Evening star., 1896-02-20
THE UNION PACIFIC
Government Directors Of the Road
Appear Before the Committee.
ALLEGED MISREPRESENTATION
Exhaustive EXCLAMATION Of Mr.. E.
EI!ery Anderson.
OBSTACLES TO SETTLEMENT

E. Ellery Anderson and eX-Representa-
tive Coombs, government directors of the
the House committee on Pacific railroads
today on the general question OF settle
ment between this road and the govern
nent. Mr.. Andersen first addressed the
committee. He first called attention to a
statement by Secretary Smith that he
understood lands of the Union Pacific grant
were sold by company organized within
the railroad company. He said that Mr.,
Smith was rlisinformed. He could not un-
derstand how the Secretary acquired such
imperfect knowledge on the subject. FIe
then explained the manner of dispQsing of
these lands. He said all mortgages were
issued directly by the Union Pacific or
in a wheel, ne said. Secretary Smiths in
formation was incorrect. He enumerated
the mortgages to trust companies.
Il make these explanations" he said,
because the suggestion of a subcoHpany
making these transactions gives false inn
preston and eXcites suspicion of wrong.
The mortgages were made directly by the
companies, and the names of the parties
rrecluded the suspicion of wrong and dis
honesty. / canrot- say whether all the
money divided from the sale of bonds twen-
ty or thirty years ago was properly applied;
but as far as the sale of lands is concerned,
there is no difficulty in satisfying this COM
mittee that every dollar has been applied
to the payment of outstanding debts and
interest.
This is a totally different question from
thar as to what may have been done by
the company twenty or thirty years ago
with the m0l.ey Ilocured from the sale of
bonds
Financial Standing of the Road.
He said there was a good deal of miscon-
cept:on as to the financial standing of the
Union Pacific. 1t is, he said, a growing con-
Cern. and comes closer to paying all its eX-
penses and outstanding obligations than any
other road in the country The company
can earn enough to pay the running eX-
penses.
The trouble. he said. grows out of the as
sumption of responsibility for the obliga-
ticns OF the Navigation Company and the
Gulf Company. The Union Pacific debt, if
the obligations were reduced to a judgment.
Guild amount to six or seven million dol
lars.
Mr.. Anderson said that a Judgment
against the company would not interfere
with forfeiture of land to the government.
Mr.. Smith suggested, he said, an act of
forfeiture giving the holders OF land an op-
portunity to make good their titles. Mr..
Anderson suggested that, instead of this,
provision be made at once to clear the titles
of innocent holders of land.
Difficulties in Settling.
AS to settlement of debt at large, he said,
the directors had filed an official report in
which they have made certain suggestions.
They, as all their predecessors had been,
are opposed to government ownership of
the roads. They recommend the common
of ha tyro
closure. This suggestion, he said, was
largely Mr.. COMBS. There were so many
roads that would want to- acquire this
route, the best to the Pacific coast, that a
good price might be obtained
The settlement of the Union Pacific with
the government, he said, presents almost
insuI mountable obstacles. There are so
many elements admitting of differences of
opinion that an agreement in Congress is
difficult. He did not think a satisfactory
funding bill could be prepared or carried
into effect. No bill, he said, giving the
government first lien, even at 9 per cent,
could be carried into effect by the COM
pany. The road has not the financial DOW
er to carry it into effect, he said
An extension under present conditions
would be of no avail. The roads, if they
got into trouble, would plead for furthe +
favors, for extensions and reductions of in-
terest, and would still insist that fore
closure is impractiCable. The proposition
to settle with the government by the ac-
ceptance of proportional share of first
mortgage bonds, he said, had some merits
over the funding schemes, inasmuch as
1t would end the direct relations between
the government and the road.
COmplicnt ion of Accounts,
Mr. Coombs followed Mr. Anderson He
said that he had spent some time in study
ing the figures of tho Union Pacific, and
found that
one that could not be untangied by Con-
gress without great difficulty.
From Omaha to Ogden there could be by
law but two classes of obligations. On the
Kansas Pacific branch there is a mass of
a scheme. to settle with the government.
ment from the first that the Union Pacific
and Central Pacific roads should form one
through route to the Pacific coast.
Amy settlement to satisfy the people of
the section through which the roads pass
must contemplate the opening up of an
outlet through a trunk line from Missouri
river to the Pacific coast.
He suggested that the government for
close ITS mortgages on both the roads and
put them up at auction. Then the various
would contend for their possess
sion.
Now Is the Time to Settle.
"You cannot get the consent of Con-
gress," he said. to extend the time
of settlement with these roads. I do
not think that it is right to extend the
time. This is the best time to settle TIL,
country could afford to give the roads
away, for the material benefit they have
been to the country. but the government
has TO right to give them away
said ha hlH n tho eli
in considering this matter that a syndi-
cate Of outside parties could be formed to
purchase the roads at a price to pay the
government as much as they have ever
expected to get. Seventy-five millions have
been suggested. He said Congress should
pass a bill consolidating these suits, and
the property will come before the public
as property in the market. An upset price
might be provided for.
The chairman suggested the difficulty of
dispute cf claim to terminal facilities. This
could be settled by the court in the juds-
ment, Mr.. Coombs thought.
stnI,Sart Figures Suggested.
Mr.. Coombs said that he was satisfied
from Information he had that a syndicate
would be formed of parties not now inter-
ested in these roads. to buy the two roads
If ssid under foreclosure, bidding as high as
$12O, 600
Mr.. Anderson, resuming his address at
the conclusion of Mr.. Coonibs' statement,