New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-01-29
(, UNION PACIFIC DEBT.
tfrs REFUNDING RECOMMENDED TO THE
SENATE.


REPORT OF THE COMMITTED APPOINTED TO IN
r.- vEsrIGArE THE CONDITION OF THE ROAD.
Washington Jan es-Mr Brice from the Senate
Committee on Pacific Railroads. to-day submitted
an important report upon the roads or mat system
in which the refunding OF the DEBT OF ,he Chioh
Pacific is recommended. This report Is IN reply
TO a resolution passed by the Senate on october
IL. 1893
After deliberately setting forth the present con-
d,ion Of the road. the appointment OF receivers
and reviewing the legislation concerning the ROAD
from the time the original act was passed "ie
; committee discusses at great length the measures
OF relief. or az stated In the report. what acuoh
ought the United States to take IN the premises In
order to subscrve the interests of all parties con
ccrned and or secure tho Pachc i'a"""F
debt" The committee opposes the absolute lore
closure and sale OF the property for the reason
that 1.-THE net result of such a policy would De the
extinction of the Government debt. with iitue OF
no recompense beyond the amount now IN the sinh-
ing fund; virtual sacrifice or say Soo"V'VV'
Should the United States conclude. Instead 10 pay
of the first mortgage bonds underlying It's OWL
subsidy bonds. so as TO give 1t hrs' mortgage OH
the lines OF the Union Pacific, the nrst quesho"
that suggests itself Is that Of the cost The oohus
necessary TO be lifted are follows. In round num-
bers: First mortgage $3o5Oo.0oO: SUBSIDY sS'oVo'VW'
excess OF interest approximately. >zo""'VV' man
ing total OF $50 100000. or an average cost OF s'-
Csc per mile on 1852 miles Of road. These hgures
apply only to the subsidized portions or the ROAD
without the terminals. and the committee. quoting
the language of the Commissioner or RAILROADS IN
his 1892 report. says ut would not seem 10 DC
p. desirable for the Government to acquire railroad
properties at these figures" To become possessed
OF first mortgage on the entire line from Counch
Bluffs 10 the function with the Central Pacific. the
branch lines and the expensive terminal facilit'es
in the various cities would the committee says IN
volve an outlay OF $isO0oo.ooo The road could not
be sold for enough to satisfy the debt secured by
such a mortgage. Continuing the subject OF re-
medal legislation. the report says
Another course seems to have been left open
by the Government under the sixth section of the
made upon the condition that the company should
pay the subsidy bonds at maturity This is IS con-
the United States may. at the maturity Of the debt
proceed to forfeit the charter OF the and
take its chances for recovery Of whatever portion
Sr e the have Sen said % above Dc
amount would be small indeed 1t Is aue e on
best thing. under the circumstances, to do Il
might leave large number OF junior secnt
snd Wpe out the Government debt without the
Of portion sTsa Of deal he Of oss
who have honestly and IN good ah tsa th the
road was practically backed by the Government
yet on the whole, by reorganization OF ihe Sys
w,ho Sn nSrey in its Securities road
would be more easily put upon pay hene to a the
wSa III sse WITCH sneh e you'd
meet its necessities Ii would not heeu 10 , eain
nearly so much II does now on It's present pasl'
Of CAPITA zation and debt. and the rates OF passen
ger and freight traffic could be mus na'eriah'
reduced -, -. ,.;sh % ha
Your committee, however does not wish 70 BE De
Understood as recommending this measure OF re-
ef but merely suggests it as an alterIauNe III
case other remedies believed now 10 De pe''ei
should fall.
In concluding this part Of its report the co'
mittee says IT Is clear beyond question that as
financial investment the operation OF Inc po'u-
aided Pacific roads by the Government would De
q Hat failure The report then proceeds:
II the adoption OF none OF the plans we nave us
cusstd would for the interest or the IoVeihiles
or the communities and people who are 70 De selNed9
with railroad facilities by this system oil roaus a
ma other 'comprehen.va scheme based on good busl-
- sense and sagacity be presented. the only a'ei
native would seem to be to fund the Union ldc.c
debt for a considerable period OF time al ray
OF Interest commensurate with the earning caPaes
esSf The road This is the plan which mas fouho mus
with fnanciers and those who nave gwen 's
subject much attention.
The continuance of the sinking fund and the pay
ment, into IL OF a larger share of, the net earnings
than are at present paid into 1t are OBJECTED TO-
The sinking fund and It's management unoer 'he
statute the committee characteriZes as clumsy
niece Of machinery. unsuted to the business II was
attended 10 perform. The committee says N Would
he more beneficial and more in ACCORD Win pu
ne.s principles TO provide for periodical payments
81 Axed amount into the United states treasury
until the debt was liqudated. 49,, c.o,
That part of the report relating 70 ihe "a
Pacific states the condition OF the road ony' tne
mittee making recommendation Oh any s"'N