The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1896-02-09
THE PACIFIC RAILROAD DEBT.
Arguments Before the senate Gommit-
tee I'm Favor OF the Union Pacific.


Washington city, Feb. S.--The hearing
nv the senate committee on Pacific rail-
roads of persons interested In securing re-
organization OF the Pacific railroads was
resumed today. Mr.. Pierce, representing
the Union Pacific reorganization commit
tee. was put through sharp questioning by
Senators Wolcott and Morgan. He stated
that II had been the purpose of the com
mittse on reorganization to leave consid-
erabie latitude to the government, but the
plan proposed would give the government
about 80 per cent. of its debt, principal and
interest which would not amount 10 quite
as much as the principal itself. lie said
that while nepew and Hewitt were On the
re<ssSr. ~ zsstiori gsnsnfffee he could NOT say
whether the Gouids and Nanderbilts were
interested in the proposed reorganization.
or that there was an ulterior purpose TO
attach any portion of the Union Pacific
system 10 either the Missouri Pacific or
the Northwestern.
Morgan pressed Pierce to know whether
il was not possible. under the reorganiza-
ton plan proposed. for an alien syndicate
to get control of the road. He replied that
IN case the proposed plan of reorganization
should be accepted IL was contemplated
that the reorganization committee should
itself take the property. He was doubtful
whether If alien purchasers should secure
the property. they would be able under the
II.
made no definite proposition except that
Of per cent honds for the principal and
bonds 10 cover the accrued interest TO run
fifty wears without interest.
T.. Ellery Anderson said that as a gov
ernment director her was an advocate OF
no particular plan of reorganization. lie
favored o reorganization which should en-
brace the Union Pacific and Central Pa
ciiic, and was confident they were not able
IA bs mi Int a
10 the government. lie estimated that the
property was worth 900 to $50 e.taa.eo
In 1884 the net earnings were about 81 S1.
600. WHICH, he stated. were the lowest I'm
years To arrive at the value of the gov
eminent lien II is necessary TO deduct
about $509o.e9 due on first mortgage
bonds and other accounts He would. he
said, recommend that the government ar
cept cash offer of So. .000 600 and IL would
he better TO do this than 10 enter into the
other schemes suggested. This suggestion
was based upon the Union Pacific alone
bat he thought both the Union Pacific and
Central Pacific should he disposed of as
one line, because they would hiring more
that way. Mr.. Anderson expressed tho
opinion that the oregon short Line would
be forecIosed within six months and taken
ont of the system. HI also expressed the
opinion that foreclosure on the first mort
gage bonds would not only close the gov
eminent out. but cut of the equity of re-
denlpiion.
Senator Morgan made an EFFORT to secures
Mr. Andersons opinion as 20 the Increase
of the value 81 the Union Pacific property
In the next 100 years. IN view ~ the re-
sources ~ the country penetrated and
asked him ~ ne ala not think the Invest
rnent of gss. go 0s1 would In that time prove
profitable Mr. Anderson replied that he.
thought that 10 would be n good inVess uaent
but mot enormously good" He sag that
the experience of investors in the Western
roads IN the past had been the opposite OF
profitable.
Senator Briee asked Mr. Anderson 10
explain how II WIS that with the net earn
frzx equai q twice the amount necessary.
- operate tire road. the manage
rnent had allowed the road TO
approach the point Of foreclosure. To this
MIR Anderson replied that the road was 10
hs foreclosed because the bonds rad
reached maturity. He thought thar the in
ferest could have been taken care or how
ever. In the net earnings was included
about 81. 90 90 for business done Tor the
United States. which had been withheld,
leaving only about 81 go go Of actual earn
mes 1t was also a fact that Judge SAN
born. IN whose Jurisdiction the road lies
was opposed u applying much Of the
money earned % the interest account
Mr. Huntington asked 70 Re allowed 70
make lis RfEHttsssti state fEsKf concerning
fee Central Pacific az a later date and
tse permission Sas granted He took oc-
caston. however. 20 repeat his statement
made a tae last meeting that the Cen
tfai Pacific meant % pay llo cents on ~,
5c}lar- he also repeated his statement
t6at the Central Pacific WAS in geos con-
ditian. ami adds3 s1=le facts concerning
the cost - the construction OF MS road
lie said that less than 3o miles of the
Central Facinc across the mountains had
cost more . build than had lg9 miles of
ere ni0n Pacific from Dnaba 70 Dgfen.
He said tae road BAD been b1iit wtta gold.
asa that many of the bonds ha6 been sold
for - cents on ths dollar. senator Nor
xzn asked why silver instead u zo8d had
not been usea. and Senator Stewart re-
pied. for Mr. Hanfington. that az the
time the ROAD 2as built silver had been
WORTH 3 per cent. more than S94d.
David IAttler furnished the committee
wssh sorse additional details concerning
TIE SIOUX City * Pacific Toa1.