The herald., 1896-04-26

Curlly competed IN tne respect III
which it has been heretofore so clearly
deficient. The lien of the government
will embrace additional indispensable
properties, which include more than 20
per cent of the main line mileage Of the
Union Pacific railroad 220 miles Of
branches, it's extensive terminals at
Omaha, Kansas City, Denver and Og-
den, the bridge across the Missouri
river at Omaha, the entire body of un-
sold lands, together with outstanding
land contracts. In the case of the
Central Pacific the lien is extended to
include the non-aided lines extending
ftom Niles to Oakland ION the Bay OF
San Francisco), together with the local
lines, terminal properties and real es-
tate in San Francisco, Oakland and Ala
media, steamers, ferryboats and equip
ment of ferries, which constitute the
great terminals of the Central Pacific
in and near San Francisco.
The bill requires the Southern Pacific
lease of the Central Pacific to be modi-
fed to guarantee the Indebtedness OF
the Central.
The report estimates $4000,000 to be a
fair average of the annual earnings or
the roads and declares that 1t will be
folly to exact more each year than the
income of that year could discharge.
On this basis 1t Is estimated that the
payment of fixed charges each year
will be: Central Pacific, $3,S25,S9O
Union Pacific, $S,36S,54s. In each case
small margin is left to cover unexpected
contingencies.
The report continues: 1t is provided
that charges to the companies from the
government for transportation of mails,
supplies, ETC., shall be withheld by the
government if default is made in any
years payment. These charges alone
will nearly meet the annual interest
charges. The bill authorizes the Union
q a =
gage for the amount of it's existing 4
per cent mortgage of $540O0,0O0. The
Central Pacific is to extend its first
mortgage on the aided portion of it's
line at a rate not exceeding 5 per cent.
This, added to existing first mortgages,
aggregates $63, ,564 900, less the sinking
funds applicable thereto, amounting to
$40, 763,00 which leaves the mortgage
Indebtedness of the entire system about
52,S01, 900.
In referring to the Union Pacific the
report says that at previous stages of
the history of this question it has en-
hraced vast and well-appointed prop
erty with mileage of $500 miles, but
there now remains only the Union Pa
cific railroad proper, embracing about
1000 miles, as a subject for congress
sional legislation. Even this property
must be regarded as subject to dismem-
berment as a result of any omission on
the part of congress to enact legisla-
ton for the protection of the interests
of the government. Six mortgage fore
closure proceedings are pending affect
ing the various mortgage divisions of
the Union Pacific railroad proper, three
OF these having been instituted under
mortgages prior to the lien of the gov
ernment ''
Mr.. Powers report concludes:
ut is manifest that unless bill pro-
viding for the settlement of the indebt-
edness of the railway is adopted by con-
gress it must make immediate provis-
ion for the payment of the first mort
gage bonds upon the subsidized portions
of the Union Pacific railroad and early
provision for the payment of the like
bonds upon the subsidized parts of the
Central Pacific railroad, and in addition
to this, adequate provision for the ac-
quirement of such portions of the I'M
subsidized properties as are clearly in
dispensable to the operation of the aided
portions. In the present condition of
the treasury no funds are available for
such application and in the event that
congress should desire to carry such an
undertaking into effect it must immed-
lately provide the necessary revenue to
cover the appropriation. The provision
reasonably necessary for such purposes
would exceed $S0000,000 The commit
tee cannot recommend the increase of
the public debt by the issue of bonds
of the United States which would be re-
quired for such a purpose. 1t is be-
leved that for the first time in the his
tory of this matter. the relation of the
Pacific railroads to the United States
may and should unhesitatingly be dealt
with as a business problem. 1t is be-
lieved that this legislation should be
comprehensive and final and should
terminate the interminable intimate re-
lations of the government with the en-
terprises of railroad companies.