New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-08-13
PRICE THREE CENTS.
CHAPTER OF UNION PACIFIC.
THE STORY OF A BRANCH LINE-HOW II
WAS USED AS A PACKHORSE-
RIGHTS OF MINORITY STOCK.
HOLDERS-OREGON SHORT
LINE AS AN INDEPEN.
DENT PROPERTY.

It IS doubtful II there was ever in the history
of business transactions a more complex and be.
wildering tangle than the receivers of the Union
Pacific Railway Company have to deal with.
These complications have grown o@ OF what
seemed TO be the necessities OF the situation IN
developing the system. Under the restrictions
put upon 1t by Congress the company was obliged
to resort to circuitous processes In constructing
Its branch lines These methods Of ndirection In
creased and multiplied with the growth OF the
system becoming more and more confused ana
confusing time went on, until at the time the
receivers took possession the muddle OF paying
and non paying properties their relations TO eacn
other and to the parent company, and to minort-
~ stockholders seemed inextricabe. The manner
in which the blunders of hasty legislation and the
evasons OF law which they draw after them,
propagate and perpe,uate themselves is striking
" illustrated in the history Of the struggles OF
the Union Pacific to break through the meshes Of
restrictive legislation in which 1t had been en-
tangled by an angry Congress, In order to estab-
ltsh a connection with Oregon and the Paciho
Coast.
The wisdom Of the policy that gave the conn
many control of a through line to the coast by the
construction of the Short Line and lease OF the
Navigation Company was from a business point
OF view beyond question In the original Union
Pacific surveys the necessity for an Oregon OUT
LET had been considered AMI a line substantially
the same as afterwards built from Granger TO the
Columbia River approved The Oregon Drancn
was not provided for in the charter for the rea-
son that another company the Northern Pacinc.
was chartered at the same time-n lS64-to puho
to Portland by a different route. The pusi-
ness Of that section was not enough lor '"o
lines But the Northern Pacific fingered ana
halted and made very slow progress. Meanwhie
the Denver and Rio Grande was making con-
nection with the Central Pacific for the Chica-
60 Burlington and Quincy by its road from Dem
YER TO Ogden, so that the latter could swing en-
t,rely round the Union Pacific and, joining with
the Central, have its through connection ana IN
dependent line from Chicago TO San FRANCISCO
The Central and the Union Pacific had been az
oggerheads from the time they both began 10
scratch gravel for subsidies and Salt Lake ousi-
ness. The new Connection left the Union at the
mercy Of the Central so ia" as through business
was concerned, and as may we'll be imagined. the
latter was not slow to take advantage or the
situation.
In this tuncture the attention Of the Union
Pacific was naturally directed toward its second
objective point on the coast. and the project OF
building from Granger to connection with the
Oregon Navigation lines IN process of construc-
tion from Portland east, under the management
of Henry Willard, began TO be seriously conslo-
cred Any other railroad in the position or the
Union Pacific at this time could and undoubtedly
would have gone straight at the work Oh con-
struction, putting out It's own bonds secured oJ
mortgage of the new mileage for the COST IL
was Just then in the midst of profitable ana IN
creasng business with promising prospects. only
a little clouded as has been said. by the possible
connection of rival lines for through business.
II was paving dividends and In good credit
natural and orderly proceeding for the company
would have been to build the road openly In lts
own name just any honest unhampered cor
poration might undertake any legitimate enter.
prise paying the cost out Of proceeds or its own
bonds al 5 per cent, issued on the new mileage.
for which a ready market was obtanable at par.
The natural first inquiry is: Why was not this
course pursued? II is OF the questions that
have been constantly arising in connection with
the Union Pacific, which those most Ignorant
about the matter have been always the readiest
n answer The ready answer in this instance
would be that different method was adopted In
order 10 furnish opportunities for the directors
70 make money on the securities OF branch line.
In one Of the exhaustive series OF articles on
the subject with which The New-York World'
in 1ss6-S7 so ably co-operated with Messrs "oer'
lshofrer and Cammack in eevating the standard
OF public virtue and depressing the price OF Stocks
It described this transaction as "one OF the most
scoundrelly acts OF this pratical set"-vigorous
language, but lacking pertinence.
II.
Retween the Union Pacific and It's building or
tbis necessary branch line in straightforward
wav the Government OF the United States stood
with a flaming sword in the form OF an Act o1
Congress forbidding the company from Issuing
new stock or making mortgages or pledges on us
nroperty or future earnings. The prohiplton
was in the form Of rider to an appropriation
hill passed in the closing hours OF Congress on
tho heels of the political panic caused by the
Credit Mobilier disclosures, at time when every
body was turning his pockets inside OUT 70 HaHe
sure that no designing person had stuHed MN
with Credit Mobilier stock without MS kho"'
edge 1t is a standing illustration OF the e''is
of hasty legislation. 1t is difficult TO UNDERSTANDS
the processes, II there were any, by wnich Con-
rass rsachad this result The only reasonable
exnlanation Is that In a sort OF deirium OF panic
over the current imputations upon It's virtue II
struck out wildly like ar: old maid with an UNI
braIla II could not but know, II 1t stopped TO
think for a moment, that branch lines were aoso-
lutely necessary feeders TO the existence OK
all the great railroad systems; that they "ere
necessary to a road running through
an absolutely new and undeveloped country, az
did the Union Pacific; that the payment OF that
large debt TO the Government ae-
pended solely on its being able to build up
business by such means and tnat the
prohibition in the act. If literally ooeyed' wouio
the company and cause the deot 10 De
total loss.
What 10 called the branch line system Of the
Union Pacific has been the subject OF great
deal of misunderstanding and not little mis-
The first thing It suggests to the
mind of a suspicious person is that II offers the
temptation and opportunity to divert business
from the Government aided portion. or so to
regulate rates by constructive mileage allowances
-. A.. -ai,.oa the na. aarnin1s q the main line.