The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1894-07-22
REILLEY'S RAILROAD BILL.
Proposition for Settling Mortgage Debts
of Pacific Road5.

WASHINGTON, July 2l.-Representative
Kelley of the committee on Pacific rail
roads. made report to the house today on
The bill to ADJUST the debts of the Central
and Union Pacific railways. A review of
Tie legislation affecting the roads from
&c is given in the report. The purpose
Cd the committee. it Is explained, is not
only to devise some plan that will insure
ID, ment OF the government claims but
{ would be final in its operations and
Dissolve the complicated relations that
Lava heretofore existed between the
5 ovcrnment and these companies. That
g. said 10 differ from former bills can
-IiIf .ated, thai In the eXtention or fuudInc,
o. o. Z entire indebtedness, the first mort
gaze H. well as the government debr. and
app.Itd the amount IN the sinking fund Tn
the credit Of the companies on their in
deltedness TO the government II &c
roiuted out that both the first MORTGAGE
bonds aud the government bonds bear Il
u,r cent interest which the committee he
iieved il is and Will be possible for tn.
companies 10 meet, as 1t has been in nh.
past Interest on the first mortga bonds
has been paid regularly, bat the nrincinaI
of the government bonds has been nora
than doubled by the accumulation of in
terest in excess of all reimbnrse-
ment, ana no one expects The
Il
Annual interest on the first 1norfga1e
bonds has amounted to over two Millions a
wear for the Union Pacific, and 81 $50 OaO
for the Central Pacific. aud it seems 70 IL
committee that If the first mortgage WIS
10 be- continued with priority OF lie, 10
woGld be futile to attempt an adjustman.
On that basis. According TO il. The CON-
mittee directed their efforts TO a pIan Iooll-
i'm. to the extinguishmeut of the lie, and
by he bill the amount In the siDkino fu,5
l. applied TO that purpose, Rpon condifIo,
that the companies shall provide in a ,,,,,,.
urr satisfactory TO the secretary of the
treasury, for the payment of The remain
der OF the bonds and the discharge of rba
first mortgage, giving the government ).
first instead of a second lien on the nro,,
erty: 4 disposition of the sinking fupd co.,
sidered more advantageous TO the T-nifed
States than Its application as a credit ON
IT. own debt.
The government must continue 70 nay in
leleSU on the subsidy bonds until their M
turity and the bill provides for the method
Of sscertainIng the amount OF m. J.Ir
due tie government on January 1Sa,
aud that bonds of the companies IN ru.,
fly years shall be given for the arnouUt
bearing per cent Interest PAYABLE semi
annually. and gradually increasing nav
nl-uts ou the principal.
I've bill cOntempiates setting the extent
81 he government lien and ,ude. in Tho
MOI gage the valuable terminal
properties of the Union p.c.6c
At Omaha, Kansas City and ILL.,
n,inIs, estimated To be worth Sl5 ono pno
There are other provisions COVERING tba
payment of dividends by the c3npanIes
80 long as the | nIted States shal! own any
bonds, for payment tor TRANSFORMATION
services and for preserving other rights of
the United States. In case OF da:au.r In
respect to any obligation for which any
lieu exists in favor of the United states
upou any property OF any other comma
mes. or in case any proceedings brought
by holders OF any other lien, the attorney
general Is authorized II enforce the claim
and foreClose any lien of the United States
ny sale or otherwise. and ii 10y sale the
property shall be sold TO the highest bid
der tor a sum not less than the amount of
the debt due 10 the United States and ali
Int rest thereon to the date Of the confirm
alton of the sale. and the attorney general
Is authorized TO bid such amount in order
Ia protect the government The court Of
appeals of the District of Columbia =
gwen jurisdiction over legal proceedings.
Unless some adjustment i affected M:
Reillys proposition concludes, foreclosure
seems inevitable. and that might Involve
the necessity OF the government being
compelled, IN order TO protect itself, to
pay on the first mortgage, thereby lnyolv-
Ing an additional Outlay OF public money
On the roads OF over forty millions above
the sinking fund, which would make the
S-GregEt- of the governments Investment
about $40, 0G0 600