The record-union., 1896-03-07
Colonel John P. Irish on Proposed
Legislation.
Some Facts and Figures in Regard to
the Payments Made by the Cen
tral Pacific Railroad.

Tic CFo1idSlllS anll-fallrOad, anti
property fight.
The funding bill? have not seen
| II, ne. said. Il am told that tt ,1ro-
vtdes Tor the payment 20 cne United
States OF every dollar principal and
interest, due from the Pacific roads.
FROM Judge Maguire's interviews and
other sources | learn that the alterna-
tive proposition is a foreclosure bill
providing for the sale of the roads and
h1lng a minimum price of 40 per cent.
OF the Governments claim, the bidder
VINO oHers the highest fraction above
AZ per cent. to take the property / be-
lleve the Governments claim on botb
foads is 9l4O,OOO,O0O The funding bill
Will pay all this back into the treasury,
with interest during the process of
liquidation. The Vanderbilt foreclos
ure Dill provides sale at which none
but the Vanderbilts can bid and they
can take the property for the smallest
fraction over 40 per cent.
1.-The funding bill proposes pavment
of the whole debt. The foreclosure bill
presents vanderbilt with about 1884,
000,000
Judge Mcguire regards this change
in the situation as certain to beat the
/ L
| There is a persuasive power in a gift
or So4uUO,OOO which arouses the we'll
directed gratitude of the expectant re-
clp1ent, and as the taxpayers have to
| foot the bill it is only little more than
dollar apiece for each man, woman
and child in the country.
after ALL this settlement is not quite
as radical as that proposed by the late
/ GCva FOR loo a.-cs+ ~ ~
surely business man, not outranked
by any in California. He had a we'll
matured judgment and did not inherit
his fortune, but made it. His view of
the Pacific railroad debts was from a
business mans standpoint, and he went
to an extreme that would now add him
tc the black list He was a member
of the Pacific Railroads Committee of
the Senate, and his policy on the debt
of the roads was announced in this
| speech, which you will find in the regu-
lar dispatches of that time:
| don't believe in making the BOYS
pay dollar of that debt Building the
Pacific railroads was a war measure.
It's cost a part of the war cost. and it
should be Cancelled. You might as we'll
make the widow of General Grant pay
/
Vicksburg.'
| Senator Hearst therefore, wanted
| the debt Cancelled and the road left in
possession of Mr.. Huntington and his
! partners. The present foreclosure prop
osition cancels 60 per cent. of the debt
and turns the road over to the Wander
bits"
But what about the reputation of
1 q ircf 1rA4@fcr l.
cific roads?"
We'll, you will find the first reference
made here to the effect of the opinion of
John [. Doyle in my interview in the
Post of the 18th of February The
anti-funding and Government owner
ship proposition is tied up with repudia-
tion of the prior lien. For evidence of
this see my friend Judge Maguire's in
terview in the Cali of the next day.
the 18th. Senator Cullom introduced a
foreclosure resolution in the Senate of
which Judge Mcguire says:
Senator Cullom's resolution, ON it's
face, seems to hasten the foreclosure of
the Government lien of the Pacific rail-
roads, but the provision for applying
| the sinking fund to the payment of
paramount liens, superior to the Gov
ernment lien, has a sinister look to me.
| 1t seems to me one of the purposes of
| the resolution. if not the only purpose.
| is to acknowledge by resolution the
priority of the so-called first mortgage.
" The Secretary of the Treasury had
refused to apply the sinking fund to
| the payment of overdue first mortgage
installments. The Cullom resolution. if
passed, would probably override the
| Secretary's decision and action in this
matter and might be held to be a com
plete abandonment of the Governments
claim to priority.
AT any rate, see no necessity for
the passage of any such resolution at
this time, and I am, therefore, opposed
TO the resolution
'"The amount proposed to be repudi-
ated is perhaps 100000 00O and no one
here need be surprised that the PROPOSE
ton startles business circles in the East.
1t should be remembered that this pro-
posed reputation is not to be the act of
a corporation, nor is it the result of cor
pcrate insolvency. 1t is to be the act
solely of the Government of the United
States, and therefore it will affect not
only corporate credit but National
credit
"As far as the Central Pacific Com
pany is concerned it has heretofore per-
formed all of its financial obligations to
the Government and to the private
holders of its first mortgage bonds 1t
has never defaulted its interest or obli-
cation to either
"I don't wonder you smile at this
statement, for it is at variance with
that made persistently by the press of
this city Mr. Bierce is in Washington
using his pen on the subject to influence
Congressman, and begins his work with
the statement that for thirty years the
read has defaulted on its interest OF
course the record is accessible to Con-
gressmen and proves just the opposite
Il need not explain the change made
in the contract by the Thurman Act OF
1873. 1t provided in lieu of interest
payments, sinking fund to be paid
into and invested by the United States
Treasury to yield 5 per cent. COM
pounded, which at maturity of the debt
would equal and cancel it. This sus-
pended the payment of interest, as
such. and transferred the obligation of
the company to the sinking fund
ITO this subject the report of the Pat
tison Commission makes the following
reference:
page Is, Senate Executive Docu-
ments. first session Fiftieth Congress.
volume 2: The United States sinking
fund is the result of the Thurman Act
passed in May, 1878. It's trainers ex-
pected that this fund would reach much
larger proportions, but these antfcipa-
tions have not been realized. This
70,