The San Francisco call., 1896-02-15
AS A PHILANTHROPIST
Great Service Done Uncle Sam
by the. Central Pacific
Railroad.
ENORMOUS COST OF THE LINE.
Representative Mcguire Says the
Magnate Practically Admitted
Unfair Methods.

WASHINGTON, D. c., Feb 14-The
Senate Committee on Pacific Railroads to-
day resumed its hearings on the various
bills before it for the settlement of the
debts of the Pacific railroads to the Gov.
eminent.
Winslow S. Pierce, general counsel foI
the reorganization committee of the Union
Pacific, presented for consideration a bill
emoodylng the reorganization committee S
plan for the settlement of the Union Pa
clilc debt. 1t provides for the appoint
ment by the President, the Senate confirm
ing, OF three members TO investigate,
determine and report fair cash value OF
the claim of the United States, the au-
thorlty OF the commissioners to be conclu-
slve as to the sum which, together with the
amounts appropriated for commissioners
expenses, ETC., may be paid for the claim
and lien of the Government; the Secretary
of the Treasury, upon such payment 10
execute an instrument of assignment oil
the lien and claim, reserving the sinking
fund, and giving authority to the pur.
chasers to organize a new company. en-
powered to acquire and operate the line:
The bill further repeals the provisions ot
prior acts, which would be lnapplicable to
the reorganized company under the new
conditions. It gives authority and direc
tion to the Attorney General in default OF
payment of the amount fixed by the Com
mission to foreclose the lien of the Gov
ernment, and upon the sale to bid the
amount of the Indebtedness to the Gov
eminent.
= Replying 10 questions, Pierce said there
was no reason why the provisions of the
bill eoulu not apply to the Central Pacific
as well, if the necessary changes were
made in its wording. a separate bill fol-
the other road, however, would be more
practicable.
To an objection raised by Morgan that il
contained no provision binding the reor.
ganization committee to pay the amount
found due by the commission, Pierce said
such provision could be inserted, or, il
the reorganization committee did not &C.
cept these findings. they could retire and
the Government could go ahead and exer-
else its rights in the property.
Mr.. Coombs, representing the Credits
Communication Company, an association
composed of 800 or 400 savings banks, scat
tered all over the country, having interest
in the Sioux City and Pacific Railroad, ad.
dressed the committee in reference to the
affairs OF that com pany. His proposition
was. in short, that the Government should
invest S., ,O00, 900 of securities in building
$50 miles of road from North Platte to
Sioux City, which he guaranteed would,
by completing connections with other
lines: give effectual com petition
Mr.. Littler, in reply to Mr.. Coombs, said
the proposition of the latter, stripped Of
all sophistry, meant that Congress should
assist lot of Boston bankers who hac
made an unsuccessful speculation. He
declared that Mr.. Coombs asked $500
more per mile than it would cost to build
the road for which he desired assistance.
c. 2. Huntington was then placed upon
the.stand after having been put under oatt
in accordance with the Senate resolution o.
yesterday. He said if the Pacific roads
had been built as military necessities. he
knew nothing of it. He began by recitine
the difficulties under which the Central
- Pacific was constructed, and the difference
In cost of materials then and now. Rails
cost $140 ton as compared with $50 for
steel rails now; locomotives now costing
$1,000 TO $4,000 cost then $4,000 and $50, ,0OO,
with excessive freight cost ana high in
surance in bringing them around by Cape
Horn. Labor was high and everything
was paid for in gold. Mr.. Huntington
said he had at times been compelled pay
81 20in currency for 81 in gold.
When the Central Pacific was ornpleted
the value of all its assests was not suffi-
Gent to pay the debt by several millions
nf =
debt in full, although that construction.
by reason of the nature of the country and
engineering difficulties, was greatly en-
hanced. As an instance of this Mr.. Hun
tlngton showed that since 1872 his com
pany had been compelled to expend 81, ,64l. :.
600 for snowsheds alone. The road had
never had any trouble with either the
white man or the Indians. Its line of road
had formed barrier between the two and
prevented conflict and policed the country.
1he Central Pacific was to-day, he said.
the best equipped and could do twice the
business OF all the transcontlnental lines.
With reasonable extension of time he
said the road could pay dollar for dollar of
Its debt and all accrued interest. The
charge that the Central Pacific had not
done its dnty toward the other lines, es-
pecially the Union Pacific, he said had no
basis; 1t was, as any one acquainted with
the facts knew, unjust. The original idea
wnen these roads were built was that they
could do excellent police duty. Little at
tenrion was then given to the question oil
traffic. He produced a map to show that
all the transcontinental roads had outlets
independent of the Central Pacific.
No one could, he said, show that. the
Southern Pacific had been responsible for
the diversion of business from the Central
Pacific. The statistics showed that OF the
total freights on the Central Pacific and