The morning call., 1895-02-26
INTERESTING REPORT MADE BY
THE MINORITY OF THE
COMMITTEE.
HOW LIENS MAY VANISH
IT WOULD SEEN THAT ALL Pro
VISIONS FAVOR THE DEBTOR
COMPANIES.

CHIC railroad COmmlttee SUBMIT tndI Ii1e
time devoted to the consideration OF said
bill was confined to two sessions OF the
committee and its preparation was hurried
and imperfect The limited time which
it is possible to obtain for its discussion in
the House at this late period OF the ses-
sion renders it absolutely impossible for
the House to be fully informed or to con-
slider the important matters to be decided.
We do not believe that any emergency
exists which requires or will excuse hasty
legislation.
Mr.. Anderson. one of the receivers of
the Union Pacific, stated to the committee
that the Secretary of the Treasury was
confident that under the existing law all
rights of the Government could be pro-
tected for two or three years, and this was
also stated by the chairman of the COM
mittee after consulting with the Secretary
OF the Treasury under instruction of the
committee.
We call attention to following fatal OBJ
iections to bill: While ostensibly provid-
ing for the payment of the principal Of the
subsidy bonds, amounting to $64, 623, 512, it
really gives to the debtor companies sim
ply an option which they may or may not
accept, and during which time the burden
OF providing for the payment of all sums
of principal and interest which may fall
due is thrown upon the Government.
Should the provisions of the bill be &C
cepted by the debtor companies it will
result in a transfer of the lien
which the Government holds as to
the principal of the debt to parties whose
interests will be entirely antagOnistic to
that of the Government in the final pay
ment of the net interest advanced,
amounting to the enormous sum of $75,-
10, 429, which is by the terms of the bill
expressly relegated to third place, as the
security will be in effect no security what
ever, as there will be superior to
the Government claim the sum OF
$129, "a, 024 one-haf drawing per cent
and half per cent, all of which will be
so managed as to destroy any possibility
of ultimate payment of the Government
interest. 1t is assumed with much import
ance that the compensation due the COM
panies for services will pay the balance due
the Government, but the fact is the earn
ings OF the companies from this source will
hardly more than equal the interest even
at the low rate of , per cent, which is
provided. While the law provides that
the sinking fund of $50, 40S, S77, now in the
treasury, shall be applied to the payment
Of first mortgage bonds, the bill provides
in lieu of this that it shall be turned over
TO said companies, and if this bill
passes the sinking fund must be kept
intact for twelve months and the
Secretary of the Treasury will be forced to
pay out of the funds in the treasury the
interest and principal of the first mortgage
and subsidy bonds that will be due during
the next twelve months, and the funds that
he would have to use in such payments
would be the funds of the United States
Government, and no part of the same
would be furnished by said companies.
Another objection is that under the pro-
visions of the bill these insolvent companies
are allowed to declare dividends before
they have paid the debt to the United
States.
In submitting the bill which was recon-
mitted a great stress was laid upon the
extension of the Government lien to ter
minals at Omaha, Kansas City, Denver
and San Francisco. The Omaha bridge,
Denver extension and other property vet
in the bill which the committee now pro-
poses no mention is made of these proper
ties, although the necessity for additional
security is made more imperative by the
reduction in the rank of the security which
the Government viii have for much more
than half of the debt
In section II of the bill permission is
gwen for portions" of the Union Pacific
Railway to he acquired by new corpora
tons, so that the least valuable portions
of the road may at last be thrown upon the
hands of the Government, and SO dis
jointed and disconnected as to be abso-
lutely without value. The bill is also i'm
perfect in not explicitly requiring that all
companies must accept and comply with
all its provisions in order to prevent sac
rifice of the Governments interests by the
surrender of the least valuable roads to the
Government.
1--WE regard the bill proposed by the
committee not as a settlement of the Pa
cific Railroad Indebtedness, but merely as
voluntary extension of one years time
to the debtor companies within which to
determine whether or not they will make
a settlement. Such extension is to be en-
tirely at the expense of the Government
and without any consideration whatever
from said companies"
The report is signed by Snodgrass, Harris
and Cooper.
A bill prepared by Judge Mcguire as
substitute for Reilly's new bill provides
that the debts of the Pacific roads may be
settled by paying in cash the entire princi-
pal of the Government bonds within
twelve months, and the payment of all in
terest as specified in the committees bill,
provided however, that the roads must
Immediately pay all the principal and in
terest now due, and all installments of the
principal falling due within twelve months
They must net pay any dividends until
the entire debt to the Government, princi-
pal and interest, shall have been paid.
They must give the Government a second
mortgage on all properties of the companies
including terminals and branch lines, and
must not while indebted to the Govern
ment make any sale, contract assignment
or lease affecting the occupation or use of
roads without the approval of the Secre-
tary of the Treasury.
Judge Mcguire tonight stated his be-
lief there would be no Pacific roads legis-
lation this Congress. The House Rules
Committee had arreed tn Give Reilly time