The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1893-02-19

The Pacific railroads are again knocking
at the door of Congress for relief from their
rapidly maturing debts to the United
States.
The nearer to maturity these debts get
the greater is the vehemence with which
the emergency requiring additional legisia-
ton is urged. The prime movers i'll these
matters stir public opinion often in The III
terest of stock speculation, and this has
generally resulted in the adoption Of q
resolution TO investigate the management
of the reads.
In Washington and before Congress these
roads plead poverty and inability TO pay.
On Wall street they adopt different tone.
expatiate on their resources and future
prospects. They bull the stock markets in
spite of legislation which if not complied
with will crush the stock out OF existence.
Already volumes have been filled with
the reports of investigating committees.
until these reports are only useful in deter
ring any one disposed TO study the matter.
unless his patience and time are alike nn-
limited.
Without entering into the thousand and
one details of the litigatiOns between these
great corporations and the United States
growing out of this stupendous indebted
ness let us take a comm0n-sense glance at
the present condition of these debts and
the prospects of a satisfactory settlement
In 1862 the General Government author
lied bonds to aid In the cOnstru ton OF
these roads. as follows: Union Pa
cific, S33. 539, 312; Central Pacific, S27,-
S55,6S0; Sioux City and Pacific. $685.
go; Central Branch u. p, $l,600,00 ;
an original debt of S63, 900. 000-On which
the United States has paid out of the pub
lie treasury S94,000,000 interest. which has,
however. been reduced, by credits given
the ROADS upon the books of the treasury,
for services performed and cash paid in, to
$40, 100000. which sum the United States
has pa d IN excess of all credits, as interest
upon the bonds of these. companies, leaving
them to-day debtors TO the amount of
S115. 100000, bonds and interest.
In 1864. upon representations that the
SOS, 600, 600 already loaned tn construct these
roads had proved insufficient, Congress
authorized the issue of like amount of
bonds by these companies to be known as
first mortgage bonds, to bear per cent an
nual interest, 10 be sold TO tho public at
large, the Government cOnSenting to accept
r second mortgage for the original issue of
bonds.
Thus these roads owe to-day to the Gem
eral Government and the withdrawing
also an allowance Of from fifteen TO twenty
million dollars tor floating debts" having.
perhaps, priority TO the bonded debt-the
immense sum of two hundred million dollars.
1t is most significant fact that while
these companies pay with business prompt
ness the annual interest on their first mort
gage debts and all other business Oblga-
tiOns. the United States is left 10 whistle
for the interest due upon its sixty-three
million loan, while she kindly pays for the
defaulting debtors nearly three million
dollars annually out OF public funds.
The fact made public by the press that
| these bonds, in the case of the Central Pa
cifie. are owned exclusively by ninety-five
men, or less, engaged in the control and
| operation OF the road, and that they are
never permitted to appear upon the money
markets If the country. is too fOrcible a
| proof of their value to need comment.
TO determine the character Of any al
| ditional legislation which should govern
| Congress touching the payment OF these
| debts there really appears but one question
| of vital Importance 10 the United States,
| and that is whether these roads are solvent,
whether they OWN available and salabe
| property to cover the amount the Govern
ment must assume in case of Il foreclosure OF
its mortgage in 1897, the date the bonds
mature. IL the roads are solvent the just
Tulfjllment If the contract made by Congress
for the people in the investment of these
enormous sums OF public money In theiI
| construction should be rigidiy insisted upon.
The pleas that were made by Mr.. Dillon
| and Leland Stanford, as representatives OF
these roads, about the development of the
| country and the saving in transportation
fees by the building of the roads, is no legal
| or admissible excuse for non-payment. Ii
| is. moreover, all extraneous, outside the
merits OF the case, for the officials, stock
holders or paid lobbyists of these roads to
urge the extension of these debts al 2 pei
cent interest for 100 years, because the
a NJ
In the commercial relations of life the
fact that a creditor is rich and does not need
the money of a matured deot would be re-
garded with rdicule. il not an insult to
eommon-sense, as an argument for non-
payment 1t should be equally so in this
case If these roads are legally and fnan-
cialiy responsible they should be required
by Congress, the trustee of the people IN
this matter, TO pay this just debt into the
public treasury al maturity
To foreclose this debt and protect the
S120. 600, 900 which these roads will owe the
United States In 1897 it would be necessary
that the Government assume or pay the
first mortgage bonds, requiring further
investment of perhaps $50. 000,0 600, by which
the United States would become absolute
owner of all properties of these companies
including main and branch lines and theii
equipments, ali real estate and terminals
rights of way and ownings OF every nature
and description now held by these CON-
panies.
TIE salient inquiry therefore is: What
do these companies own. and have these
properties salable value TO cover the
amount of their debts?
FIRST, then, let US take the last showing
July, 1892 of the assets OF these companies
as submitted by them officially TO the Com
missioner of Railroads in his last annua
examination of their books and affairs
which are as follows:
IrNTON pACIFIC-A CCETc