New-York tribune., 1896-12-08
THE piCIFIC RAILROAD DEBTS.


President Cleveland again calls the attention
of Congress 10 the relations Of the Goyerrheh'
with the Pacific railroads. which. in his ludg-
ment. demand early and Intelligent consldera-
,ion in order to save the debts due from those
corporations 10 the Government l'y one OF 'he
provisions Of the Act of 1887. appointing IN
investigating commission. the President Is
charged with instituing proceedings 10 Tore
close the t,oycrnmcnts second mortgage when
ever the prior mortgage shall become lawfully
liable 10 be enforced In the case of the mon
Pacitic proceedings TO foreclose the first mort
gage have already been begun In consequence
of these and of complications which VIII result
from The defanIt occurring on January ]. 1877.
a condition will be presented which the IreSi
dent saws must emphasize the mandate Of the
..Act of 1887 and give TO Executive duty under
Its provisions n more imperative aspect. Inc
subject has long been under consideration pE
Conorcss and he saws ''the conclusion has been
reached with practical uniformity that II those
"relations are not terminated they should he
revised upon basis securing their saie con-
''tinuancc" In other words, a crisis has been
reached which makes il incumbent upon Con-
gross TO take some decisive action if any part
of the debt is to be saved to the Government.
II is now pretty generally understood that the
onposition to any and all plans for revising the
rolotions of the Government with the roads so
as to secure their safe continuance comes solely
from small number Of Popocrais in both
houses. whose ultimate purpose it Is to bring
,hou, Government control and management OF
the roads. That consnmmatlon seems 10 the'h
so desirable that they are quite willing the EoV-
ernmcnt should lose the entire debt. II ncccS-
sarv in order 10 effect il. From recent utter
anccs of "Tbe San Francisco CALL as well as
from other evidences. ii would appear that our
fellow wcitzens in California are somewhat
stirred up over this matter They are appar-
only anxious 10 have the Government own and
operate railroads Oh lis own account, ana espc
cally anxious that the experiment should beglh
in their own State with the contiScation OF the
Central Pacific. The reason for their solicituoc
is NOT difficult TO discover but the advantage of
such an expcriment TO the rest of the country
* bv no means so clear The sale of these roads
under foreclosure would 1t is true. settle the
uuestjon of their indebtedness for good and all;
but what would the Government have TO snow
for its The Government lien Is forcsialled by
the first mortgages which must be paid before
any of the purchase money received from 'he
sale can be applied TO the payment Of that Hen
The roads were constructed in war times, when
the prices Of labor and materials were abnor-
mally high, and il is stated on the authority OF
those who are best fitted 10 form an intelligent
Judgment that the properties would not sell Tor
more than would satisfy the first mortgages
Assuming that this unbiased judgment. based
upon careful consideration of the subject. after
wears Of the most searching investigation into
the financial affairs Of those companies. is cor
rect. the result Of sale under foreclosure would
pay the first-mortgage bondhod,rs and leave
practically nothing for the Government.
The people Of California may view such
prospect with complacency. counting the loss of
hundred millions the mcrest trie so long
as they lose nothing. but hope To reap some ad
vantage by II. They complain that California
has never made anything out Of her position In
the Union but has paid millions into the Treas
ury for which she is entitled 10 some return
They insist. accordingly. that the Government
ought 10 take these roads and operate them large
" for the bcnch, Of California. This might be-
an excellent thing to do 70. California but the
people who occupy the rest OF the country VIII
hardly see IL in that light The Pacific railroads
are growing propcrlies'and they can earn. be
yond any doubt. sufficient To pay the Govern
meni in full if the Government VIII wait rca-
sonablc time for its money. II Congress can
make some hard and fast contract with these
roads by which the latter Will have 10 pay cur
rcnty and AT regular stated intervals fixed
amounts Of money payments not Too large Tor
thc debtor to he certain Of being able 10 meet
and not too small Ia he just Ia the creditor
together with a fair interest on deferred pay
menis II seems to us that such an arrangement
would he wise. The present Congress viii have
10 face this question. and it may he that it Will
prove itself equal 10 the emergency. Obvious
". it Is time something was done 10 settle the
question in such way as to furnish the nss'ir-
nucn fhnt liz. lnIlis will uliimalelY be mid.