The record-union., 1896-12-20
Highest all in Leavening stengthLatest S. Govt Report
g! Rs%aesz RRskiHs
ABSOLUTELY PURE


United States. 1t is somewhat sur
prising but nevertheless true that the
subject is better understood in the East
than here. For instance, it does not
appear to be understood In this State
that the Government has never paid a
dollar of the principal of the bonds
loaned to the Union and Central Pa
cific Railroad Companies. Those bonds
aggregate $6O,OOO,OOO. The Govern
.ment delivered these bonds to the
railroads, and they sold them, some
times as low as forty cents on the dol
lar; but they are guaranteed by the
Government and at their maturity
must be redeemed by the Government
''The sentiment at the East is de-
cidedly opposed to any reduction of any
part of the debt and will listen only to
such propositions as look to it's full
payment. Senators and Members Of
Congress say that If the second mort
gage is foreclosed and the Govern
ment claim sold, subject to the first
mortgage, the Government must neces-
sarily lose the difference between the
face of the claim and what it sold for.
and that this would amount to an adj
ditional subsidy to the Pacific rail-
roads. When the consideration was pre-
sented that it would eliminate so much
capital and thereby relieve the cost
of transportation to that extent, the
answer invariably was that there was
no guarantee that the rates of trans
portation would be less, even if the
Government should freely forgive the
railroads every dollar of debt they owe.
Railroads in the United States that
have retired their entire bonded in
debtedness charge the same rates as
other railroads.
AS to the proposition Of Govern
ment ownership and operation, there is
no sentiment favoring that policy. All
such propositions are answered by a
declaration that the Government has
no right to charge low rates of trans
portation in one section of the country
and compete with the private capital
invested in lines already constructed,
or to attempt to influence the routing
of freight or do any other thing nee
essary to the prosecution of railroad en-
terpriseS, and should a loss accrue the
rest of the country is not disposed to
run railroad for the benefit of single
section, or to tax the people of the
United States to make cheap trans
portation for single portion of the
country.
The same objection is lodged against
forgiving any part of the debt for the
benefit of the people Of the Pacific
al
ready been subsidized by land grants
amounting to hundreds Of millions of
dollars in value; and that any device
which would discount any part of the
claim of the Government against the
Pacific railroads is simply gift to
the railroads themselves.
From what 1 learned, I am clearly
of the opinion that a funding bill will
pass, that is, that in the hope that the
Pacific railroads can be made to re-
store to the treasury. of the United
States the money which the people of
the United States have paid in conse-
quence of the loan of the credit
of the Government, an extension of
time will be given. 1t is known that
the railroads have not the present abil-
lty to pay, and that the only way by
which the debt can be collected is by
extending the time to an insolvent
debtor just as private creditors do.
Il do not believe that even the rail-
roads with all their influence could
pass a bill through Congress providing
for the sale of the roads by foreclosure
proceedings. AT the same time the
President has already announced that
unless bill does pass he will foreclose
the Government lien. This, of course,
would be inevitable, and / take the lib
erty of doubling the ability of any one
to pass bill through Congress con-
tanning a provision looking to any other
result than the collection of every dol
lar of debt which the railroads owe to
the Government"