The record-union., 1894-04-27
.uircd to result in great reduction of

CURED to result in great reduction of
hxed charges.
Ii would be the hight of folly to re-
organize the company, leaving it without
resources for development and improve
rnent. A railroad is a thing of constant
growth, if not in mileage, in the condi-
tion Of its plant, and constantly requires
fresh capital for new construction. Con-
sequently the general mortgage bonds
may be used for Improvements with the
consent of two-thirds of the directors.
The power of the United States in gen.
eral mortgage bounds and stock for re-
funding is limited TO the annual charges,
sinking fund requirements of bonds held
by the United States and guarantee rent
ais OF the company after all bonds are
issued, shall not exceed So, 100000. This
Limitation, by cutting down the fixed
charges by from $4,000, 900 to $1,000, 900,
seems to make it reasonably certain that
after the reorganization the company can
hardly fail to operate its roads success
fully and TO meet all legal requirements
upon its revenues.
The existing sinking fund of the United
States is utilized by the cancellation of
such parts as consists of existing first
mortgage bonds and by placing the ual-
ance OF its security with the Treasury as
additional security for the new bonds ac-
cepted by the United States.
a plan OF reorganization has not yet
been formulated. Therefore but little
progress can be made with such plan
until the requirements of the Govern
ment are clearly ascertained. 1t has
been claimed that the Government should
content itself with prescribing what it
VIII accept In payment of the debt, and
leave all the other terms of a reorganiza-
ton to be settled by the directors and
stockholders Interested. 1t would be
grossly improvident for the United States
| to assent 10 a plan which was not known
in advance, and which was not thus as
certained to be such that under it the re-
organization committee may be expected
to permanently operate its road and full
ill all its private and public obligations. A
plan OF the character would simply bring
the Government only in a short time face
to face with the demands that now cor
front It, The Government ought not to
consent to scheme which it does not
know to be framed on principles of justice
to all parties
While permitting the private interests
involved all possible latitude, the pro-
posed bill puts limitations which are
simply what sound policy and justice re-
qulre; thus fixed charges after the reor-
ganlzatlon by liking an amount which
IN the charges. guaranteed rentals, etc.,
shall not exceed, so the entire scheme of
reorganization must be satisfactory and
receive the cooperation OF the law Off
GERS OF the Government, and the bill also
provides in terms that the plan of reor-
ganization shall confer the same condi-
tlons upon all members of each class
without discrimination or preference.
1t being highly improbable that differ
enceS should arise respecting the rights of
parties under the plan of reorganization,
the bill provides forum by which they
shall be adjusted. The forum suggested
is the Court OF Appeals of the District of
Columbia.
1t may be suggested that under the
plan OF reorganization agreed to on be-
hall OF private interests, Congress should
remain passive. Until the requirements
OF the United States are first authorita-
lively defined, however, the private par
ties are without the groundwork upon
which reorganization plan must rest.
The bill will furnish that ground. will
put the creditors and stockholders in
possession of the exact conditions they
have 20 deal with, and enable them to
agree upon plan OF reorganization.
How largely the United States in it's
creditor capacity is Interested in the sue
cess of such a plan has, perhaps, been
already sufficiently urged, but it may not
improperly be urged that much more is
involved than the exact price to he col
started the Union Pacific Company to
promote great public ends, and to secure
great public advantages, and to grant it
lands and subsidies on the express con-
dition that it should transmit it's dis
patches, mails, troops and munitions of
war, supplies and public stores for the
Government. Unless the objects have
ceased to be of value, OF that corpora
ton like the Union Pacific Railway Com
pany is not needed for their accomplish
ment, the rehabilitation of that company
or the substitution of another with like
franchises and subject to the like duties
is imperatiyely demanded on the broad
ground OF the general welfare. 1t is of
Importance to the public and of immense
moment to the public of the States and
Territories traverSed by the road, that
the existence of receiverships should
give place to the management of solv-
ent and strong corporation as soon as
practicable. In the hands of the receiv-
ers there is comparatively inert proba-
bility; simply mass OF assets to be kept
intact, if possible, for ultimate distribu-
ton among the creditors. until it will
again become live property.
81 am authorized to say that the special
counsel of the United States in the Union
Pacific matters, the Hon. George Hoad-
ley OF New York, whose valuable aid
and cooperation in the preparation of
the proposed bill l have freely availed
myself entirely agrees in the expediency
of such legislation, and in the views ex-
pressed in this report.o
There is much satisfaction in Congress
sional circles over the prospect of the set
tlement of the Union Pacific debt. At
torney-General Olney's plan of settle
ment is TO be presented to the House
Committee on Pacific Roads tomorrow,
and will be presented to the House the
next day. Reports come from Boston,
where the annual meeting of the Union
Pacific was held, that the Government
and the road have reached an agreement.
Chairman Reilly of the Pacific Roads
Committee said the agreements, if it had
been reached, would greatly simplify the
question. 1t would still be necessary to
have Congress approve it, yet it overcame
the difficulty of disagreement between
the parties interested. The agreement as
reported from Boston is for a refunding
of the big debt. Mr.. Reilly says this is
the plan in favor with the committee,
and generally preferred in previous Con-
crosses. The most significant feature of
the agreement is that it disposes of the
plan Tor toreclosing the Government debt
and taking possession of the Union Pa
citic road.
RAILROAD COMMISSIONERS.