The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1894-02-07
To RroRGANlzE CENTRAL PACIFIC.
Huntington submits . Plan so the Senate
knttroAd Cfmnaitt~~.


WASHINGTON CRY, Feb. "a rlan for
reorganization of the Central Pacific. as
outlined in the senate committee on
Pacific railroads today by {. =. Hunting
ton. looks 20 refunding the indebtedness
OF that company and issue of bonds the
payment o; which is to be guaranteed by
the government of the United States.
Huntington submitted the proposition in
the shape Of bill TO be introduced
In congress. and also made statement in
explanation OF the proposition. The bill
is very elaborate one. In brief II pro-
vides for the issuance of bonds Of Si,oea
each. amounting to $i54. .ooo. .ooo, to bear ~
per cent. interest and run rs years or less
time. at the option OF the COM
pany, payment of the principal and
interest of the bonds to be approved and
guaranteed by the government on condi-
ton that the railroad company snail
mortgage lis entire property. including its
interest in branch or auxiliary lines TO tho
government as we'll rs the present lease to-
the Southern Pacific Railroad Company.
which mortgage is to bs held as security
for payment of the bonds guaran-
teed by the government IL is stipa-
lated. however, that the mortgage
any prior liens and is not 10 be construed
so as 10 prevent the railroad company
from disposing of any of its assets or To
prevent the company from using the pro-
cceds from the lease TO the Southern Pa
cibc company for payment of dividends .c
the stockholders. The company Is aiss--
grant lands for satisfaction of prior
Mfs IA ts.r
issuing PISS, 900 Of bonds. which
shall be given dollar for dollar in
exchange for first mortgage honda Of the
Central Pacific or Western Pacific COM
panies, and 10 which the lien Of the United
States issued TO those companies IL ex-
pressiy subordinatsd. The bonds received
bill are t6 be held az collateral security
in tho treasury. the old bonds to bs
designated ~ United States subsidy
bonds and when they mature the secss-
tary OF the treasury shail cover into the
treasury m amount of new bonds equal to
the maturing bonds. similar honds to he
issued TO the amount OF $36, ,0o0. 600 in az
change for the bonds of the California e
Oregon railway aud Southern Pacific rail-
way and disposed Of in the same manner
as above stated. The old bonds shall bs
cancelled unless the Central Pacific
should desire 10 keep them alive
for the security of the new
bonds and the secretary should assent
TO so doing. The old bonds which are de-
posted and the coupons shall not be re-
quired 20 be paid unless under decree Of
foreclosure OF the mortgage securing
them, but such decree shall not he issued
unless in default of payment OF interest
on bonds of this act continuing six
months. Provision 10 made for redcmp-
tion of the bonds. commencing July !, 1895.
by depositing for cancellation 81. 5000
and continuing at this rate for twenty-five
years. For twenty-five years after July |.
1870, 1915 coo in bonds shall be annually
presented for cancellation; for twenty
five years after July l. 1915. s5o2.coo shall
be Cancelled yearly; for twenty-five years,
beginning in 1870. $685.. 900 per annum. and
for twenty Ave years. beginning In 1895, oue-
twenty-fifth of the bonds outstanding shalt
be cancelled yearly. One section Of tho bill
provides that as long as any Of the bonds
OF this act remain outstanding no divi-
dend shall he paid by the company unless
the company has earned such dividends
over all interest and matured indebt-
edness. When dividend ia excess OF
4 per cent. Is paid an equal amount
above 4 per cent. shall be applied 20 the
purchase aud cancellation of bonds hald
in the treasury. The act shall take effect
upon the acceptance OF its terms by the
board of directors. The president ~
authorized to direct the sale OF the
old bonds held IN the treasury. The
bonds issued under this bill may be de-
posted as basis of circulating notes.
The bill provides for the repeal of laws
withholding money from the Pacific roads
and their branches; also laws forblddtng
the companies TO mortgage property and
allowing them TO borrow money. IL 10
made the duty of the attorney general to
enforce the act.