The herald., 1896-02-15
Proposed Scheme of Pacific Road
Reorganization
HUNTINGTON ON T.rr STAND
Points to the Benefits Following Railroad
Building
He Suggests the AdvisabiIity OF Refunding
the Debt at One and One-half
Per Cent

Associated Press Special Wire.
WASHINGTON, Feb. IA. - Winslow S.
Pierce. acting for the reorganization COM
mittee of the Union Pacific Railway COM
pany, today submitted to the senate COM
mittee on Pacific road reorganization a
draft of bill for reorganization. This
bill provides for:
First-Appointment by the president,
| subject to the approval of the senate, of a
commission of three members to investi-
gate, determine and report to the president
a fair cash value of the claim and lien of
the United States.
| Second-Authority to the commissioners
to subpoena and examine witnesses and
| have the process of courts.
| Third-The report of the commissioners
or majority, subject to the approval of
| the president, is to be conclusive as to the
sum which may be paid for the claim and
the treasury, upon such payment, to exc
| cute an instrument of assignment OF the
lien and claim, reserving sinking fund.
Fourth--Authorty to the purchasers to
| organize new company, empowered to
acquire and operate the lines and property
| of the railway company, with such corpo-
| rate powers as are necessarily involved.
| Fifth-The repeal of the provisions OF
prior acts which would be inapplicable to
| re-organized company under new condi-
lions, and Ieserving the governments pre-
| ferred right for transportation of mails,
| troops, munitions of war, etc.
| Sixth-Authority and direction to the at
torney-general, in default of payment of
| the amount fixed by the commission, to
foreclose the lien of the government, and
upon the sale to bid the amount of the in
debtedness to tho United States.
| Seventh-Reservation OF remedies to the
United States and power to alter, amend
or repeal.
The hearings by the committee on the
Pacific road question was continued today,
with Mr.. Coombs, an attorney for the
| Credit Communication company, on the
stand. He objected to the sale of the
| Sioux City and Pacific railroad except on
condition that another road be built by the
government. He said the Sioux City road
was the only outleu from Fremont, the
terminus Of the Elkhorn, which was the
only competing line of the Union Pacific
running east, and suggested this as the
reason for the desire to secure the sale of
the sioux City. The Vanderbilt family
would thus come into the control of about
one-tenth of the railroad mileage OF the
United States, and about per cent of the
assessed property valuation of the world,
SO that they would be able to combine
with ninety-nine other families in like for
mainder of the population: "We own the
earth you get off"
Mr.. c. P. Huntington took the stand
next. He began by saying that when the
Pacific roads were built SO much was not
heard of their being built for war purposes
as had been since. They were built for the
policing of tho country and to permit easy
/ communication between the east and west.
The promoters of the line were regarded
as crazy. When the road was completed
| the assets were not sufficient to meet the
obligations of the road by several millions
The road benefited many and injured no
| one. Among other things it had vastly en-
hanced the value of the lands through
which it passed. 1t had also had the effect
of causing discontinuance of Indian hos
tilities. Mr.. Huntington dwelt upon the
fact that the road had been kept in fine
condition. 1t was, he asserted, now in
condition to do twice the business done by
all the transcontinental lines. The cut
ting of rates and reduction of time had
been responsible for The fact that the COM
pany was not able 10 meet its obligations.
Replying to the charge that the Central
Pacific had not shown a disposition to CO.
operate with the Union Pacific so as to
form a continuous line, he said that the
| charge was without foundat ton.
or the through freight passage over the
Central Pacific and the Southern Poetic
for the ten years ending in 1892, the Cen
competing lines, while it had for the same
time done 4S per cent of the passenger
business. The records show that the
Southern Pacific and its ocean connection
to New York had gotten the greater part of
their increased business by driving off the
ships that had been carrying freight around
Cape Horn. and had taken very little busi-
ness that would have gone via the Union
( Pacific.
Senator Morgan questioned Mr.. Hunt
ington concerning the contract of his road
with the Pacific Mail company for the con-
troll of the tonnage of this company via the
Panama road wi h Il view to showing that
the purpose was to force business over the
Southern Pacific but Mr.. Huntington cen
tended that he had no interest in the Pa
ciiic Mail, and The object of the arrange
ment was to afford a fair remuneration to
the capital invested.
Continuing he denied with emphasis the
assertion that compulsion was used to get
the California business for the Southern
Pacific and said that company obtained its
business by going into the competitive
field for it. He asserted that the Union
Pacific itself initiated the competition on
the Oregon short line, which was owned by
the Union Pacific, and by charging exor-
bitant rates ON business done for the Cen
trail Pacific, while the Central Pacific had
stood by the Union Pacific OIL all through
business where it could do so without i'll
jurng the public welfare.
MIR. Huntington expressed the opinion
that consolidation of the Union Pacific
and Central Pacific as contemplated by
Senator Thurston's biil,would Re injurious
to the interests Of the owners of both lines.
| He thought such a combination would re.
suit in the extension of other lines west
from Ogden, and believed it advisable. in
the interest of all. that an equitable ar
rancement should be made whereby the
Union Pacific should remain an independ-
ent line. The same remark would apply
to the Central Pacific, and the question be.
fore the committee, as he cOmprehended
it, was whether the Central Pacific Should
be a bridge over which the business con
centratiug at Ogden on all the roads
should be transported, or whether il should
serve that purpose for only one of these
roads. tho Union Pacific.
In concluding his prepared statement
Mr.. huntington said that while this gov.
ernment obligation, was not a personal
debt of his, he felt as great interest as il
it were such, and he was anxious that an
advantageous arrangement should be
made for all parties. He suggested tina,
the debt should be refunded at the rate OF
one and one-half per cent, and provision
made for the payment of fixed sum, say
49, L.