The San Francisco call., 1895-10-19


g. Foreclosure aUds threat
ened ,cten the Reilly fund
ing bill was before Congress.
Why, n. your opinion, acas
the threat neUer carried 0utf
| cannot answer this, as l have not now,
and have not had in the last thirty years,
any of the first mortgage bonds.
7. If the first mortgage IS
forecJoSed, qVhat becomes Of
the Government mortgage
I have no answer to this, as L cannot. of
course, know what the Government would
do. My own impression is that it would
be bad oliey for the Government to take
and operate the road, although if it wishes
to do this, I, as an individual, have no OBJ
lection, as we make no money on through
business. and we could make more by dis
tributing the goods that the Government
brought here free than we can make by
running the main overland line ourselves
and if 1t would help California to any con-
siderable extent l would like to have the
Government do it, but do believe that
the bringing of manufactured goods across
the continent for nothing, or at an illegiti-
mate price, so to speak, would harm Cali
fornla more than it would help her, as it
would put stop to nearly ali her manu-
features, since labor is both cheaper and
more plentiful at the East than it is here.
s. If the Government mort
gage falls az the eyeat of the
first mortgage being foreciosed,
,Oould you, speaking for the
railroads, recognise any
moral obligation to pay the
debt, or woufd you stand on
your strict legal rights
If the Government wishes to discuss this
question from moral and equitable stand
point we should be glad to settle on that
basis, but as long as it insists upon it's
strict legal rights certainly should stand
upon the strict legal rights of the COM
pany, believing, as do, that the Govern
ment has made much more money out of
the road than it advanced in Government
bonds, and that the lands which the Gen.
trail Pacific received were not of great value,
as all, or nearly all, of the good lands of
California through which the road runs
were covered by Spanish grants and the
even sections that the Government re-
tanned, in the high, dry parts of the con-
tlnent were worth several times more with
the railroad built through them than the
odd and even sections together were worth
without the road. l believe if the people
OF this country understood all the trouble
and embarrassments and the long hours of
day and night that the writer of this
expended in the creating and building of
the Central Pacific Railroad they would
say that he ought to stand on his legal
rights.
9. Hoac much does the Cen
traI Pacific Railroad owe the
Government ? What is your
own idea Of the debtR
The debt to the Government, I believe,
at the present time amounts, with prnci-
pal and interest, to little over $50 000, ,00O
but the people at the present time know
very little of what the road actually cost
to build. If the company had the money
l should expect it would pay the debt. but
as it has not the money think the Gov
ernment can afford to sacrifice something
when it takes into account the fact that
the road was built-much of it-in war
times, when gold was at heavy premium,
and when many hundreds of thousands of
dollars of that metal were bought at a
large premium, some of it costing as much
as 81 20 in currency for 81 in gold. The
Government wanted the road completed
as soon as it possibly could be, and the
work was accordingly hurried forward
and supplies were bought in large guam
titles, for which the company was re-
quired to pay very high prices.
know that $50, 500 was paid for 16x24 cylin-
der locomotives, with per cent war tax
on top of that, as can be shown by vouchers
at this time. Most of the rails cost $S5a ton
at the mills where made, and some of
them were sent by the Isthmus of Pan
anna at $33 go freight. while the current
rates around Cape Horn were $1S ton
and on some of them Is per cent insur-
ance was paid. The prices of other sup
plies were relatively at the same high
rates. Without speaking for the railroad,
I will say that the less the Government
takes, or the lower interest it receives on
this debt the more possible it will be for
the railroad to give lower rates to the peo-
pie of California, for one thing is very Ger
tain, and that is that the Central Pa
cifc, like all other roads, will
endeavor to make money enough
to pay its current and fixed expenses.
The builders of the road In California have
large amounts of money invested in the
shares of the different companies for many
years. on which, with the exception of
the Central Pacific. they have received no
dividends; but they are willing to wait,
believing that the time will come when
the population of the State will so increase
as to admit of return upon the money,
even at the reduced rates which will be
made possible thereby, for if the business
of the road should be doubled the price
could be reduced probably % per cent, as
the fixed expenses are the main ones and
viii always remain about the same, while
the cost of the actual movement of the
train is very little, requiring only four men
to each train and the necessary oil, waste
and fuel.
DR, ERhKER Is INDIcTFD.