Fort Worth gazette. [volume] (Fort Worth, Tex.) 1891-1898, 1894-07-22
THE PACIFIC ROADS DEBT.
THE commiTTEn MAKE A nErorr
On THE NIL.
The Hill said TO Diner From Former
Bius Contemplating the Funding
OF the Entire Indebtedness.
Lower Interest Rate.

Washington. July 2i.-Representative
Riley OF the committee on Pacific rail-
ways made q report to the public to-
day on the bill to adjust debts Of the
Central and Union Pacific railways,
A review OF the legislation affecting
the roads from 1869 is given in the re-
port. The purpose OF the committee,
1t is explained. Is not only TO devise
some plan that will insure payment
of the government claims, but that will
be final in its operations and dissolve
the complications that have heretofore
existed. The bill is said to differ from
the former bills contemplating the ex-
tension or funding Of the entire In
debtedness OF the first mortgage as
well US the government debt and apply
the amount in the sinking fund to the
credit OF the companies on their in
debtedness to the government II Is
pointed out that both the frst mort
sage bonds and the government bonds
bear per cent interest. which the
committee believes It Is and will be
Impossible for the companies to meet
as II has been In the past. Interest
on the first mortgage bonds has been
paid regularly, but the principal OF the
government bonds has more than
doubled by the accumulation OF inter
est In excess OF all reimbursement and
no one expects the companles TO pay
their debts to tho government at ma
turity. Annual interest on the nrst
mortgage bonds has amounted to over
one million year for tho Union Pa
oinc, and It seemed to the committee
that n the first mortgage was TO be
continued ~dth oriority or lien it would
be futile 70 Rttennpt an adjustment on
that basis. Accordingly the committee
dirsctsd their eniorts to a plan looking
by tho bm the amount in the sinking
fund, is applied to that purpose upon
condition that the companies shall
provide IN a manner satisfactory 20 the
Becretary OF the treasury for the pay
msnt OF the remainder OF the bonds
and the discharge OF the FIRST mort
gage. giving the government first
instead OF q second lien on the prop
ertyi o disposition Of the sinking fund
considered most advantageous 10 the
United States than its application az
q orodlt Oh It's debt.
The committee considers tho arrange
ment advantageous 70 both parties,
that II IS within their ability 10 com
Ely with the provlslonB OF the blll and
think the companies viii willingly
comply " they are disposed toward
settlement. The government must
continue TO pay interest on tho sub
sidy bonds until their maturity and
the bill provides for the method OF
ascertainiug tho amount OF the debt
due the government on January /, 1898.
and that bonds OF tho company TO run
ATTY years shall be given Tor the
amount. bearing per cent. interest,
payable Bemi-annually with semi IN
nual and gradually increasing pay
ments on the principal, The bill con-
templates setting the eNtcLt uf the
government lien and includes IN the
mortgage the valuable terminal prop
critics OF the Union Pacific at Omaha,
Kansas City and other points estimated
10 be worth si5,oO0.000. There are
other provisions covering the payment
Of dividends by the companies 30 long
as the United states shall own any
bonds for payment for transportation
services ana preserving other rights
OF tue ANikfQ falAltH. IN NlHt OF We
fault in respect to any obligation for
which any lien exists in favor OF the
United States upon any property of
any other companies. or IN case OF any
proceedings brought by holders Of any
other lien. the attorney-general b. IL
thorized to enforce the claim and fore
close any lien OF the United States
by sale or otherwise, ana ~ by sale
tho properly shall be sold TO the high
est bidder for a sum not less than
the amount of the debt due 20 the
United States, and all interest thereto.
80 the date Of the confirmation OF the
sale, and the attorneys general IS uu-
thoriscd such amount in order TO pro-
tect tho government. Purchasers and
their associates shall be invested With
NIL the property and a franchise upon
confirmation of the sale by the court
and compliance Herewith, upon filiug a
certificate accepting the provisions OF
the act, giving name under which the
company is TO be organized. naming
fifteen directors and making all the
laws relating 70 the government d.
rectora apply to the reorgRnized COM
pany. The court OF appeals OF the
District OF Columbia Is given jurisdio-
ton over legal proceedings, Unless
some adjustment ia affected Mr.. RI
iey's report concludes, foreclosure
eeems inevitable, and that might In
voAYe the necessity OF the govern
ment competing in order 20 protect It.
thereby involving an additional ont-
lay OF public money on the roads OF
over $4,000 above the sinking fund,
which would make the aggregate OF
the governments investment about
SIC, 900 600.