The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1896-04-28
REPORT on PACIFIC RAILROADS
Ending With the Recommendation to
Divorce Railroad Government.

Washington, d. c., April 27.-The Pa
cific railroad bill as today reported re-
quires the Southern Pacific lease of the
Central Pacific 10 be modified 10 guar
antee the indebtedness of the Central.
The report estimates S4000,0 600 TO be a
fair average of the annual earnings Of
the roads and declares that it will be
folly to exact each year more than the
income of that year could discharge
On this basis it is estimated that the
payment of fixed charges each year will
be: Central Pacific s3.S25. $50; Union
Pacific S3,62S. 54S. In each case a small
margin is left to cover unexpected con-
tingencies. The report continues.
1T is provided that the charges due
TO the companies from the government
for transportation of mail supplies,
etc. shall be withheld by the govern
ment if default is made in any years
payment. The charges alone will near
~ meet the annual interest charges"
The bill authorizes the Union Pacific
to issue a new per cent mortgage for
the amount Of its first mortgages, $685.
100000. The Central Pacific is TO ex-
tend its first mortgage on the aided por-
ton OF its line at a rate not exceeding
per cent. This added TO existing
first mortgages, aggregates S63.564, 600,
less the sinking fund applicable thereto,
amounting 10 $40. 763. 600. which leaves
the mortgage Indebtedness on the entire
system about So, sol. GOO.
In referring 70 the Union Pacific the
report says that at different stages
OF the history of this question. IL has
embraced a vast and well appointed
property, with a mileage Of $500 miles.
but there now remains only the Union
Pacific railroad proper. embracing 1000
miles, as a subject for congressional
legislation. Even this property must
be regarded as subject TO dismember-
ment as a result Of any prolonged mis-
sion on the part Of congress % enact
legislation necessary for the protection
OF the interests Of the government Six
mortgage foreclosure proceedings ar
pending affecting the various mortgage
divisions Of the Union Pacific railroad
proper, three OF these having been in
stituted under mortgages prior % the
lien Of the government Mr.. Powers
report concludes:
1t Is manifst that unless A bill pro
viding Tor the settlement OF the indebt-
edneSs OF the railways i adopted by
congress, IL must make provision for
the payment Of first mortgage bond.
upon the subsidized portions q the In
ION. the Central Pacific railway and
early provisions for the payment OF
Ike bonds upon the subsidized parts OF
the Central Pacific railroad, and IN a3-
ditlon 70 this adequate provision for
the requirement q such portions % sub
sldiZe1 properties as are clearly indi-
spensable - the operation q the aided
portions In The present condition o.
the treasury no funds are available Tor
such application and IN the event thst
congress should desire - carry sCcl
an undertaking INTO effect, L must In
mediately provide the necessary reve-
nue. 20 cover The appropriated The
provisions reasonably necessary 20
such purposes would exceed $50 %. Ca
The cOmmitte cannot recommend any
Increase of the public debt by the -
sue q bonds q the United States which
would b required for such 2 purpose-
II : believed that for the first time -n
the history q this matter. tbs relations
Of The Pacific railroads % he Uaige1
States may and should be dealt win as
a business problem Il Is believed TIA;
legislation should - coDp7eAels.ve
ard final and should terminate the tn-
Innate relations CT the government With
the enterprises os thess rzllrcz3 COZ
psE.e g 4