The record-union., 1896-05-09
in view of the situation as it exists to-

in view Of the situation as it exists to-
day.
Three possible lines Of policy seem to
be open to the Government:
First-That the Government should
enter into possession of the properties
under the provisions Of the original
Acts which gave it authority so to do
II the event of the failure Of the COM
panies to repay the subsidy bonds at
maturity. This would, of course, in
volve the practically immediate pay
ment by the United States Of the out
standing first mortgage bonds of the
companies, amounting in the aggregate
to $61, 1886, 900, besides considerable ma
tured and unpaid interest on the Union
Pacific and Kansas Pacific first mort
gage bonds.
Second-A foreclosure and sale Of the
Governments lien upon the property,
at which the Government could protect
itself and it's interests only by providing
the like amount Of upward Of SCI, $780,
600 for the repayment of the first mort
gage bonds of the companies and the
matured and unpaid interest thereon,
and bidding on the property the amount
of the Government debt, or a consider
able portion thereof, which would, no
of the Governments acquisition Of the
roads. If it declined to thus protect its
interest the roads would, of course, go
for what they would fetch, subject to
the first mortgage bonds, which it is be-
lieved would yield little or nothing for
the Government on its debt.
Third-To make an arrangement with
the various companies which should
secure to the Government the payment
on account Of the debt of fixed amounts
at prescribed dates as large as the rea-
sonably anticipated earnings Of the
companies would bear.
The committee has given careful at
tention to the whole subject, has heard
parties representing all interests in con-
nection with the matter. and has
reached the clear and unqualified con-
clusion that the Government should
neither undertake to provide the Sbl,-
3S5,0O0 requisite for payment OF the
first mortgage bonds upon the property
nor acquire the ownership of the prop
critics and assume the burden or their
operation and that arrangements
should be made for now making final
settlement of this controversy upon the
basis of the payment by the compa-
MES of xed amounts, at prescribed
times, to the extent Of the reasonably
anticipated ability Of the companies
based upon the earnings of the prop
critics; but that, in connection Win
making such arrangement, the lien OF
the Government should be so extended
as to cover not merely the aided lines,
substantially bare of terminals and ter
minal facilities, but the whole proper
ties of the companies including the ter
minals and terminal facilities, and the
branch lines and feeders which the sew
eral companies have from time to time
acquired.
The committee has prepared a bill,
which accompanies this report, by the
terms of which it is proposed that the
remaining debts of these companies
shall be extinguished by periodical pay
ments with interest upon the unpaid
sums at the rate of per cent per an
mum, and that these debts shall be Sc
cured by second mortgages, made by
these companies, respectively, which
shall embrace not only the subsidized
parts Of their railroads, upon which the
Government now has a second lien, but
also all their railroads, terminals, lands
and equipments to which the lien of
the Government does not now extend.
The bill provides for the issue of bonds
of the companies for the whole balance
due from them to the United States
(about S112, ,00O,0 ,0O0), such bonds to bear
interest at the rate Of 2 per cent per an
mum, payable semi annually, and for an
nual payments by each company on ac-
count of principal, for the first ten
years at the rate of 1855, 900 Cor 81 900