New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-12-09
ruE PACIFIC RAILROADS.
r.roR THURSTON's PLAN TO ADJUST
THE GOVERNMENTS CLAIM
r.voRs SELLING THE SECOND MORTGAGE
.,Ns TO THE HIGHEST BIDDER-IN AN
INTERVIEW HE EXPLAINS HIS VIEWS

,,rgton Dec. CSpeciaD-For upward OF
,v-aye wears the Pacific railroads have been
" rhrlgig OF fortune. They have bright
- and goomy ones; have been the subjects OF
., congressional legislation and disturbing
NJ, for the last decade in much OF the politics
me country. Brilliant theorists and practical
.rrosd men have been AT their head The aid
TO-, these pioneer Western railroads which have
-, responsble for the building up OF great en-
~. IN the ;ransmississipp country Is about 20
- r.oui-ed from them. with interest extending
. nsriod Of years. The roads are no, in condition
" meet the claims OF the Government and some
..,on looking 20 an amelioration OF the existing
conditions deVoNes upon ne LlNth congress- now
N session.
Since I, has become known that Senator John NJ
-sp-s;oa OF Nebraska, had in contemplation
~ looking 20 the adjustment OF the Governments
sm against the Union and Central Pacific rail-
,o,as and since interviews with him upon this
,ues,ion have been largely OF character TO leave
his purpose In the background. correspondent OF
The Tribune sought the late General Solicitor of
tho Union Pacific system, with q view OF securing
from him authoritative utterance upon this
vita. question
In tracing the history of these roads the Sena-
,or said: The present Union Pacific Railway Com
nsnv was formed by consolidation OF the Union
pacific Railway Company with line from the
Missouri River 10 ogden; OF the Kansas Pacific
railroad Company, with a line from Kansas City
:, Denver and OF ;he Denver Pacific Railroad Com
many with a line from Denver to Cheyenne. there
connecting with the main line between Omaha and
Ogden The entire mileage OF the consolidated COM
rarv is about eighteen hundred miles OF main line,
vithou; branches or feeders Up 10 the time this
,,ro,e-tv vent INFO the hands OF receivers the
Union Pacific had secured by ownership Of stock,
lease o. traffic agreement control OF vast system
Of railway lines aggTega;ing nearly eigh; thou
ears miles Of road extending into thirteen States
and Territories and occupying the best part of the
country between the Missouri River and Port
land ore
FORECLOSURES THICK AND FAST.
The insolvency OF the Union Pacific and its al
III. lines brought about by hard times and general
sagnation y business. has resulted in the begin
r.ng Of many foreclosure proceedings. until to-
day all parts OF the entire system under process
o. foreclosure. and about half OF the connecting
and auxiliary lines have passed entirely out Of
Union Pacific control. being operated under
separate and Independent arrangements and what
eve interest the Union Pacific had in, them has
ben virtually wiped out. All the remaining
branches and connecting lines are. in process Of
forscosurs and II the present situation continues
vii soon be sold by the courts and reorganizsd as
Independent; lines Thus the Union Pacific Company
WI 5e stripped Of all its branches and feeders and
LEI; with only is main line Of 800 miles
"Ua these main lines there are hrst mortgages
having priority over the Government Claim amount
irs 20 upward Of s0O00o0o being near.y or quite
g. 90 per mile. The first mortgage bonds are held
b. multitude OF investors. and tho mortgages al
ne present time all neing forec.osed- II IS eX-
iremey doubtful If this property goes 10 sale on
foreclosure that /, VII bring anything more than
th amount Of the first mortgage. ana certainly there
YOU'D 5e little Of the purchase price left after
satisfying the first mortgage 10 apply upon the
Government Indebtedness. In the absence or Tny
IaU authorizing the appearance of the Attorney
General in these foreclosure cases or providing lot
bringing the United States into court by process,
(, IS probably true that the Government would ro'
b. bound by The foreclosure sale. but would stand
the same as any other second mortgage. emitted
70 redeem from the sale by repayment Of the pur-
chase price and any proper outlays for me
be,teruent OF The property by the purchaser. Ihis
rghi o. the Government 70 redeem would not ne
perpetual right. but. under weliestabished equs-
be rules. would have to be exercised within rea-
sonabe time after the sale
AN EXPENSIVE FORM OF REDEMPTION.
Should the Government redeem from the first
either before or after sale. II woulo
be compelled 10 make a new investment o. ioI'y
odd million dollar in addition TO the amount OF
its bonds now outstanding. and the balance OF &C
cumulated interest. asSregatinG something Ike
So 900 coo In other words. for the Government TO
take possess,on OF the Union Pacific Railway. now
o. al any subsequent time means an investment
OF about 500 0coc GO for 100 miles OF ROAD, more
than $1,000 per mile Il the Government taxes
possess OF o. the road by assuming and paying on
TIE first mortgages 1t must do so for one or TWO
TO 90 into he railway business
a. o,e-a-a The line as Government enterprise,
~ n resell 10 some purchaser VINO Will pay the
highest obta,nable price
DO YOU regard the Government ownership OF
"a roads Seriously asked.
~ +. IS the part % good government 10 inausu-
,ats q nolicv o. National ownership and operation
and
she nu-chase OF 800 miles az road at S5oco per
mile o- course II is useless consider any phase
a. adjustment or settlement OF the Pacific roads
Indebtedness I should look upon the Government
ownership and operation OF railway lines win
rrea, aporehension. Such policy once deter
,,,,sd rnon would find no hating place until all
o. the railroads OF the country had been brought
under Government ownership and operation; ana
A. nv Judgment ii would mean such an accumu-
la.ior and Capitalization OF Federal power as must
f. evitably result in practical despotism ana SUD-
version OF the liberties o. the people
.rsv;ng ASIDE the idea OF Government ownership
md o,eration every man must see that the time
has come for a speedy and final settlement Of the
Pacific Railways Indebtedness. That settlement
whatever II is 10 be. must be authorized oy THIS
session OF Congress or else the Government
rivbts and interests will be seriously jeopardized'
Jo-ecloslr. suits OF all the first mortgages on the
entire Ene are already well advanced ana II no.h-
tn g done bv this session % Congress, maj de-
cr.es will h. entered and the road sold long be-
fore Congress again assemblies In the language OF
49,. 49, =, au,boritv 1t is a condition and not
theory that confronts the country
Does the situation on the Central Pacihc unier
from that OF the Union Pacihc?
THE CENTRAL PACIFIC SITUATION.
The situation as 10 the Central Pacmc Is III
so-ne respects similar The Central Pac,nc' "h'ch
was also aided by the Government, e&tends rom
Ogden 10 San Jose Cal The single man Hhe
runs for the most part through desert Oouns' =
-. -. branch lines or feeders. and with a
MILEAGE NJ about nine hundred miles On TINS there
IS first mortgage OF more than s25,.oV" "hich
VII soon be due-somethng like s2s"" niiie.
The foreclosure OF this first mortgage VIII !" ny
Judgment take the line. as do not pehe'e pu
ob.ssr 80, he found on foreclosure sale VINO VIII