The herald., 1894-10-10
PACIFIC RAILWAYS HISTORY.
Their Construction and Finan-
cial Management.
Compiled From the U. S. Pacific
Railway Commissioners Report.
A showing of the Aid tho Governm snt
Gavs tho Railway Building
and tho Action OF tho
Companies.

Mr.. George S. Patton has published q
history OF the construction and financial
management OF the Pacific railroads,
compiled from the reports of the United
States Pacific railway commiasion, ap-
pointed by President Cleveland under
the act OF congress OF March 8. 1887. The
history will be published in the HER
AID. the following being the second in
stallment:
Had the Pacific railroads been built
ond managed upon honest methods. had
the government loan been properly ap-
piled, these companies. regarded as
whole, could have delared dividends at
the rates Of per cent per annum for l8
years from the date of actual completion
to the present time upon all moneys
that they would have been required to
pay in to complete and equip the roads
they would have owned 2495 miles OF
roads, free from all debt and worth
$l24, 100000, upon an original outlay of
less than s34, ,490. 3Sl Al. Three of them,
the Union Pacific, tho Central Pacific
and Central branch, could have repaid
every cent of the principal and interest
advanced by the government to date,
anti could have reduced their charges to
shippers to the extent of $4,000 000.-
600, or nearly $4,000, 900 year. For 81
the stockholders would have realized
s1.70 in dividends in IS years, Sill in
land sales. The property would have
been free from debt; and for every 81
they have invested, the stockholders
would have had in property, 81 go that
in IS years each 81 would have yielded
$618.
But they chose dishonest methods.
At the outset they divided $l72,34 115
OF fictitious capital; they dissipsted
over $117.000,00 which should have
been applied to the payment OF the prin-
cipal and interest OF the government
debt, and they taxed shippers to the ex-
tent of over $l40. .000, 900, or nearly $3,-
000 900 year, to pay for the imitation OF
the capital OF these companies and for
the vicious practices that crept into
their management"
"The Union and Kansas Pacific roads
(aided portione) could have been built
for an original outlay by stock holders of
$17, ,4SS, in addition to the govern
ment loan. All debts could have been
paid, including the government debt,
principal and interest to December 81.
1886, and from the profits of operating
the roads. and from land salen, aggre-
eating SIG. 295, 1883, the stock could
have paid regular dividends at the rate
OF 6 per cent per annum. and by an
original outlay of s17 ,02l, 47S, which the
law required, but which was not made,
the company would today own rail-
road worth at least $40 900 900 and un-
sold lands worth $l4, ,004 240. equnlling
an appreciation of 447 per cent in 18
years, while shippers would have been
benefited and the developments OF trib-
utary territory encouraged by a reduc-
tion o. $85, 1870. 845.49 in charges for
transportation"
In the Central Pacific for SIG 6,600,-
203.76 OF stock subscribed, which should
have been paid in conformity with the
act OF congress, all debts could have been
wiped out, including the government
debt, principal and interest; the etock
would have paid regular dividends at the
rate OF 6 per cent per annum and for the
outlay of $4,000, 2O3.76 the comp my
would today own railroad worth at
least $40 000.0 900. and unsold lands worth
S12.500. 900, equslling an appreciation CT
over 200 per cent in Is years. while ship
pers would have been benefited by
reduction of over $54 200 600 in the cost
OF transportation" Up. 146).
"Because of the vicions methods act
ually pursned by the bond-aided COM
panies, the government has been de-
frauded OF the bulk Of it's advances;
shippers have been taxed to the extent
Of over $548. 900. 900 and liabilities to the
amount of $3.50, ,517.265 have been
heaped upon the properties" (p. 147).