The record-union. [volume] (Sacramento, Calif.) 1891-1903, 1895-02-22
PACIFIC RAILROAD DEBTS.
New Measure to Be Reported to
the House of Representatives.
BASED UPON THE REILLY BILL, WITH
SOME CHANGES
The Principal of the Government Debt
to Be Paid at Once, and the First
Mortgage Bonds and Interest Upon
Government Bonds to Be Extended
and Paid In Installments Through
a Period of Fifty Years.
Special to the RECoRD-UNION.

Special to the REcoRD-UNIoN.
WASHINGTON, Feb. 21.-The House
Committee on Pacific Roads to-day de-
cided to report new bill based on the
Reilly bill. but having certain changes
recommended by Chairman Reilly. The
amended bill will provide that the prin-
cipal of the Government debt shall be
paid at once and the first mortgage bonds
and interest paid upon the bonds by the
Government, and due the Government at
the date the bill takes effect, be extended
and paid in installments through period
of fifty years. The extended first mort
gage bonds will bear interest at per
cent.
The extended interest will be secured
by practically third lien on the prop
erty, subsidiary to the claims of the par
ties who advance the funds TO pay the
principal OF the Government bonds, and
who will be entitled under the bill TO .
per cent. interest on advances.
The committee voted not to make the
new bill public until it could be printed.
An outline is as follows:
Section provides that if either the
Union Pacific, the Central Pacific, or the
central branch OF the Union Pacific shall,
within twelve months, pay TO the United
States an amount equal to the principa OF
the subscriptions OF the United States, the
Secretary OF the Treasury shall convey to
! the company or its trustees so much OF
the Indebtedness of the company to the
United States as will be equal to the sum
paid TO the United States, together with
the lien and mortgage of the L nited States
on the railroad, so lar as 1t shall be re-
quired to secure to the assignee the pay
ment from the portion or the indebted
a
TO the United States in any event, and all
the moneys and securities IN the sinking
fund shall be delivered to the company
or trustees, providing the Indebtedness
so assigned shall be extended not more
than fifty years, at a rate of interest not
exceeding per cent. The balance Of the
Indebtedness to the United States, being
the interest due to the date OF the pay
ment OF the principal, shall be extended
for fifty years and paid in semi-anuual
installments, and for it the com panies
shall issue the bonds to the Government.
Each may issue to the purchasers of such
claims its negotiable bonds, payable in
fifteen years at interest at per cent, that
is the purchasers OF the principal of the
Government debt.
Section ) provides that the Government
lien shall remain in full effect, but en-
forcible as security for the payment of
Indebtedness due the United States.
the first mortgage bonds by renewing
them by new issue to run fifty years,
with interest at a rate not exceeding 4
per cent, and secured by the first mort
gage, the same as are the bonds they are
! issued in renewal OF.
Section q prOhi bits the companies from
! paying dividends SO long as the bonds
| authorized by the Act are outstanding
/ unless they shall have been actu ally
earned, or the company has paid all its
! obligations to date under the bill, or un-
| less the earnings, alter deductlng all in
| terests accrued, but not payable at the
time of the declaration of the dividends,
warrant it; and no dividends over per
cent. are to be paid unless an equal
amount Of excess of 4 per cent. is paid
| upon the principal of the Government
| debt. The companies are to cooperate
in making track connections with all
roads that join them, and 10 exchange
traffic on equal shares, and devices to
evade this shall be unlawful.
Section provides that the companies.
when required in writing by the Depart
ment of Justice, shall institute suits at
law or equity against any parties for mis-
appropriation OF assets, the suits to be
conducted by the Attorney q eneral in
the name of the companies and the sums
recovered to be applied to the payment of
bonds and any excess TO he paid to the
! companies.
The remaining sections provide for fore
closure by the Government in case Of de-
| fault, under the terms of the Reilly bill.
The bill met with greater favor in COM
mittee than its predecessor.
The minority members say they will
contend in their report that the outcome OF
the plan, if adopted, Will be the contiuu-
ance of the Union Pacific under it's pres
ent management, and that the Central
Paciilc will come into the hands of the
Government, a practically worthless
property, because it will be without
terminal facilities.