The morning call., 1894-06-20
TWO WAYS TO PAY A DEBT.

The Central Pacific Railroad owes the
Government in round numbers 100000, OOO
The road is in debt not because it has not
been paying property, but because its
earnings have been appropriated by the
owners 10 their personal use. As the date
for the payment OF the debt has about ar
rived. the debtors and the creditor are hold.
ing conferences as to what should be
done. The debtors propose to consolidate
the interest with the capital and give a
ffty-yesr bond for the payment Of both.
The creditor as yet has not proposed any,
thing. Its counsel is inclined to accept
the debtors proposition. He says that
there will be difficulty in collecting the
money the proprietors of the road have
been putting into their private pockets
during the last thirty years, and that If the
creditor should succeed in getting judg-
ments the enforcement of them would
cause the debtors embarrassment. 1t is
not intimated that the debtors would be
embarrassed by the circumstance of being
convicted of having property in their
possession that does not belong to them.
but that a judgment of court compelling
them to turn the property over to their
creditors would be embarrassing Now,
the counsel for the creditor is a kindly
disposed gentleman, and consequently de-
sires to make things as pleasant for both
parties as he can. He proposes, therefore,
10 allow the debtors to choose their own
method of payment The debtors will be
permitted to retain possession of the rail-
road and to regulate charges for service on
the basis OF charging enough to meet fixed
and operating expenses. In other words,
the debtors will be allowed to collect the
money with which to pay their debt from
the people the railroad serves.
A population Of about $4,000 will,
under this plan Of settlement, have to paw
the entire debt. The debtors do not pro-
pose to take one dollar out of their own
accumuiations. What they have they will
hold on to. But they are perfectly willing
to pay their debt providing the money can
be taken from the people. The $1,000 900
year which will be needed to meet this
condition of the proposed funding bill
will cause pretty steep rates on the Pacific
Coast part of the Southern Pacific system,
But the company will show that rates can
not be reduced without impairing its
ability to pay its debts It will show that
over large part Of its system competition
will not permit it to increase rates. But
over the Central Pacific Coast part there
is no competition. North and south there
may be, but in the rich central region. in
all of California except the extreme
southern counties. in Southern Oregon and
in Nevada and Utah to Oregon, people
have TO pay for railroad service what the
Southern Pacific Company finds necessary
TO meet fixed charges and operating ex-
penses.
The Republican State convention ow in
session should take broad view of the
situation Are the industries of the State
in condition to assume an extra burden of
100000 year? VIII not an increased
charge reduce the already small profits on
fresh fruit sent East? Will not extra
freight charges on agricultural products to
tidewater and on merchandise from tide
water to the interior narrow the range OF
territory the local merchants can supply
Will not the rule of charging all the traffic
will bear become even more burdensome
when the fixed charges and operating ex-
penses Of the railroad company are ma
terially increased? These are questions
for the convention to consider. A ringing
resolution denouncing the proposed fund
ing bill will help the candidates the con-
Vention may nominate in their campaign
over the State.