The advocate., 1894-06-20

- NUAADNbs
First mortgage bonds s n. ,OOC
United States bonds. 7,2S6JSlG
Land grant bonds s..,,.,......,........ 922E,OOC
income DOnds. ACKNOWLEDGEMENTS. 9fSO5,00C
Stock. ................,....... g., 2S0(
AObals .s...... ...,.sss........... SlO9ySl4,Sls
Cost OF construction ion.................. SSS24.OO(
FICTITIOUS capital. al....................$ s 7O99O,S1.
One thing is evident After allowing FOL
discount, the road was built for less than
the proceeds Of the first mortgage and
government bonds, which had q face value
Of $54, ,465,672, che builders taking as profit
part Of the proceeds of the sale Of those
bonds as we'll 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,sl4,S12.
The congressional committee, known
as the Wilson committee, which inves-
tigated the construction Of the Union
Pacific in 1878, in It's report, said:
Every preOautiOn that congress had taken
for Che proper management Of these great
properties had failed Of it's purpose, Con.
greSs had demanded that money be paid
in, and that this money should be subOr-
din&ted 10 the government lien. Ih had
provided for the presence of Ave directors
representing she government in the meet.
ingB of the directors Of the company; fol
the appointment Of commissioners 90 pass
upon the work Of road construction as il
progressed; and il had held the reserved
power TO alter, amend, or repeal; and yel
the road was subjected to tie most scan.
dalOus mismsnagement. ="
Large sums Of money were borrowed by
the corporation apparently 10 provide for
the necessities Of construction, but which
were distributed in dividends among the
coFpOERborS. Stock was not paid for in
money, some Of the government directors
neglected their duties and others were in
tePested in the fraudulent transactions OF
Che company. One Of the commissioner
appointed 10 pass upon the condition Of Che
road was paid $4,000 in consideration oi
bis signing officially q report ROOeptingSRl
frst-Olass a section Of 100 miles OF the road
The chief engineer, Peter A. Dey, resigned
because the Ho1ie contract was fXed al
$4,000, though his estimates were for $780,
600 per mile.
There is not line or a syllable Of
the report Of the railroad commission
ers that should not be published so
that the American people everywhere
could read it; but we will limit the
present extract from it to a few addi-
tionsl paragraphs under the sub-head
''The management contemplated by
congress and the method actually
pursued" as follows:
Had the Pacific railroads been built and
managed upon honest methods, had the
government loan been properly applied,
these companies, regarded as whole, could
have declared dividends Rb the rate Of per
cent. per annum, fOr eighteen years, from
the date Of actual completion TO the pres
emit time, upon all she monies that they
would have been required TO pay in TO COM
plete and equip the roads; they would have
owned 2,496 miles Of roads free from all
debt, and worth $124,6O0,0OO upon an
original outlay Of less than $S5, 49O, ,3S1.44i
three Of them, the Union Pacific, Central
Pacific and Central Branch, could have re-
paid every cent Of the principal and inter-
est advanced By the government 10 date,
and could have reduced their charges to
shippers TO the extent Of over 140 million
dollars, or nearly 8 million dollars per year.
To, 81 kha nkoa6hoINn,. -,o,,ll h.-o .a.I