The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1896-04-28

WASHINGTON, April 27.-The minority
report on the Pacific railroad bill was
submitted to the house today by Repre-
sentative Hubbard of Missouri. 1t deals
exhaustively with the financial condi-
tions Of the companies concerned in the
proposed funding plan. II argues that
the majority bills should not be adopted
for three reasons:
First-The committee have not learned
enough of the affairs Of the debtor COM
panies to be able to tell the house what
is best 10 do.
Second-The companies made offers be-
fore the committee and are undoubtedly
ready to concede terms very much better
Tor the government than those embodied
III the bill.
Third-The propositions in the bill are
neither good nor safe for the government.
Under the first head it is contended that
most of the parties who appeared before
The committee We're Interested IN the rail-
roads and that every diSlntereSied voice
advocated foreclosure proceedinSs-not in
view that the government should operate
the railroads but to protect the govern
menl as a preliminary step. 1t was not
considered whether the government mas
lien on ali the assets under the Thurman
act either IN view OF the acceptance OF
that act by the companies CT Us matter
OF law. Inc extent OF me lien Oh the
government otherwise is in much doubt.
The road compares the statement of the
Central Pacific earnings made by its at
lorney, Mr. Tweed, with the statement in
Poor's manual from 1880 TO 1894. In the
first of these years Mr.. TWeeds state
ment was 1855, csc; Poor's $6,061, $50; in the
last year Iweed's $144,G00 Poors $4S5A,llz.
The report declares that there is no
assurance that those would be carried out
because both companies are insolvent and
their undertakings idle; that SO far as
the Union Pacific is concerned. it is an
option to the cOmpanyS successors, I'M
limited in time and binding on the gov
eminent.
In regard to the Central Pacific II says
1t was advanced before the committee
as an open secret that the Central is
saved from default only by the purchase
OF its subsidy bonds by its friends who
carry them without interest to prevent
their presentation to the government for
payment. pending this settlement. As
TO which of the two companies showed
the NEST Strength-the negotiation offer
ing the same terms to each was carried
to point where the Central broke down
and the Union still stood up.
Under the Powers bill the principal in
debtedness would be reduced to about
$2S G90,000, while under 10 other plan could
II be less than ,000.G09, exclusive of
$50 00D.C00 preferred stock, if that were
taken instead of that amount of second
mortgage instalment bends. So that most
Of the debt all of the time and all of the
debt most of the time would be secured
as part of first mortgage instead of a
second mortgage all the time as proposed
in this bill
Assuming that the sinking fund provid-
&c IN the bill may pay the Union Pacific
DEBT IN e,ghty-one years. the report as
serts that the company would pay $780,
OG0 900 in principal and interest. while
under the company's first offer it would
nave pald IN interest during the same
time on S25,090o00 1 per cent bonds, S113,-
OOO,eOO. The offer tho committee rejected
IS said to be S4S.000000 better than the
bin under which il is held the Union Pa
eihc company VIII practically never pay
the government dollar in money.
My. Hubbard holds that for the pro-
lection Of the interests of the govern
ment these conditions are necessary TO
First the main lines of the Central and
Union Pacific should be united for the
support of the common security which
the government must take on both.
Second the United States should never
again rely upon a Junior encumbrance.
Third, a bill which purports to consti-
tute contracts by the United States
with other parties should deal with foun-
dalton titles and the holders of them.
There is an exhaustive contention of
government lien on the subsidized part
Of the Kansas Pacific division. 1t is held
that with this lien established and the
Central Pacific freed from its lease to
the Southern Pacific, the roads could be
restored to their old prosperity and the
be assured. In connection with the
Southern Pacific of Kentucky, it is held
that the business into which some of
the states have fallen of selling char
tiers for extra territorial operation is
manifest evil
The additional, argument is made
against the committee bill that it is
in conflict with the principles of the anti
trust law and viii create two of the
greatest railroad monopolies in the coun-
Try; that it is contrary to the constitu-
ton Of California. and that of Nebraska,
which require that stock be issued for
values only.
1t is said the Union Pacific reorganiZa-
ton committee. having organized three
lourths of the first mortgage bonds, is
pressing for a foreclosure, which would
bar the governments secondary lien. To
prevent this, the Morgan-Brice bill is
recommended.
The report concludes that the secretary
of the interior having held that the gov
eminent claim is good and should not be
discontinued over 20 per cent, the at
tcrney-general assisted by Governor
Hoadley having drawn bill to determine
the government lien, which bill is sup
ported by Senators Brice and Morgan,
when the government directors have said
the roads are worth much more united,
have a plan to unite them and assure
congress that capital is waiting to bid
for the property in that shape, it would
be unwise to pass a bill which declares
the government lien TO be limited, when
the Thurman act said il should not be.