The record-union. [volume] (Sacramento, Calif.) 1891-1903, 1895-10-22
WHAT OUGHT TO BE DoNEs

w hal OOOd4 LIZ 0O@N6t
The question as TO what shall be done
In the way of adjusting the debt due by
the Pacific railroads to the Government
is one of present policy, bearing on
future commercial relations between the
Pacific and Atlantic States. The under
lying consideration will be: What is
best for the country and for the Govern
ment? Whist ia best for the people of
California? will be q question confront
ing Californis Congressman. If an ad-
justment is reached which will work in
jury TO the commercial relations of this
coast, If in complicating transportation
we infict wrong upon the industries OF
the State, the pathetic stories of the profit
which Injured to the builders of the
Central Pacific and Union Pacific roads
will scarcely compensate our people for
the injury.
The coming session of Congress will
have to deal with this question. Inc
problem to be solved is in no respect
different from what it would be If every
man connected with the construction OF
the Union Pacific and Central Pacific
Roads had been forced into bankruptcy.
The story of the profit made out OF the
construction and the speculation concern
ing the facts of that case are thrice
threshed straw. It is beating the air use
lessly to consider the subject from that
standpoint The situation that confronts
the country to-day is that the Pacific rail-
roads owe the Government large
amount OF money; that a first mortgage
lien, permitted to be created by the Gov
eminent itself, stands between the prop
erty which must be depended upon for
the recovery of the second mortgage, by
which the Government claim is secured.
and the property against which the Gov
eminent has recourse. The line consti-
tutes the main artery of commercial com
munication between the Pacific and the
Atlantic States.
Shall the debt due the Government be
extended, and leave the property in the
hands of its present managers
Shall the Government pay off the first
mortgage, amounting to s55,Oo0,oOO, and
take the road and operate it for the bene-
fit of the people of the Pacific Coast?
Shall the Government pay the first
mortgage indebtedness, take possession
of the roads and sell them at auction?
Shall the Government pay off the first
mortgage, take the roads and lease them
to operating companies for term Of
years?
Finally, shall the Government pay the
first mortgage, take possession Of the
road and sell to some railroad company
on long time?
This latter expedientis the exact equiv
aleDt of the first. 1t will be far better for
the country to give the present COM
panies an extension of time than TO either
lease the roads for long term Of years TO
an Eastern railroad organization, or sell
to any railroad corporation in the United
States now formed or to be formed on
long term of years.
The whole subject is net involved in
obscurity. It Is not abstruse or COM
plicated. 1t simply amounts to this:
The Government loaned the Pacific rail-
roads sums of money which have be-
come due and remain unpaid. The
Government permitted the railroad COM
panies constructing these lines to issue
first mortgage bonds having priority of
claim against the property, The amount
Of the first mortgage Indebtedness is
equal to the value of the property. Shall
the Government try to recover what is
due by policy of compromise or extern
sion, or shall it buy, pay the first mort
gage and then attempt to get the addi-
tional amount of $50. 900. 900, by selling or
leasing the road on long time; or the al
ternats of this proposition, operate the
road as q great political partisan ma
chine?
The members Of Congress from Califor-
mia will have an opportunity to display
the wisdom Of statesmen or the con-
temptible weakness Of demagogues in
handling this question.