The record-union., 1895-12-07
THE ISSUE CLEARLY DEFINED.

THE ISSUE CLEARLY DEFINED.
The dispatches of yesterday inform
the country that Mr. Huntington has
gone to Washington, and with that
openness and manliness which are
characteristic of what he does, has de-
olared without indirection or conceal
ment that he will promote the passage
of a bill for an extension of the time of
amount which may be found due by
reason of the credit extended to the
Central Pacific at the time of its con-
struction.
The dispatches indicate that Mr..
Huntington will ask for forty-four
years extension. What Mr.. Hunting
ton proposes is that the Central Pa
cffc Railroad Company viii pay to the
Government what it borrowed. On the
face of it, this is a very honest propo-
sition. In principle it is right, and the
only question remaining to be consid-
cred is one of expediency.
There is a first mortgage on the Cen
trail Pacific of S2S, ,O00.O 600. The Govern
ments lien is subordinate TO this
first mortgage, and unless the
Central Pacific can now pay. the
property viii be subject to sale un-
der proceedings of foreclosure. The
Government, therefore, has its choice
between purchasing the first mortgage
bonds or discharging this first mort
gage and thereby consolidating the two
loans, the first mortgage loan and the
loan made by the Government, or ar
ranging with its debtors for an exten-
sion of time
Substracting what may be found in
the sinking fund accumulated to dis
charge the first mortgage, there would
remain standing against the Central
Pacific from 100000 to $4,000, 600,
or, to state this in another form, the
aggregate amount of the first and sec
ond mortgages is from S75,000000 to
$4,000, 600. It requires no special in
formation of a technical character to
form the conclusion that S75000,000
will parallel every mile of the aided
line of the Central Pacific and leave
S30,000,000 or S40,000,00O as profit
on the transaction.
Here is a property worth about half
the face value of the first and second
mortgage liens, and necessarily under
these circumstances the first mortgage
will take it, unless that first mortgage
is discharged by the holder of the sec
ond. and in this instance the holder of
the second mortgage has no incentive
whatever to discharge the first lien.
Ihe owner or holder of the equity of
redemption comes forward to say that
II he is given time he viii pay the sec
ond mortgage. From a purely busi-
ness standpoint, it should occasion no
little surprise that this proposition
should meet with objection in any
quarter If Mr. Huntington is willing
to pay in forty-four annual INSTALL
ments what the Central Pacific Rail-
road Company owes to the Government,
and interest on the deferred payments,
it is strictly in accordance with the
dictates of common sense and common
business prudence to accept the prop
osition.
Mr.. Thurston of Nebraska has an
other proposition. 1t is to settle the
Governments claim for forty cents on
the dollar; that is. to confess bank
ruptcy and settle up with the creditors,
scaling down the debt
We have so far, then, two PROPOSE
tions: one to pay at such time and at
such rate of interest as the debtor can
afford; the other. to take proceedings in
bankruptcy and give away 60 or 20 per
cent of the debt. The creditor who
will give away 60 per cent of the credit
obligation in preference to extending
the time for its payment would scarcely
be credited with ordinary business acu-
men. To give away 60 per cent in
preference to taking the chances of
being eventually paid in full, would be
the equivalent of business idiocy.
So far, then, we have two PROPOSE
tions: one to extend the time for pay
ment, to receive from the debtor annual