The record-union., 1895-01-28

legislation, roads embraced in the sys-
tem, Indebtedness, assets and earnings.
he report makes no direct recommends
tons, but urges the importance of taking
up the question of the Pacific road in
debtedness in the following terms:
The present practical question of the
Indebtedness of the bond-aided Pacific
railroads is Of vast magnitude and Of the
highest importance. Its solution and set
tement and Il final adjustment of the
relations of the Government with these
roads, looking to the ultimate discharge
of this Indebtedness and the rehabilita-
ton OF the roads, SO that they may SUBJ
serve the purpose for which they were
originally created, is imperatiyely de-
manded, not only by the United States
and the roads themselves, but also by the
communities and people which they
serve with railroad facilities and by the
holders Of valid securities issued or
guaranteed by the railroad companies.
The measure of relief to be provided
ought TO be comprehensive and far-reach-
ing enough TO embrace all these interests.
1t should especially aim 10 preserve the
rights Of the United States in the
premises and to he such as the roads can
live under. Whatever OF partnership re-
lations exist between the United States
and these roads should be terminated i'll
such a manner as shall be to the interests
Of both. In dealing with this subject.
more regard must be had for the present
conditions than for past grievances.
Recollection of the Credit MoDilier and
other unjust manipulatiOnS should not
overbalance the sober business thought
OF to-day or outweigh considerations and
conditions obtaining at the present
time"
After discussing various methods max
ing secure the Government Indebtedness
ti.A | MI iin hn rQn HrTC c.
Another course seems TO have been
left open by the Government under the
six Xth section of the Act Of 1867, which
provided that the grants were made upon
the condition that the company should
pay the ubsidy bonds at maturity. This
Is 4 condition subsequent, and for a
breach OF the same the United States
may, at the maturity of the debt, proceed
to forfeit the charter of the company and
wind up its business through receiver
and take It's chances for Il recovery OF
whatever portion o. the debt II may be
able TO obtain. From what we have said
above we think it sure that the amount
would be very small indeed. 1t Is a
question. however, on the whole, If it
might not be the best thing under the
circumstances to do"
TO this the report adds:
Your comnIttee, however, does not
wish to be understood as recommending
this measure OF relief, but merely sug-
gestS IL as an alternative in case other
remedies believed now to be better should
fail"
Positive ground is taken against the
Governments foreclOsing the liens and
operating the roads. TO this plan they
say there are many grave objections, and
ADDS:
NO considerable number Of citizens of
the United States, certainly not q major
lty, have ever declared for the Govern
ment control OF railroads, and fewer yet
have ever seriously entertained the idea
that the Government should enter the
held OF railrOadlng as the owner and OPP
orator OF but one transcOnunentaI line OF
railroad, and thus come IN competition
with the other transCOntiuental lines as
operated by individuals. BESIDES the
main line of the Mon Pacific and Cen
tral Pacitic-which were entered by Con-
gresS TO make and constitute one trans
continental line-there are now in the
JnIted States four other lines reaching
from the Mississippi River 10 the paGlhc
Ocean, and having their connections with
Eastern trunk lines. We think it clear
beyond question that, as financial in
Vestment, the operation OF the DOnd-aided
Pacific roads by the Government would
be i tlat failure; and we are abundantly
satisfied that on the question of govern
mental policy l. would al present and un-
DER existing circumstances be unwIse,
and would be traught with serious conse-
quences to the repu bile and with results
lar-reaching and the end injurious.
IN case OF the failure OF these plans they
suggest that the only alternative would
seem to be 10 refund the Union Pacific
deUt for a considerable period OF time, at
!. rate OF Interest commensurate with the
earning capacity OF Tue road.
This" says the report, lis the plan
which has the most favor with nuanciers
and those who have given this subject
much attention"
IS 10 the period for which the debt
should be EXTENDED, and with res pect to
the rate OF interest, no special recon-
mandatiou IS made.
That, says the report, will be a matter
for future adjustment, when the details
OF the plan shall be more fully developed.
At present our recommendations viii be
confined generally TO the matter of re-
funding OF the debt 1or such period and
at such rate OF interest as shall enable
the company, under ordinary and busi-
ness conditions, to meet the current Iu-
teresJ and Il portion of the princi pal OF
the debt each year, SO that at the eXpira-
ton of the period tor which the extension
is granted the debt may be wiped out. In
this arrangement two plans have been
suggested:
kIrst-The continuance of the sinking
fund and the payment into it of a larger
sh are OF the net earnings than is at pres
enJ paid into il.
Second-Perlodlcal payments of a fixed
amoHnt into the treasury Of the United
States until the debt Is liguidated.
The committee does not for the present
offer any suggestion as to the relief TO be
afforded the Central Pacific.