The San Francisco call., 1896-04-27
THE RAILROAD BILL.

Chairman Powers has presented the ma
jority report of the Senate Committee on
Pacific Roads for the refunding of the debt
owed by the aided railroads 1t contains
the familiar features upon which the roads
have insisted, and therefore contains moth
ing new. The report accompanying the
bill, however, is so remarka BILE produc-
ton that it cannot be permitted to pass
without notice. 1t is a special plea from
the railroad point of view, and embodies
the glaring misrepresentation which have
been so often refuted and without which
the preseD tation of the bill would have
been impossible. 1t studiously ignores
every, argument against refunding, and
could not have been more unfair and
partisan had it been written by the rail-
road attorneys themselves.
1t says, for instance, that 'the acts of
Congress prescribing the provision to be
made by the companies for the repayment
of bonds and the interest thereon have all
been fully complied with by the COM
panies." It confesses, however, that the
acts passed to provide for this discharge of
the debts have not succeeded in accom-
plishing that end. This has reference
principally to the Thurman act, which
provided for sinking fund. Thus the
report places all the blame for the failure
on the acts OF Congress and none whatever
on the aided roads. 1t completely ignores
the notorious fact that the earnings of the
Central Pacific were not only crippled by
the building of the Southern Pacific to
New Orleans and by a necessary division
OF the traffic, but were actually and de-
liberately used in building up the Southern
Pacific, probably for the express purpose
OF preventing the accumulation of an ade-
quate sinking fund for the Central Pacific
and the payment of its debt by that means.
The impoverishment of that fund has
given an excuse for refunding. and that
was doubtless what the Central Pacific was
aiming to accomplish. Meanwhile the
owners of the road have enjoyed those
earnings and the Government has been
deprived of them. Was that full compi-
ance with the provisions of the acts?
The entire report bristles with evidence
of this eager partisanship. Bald misstate
ments abound. 1t asserts that for the
Government to enter into possession would
necessitate the immediate payment of $751;
$4,000 OF first mortgage bonds, and ig-
nores the fact that the holders of the bonds
are not only willing but too anxious
TO accept Government bonds in their stead
bearing low rate of interest. The report
assumes that foreclosure would result in
Government ownership, whereas no ground
whatever for such an assumption exists,
for as the Central Pacific is the shortest
and most valuable overland road and
would yield handsome revenues under
honest management it would undoubtedly
find purchasers at handsome figure.
The excuse for the bill is the cool as
sumption that the roads will be more hon.
est in the future than in the past. In
order. however to provide against possible
dishonesty the bill increases the security
That is curiously paradoxical position.
The increase of the security will only make
foreclosure in case of default more diff
cult. Meanwhile the Southern Pacific can
play with another competing road from
California TO Salt Lake the old trick that
it played upon the Central Pacific in order
to avoid paying the debt hanging over it.