The record-union., 1896-05-13
THE FACTS OF THE RAILROAD
DEBT.

The full report or the committee or
the House on the Pacific railroads and
their debt and the funding bill, was
published in the Record Union on
Saturday last. 1t Is a document which
should be read by all citizens who de-
sire to have clear understanding of the
actual facts involved
Perhaps no public document has been
filed in recent times that clears away 50
much of misconception and misrepre-
sentation or that presents an important
matter in a more practical business
like and sensible manner to the under
standing and good.sense of the people.
From the report, which is fortified by
the official records of the Federal De-
pdrtments of the Interior and the
Treasury, it is ascertainaible just what
the debt of the railroads is, just what
payments have been made thereon, pre-
cise1y what credits are entitled to be
entered for the roads, and just what are
the obligations of the Government to
the road, and the roads to the Govern
nent. That these are in direct contra
diction of the hysterical and menda-
cious statements of the anti-railroad
press, and the calamity people, will be
perceived from the beginning of the re-
port to the end.
It is shown that the first mortgage
bonds of the Central Pacific Railroad
issued under authorization of Congress,
amounted to S27, 1853, 900, and the sub
sidy bonds to S27,S55,6s0. The SUBJ
sidy bonds were and are subordinate
to the others. 1t is shown that Con-
gress from time to time provided for
the repayment to the United States of
principal and interest, and that all such
Acts of Congress have been complied
with by the Central Pacific Company,
a fact which the anti-railroad people
have, in the face of the records, persist
entity denied, and mendaciously So
That these provisions for repayment
have not sufficed to accomplish the end
in view has not been due it is shown,
to any failure on the part of the COM
pany. The cause is referable, say the
committee, to reduction of rates, far be-
yond anticipation, which We're to be re-
ceived by the road for Government
transportation, and constantly dimin-
fishing rate of interest upon the bonds
In which the sums paid to the credit of
the company were required by law to
be invested.
It was believed that the one-half com
pensation for services rendered to the
Government would meet the current in
of the net earnings would suffice for
payment of the principal upon matur-
ity It is pointed out that Congress
originally estimated that the army, navy
and postal sevice being annually ST.
357,7 ,7S1, one-half of 1t would very nearly
pay the annual interest But though
the volume Of business greatly in
creased, the rates were so cut down
that the company actually found itself
debtor to the Government instead of
being able to meet the interest account.
These are significant facts which are
studiously evaded and recklessly
pushed aside by the enemies of the COM
pany.
As far back as 1878. say the commit
tee, reports on the subject made this de-
fciency obvious Accordingly the Thur
man Act was passed, providing for the
whole instead of the half of the COM
pensation for service 30 be set aside,
and that the amounts TO be therea fter
paid into the Thurman Sinking Fund"
should be % per cent. of the net earn
ings of the road.
1t was believed that this would pro-
vide for meeting the debt at maturity,
but 1t was ON the assumption that the
sinking fund could be invested In
United States 5 per cent. bonds, to be
purchased at not over 10 per cent. pre-.