The record-union., 1894-10-12
WHO WILL PAY THE PACIFIC
RAILROADS DEBT TO THE GOV
ERNMENT2

We address to unprejudiced minds
some thoughtful considerations on the re-
lation of the debt soon to become due the
Government from the Central Pacific
Railroad Company and the growth and
prosperity Of California. Weaddress the
considerations presented herein to
thoughtful and unprejudiced minds only
because they have no weight with anyone
who refuses to hear before determining
the right or the wrong of the questions
involved.
The question is one of far-reaching sig
niicance, and it will eventually be set
tied upon some basis of right. The ques-
tions involved must be met They will be
subjects of congressional legislation and
governmental action; and the Govern
ment will not be swayed by prejudice
The action the Government will take in
this matter will be the result of calm de-
liberation, unprejudiced hearing and can
did judgment. The small minded pref
udices manifested in the current cam
upon those who entertain them. A sober
and thoughtful review of the subject
will be of interest to earnest and thought
full minds.
At maturity, the Central Pacific Rail-
road Company will owe the Government
S70,000,000, after subtracting that which
has been paid under the operation of the
Thurman funding bill and the applica-
ton of the amounts found in the sinking
fund. The total of the first mortgage
authorized to be placed on the road was
in round numbers S2S.0O0.OOO. Applica-
bic TO this is a sinking fund which will
reduce the first mortgage to SI5, ,000,0 900.
The total amount which will be found to
be due and unpaid at the maturity of
these liens-for they mature at the same
date-will be So, 100000
Some of our contemporaries declare
that if the payment of this debt is en-
forced and demanded now it will relieve
the industries of California of the burden
of its payment Other of our contempo-
raries have declared that no extension of
the time Of payment of this debt should
be given by the Government, but that it
should be Immediately collected.
The attitude OF the three principal DO
litical parties of the State is one of oppo-
sition to the passage of the Reilly fund
ing bill, and one State platform, that of
the Democratic party, declares against
the passage of the Reilly funding bill, or
any funding bill. The Central Pacific
Railroad Company will not pay the Gov
ernment Indebtedness at its maturity,
The assertion that it ought to do so is not
an intelligent contribution to the dis
cussion of this subject. The Government
is creditor and it is confronted by a
problem such as is frequently met by
creditors in the conduct of business. 1t
is dealing with debtor who cannot pay.
1t is an idle waste OF thought and speech
TO attempt to discuss the questions aris-
ing out of this situation in any other
light than that of transaction between a
creditor and debtor. The Government
wants the S70,000,000 which it loaned to
the Central Pacific Railroad Company re-
paid, or it does not. If it does not wish
to recover the money it loaned it has it
collection of the debt by permitting the
first mortgage to take the property upon
which it holds second mortgage lien.
Certainly our anti-railroad friends do
not desire this consummation. They do
not wish to give to the stockholders of
the Central Pacific Railroad Company
the $40. .000, 900, and that is just what they
would be doing if the Government for
gives the debt. 1t is safe to assume that
the Government desires the repayment of
the S70,000,000. The question simplifes
itself and its consideration becomes
methodical and sensible just as soon as
prejudice is abandoned and mental atti-
tude of thoughtful consideration is as
sumed. Thus simplified the questions to
be answered are: How will the Govern
ment recover the $40, 200, 900 to become
due between this date and 1898? How
shall this debt be collected from one of
the great instrumentalities of transporta-
ton serving the commerce of the Pacific
Coast without infiicting serious injury
upon its industries?
We are bold enough to assert that these
questions cover the case, and that the
formulation of the issue herein presented
is irrefragible and cannot be successfully
refuted. Moreover, the questions may
be simplified by further condensation in
this form, to wit: How shall the Gov
ernment recover $40. 600, 600 due by the
Central Pacific Railroad Company with
the minimum of injury to the industries
and commerce of the territory the rail-
road was built to serve? AS already
shown, there will accrue SIC. 600 of
obligation against the road at the same
time with the maturity of SIS, ,00O, 900 of a
first mortgage. This first mortgage must
be satisfied out of the property. Pro-