The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1894-04-27

stantly requires fresh capital for the
+ new construction. Consequently, the
general mortgage bonds may be used
for improvements with the consent OF
two-thirds of the directors.
/ Fifth-The power or using general
mortgage bonds and stock for refunding
is limited so the annual charges, sink
ling fund requirements Of bonds held
by the United States, and guaranteed
rentals of the company after all bonds
are issued shall not exceed $500, COO
This limitation, by cutting down the
$4,000 600, seems to make it reasonably
certain that after the reorganization,
the company can hardly fail to operate
its roads successfully and to meet all
legal requirements upon it's revenues.
! SiXth-The existing sinking fund of
the United States is utilized by the
cancellation of such parts as consist Of
existing first mortgage bonds and by
placing the balance of it with the sec
rotary of the treasury as additional Sc
curity for the new bonds accepted by
the United States.
Not Yet Formulated.
Seventh-A plan of reorganization has
not yet been formulated; therefore, but
little progress can be made with such
a plan until the requirements of the
government are clearly ascertained. 1t
has been claimed the government
should content itself with prescribing
what it will accept in payment Of its
debt, and leave all the other terms of
a reorganiza ton to be settled by the
directors and stockholders interested. 1t
would be grossly improvident for the
United States to assent to plan which
was not known in advance, and which
was not aScertained to be such that
under it the reorganization committee
may be expected to permanently oper-
and public obliga tons. A plan Of that
character would simply bring the gov
eminent only a short time face 10 face
with the demands that now confront it.
The government ought not to consent
to a scheme which it does not know
to be framed on principles of justice to
all parties. While permitting the pri-
vate interests involved all possible I'll
tude, the proposed bill puts limitations
which are simply what sound policy
and justice require.
Thus fixed charges after reorganiza-
ton by fixing an amount which in the
charges, guaranteed rentals, ETC., shall
not exceed. So the entire scheme of
reorganization must be satisfactory
and receive the cooperation of the law
officers Of the government and the bill
also provides in terms that the plan of
reorganization shall confer the same
conditions upon all members of each
class without discrimination or pref
erence.
Eighth-It being highly improbable
that differences should not arise re-
specting the rights of parties under
the plan of reorganization, the bill pro-
vides forum by which they shall be
adjusted. The forum suggested is the
court of appeals of the District of
Columbia. 1t may be suggested that
under a plan of reorganization is
agreed to on behalf of the private in
terests, Congress should remain pas
sive. Until the requirements of the
United States are first authoritatively
defined, however, the private parties
are without ground work upon which
a reorganization plan must rest.
Conditions to he Dealt With.
The bill will furnish that ground
will put creditors and stockholders in
possession of the exact conditions they
have to deal with, and enable them to
agree upon plan of reorganization
How largely the United States in it's
creditor capacity is interested in the
success of such a plan, has, perhaps
been already sufficiently urged. But it
may not improperly be urged that
much more is involved than the exact
price to be collected on the public debt.
Congress started the Union Pacific
Railway company to promote great
public ends and to secure great public
advantages and granted it lands and
subsidies on the express condition that
it should transmit its dispatches,
mails, troops and munitions of
war, supplies and public stores
for the government. Unless the
objects have ceased to be of value, or
that a corporation like the Union Pa
csific Railway company is not needed
for their accomplishment, the rehabili-
tation of that company or the substitu-
ton of another with like franchises
and subject to the like duties is imper-
atively demanded on the broad ground
of the general welfare. It is of import
ance to the public and Of immense mo-
ment to the people of the states and
territories traversed by the road that
the existing receivership should
give place to the management Of a SOL
vent and strong corporation as soon as
practicable. In the hands of the re-
ceivers the road is comparatively inert
property, simply a mass of assets to
be kept intact, if possible, for the ulti-
mate distribution among creditors. 1t
will again become live property, be a
principal factor in the growth and
prosperity of the many communities
served by it only when the control of
the courts, which can no more than
preserve the existing status, is super
seeded by the control of owners who
can deal with it on the principles ap-
plicable to all business enterprises
am authorized to say the special
counsel of the United States in Union
Pacific matters, the Hon. George Hoad-
ley, OF New York, of whose valuable
aid and cooperation in the preparation
OF the proposed bill have freely avail
ed myself, entirely agrees in the ex-
pediency of such legislation and in the
views expressed in this report
There is much satisfaction in con-
gressional circles over the prospect of a
settlement of the Union Pacific debt.
Acknowledgement Olney's plan of settle
ment is to be presented to the House
committee on Pacific railroads tomor-
row, and will be presented to the House
next Tuesday. In the meantime, re-
ports come from Boston, where the
annual meeting of the Union Pacific
was held yesterday, that the govern
ment and the road have reached an
agreement.
SimpIifies Matters.
Chairman Reilly. of the Pacific roads
committee, said the agreement, If it
had been reached. would greatly
simplify the question 1t would still
be necessary to have Congress approve
it, yet it overcame the difficulty of
disa greement between the parties most
interested.
The agreement as reported from Bos-
ton is for a refunding of the big debt.
Mr.. Reilly says this is the plan in favor
in the committee and generally pre-
ferred in previous Congress. The most
significant feature of the agreement is
that it disposes of the plan for fore
closing the government debt and TAX
ing possession of the Union Pacific
road.
SOUTHERN PACIFIC TRAFFIC.