The record-union., 1896-02-10

Il
by the Senate Committee on Pacific
Railroads was resumed yesterday. Mr.
Pierce, representing the Union Paclht
reorganization committee, was pui
through sharp questioning by Senators
Walcott and Morgan. He stated that II
had been the purpose of the committee
on reorganization to leave considerable
latitude to the Government, but the plan
proposed would give the Government
about so per cent of its debt, principal
and interest, which would not amount
to quite as much as the principal itself
He said that while Depew and Hewitt
were on the reorganization committee
he could not say whether Gould and the
Vanderbilts were interested In the pro-
posed reorganization or that there was
an ulterior purpose to attach any por-
ton of the Union Pacific system to the
Missouri Pacific or the Northwestern.
Morgan pressed Pierce to know
whether it was not possible, under the
reorganization proposed, for an alien
syndicate to get control of the road. He
replied that in case the proposed plan
of reorganization should be accepted
1t was contemplated that the reorganl-
cation committee should itself take the
property. He was doubtful whether, II
alien purchasers should secure the road,
they would be able, under the laws, TO
hold it. He said his committee made no
definite proposition except that of per
cent bonds for principal and bonds to
cover the accrued interest to run fifty
years without interest.
Mr.. Anderson said, as a Government
director, he was an advocate of no par
ticular plan of organization. He fa-
vored some reorganization which should
embrace both the Union Pacific and
Central Pacific. He was confident they
were not able to meet both the princi-
pal and interest due the Government.
He estimated the property to be worth
S75OOO,O 600 or SS0,000000. In 1894 its
returns were about $43. .0O0, 900, which,
he stated, were the lowest in years. To
arrive at the value of the Government
lien 1t is necessary to deduct about $o0,-
100000 due on first mortgage accounts.
He would, he said, recommend the Gov
ernment to accept a cash offer of S3o,-
10000. 1t would be better to do this
than to enter into the other schemes
suggested. This suggestion was based
upon the Union Pacific alone, but he
thought both the Union Pacific and
Central Pacific should be disposed of as
one line. because they would bring more
that way.
Mr.. Anderson expressed the opinion
that the Oregon Short Line be fore
closed within six months and taken out
of the system. He also expressed the
opinion that the foreclosure of first
mortgage bonds would not only close
the Government out, but cut off its
equity Of redemption.
Senator Morgan made an effort to
secure Mr.. Anderson's opinion as to the
increase of the value of the Union Pa
cific property in the next hundred years,
in view of the resources of the country
penetrated, and asked him if he did not
think the investment of $35,00O,0O0
in that time would prove profitable.
Mr.. Anderson replied that he thought it
would be a good investment, but mot
enormously good" He said that the
experience of investors in the Western
roads in the past had been the opposite
OF profitable.
Senator Brice asked Mr.. Anderson to
explain how it was that with net earn
ings equal to twice the amount neces-
sary the road management had allowed
the road to approach the point of fore
closure. To this Mr.. Anderson replied
that the road was to be foreclosed be-
cause the bonds had reached their ma
turity. He thought that the interest
could have been taken care of, however
In the net earnings was included about
81 ,200,000 for business done for the
United States, which had been with
held, leaving only about $S. 100000 Of
actual earnings. It was also q fact that
Judge Sanborn, in whose jurisdiction
the road lies, was opposed to applying
much of the money earned to the inter
est account.
Huntington asked to be allowed to
make his promised statement concern
ing the Central Pacific at a later day.
and the permission was granted. He
took occasion, however, to repeat his
statement at the last meeting that the
Central Pacific meant to pay 100 cents
or the dollar He also repeated his
statement that the Central Pacific was
in good condition. and added some facts
concerning the cost Of the construction
of his road. He said that Jess than 200
miles of the Central Pacific road across
the mountains had cost more to build
lli6A 1sOOO AtlllGS III tlAG OlilOiI dCIiC
from Omaha to Ogden. He said the
road had been built with gold, and that
many of the bonds mad been sold for
forty cents on the dollar.
Senator Morgan asked why silver in
stead of gold had not been used, and
Senator Stewart replied for Mr. Hunt
ington that at the time the road was
built silver was worth 3 per cent. more
than gold.
David Littler furnished the committee
with some additional details concerning
the Sioux City and Pacific road.