The record-union., 1895-02-28
PACIFIC RAILWAY DEBT.
Joseph Nimmo, Jr., on the Equities
of the Case.
The Great statistician Writes of the
Original Roads and the COMPETE
ton of Their Rivals - Benefits to
the Country and the Pacific Slope.

the Country and the Pacific slope.
Joseph Nimmo, Jr., the great statlstlclan,
whose reputation for accuracy and integ-
rity have never been questioned, wrote
the following letter to the New York
Tribune, which was published in that
paper on February 18th:
Within the memory of living men the
country has had two opposite exhibitions
OF public sentiment run mad on the rail-
road question. The first of these manlas
manifested itself in general railroad laws
whereby impecunious railroad promoters
were able to secure franchises Of enor-
NOUS value, in reckless public indorse-
ment of and subscriptions to even the
widest railroad schemes, and in the re-
mission of all wholesome restraints upon
the powers of railroad corporations. On
the very heels of this mania in favor of
railroad extension at any cost came a
more senseless and much more harmful
mania. which has expressed itself in OPP
position to railroad management gener-
ally, and which seems to proceed upon
the idea that a railroad company is in
some sort per Sc a public enemy. This
sentiment has been developed as politi-
cal issue on the Pacific Coast, aud partie-
ularly in California. The craze has even
reached the point where the people of
that State demand that the United States
Government shall purchase, and that the
people on the Eastern side of the CONT
nent shall be responsible for the cost of
operating the Union Pacific and Central
Pacific Railroads for the benefit of the
people of California. This proposition
bears upon its face that peculiar eX-
preston Of generosity and patriotism
which led Artemus Ward to be willing to
altar OF his country.
The most serious obstacle, however, to
he present settlement of the Pacific rail-
:oad question appears 10 arise from the
!act that 1t has been so long the stalking
horse of political demagogues whose
greatest tribulation now arises from a
fear that the question may be settled. At
this day 1t is folly for Congress to con-
slider longer the possible mistakes of the
dead past. Its duty is 10 view the whole
question in it's more salient equities, and
TO make the best practical settlement of
the business now practicable.
The subvention granted TO the Union
Pacific and Central Pacific Railroads con-
sisted of grant of the public credit to
the extent of S64, 623, 512-the principal Of
the present deDt-and land grant. The
value OF this grant was greatly reduced
by the fact that the more valuable lands
in California had been already covered
by prior Spanish claims. Again, the al
ternate sections retained by the Govern
ment were advanced in value many times
their original value as a result of the con-
structlon OF the railroad, the balance of
advantage thus falling largely on the side
OF the Government.
Besides, the land grant was not an
available asset during the construction of
tke roaq. The money subsidy having
fallen fer short Of the amount needed for
the construction of the road, the Govern
nent realized the necessity of subordi-
mating it's loan to the rank of a second
mortgage, in order to enable the compa-
MES to secure funds in the money markets
on first mortgage.
With the successful negotiation of this
new and first mortgage, the roads were
finally completed and ready for business.
They constituted the only through line
connecting the populous East, with it's
already teeming population, and the great
and fertile area OF the West coast, sparse
IN people, but rich in possibilities. By
means of the facilities now offered, the
army of the United States was placed in
position to patrol without a 1.-THE of the
old trouble and delay the whole of the
Governments Western possessions,
which were thus secure to the Union
from foes without or within. A veritable
empire had been as surely gained by this
master stroke of public policy as was
ever acquired by the sword in bloody
hand, almost Immediately felt the quick
enlng pulse of traffic that continually
and rapidly multiplied, and which prom
lsed a speedy realization of the hopes Of q
great prosperity. Nothing seemed to
stand IN the way of complete and salts
factory fultillnent of the contract be-
tween the Government and the compa-
MES.
This was sthe situation up to the mo-
ment when Congress, by granting aid to
another and later third rival transcon-
tlnental railroad, changed the course of
events and introduced disturbing factor
that upset the careful and deliberate cal
culations of the brightest minds in the
Administration. Had the general situa-
ton continued as 1t was at and soon after
the completion of the pioneer roads,
there is no reason to doubt that the out
come OF the Governments original policy
would have been gratifying conclusion
for both parties to the contract, but the
building of the later roads through the
aid of free rights of way and enormous
land grants from the Government en-
gendered sharp competition, which
beat down the transcontinental rates
more than 80 per cent, and at this re-
duced point the rates remain to-day.
That this was foreseen by Congress it is
easy to believe, in view of the fact that in
the ultimate bearing upon the develop
lnent of the country Of constructing two
more lines across the continent such
policy was most commemorate and far
sighted one, from a National standpoint:
but it cannot be denied that the effect Of
1t upon the two original enterprises,
which had cost, by reason of the circum-
stances, such excessive sums of money
was disastrous and the most serious blow
that could have been inflicted on them;
and IL constitutes another of the historic
equities which cannot be ignored in any
1air treatment of the subject
The question at issue to-day relates to
the redemption of the deprecated Gov
eminent second mortgage bonds. This is
provided for in bill now pending in the
House of Representatives, and common
ly known as the Reilly bill" In its
issue of the 3lst ult. the Tribune related
the history of this method OF settlement
IN the following succinct statement
During the last ten years every Secre-
tary OF the Interior, every Secretary of
the Treasury, every Commissioner of
Railroads, every Board of Government
Directors, majority of the Investigating
Commission of 1887, and President Cleve-
land twice in his annual messages have
recommended the refunding of these
debts on substantially the same lines as
those laid down in the bill now pending
in the House,"
Viewing this question in its national
bearings, let us see what the Nation has
granted and what it has received, omit
ting the element of interest, whic in anv
accurate adjustment of book eeping
would count more against than in favor
of the Government. The subject is of in
tense historic interest. AT a time when
the best informed engineers and finan-
ciers regarded the construction of rail-
road across the American continent as an
1T Al l,n5