The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1895-02-20
U. p. AND,C. p.
House Committee Gives the Railway
People a Hearing.


| People a Hearing.
Washington, Feb. 19-Several mem
bers OF the House Pacific railroads
committee gave hearing today to the
representatives of the Union and Cen
trail Pacific roads concerning the pro-
position that the government accept
the principal of it's debts in full pay
Messrs. A Boissevain and Victor
MoraWetz, Charles H, Tweed and Sir
Rivers Wilson appeared for the COM
panies. The conference was entirely in
formal.
Mr. Tweed stated that the Central
Pacific people had discussed the plan
since the last meeting of the commit
tee had considered what their borrow
ing power was and had come to the
Quired amount to pay the principal if
they could have the government lien
as security for the. parties from
whom they borrowed. The question was
raised by Chairman Reilly what would
be done under this arrangement with
the first mortgage bonds which fell
due at the same time and if an e1-
tension of them would not be neces-
Sary. Mr.. Tweed said that the COM
pany would be obliged to borrow for
them although it had no interest in
their disposition if the claim was
brought up. Then the status of the
sinking fund was destroyed and COM
nittee members argued that the gov
eminent would not apply it TO its debt
until the first debt was settled. Mr..
Tweed held that the sinking fund be-
longed to the government absolutely
in any event.
In the course of the discussion Mr..
Morawetz declared that the Union Pa
cif1c must be reorganized, that its con-
tinuance under present conditions was
impossible: that it did not ask new
charter from Congress as it could re-
organize under state authority.
Mr.. Reilly said there was a serious
question about it's right to do that.
Chairman Reilly proposed to the
representatives of the companies a
new plan for the settlement of their
debt which is practically a variation
of the Reilly bill. He proposed that in
stead Of raising the first mortgage
debt and extending the government
principal of the government debt
into the treasury; that the in
terest on the government debt
should be extended and the first
mortgage debt be extended un-
der the terms of the Reilly bill, to
be paid in tnstallments through q
period of fifty years with interest at
per cent. The advantage over The
pending bill which this plan presents
IS that the treasury would receive the
amount of the principal of the govern
naent debt instead of the holders Of the
first mortgage bonds being given q set
tiement and the goyernm ent debt
principal and interest being extended
The payment of the principal, Mr.
treasury. while the extension of the
first mortgage bonds would merely be
q good investment by q reissue of the
! first mortgage bonds. This change
could be made without financial COM
Ipication, because the amount of the
/ first mortgage and government mort
gage, (the principaIs) are the same
some S32, 600, 900. The apparent ability
and willingness Of the companies to
| raise the principal of the gov
| eminent debt suggested the feas-
ability Of the change. BY this
plan about $4,000, 1000 in round
numbers, would be paid into the
treasury, the balance of the principa
| being covered by the sinking fund
which amounts to about $4,000, 600
Mr.. Reilly said he could not take the
| responsibility OF recommending ths
plan for the satisfaction of the gov.
ernment claim by paying the principa
ana remlttlng the interest, since Ii in
wolves the REIMBURSEMENT of an i'm
| Hense sum due for interest which
icouid be collected under the Reilly bill