The morning call., 1895-01-18


Carlisle to decide a big question. The
principal of the first series of Central Pa
ci6c bonds. which amounts to 1882, 600,
matured yesterday, and are now being pald
as fast as presented. The principal and in
terest for thirty years amounts TO nearly
81 GOO 600. Some time ago Secretary Car
Isle issued a notice to bondholders that
these bonds would be redeemed on and
after January Is, when they would mature
and the interest cease. The Treasury De-
nartment commenced redeeming them
Yesterday, and so far has paid out some
thing over $500, 900. The bonds are IN the
hands of about 200 corporations and indi-
viduals As interest ceased yesterday, it is
thought by the Treasury Department that
all of the bonds of this series will have
been redeemed by the end of the month.
Although a sinking fund was provided by
the Thurman act, and now amounts to
almost 81 ,000, coo, the Government officials
have determined not to touch this fund,
but have been issuing warrants out of the
general treasury to the bondholders.
There is a question raised now as to
whether the Government can indemnify
itself out of this sinking fund, and the
opinion by Secretary Carlisle. The railroad
company has counter claim against the
Government for the transportation OF sol
diers, military and Indian supplies, and
this claim amounts to millions of dollars,
almost as much as the sinking fund now in
the treasury. The next Central Pacific
bonds fall due in February, 1896, and the
next ones in February, 1897.
The redemption of the first series of
bonds will probably have no effect upon
the fate of the funding bill or any Pacific
railroad bill. However, if the House gets
into tangle and is unable to decide in the
two days allotted what it viii do with the
Pacific roads, it may urge that there is no
hurry, as there is yet one year before de-
fault or foreclosure can be made.
If Attorney-General Olney should give a
decision Immediately to the effect that the
Government may recoup itself out of the
sinking fund for money paid in redee ming
this first series of bonds, of course there could
be no default or foreclosure at this time,
and the attempt of the Californians to pass
foreclosure bill would be defeated.
There is considerable speculation among
Californians as to what Olney's decision
viii be. He seems always ready to favor
Mr.. Huntington, but the question is what
would Huntington prefer? Would he
like to have his claim for hauling soldiers
and Government supplies made an Offset
so that the sinking fund can't be used by
the Government on account OF the bonds,
in which case he would have to put up the
money to pay the Government for the first
series of bonds with interest to save a de-
fault, and possible foreclosure.
Mr.. Bowers of California is one of the
few who believe that Huntington would
like nothing better than that the Govern
ment should foreclose on the Central
Pacific.
'eWhy should he?" asked the CALL cor
respondent.
Because" said Bowers, "the Central
Pacific is no good. 1t is dead weight on
his hands and don't pay expenses. If the
| Government should cancel the first mort
gage by paying the bondholders $40, 000,0 600
you can bet Huntington would manage it
so that he would get some of that money"
The other Californians do not share this
view. They believe that although Hunt
ington is practically allowing the Union
Pacific to make this fight for the funding
BILL to all appearances, he is really
anxious to get 100 years extension, or fifty
years if the first is impossible. The idea
that Huntington would give up the Central
Pacific and allow it to compete with the
Southern Pacific is considered by them an
absurdity.
Thus far the Central Pacific has not paid
in any money on account of the maturity
of the first series of bonds, and until the
Attorney General makes his decision will
do nothing. If Olney decides that the
sinking fund can be used to recoup the
Government of course the railroad will not
have to pay anything at this time and
there could be no foreclosure. If Olney
decides that the sinking fund cannot be so
used because of the railroad S Offset claim
for hauling Government supplies, then of
course Huntington will have to put up the
cash to prevent foreclosure. In any event
it is safe to say that Mr.. Olney's decision,
whatever it may be, Will suit Huntington.
Representative Caminetti said tonight:
'tOf course the Government can use the
sinking fund to recoup itself, for that was
the intent and purpose of the Thurman
act Huntington's claim for hauling Gov
eminent troops and supplies can cut no
figure whatever in this case, and the treas
ury should proceed to indemnify itself out
of the sinking fund without consulting Mr..
Olney."