The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1896-12-12
PACIFIC RAILROADS.
minority of the Committee VIII
Make a Very Stubborn Fight For
What They Believe to BE Right.


Washington, Dec. 11.-Unless the Pa
cine funding bill now before the house
is amended TO meet the objections
urged against it by the majority OF
the Pacific railroads committee, the
bill will be opposed bitterly The mi
nority, in report submitted today,
recommends that the bill be amended
SO as to provide that the debts due by
the roads be extended at per cent
instead of at per cent per annum,
/ and that the extension be granted only
on condition that the COMPANIES ar
range to secure the government debt
by hrst mortgage, upon which it is
| proposed in the bill il shall have a
second mortgage.
1t is also recommended that a pro-
vision be inserted requiring the law
/ Cfilcers of the government to institute
! proceedings looking to a foreclosure
OF its lien, and the sale of the property
in the event that the terms of settle
ment are not accepted by the respect
i've companies.
Among the objections stated to the
bill in its present form are applications
provided for of the funds in the sink
ing fund; the requirement that the
y, 40S,SlS which stands credited To the
central Pacific company for services
on non aided lines should be applied
10 the payment of the Central Pacific's
debts TO the government; to the default
provision of the bill. and the prohibi-
ton against the payment of dividends
upon the stock unless actually earned,
and unless the companies shall have
PAID all interest due on their bonded
oeDt ana all matured inStallmentS of
the interest. In reaching these con-
clusions the minority report recited the
history of the legislation authorizing
the building of the Pacific roads The
Union Pacific road and the Kansas Pa
enc are treated as one, and the re-
port states. have been consolidated.
ana 10 them have been issued 1913, 500
Oh OF subsidy bonds. 1t was thought.
the report states, that when the bonds
loanec these companies were issued
that one-halt of the COMPENSATION due
by the government for services rem
dered It by the companies, and that 5
per cent o. the net earnings, which
was 10 be applied to the payment of
the bonds and interest, would paw the
interest and leave something over for
the gradual extinction of the debt.
rms, the report says, has proved de-
luslVe, the companies having defaulted
interest and suit having been entered
for the same
The supreme court has decided that
the amount paid by the government
was not due until the bonds matured. i
There is now held in the treasury, the !
report saws. available for the purpose /
OF paying off the mortgage debts of |
the Central Pacific company. So 1913. 127. :
and OF the Union Pacific company. Sl5- !
325, 9S5.
1T is proposed by the BILL" the re- .
port says, to apply the amounts in the |
respective sinking funds to the extin- /
Drotanre of the govern (
ment's debt and 10 this suggestion
there can be no opposition
The report makes the Indebtedness of
the Union Pacific company to the gov
after deducting the amount
which would be realized from the Sc
curltles IN the sinking fund $53. III 40S
and Of the Central Pacific So, 6Sl, 514
The report treats at length of the
5ufnciency Of the settlement proposed
by the Pacific railroads. and finds that
tAat property is appraised at much
more than its cash value. which is
stated by the railroads a S55. 800 900 of
unsubsidized property.
The report states that when the first
lien of SIS. a32 900 is consid-
cred, that if the roads are sold at auc-
ton, they will not bring sufficient to
satisfy that lien and the governments
debt. The settlement proposed of ex-
-C4ANAAiS Liz @ONEAliiIeEI lDdQ lCf 4U
years at per cent, While the road is
paying ! per cert on its first mortgage
oan. would he unjust to the govern
nent.
If the government extends the sec
1nd mortgage now, the report holds, it
would, in effect, guarantee the pay
nent of the first mortgage bonds.
The report further says what has
oeen said of the Union Pacific applies
equally TO the Central Pacific which
'wed the government $50, sol, 600; that
s, if the government extends the sec
md mortgage. The report recognizes
hat without any fault of ours, con-
iitions prevail which render it neces-
AIRY for the government TO either lose ;
IN enormous sum of money or TO adopt
| funding scheme. but before I'VE can
igree 70 am scheme ii ought to be J
'learly demonstrated that the govern /
nent would be placed in much better
position than it now is. Believing the {
sovernments position would not be ]
materially improved if the terms of the ]
bill! were carried out. we
annot assent to its provisions