St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1894-05-25
HUNTINGTON EXAMINED.
FIRST MORTGAGE BONDS NEVER
PAID. ne SAID. y
ANOTHER ISSUE SUBSTITuTED

IltAAs
The Government Earns Interest
But Does Not Get It-Senate
Bill Good One for Creditors
Central Pacific Crippled by
the Government = Substituting
Competitors.
! WASHINGTON. May Representa-
| tives of the Central Pacific Railway
company appeared before the house
committee on Pacific railroads today 10
| give their views on the Pacific railroad
| bill introduced by Chairman Reilly, Of
Pennsylvania. President G. L. Hunt
ington spoke at length on the difficult
| ties encountered in organizing and
| building the road in the early SOS. The
impression abroad that the builders had
been made rich, he said, was erroneous,
and he detailed some of the eXtra0r-
| binary expenses tie builders had been
compelled to meet. When the road
was completed there were no govern
ment bonds left, but many debts. The
company had always managed to keep
Its credit good. Coal, which was at
hrSt Imported from Australia, was a
great expense. Shares had to be sold
at from IS To 50 10 pay the bebts.
Chairman Reilly suggested that the
last of the first mortgage bonds would
mature i'll 1899, and inquired what the
road proposed to do. The president
replied that the great roads almost
never paid their first mortgage bonds.
They were replaced by other issues. He
was anxious to pay the debt, but, as
long as the government was drawing
its interests, time was no object to it.
Replying to question from Repre-
sentative Boatner. Mr.. Huntington said
that he had submitted no plan of reor.
! ganiZation. The bill submitted to the
senate committee was not his own plan.
but he was pleased with it because it
outlined a plan by which all the cred
itors would get their money and under
which the ROAD could live. By selling
another issue of mortgage bonds to
replace the original, the government
| could place S7O.C00.000 in the treasury
i'll ninety days. One hundred and ten
| million dollars would be required for
mortgage bond issue at 215 per cent 10
| cover the debts of the road to the gov
eminent and all other parties, the gov
eminent guaranteeing all the issue. He
was certain that the e..rniiigs of the
road would be sufficient to defray its
current obligations.
Representative Boatner reminded
President Huntington that the govern
ment had paid interest for years OH the
bonds, saying that the supposition had
been that the road was to pay interest
and inquired whether the ROAD intended
TO pay the government interest OIL the
$40, 900, 600 it had expended for the road
in that way. Mr.. Huntington replied
no, and said that, basng hereinafter
purely Oh grounds of equity. the road
should ply the government nothing be-
cause the government had crippled the
road by subsidiZing rivals which took
away much of the business. He did not
question the policy of the government
III this respect, but considering it solely
as a financial transaction it ihad its
bearing on this contract. fs'ti
Mr.. Huntington knew of no plan With
out an extension of time, assuring the
committee that the owners of the road
would not administer it for 100 years
without getting anything out of it