The record-union., 1896-05-02
Senate Committee Submits a Report on
the Bill to Refund the Debt.
The Foreclosure Of the Lien Dis
approved OF.
The Government Had Better Abandon
It's Entire interest i'm the Proper
ties Rather Than Take the First
Step in a Scheme SO Vast and
PerilouS as the Control and Oper=
alton of the Roads.

PeriIOuS as the Control and Oper=
alton of the Roads.
WASHINGTON, May 1-Gear, from
| the Senate Committee on Pacific Rail
roads, this afternoon submitted a report
on the bill to refund the debts of the
Central and Union Pacific Railroads to
the Government. The bill itself was re-
ported several days ago.
The committee does not recommend
any departure from the settled policy of
| the Government to keep itself free from
any connection with the ownership and
operation of railways. 1t does not re
commend, and feels sure that the good
sense of the people would not approve
any legislation looking to the control
and operation by the Government of
single systems of railroads in competi-
tion with those controlled and operated
by private enterprises, or to the inau-
guration of a policy, the logical out
come of which must be the ultimate
control and operation by the Govern
ment of the great railway systems of
the United States. In the opinion of the
committee the Government had far bet
ter abandon their entire interest in
these properties than take the first
step in a scheme so vast and perilous.
The foreclosure of the lien of the Gov
ernment is disapproved for practical
reasons. The Government-aided parts
of the various roads upon which the
Government lien rests are incomplete
at the outlets, and practically without
terminals and other Indispensable ad-
juncts. These could not be embraced
or controlled in proceedings for the
foreclosure of the liens, and could only
be availed of to complete the lines
" hich might be acquired by the Gov
eminent under foreclosure by the out
lay of large sums of money in addition
to those which would be required to dis
! charge the prior liens upon the aided
| lines.
Foreclosure of the Governments lien
would, of course, involve the necessity
/ OF providing for the retirement OF the
! first mortgage debt upon the aided
| parts of the property, but under such
| foreclosure the Government could only
acquire fractional parts of the system
/ to the successful operation in which
/ other lines and terminals, wholly un-
anected by the Government lien, is es-
sential.
| In the opinion of the committee no
! foreclosure of the Governments lien
! should be undertaken without full pro-
vision previously made by Congress foI:
the discharge of superior liens and for
the acquisition of the other important
and valuable properties which must be
acquired in order to make possible any
successful operation of the aided parts
of the system. 1t is estimated by the
committee that at least 90,0OO,O00, ex
elusive of the amounts held in the
sinking funds, would be requisite for
this purpose. Any proposed appropri-
alton of so large a sum of money, or the
issue of securities Of the United States
to provide such a sum for the purpose OF
making such an experiment, would be
fttle less than preposterous-
The committee is satisfied that the
solution of the existing questions be-
tween the Government and the Pacific
railroad corporations is to be found in
an extension of the debts due to the
United States upon the conditions
which are embodied in the bill.
Attention is called to the fact that the
provision is made that mortgages to
secure the adjusted bonds shall contain
a clause that in case of six months de-
fault in any payments the entire debts
due the United States shall, at the OPP
ton of the President, mature, and the
United States shall thereupon be en-
titled to enter upon and take posses
sion of mortgaged properties without
applying to the courts or to Congress
The committee calls especial attention
to the provision in the bill which gives
all lines connected with the Pacific sys-
tenn at any point equal terms, rates
and facilities for the interchange OF
traffic both passenger and freight, be-
tween such connecting roads and every
part thereof" Also to the provision
that "any contract, arrangement or de-
vice by sale, lease or consolidation, or
otherwise, intended to give preference
or advantage to any railroads so con-
Meeting at such common point shall be
unlawful.
when it is taken into consideration
that at the eastern terminal of the Pa
cific system there are few great lines or
translate roads which have connec-
ton at Chicago and elsewhere with
great lines of road leading to the At
lantic Coast, it will be readily seen, the
committee concludes, that this clause
providing for connection with the diff
ferent roads practically gives to the
transportation of freight or passengers
going either East or West competition
between the Atlantic Coast and the Pa
cific systems, thus carrying into effect
what was doubtless the intention of the
Act of Congress in the Act of 1862. For
these reasons the committee recon-
mends that the bill pass