The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1894-07-22

Washington, July 21.-Reilly, Of the
Committee on Pacific Railways, made
a report to the House today on the bill
to adjust the debts of the Central and
Union Pacific railroads.
A review of the legislation affecting
the roads from 1862 is given in the re-
port. The purpose of the company, it
is explained, is not only to devise some
plan that will insure payment Of the
government claims, but that would be
final in its operations and dissolve the
complicated relations that have here
tofore existed between the government
and these companies.
That bill is said to differ from for
ner bills contemplated, in the extern
sion or funding of the entire indebted
ness. the first mortgage as well as
the government debt, and apply the
amount in the sinking fund to the Gre
dit of the companies on their bonded
Indebtedness to the government. 1t is
pointed out both first mortgage bonds
and government bonds bear 6 per cent.
interest, which the committee believes
it is and will be possible for the COM
panies to pay, as it has been in the
past.
ne AllAGL6Sl Oh TIE 11ISl LlOIlSdSS
bonds has been paid regularly, but the
principal of the government bonds has
been more than doubled by the accu-
mutation Of interest in access of all
reimbursement, and no one expects the
company to pay their debts to the
debts to the government at maturity.
Actual interest on the first mortgage
bonds has amounted to over two mill
ions a year for the Union Pacific, and
81. 900 for the Central Pacific, and
it seemed to the committee that if
the mortgage was to be- continued with
priority then it would be futile to at
tempt an adjustment on that basis.
According to it the committee direc-
ted their efforts to a plan looking to
the extinguishment Of the lien, and by
the bill the amount in the sinking fund
IS applied to that purpose, upon condi-
ton the companies shall provide in
a. manner satisfactory to the secretary
of the treasury for the payment of the
remainder of the bonds and the dis
charge Of the first mortgage by CIV
ing the government a first instead of
a second lien upon the property; a dis
position of the sinking fund consid-
cred more advantageous to the United
States than its application as credit
on its own debts.
The government must continue to nav
interest on the subsidy bonds until their
maturity, and the bill provides for the
methods of ascertaining the amount of
the debt due the government on Janu-
airy !, 1885, and that bonds for the COM
panies to run fifty years shall be given
for the amount, bearing per cent. in
terest, payable se1ni-annually with
semi-annual and gradually increasing
payments on the principal. The bill
sontemplateS settling the extent of the
government lien and includes in the
mortgage the valuable terminal proper
p he Tai
Kansas City and other points and esti-
mated to be worth $4,000, 900. There are
other provisions covering the payment
of the dividend by the companies as
long as the United States shall own any
bonds, for payment for transportation
services and for reserving other rights
of the United States. In case of de-
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 any pro-
ceediEgs be brought by holders of any
other lien the encouragement is au-
thorized to enforce the claim and fore
close any lien of the United States. by
sale or otherwise, and if by sale the
property shall be sold to the highest
bidCer for sum not less than the
amount of the debt due to the United
States and all interest thereon to the
date OF confirmation of the sale. the
Encouragement is authorized to bid
such amount in order to protect the
government. The court of appeals of
the District Of Columbia is given juris-
election over legal proceedings.
Unless some adjustment is effected,
Mr. Reilly's proposition concludes, the
foreclosure seems inevitable. and that
might involve the necessity of the gov
eminent being compelled, in order to
protect itself. to pay off the first mort
gage by involving an additional outlay
of public money on the roads of over
SAC, 100000 above the sinking fund
which would make the aggregate Of
the governments investment about
$40 600, 900.