pacific, Centrr
Pacifc and Central Branch, could have n
paid every cent of the principal and inter
est advanced by the government to dat'
and could have reduced their charges
shippers to the extent of over $140, ,000, ,00C
or nearly $S,O0O,00O per year.
For 81 the stockholders would have rea