The morning call., 1894-09-24
THE OUTRAGE OF REFUNDING.

The outrage proposed by the Pacific
railroads refunding bill is colossal Few
re pie have yet taken pains to inform
themselves so as to fully comprehend it,
There is 500, coo, 600 in first-m ortgage bonds
TO be provided for. There is $3.50, 900, 600
in second-mortgage bonds and accrued in
teres, which. added TO the first amount
reaches $3.50. 600. This is to be funded
for fifty years at 3 per cent per annum.
The simple interest will amount to So 700,-
600 annually, or for the fifty years $685.
100000! Grand tttal. principal and inter-
est, S475,000,000. To put such burden on
the people who most patronize the rail-
roads means perpetual poverty.
But that is not all The men who run
these roads hold S114,O0o,OO0 of so-called
paid-up stock. issued TO themselves. Their
purpose in procuring an extens sion of time
and rule under refun6ing is to make divi-
dends on this stock. We cannot figure on
what these dividends may amount to in the
course of half a century, because they will
be limited only by the amount that can be
squeezed out of the people of California
and the country between here and the Mis-
souri, River.
Furthermore, the fact remains that with
this refunding proposition completed The
companies Will be growing stronger and
more independent of the Government and
the law every year. If they can control
Congress and beat the people now by
means Of a refundDg bill, they or their
successors will be still better able to do
as they please with Government and
people right along for fifty years more.
judging by experience. interest will be
aceru1ng on the new bonds, for the compa-
nies will be collecting it from the people
and putting it in their pockets instead of
paying 1t over to the Government.
Such is the magnitude of the outrage
involved in the refunding proposition.
The only way 10 ward off this impending
Calamity Is foreclosure. That will give
the Government the road toward repay
ment of is second-mortgage bonds and
accrued interest. The debt is more than
twice what the roads are worth. The
private estates of the parties who have
overreacAed the Government are liable
and can be seized by courts of equity to
make good the deficiency. Foreclosure.
taking the road and all property belonging
TO 1t OF right, is simply making the best OF
bad bargain for the Governments benefit.
w 'Nh eo0 oA'ASCuSO III dpptNlJk pt6S6uk
remedies and the progress of settlement
the Government may yet recoup itself; at
any rate, the loss will be made up to the
country by virtue Of regulated Govern
ment com petition in overland transporta-
ton. But what is Of most Importance.
foreclosure will wipe out $4,000, 600 of
bogus stock and relieve the community of
the burden of paying dividends thereon.
AS for the first-mortgage bonds, amount
ing TO $4,000, 600, for which the Govern
ment will become responsible, recourse
must be had to suits against the persons
and estates of those who have been loot
ing the roads, the Government and the
people for the last thirty years. They
are amply able to pay and suit in equity
would afford opportunities for showing
the ways and means by which the income
and grants of various kinds made TO The
roads have been diverted from their proper
course to enrich few Individuals.
In the face of such astounding facts
will sensible people talk about the I'M
policy of Government control of a single
line of railroad which the Government has
paid for. or the danger of embarrassing a
university when no real danger of that
kind exists?