The record-union., 1896-02-15
PACIFIC RAILROAD DEBTS.
The Senate Committee Resumes Hearings
Of the Various Bills Before Il.
New Measure for the Reorganization
of the Union Pacific.

C. p. Huntington, President of the
Southern Pacific System, Testifies
as to the Cost of Building and
Maintaining the Central Pacific
With a Reasonable Extension of
Time the Road Could Pay Dollar for
Dollar of Its Debt and All Accrued
Interest.
WASHINGTON, Feb. 1.-THE SEN
ate Committee on Pacific Railroads to-
day resumed its hearings on the var
ious bills before it for the settlement of
the debts of the Pacific railroads to the
Government.
Winslow S. Pierce, acting for the Re-
organization Committee of the Union
Pacific Railway Company submitted
the Reorganization Committees draft
of the bill for reorganization. This bill
provides for:
1. Appointment by the President,
subject to the approval of the Senate,
of a committee consisting of three mem
bers to investigate, determine and re-
port to the President the fair cash value
of the claim and lien of the United
States.
2. Authority to commissioners to sub
pena and examine witnesses and have
the process of courts.
,. Report of commissioners or a ma
jority of the same, subject to the ap-
proval of the President is to be conclu-
sive as to the sum which may be paid
for the claim and lien of the United
States. The Secretary of the Treasury,
upon such payment, to execute an in
strument of assignment of the lien and
claim, reserving the sinking fund
4. Authority to purchasers to organize
new company, empowered to acquire
and operate the lines and property of
the railway company with such cor
porate powers as are necessarily in
volved
D. The repeal of provisions of prior
Acts which would be inapplicable to the
reorganized company under new condi-
tions, and reserving the Governments
preferred right for the transportation of
mails, troops, munitions of war, etc.
6. 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 sale to bid the amount of in
debtedness to the United States.
4 Reservation of remedies to the
United States and power to alter.
amend or repeal
Replying to questions, Mr.. Pierce said
there was no reason why the provisions
of the bill could not apply to the Central
Pacific as well, if the necessary changes
were made in its wording A separate
bill for the other road, however would
be more practicable.
To an objection raised by Senator
Morgan that it contained no provision
binding the Reorganization Committee
to pay the amount found due by the
commission, Mr.. Pierce said such a pro-
vision could be inserted, or, if the Re-
organization Committee did not accept
these findings, they could retire, and the
Government could go ahead and exer-
else its rights in the property
Mr.. Coombs, representing the Credits
Communication Company, an association
composed of 300 or 400 savings banks
scattered all over the country having
interest in the Sioux City and Pacific
Railroad, addressed the committee in
reference to the affairs of that COM
pany. His proposition was, in short,
that the Government should invest So
100000 of securities in building $50
miles of road from North Platte to
Sioux City, which he guaranteed would
be completing connections with other
lines, giving effectual competition.
Mr. Littles in reply to Mr.. Coombs,
said the proposition of the latter, strip
ped of all sophistry, meant that Con-
gress should assist a lot of Boston
bankers who had made an unsuccessful
Coombs asked $1,000 more per mile
than it would cost to build the road on
which he desired assistance.
c. P. Huntington was then placed
upon the stand, after having been put
under oath, in accordance with the Sem
ate resolution of yesterday. He said
ii the Pacific roads had been built as
military necessities, he knew nothing of
it. He began by reciting the difficulties
under which the Central Pacific was
constructed, and the difference in cost
of materials then and now. Rails then
cost $40 ton, as compared with $50
for steel rails now; locomotives now
costing 5000 to $4,000 cost then $780,
900 to $4,000, with excessive freight
cost and high insurance in bringing
them around Cape Horn. Labor was
high, and everything was paid for in
gold. Mr.. Huntington said he had at
times been compelled to pay 50 20 in
currency for 81 in gold.
When the Central Pacific was COM
p1eted, said Mr.. Huntington, the value
of all its assets was not sufficient to pay
the debt by several millions of dollars
1T finally paid its construction debt in
full, although that construction, by rea-
son of the nature of the country and en-
gineering difficulties, was greatly en-
hanced. AS an instance of this, Mr.
Huntington showed that since 1872 his
company had been compelled to ex-
pend 81, ,241, 600 for snowsheds alone.
The road had never had any trouble
with either the white man or the In
dams: its line of road had formed a
barrier between the two, and prevented
conflicts, and policed the country.
The Central Pacific was to-day, he
said, the best equipped, and could do
TWICE the business, OIL all the lranScOnW-
rental lines With reasonable extern
sion of time, he said the road could pay
dollar for dollar of its debt and all ac-
crued interest.
The charge that the Central Pacific
had not done its duty toward the other
| lines, especially the Union Pacific, he
said, had no basis; it was. as anyone ac-
ouainted with the facts knew. unjust.
The original idea when these roads
were built was that they could do excel