The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1895-10-20
UNION PACIFIC.
Synopsis of the Report of the Gov
crnment Directors.

Synopsis of the Report of the Cow
crnment Directors.
NEW YORK, Oct ia special to
the World from Washington says: The
report of the government directors of
the Union Pacific Railroad company
has been in the hands of the secretary
of the interior for the past three days
and it is understood that it will be
! made public today. Its recommended
tons will act as a cold bath to the
! plan of reorganization proposed by the
| reorganization committee. That plan
seems to have been constituted prac-
| tically without regard to the govern
ment debt while the report of the gov
| eminent directors proposes a plan
whereby the government may be per-
sonally sure of the payment of large
! percentage, if not all, of the debt due
| it by not only the Union Pacific, but
by the Central Pacific.
The basic proposition which the re-
| port has made. is the consolidation of
the Union Pacific and the Central Pa
| cifc railroads into a single trunk line
! extending from Omaha to San Jose
| Cal, thus connecting the Pacific coast
! with one of the principal railway CEN
ters of the trans-NIississippi country
! by the shortest line in existence and
with ample terminal facilities at each
! end. Under existing conditions the var
| ious feeders of the Union Pacific will
! be Topped away from the parent sys-
| tenn by foreclosure proceedings on the
! part of their respective bondholderS
| and save for the protection which the
! interstate commerce and various state
railroad commission acts may afford,
! the new trunk line would be placed at
a disadvantage in securing the bust
/ i 4,,,., liz n
| from the lines in question. But as a
trunk line it is pointed out that it
would have vast advantages over any
! of the other Pacific railroads on ac-
count of its shortness and from other
natural sources. 1t is held that the
lease of the Central Pacific by the
| Southern Pacific can be broken and
set aside This done, the way will be
| clear for the plan of reorganization
with the two roads treated as one. 1t
is shown that even in the year of the
panic the net earnings were about
81. 900, sufficient to pay per cent
on 500 000, 900 of bonds, and leaving
So. 800 600 for distribution among the
shareholders. If this showing can be
made with the Central Pacific worked
solely for the profit of the Southern
Pacific and the Union Pacific conse-
uuently starved by deprivation of its
rightful source of income, it is argued
that with the two roads worked in
! harmony the enormous traffic that
would Immediately pass over them
would at once increase their earnings
to figures equal to. if not in excess, of
those of their most prosperous days.
1t is pointed out that under the pro
posed consolidation the interest Of the
eastern trunk lines centerinS at
Omaha will be at once gained, and 1t
is suggested that if an open proposition
were made by the government to lease
or sell the combined system to that
! trunk line or combination of capitalists
which would pay to the government
the largest amount on the combined in
deb&edness of the two roads above a
minimum fixed at, as is suggested go
! 900, 600. there would be strong competl-
ton to secure control
This plan, as outlined by the gov
eminent directors. has been pronounced
feasible by high officials of, the Union
Pacific In California. especially, has
the project been strongly indorsed
within the narrow circle of those to
whom it could be submitted in confl-
dence prior to the publication OF the
report.
one of the government directors tc
carry out the object sought and will
| be submitted to the secretary of the
| interior and the secretary of the
treasury, and the attorney general foI
approval If favored by them 1t viii
| be introduced early in the coming SEES
sion of Congress.
The board says that the fixing of the
minimum price of the roads would be
attended with some difficulty, but
free negotiation with all competitors
DESTROYS of bidding would soon de-
velop the limits of price to be OBJ
tanned They believe that such a
scheme would realize a better return
to the United States than could be
reached through any funding bill or
extension of the present Indebtedness.
Portions Of the government debt of
both roads will mature early in 1896.
The board thus sums up the sltua-
ton of the roads:
! Standing to the credit of the Central
Pacific and Union Pacific in its sink
| ing funds October 1, 1895, S21 .3S9, 095: in
sinking fund to the credit of the trus-
tees of the Central Pacific mortgages
lien, which is prior to the lien of
port of 1894 S. 1876, ga; amount of
prior bonds TO the Union Pacific Rail-
way company and Central Pacific Rail
way company exclusively of the Kan
sas Pacific railway. S55.S47 900; amount
required to complete payment Of the
! Omaha Bridge bonds, $4,000 600.
The cash balance in the hands of the
Union Pacific receivers payable to
Union Pacific property probably will
! be approximately sufficient to meet
the arrears of interest acoruing on Its
! prior bonds.
The Interest on the Central Pacific
prior bonds IS paid up to date The
board says that therefore the entire
gross amount of the prior liens on
the Union Pacific and Central Pacific.
exclusive of the Kansas Pacific, less
| the amounts stated held in the sinking
funds, will be $50, 961 $50. The amount
which may be required to discharge
or purchase the prior liens is liable
to be increased if the above men
toned sums in the sinking funds Of