The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1895-02-22
REILLY'S FUNDING
BILL REVISED.
AGREED UPON BY A MAJORITY OF
THE PACIFIC ROADS
COMMITTEE.
EXTENSION OF INTERESTS.
MINORITY MEMBERS SAY THE
SCHEME WILL RUIN CENTRAL
PACIFIC EARNINGS.

WASHINGTON, Feb. 21.-The House Com
mittee on Pacific Roads to-day decided to
report new bill based on the Reilly bill,
but having certain changes recommended
by Chairman Reilly. The amended bill
will provide that the principal of the Gov
eminent 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 eff
feet be extended and paid in installments
through period of fifty years. The ex-
tended first mortgage bonds will bear in
terest at per cent.
The extended interest will be secured by
practically third lien on the property,
subsidiary to the claims of the parties 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 principal 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
United States on the railroad, so
far as it shall be required to secure to
the assignee the payment of the portion of
the Indebtedness to be assigned, "but with
out recourse to the United States in any
event" and all moneys and securities in
the sinking fund shall be delivered to the
company or trustees, providing the indebt-
edness 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 payment of the principal, shall
be extended for fifty years and paid in
semi-annual installments, and for 1t the
companies shall issue bonds to the Gov
eminent. Such company may issue to the
purchasers of such claims its negotiable
bonds, payable in fifteen years at interest
at 5 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 enforce
able as security for the payment of the
Indebtedness due the United States.
Section provides for the payment of the
first mortgage bonds by renewing them by
a new issue, to run fifty years, with interest
at a rate not exceeding 4 per cent, and Sc
sured by the first mortgage, the same as
are the bonds they are issued in renewal of.
Section 6 prohibits the companies from
paying dividends so long as the bonds
authorized by the act are outstanding, IN
less they shall have been actually earned,
or the company has paid all its obligations
to date under the bill, or unless the earn
ings after deducting all interests accrued,
but not payable at the time of the declara-
ton of the dividends, warrant it. And no
dividends over 4 per cent are to be paid
unless an equal amount of excess of per
cent is paid upon the principal of the Gov
eminent debt. The companies are to CO.
operate in making track connections with
all roads that join them, and to 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 misappro-
priation OF assets, the suits to be conducted
by the Acknowledgement in the name of
the companies, and sums recovered are to
be applied to the payment of bonds, and
any excess is to be paid to the companies.
The remaining sections, which provide
for foreclosure by the Government in case
OF default under the terms of the Reilly
bill, met with greater favor in the commit
tee than their predecessor. The minority
members say they will contend in their re-
port that the outcome of the plan, if
adopted, will be the continuance of the
Union Pacific under its present manage
ment and that the Central Pacific will
come into the hands of the Government
practically worthless property, because it
will be without terminal facilities.
Objection was made in the committee to
the wording of the section of the bill which
stipulated the Union Pacific 'or' the Cen
trail Pacific could accept its terms, and the
word was amended to land"
Representative Harris of the min oritv
has in contemplation a bill somewhat in
line with the present plan. which will
authorize the payment of the principal of
the Government debt, apply the sinking
fund to the first-mortgage debt and con-
solidate the remainder of the first bonds to
secure their payment.
Chairman Reilly talked to-day with
Speaker Crisp about day for the commit
tee and the Speaker expressed a willing
ness to grant another day if the committee
felt assured the new bill had chance of
adoption. The opponents of the bill may
make their fight against the rule for con-
alteration if one is presented.
CALIFORNIANS OPPOSE 1T.
There Is a Joker SOnietchere in ReiUy's
NetU Bill.