The San Francisco call., 1895-12-03
FORECLOSURE OF MORTGAGES.
Many Reasons and Plans Urged for
Settlement of the Vexed
Proposition.


important subject. The Mississippi
Congress here last week debated resolu-
tions declaring for the immediate foreclose-
ure of the Government mortgages on the
Pacific roads or else reorganization on
such lines as would only allow the rail-
roads reasonable degree of profit.
w. J. Carlson of California presented a
minority report on the latter resolution,
in which he pointed out the utility of the
railroads in the development of the West
and urged that settlement be effected on
the merits of the case.
The resolution was championed by
President Bryan, who had originally in
troduced it. He declared that the Union
Pacific Railroad was the most iniquitous
corporation in this country. 1t had
robbed the people, and even attempted to
intimidate the United States courts.
There was no reason why congress of
Western business men should not go on
record in opposition to this gigantic bur-
den on the people. Mr.. Carlson spoke at
length in favor of the minority report and
after some further discussion and gen.
eraI ventilation of opinions both reports
were referred back to the committee.
Senator Thurston's plan is this: Take a
statement of the Governments claim
against the main line from the Missouri
River to San Jose as it will stand July 1,
1896, and offer the claims as whole for
sale to the highest bidder who will give 40
or so per cent of the principal or interest;
make that the minimum, SO the
Government would get nearly or
quite half of its entire claim; sell
that claim to one purchaser. giving
the purchaser all the rights of the Govern
ment, including its right of entry posses
sion and foreclosure; give to one court of
the United States, presumably of Ne
braska, jurisdiction over suit to forecose
on the entire property and on the fore
closure sale provide that the property
should be sold as whole, the purchasing
committee to be created as corporation
and as such to possess all the corporate
powers that Congress conferred upon the
several lines.
Speaking of this new plan of settlement
Edward Rosewater, editor of the Bee, said:
''Those who insist that the Government
shall make a settlement by which repay
ment of every dollar advanced by it to the
Pacific railroads, as we'll as the unpaid in
terest accrued, shall be secured will object
to any scaling of the Governments
claims. On the other hand, those who
desire to see the water wrung out of the
roads in order that they may be operated
on the basis of actual value will object to
any scheme that would squeeze out only
one-half of the water and leave the other
half in as dead weight upon the patrons
of the road.
"They will insist upon absolute fore
closure and sale to the highest bidder
under restrictions that will prevent future
fictitious capitalization. On that basis alone
can any reasonable assurance be had that
the Pacific roads will regain prosperity
and the region tributary to the great over
land system be relieved from burdensome
exactions to meet fixed charges on
million of million of imaginary capital. I
have held to this view for years. In the
winter of 1887 was summoned before the
United States Pacific Railway Commission
and asked to present my views as to the
best plan of handling the Pacific roads
debt. In all essential particulars my views
are the same to-day where conditions have
not undergone radical change. In refer
ence to liquidating the debt said before
the commission that of course the first
mortgage would be the first thing to liqui-
date.
''I presume the frst-mortgage bondhold-
ers will come in and claim the road or
they would put it on sale. If the road on
that sale does not bring the amount of the
first mortgage the bondholders lose the
difference between that and what they
paid, and the second mortgage is wiped out
altogether and the people are relieved from
paying this money, for it is all the same.
If, on the other hand, the first mortgage is
satisfied I want the Government, which is
going to take this money out of the hands
of the people, to say at once that there is
no further excuse for excessive transporta-
ton tolls.
''I would have the Union Pacific put to
sale. and if it bring more than the first
mortgage bonds, very good. Its debt
would be donated to the people of the whole
United States. Just as soon as tolls are
reduced it will benefit all the people. If
the road were sold and the stock wiped out
entirely and the new management had
railroad for what it is worth in the mar
ket, they would be able to give the people
rates of transportation that would revolu-
tionize Western traffic. Go into the mar
ket and sell the road for what it will bring,
and let it be operated honestly, without
any Government interference whatever"
AFTER THE ROGGS MONEY.