The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1896-04-26
THE PACIFIC ROADS.
House Committees Argument
in Favor Of Its Bill.
OPPOSITION TO FORECLOSURE.


te~ upon tne Pacific railroad bill Ii makes
q very comprehensive and exhaustive docu-
meat The report sketches very briefly
tue familiar history OF the legislation by
which the government granted subsidy
bonds to the Pacific roads. and then out
Anes exhaustlyely the provisions which
congress has made from tine 10 time for
the repayment Of the bonds. The report
says on this point.
The acts Of congress prescribing the
provision TO be made by the companies fer
the repayment Of bonds and the interest
thereon have all been fully complied with
by the companies. 1t was believed by con-
gre1s that the provisions 50 prescribed 70
be made would suffice to discharge the sub
sidy bonds and interest thereo1 at matur-
ity. As q matter Of fact they have not
sufiiced. The insuficlency OF the congress
ssonal provision has not resulted from any
Failure or omission of any OF the companies
10 fuily carry out the provisions Of the
various acts Of congress. but has resulted
from two causes. First. the great reduc-
ton In rates Of transportation, which has
reduced. far beyond the original anticipa-
ton. the amount of compensation which
the companies were entitled to receive from
the United States for government trans.
portation. and. SECOND. the reduced, and
until q very recent date, the constantly
diminishing rate OF interest upon the gov
eminent bonds in which the Thurman sink
Ing fund was originally required TO be in
vested II was expected that the reten-
ton OF half OF the compensation for serv-
ices rendered for the government would
equal or exceed the current interest upon
the subsidy bonds and that the reserved
per cent OF the net earnings would suffice
for the repayment Of the principal of the
debt at maturity. II was estimated that
the aggregate annual interest would be
Ss.sssdso, and the fact that the army and
navy transportation and postal service TO
the Pacific had cost the government an
nuaiiy E.357.1M. one-haif of this compensa-
ton for services to the government would
have very nearly paid the whole annual in
tsrest account; but, notwithstanding the
vast increase In the government transpor-
tation to the Pacific coast. the rates Of
compensation al which the companies were
paid for the services which they rendered
the government were reduced so low that
the companies, instead Of receiving an
amount double. or even equal TO the annual
interest on the subsidy bonds. found them
selves left debtors annually 70 the govern
ment In the interest account in large
amounta
THE insuficiency Of the acts Of 1862 and
1854 becoming obvious. congress In 1873
passed the Thurman ac, providing for the
reservation OF the whole instead OF half
the compensation for government trans
portation. and that the amounts reserved
In the bond and interest account, so-called.
and the further amounts specifed in the
act TO be paid into the Thurman sinking
fund. should at least equal IS per cent. OF
the net earnings Of the properties. The
provisions OF the law have been fully car
rfed out, and there has been no Interrupt
tton. notwithstanding the insolvency of
these companies, In the continued COM
pliance by both the Union Pacific Railway
Company and the Central Pacific Railway
Company with the full requirements which
congress has heretofore established; but
the expectation Of Senator Thurman that
the sinking fund could be invested In gov
erHrnent bonds upon a 5 per cent. or any
thing IKE per cent basis utterly failed,
as for a very considerable portion of the
time government bonds have sold very
much nearer per cent than per cent.
basis
United States sums which In the aggregate
are almost equal TO the entire amount OF
the subsidy bonds loaned and In the case
OF the Union Pacific Railway Company
the repayments will exceed by the sum Of
about G.ooo.oo0 the entire amount OF the
subsidy bonds issued 20 its constituent
companies. The decline in rates Of trans
portation is obvious when it is considered
that the army and navy transportation
and postal service TO the Pacific before the
construction OF the roads cost the gov
ernment annually S,s57, Isl. while the cost
OF a like transportation on both the Union
and Central Pacific In 1884 (the latest year
for which the accounts have been made
upl. when the volume OF business trans
ported must have been many times as
great as that before the construction of the
rods, cost the government only s.. 75s iss
On the other hand. the Thurman sinking
fund. instead OF earning per cent per
annum on the amout invested therein, has
yielded only comparatively Insignificant
returns"
From statements furnished by the sec
retary OF the treasury. Chairman Powers
shows that the total subsidy bonds ad-
vanced were: Union Pacific railway.
s-I .2S.sl2: Kansas Pacific, Sc nc os0: total
$50. 5ie Central Pacific railroad, SIS. .ss5-
10: Western Pacific railroad 81 .e7o. $50.
total. sgs, sS6se; total subsidy bonds ad-
yanced to these companies. SOL 81. .lse The
repayments we're: Union Pacific railroad.
81. 81. .s3S; Central Pacific railroad. SIS
lS,tss; total. $ss.S7..sas. The repayments
on January l. 1881, fall short OF an amount
equal 10 the principal Of the subsidy bonds
advanced by about the sum OF SAGE. T9T
The remaining debts TO the government ON
January !. 1876. are: Union Pacific and
Kansas Pacific. SIS. rs 4os: Central Pacific
and Western Pacific. s5-, ,sSi sif
Three possible lines OF policy seemed
open 10 the government. Mr.. Powers
states. viz:
First-To enter into possession OF the
properties. which would Involve the in
mediate payment OF 81. ~. 60 o. ars; mort
gage bonds.
second-ForecIosure and sale os the gov
eraments lien. which would practically
reach the same result % the governments
acquisition of the roads The roads N
sold for wh,f they would fetch would
yield hfile cr nothing Ger the government
on - debt
Third-To make an arranErnent With
the companies which would secure % the
government ihe parneat % arei amounts
a. prescribed dates. as large as the rea-
sonahiv ANTICIPATED earnings would h~ar
The COMMITTEES. TIE report continues
adopted tre ;h.r1 plan. ana exicrdef he
government ueE 20 cnbrar- the Whole
properties. iaciutirg terminals. branra
!res and feeders and equipments. IL tnis
c1in-ctiel % q MD. Without these Il
wcli1 be iuura -tlcathe 20 orsrafs sue
osFstaiiy ne sltsilixel properties. En.rA
az coannei 20 inisriar railroads With
opi the teral'rAls arl oufiets iudlspers1-
h'r % a courleto ans sffi-ier- property.
90 Tie olacr hard 40 settlements ha4
BEEN made ~ llrh El1lt leave -ha govern
rifut a. - present aisalyantaEc. ara
Wni-h c7es rot urog.1e for The govern
meat security competed In the respects
o. ~rn De- PAS been heretofore 80 clearly
crncieut. The lien o. TIE goys-a-
nitrs Sil embrace additional ind5srea-
cable properties. which include more
tAan . ser -ea- q The main lae ulieaSe
% ne tn.oa Paclnc railway. - niles of
branches. Is excessive terminals a. Cs-ra-
hR. Kansas CITY Denver and p--s.a. ~.
hr11re acTQss ne Il ssoar river AT Omaha
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