Omaha daily bee., 1896-05-02
SENATE HEFOHT ON fAIitiN h'NbS'
BcnutIes OF the Proposed Funding
uiIl Rccountcd Mt Length.

BiIi Rccountcd Mt Length.
WASHINGTON. May l.-Senator Gear,
chairman OF the senate committee on Pacific
railroads today submitted a report on the
bill providing for rcfunding the government
debt of the Pacific roads. The committee
appends a statement from the Treasury de-
partment showing what the estimated debt
Of the roads to the government will be on
January 1 next. Union Pacific principal and
interest are placed at $5S,7l5,i ,i0S. ana the
Central Pacific at S57 ,6Sl, ,514. Under the
terms of the bill the last payment on the
Union Pacific debt would be made on January
l, 1862. and on the Central Pacific on January
l, 1876.
After discussing the propositions that the
government shall acquire and operate the
Pacific roads or foreclose the governments
lien as impracicabe the report takes up the
question of the extension of the debt in
accordance with the bill, as agreed upon in
the committee of the two houses, which bill
II recommends as providing the most ad
visabe course to be pursued
The report says that the general purpose OF
the government in subsidizing these roads
was to promote the construction of national
highways and that the advantages which 1t
was supposed at the time the roads were
organized would inure to the country at
large was rather underestimated than eN-
aggeratel Attention Is called TO the fact
that the congressional status of the subject
imposes on the roads certain specific duties,
but otherwise leave them free from any re-
lations to the government.
Congress at the time studiousy refrained
from any direct construction, ownership or
operation of these highways. IF this pol
icy," says the report, was wise at the time
when the construction of these railways was
demanded by public eX gency and whsn the
railway systems of the United States were
comparatively few and unextended. the wis
dom OF the policy must be far more obvious
at the present day, when tho railways ag-
gregate over $4,000 miles and their capital
lZatlon $l0.740 600 900. This committee will
not recommend any departure from this
policy of the government to keep from
ownership or any connection with the owner
ship of railways. This committee would not
recommend it. for the good sense of the
people would not approve any legislation
looking to the control and operation by the
government of single systems of ra lway in
competition with those controlled and oper
ated by private enterprises or to the inaug-
uraton o: a policy the logical outcome of
which must be the ultimate control and
operation by the government of the great
railway systems of the United States. In
the opinion of this committee the gov
ernment had far better abandon its entire
interest in the property than take the first
step in scheme SO vast and perilous."
With reference to foreclosure. the report
out full provision for the discharge of SUI
per!or Liens and the acquisition of other valu-
able properties which must be acquired in
order to make possible the successful opera
tion of the aided parts of the system. 1t
estimated that 100000. exclusive Of the
sinking fund.- would be necessary for this
purpose
The advantages of the refundng plan
proposed are set forth to be:
81. The security Of the government debt
all hA
critics of the companies, including the nom
aided lines and terminal properties.
These will be necessary that the
debt in the future will be Sc
cured upon completed railroad properties
instead of upon detached properties sub
stantially without terminals and wholly de-
pendent upon outside properties for all that
is most essential to independent and self
supporting railroad systems.
"2 That the railroad company shall
pay the sums on prescribed dates, which
shall reduce the debts to the government as
rapidly as possible and in the meant me
shall pay interest at as high rate as the
earnings of the property will suffice to pay
upon all the debt which shall from time to
time remain unpaid.
The report expresses confidence that both
the Union Pacific and the Central Pacific
companies Will be able to meet the require
ments of the bill ut is,'' the report says,
| always TO be borne in mind that under the
provisions of the bill the. amount OF the
debt will be steadily reduced each year and
that each reduction will increase the security
of the remainder"
1T is believed" continues the report.
that the requirements of the bill in the way
of payments to the government will prac-
tcaly exhaust the anticipated earnings OF
the company. Especial stress is laid on the
fact that the law prohibits discrimination by
Pacific reads" when" it says. lit is
taken into consideration that at the west
ern terminal of the Pacific system there are
five great lines of transportation which have
connections at Chicago and elsewhere, with
great lines of road leading to the Atlantic
coast 1t will be readily seen that this clause
providing for connection with the different
roads practically gives to the transportation
of freight or passengers going either east
or west competition between the Atlantic
coast and Pacific systems