The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1896-02-09
SENATORS ASK QUESTIONS.

Hearing on the Reorganization
Proposition Yesterday.
WASHINGTON Feb. S.-The hearing
by the senate committee on Pacific
railroads of persons interested in Sc
curing the reorganization Of the Pa
cific roads was resumed today.
Mr.. Pierce. representing the Union
Pacific reorganization committee, was
put through sharp questioning by Sen
ators WolCott and Morgan.
He stated that it had been the pur-
pose of the committe on reorganiza-
ton to leave considerable latitude to
the government, but the plan proposed
would give the government about 90
per cent of it's debt, principal and in
terest, which would not amout to quite
as much as the principal itself.
He said that while Depew and Hew-
lit were on the reorganization commit
tee, he could not say whether Gould
and the Vanderbilts were interested in
the proposed reorganization, or that
there was an Interior purpose to attach
any person of the Union Pacific system
to either the Missouri Pacific or North
western.
Morgan pressed Pierce to know
whether it was not possible under the
reorganization proposed for an alien
syndicate to get control Of the road.
He replied in case the proposed plan
of reorganization should be accepted it
was contemplated the reorganization
committee should itself take the prop
erty. He was doubtful whether if alien
purchasers should secure the property
they would be able under the laws to
hold it. He said his committee made
no definite proposition except that of
. he
to cover the accrued interest, to run
fifty years without interest.
Mr.. Anderson said, as a government
director, he was an advocate of no
particular plan Of reorganization He
favored a reorganization which should
embrace the Union Pacific and Cen
trail Pacific, and was confident they
were not able to meet both principal
and interest due the government He
estimated the property worth S75,000,-
600 or $50, 000, 600. In 1894 the net earn
ings were about $4,300,0 900, which he
stated were the lowest in years.
To arrive at the value of the govern
ment lien it is necessary to deduct
about $4,000 900 due on first mortgage
bonds and other accounts. He would,
he said, recommend the government to
accept a cash offer of $35, 900, 900, and it
would be better to do this than enter
into the other schemes suggested. This
suggestion was based upon the Union
Pacific alone. but he thought both the
Union Pacific and Central Pacific
should be disposed Of as one line. be-
cause they would bring mores that
way.
Mr.. Anderson expressed the opinion
that the Oregon Short Line would be
foreclosed within six months and taken
out Of the system. He also expressed
the opinion that the foreclosure Of the
first mortgage bonds would not only
close the government out but cut off
the equity OF redemption.
Senator Morgan made an effort to
secure Mr.. Anderson's opinion as to the
increase of the value Of the Union Pa
cific property in the next hundred
years, in view of the resources of the
country penetrated, and asked him if
he did not think the investment of
$50, OOO 900 would in that time prove
profitable. Mr.. Anderson replied that
he thought that it would be a good in
vestment but mot enormously good"
He said that the experience of inves-
tors in the western roads in the past
had been the opposite of profitable.
Senator Brice asked Mr.. Anderson to
explain how it was that with the net
earnings equal to twice the amount
necessary.
allowed the road to approach the point
of foreclosure. To this Mr.. Anderson
replied that the road was to be fore
closed because the bonds had reached
their maturity He thought the inter
est could have been taken care of,
however. In the net earnings was in
Guided about s1,2O0,0OO for business
done for the United States which had
been withheld, leaving only about S.
00000 of actual earnings. It was also
a fact that Judge Sanborn, in whose
jurisdiction the road lies, was opposed
to applying much of the money earned
to the interest account
Mr., Huntington asked to be allowed
to make his promised statement con-
corning the Central Pacific at a later
day and the permission was granted.
He took occasion, however, to repeat
his statement made at the last meet
ing that the Central Pacific meant to
pay 100 cents on the dollar. He also
repeated his statement that the Cen
trail Pacific was in good condition and
added some facts concerning the cost
of the construction of his road. He
said that less than 200 miles of the
Central Pacific road across the noun
tains had cost more to build than had
more than a thousand miles of the
Union Pacific from Omaha to Ogden.
He said the road had been built with
gold, and that many Of the bonds had
been sold for 40 cents on the dollar.
Senator Morgan asked why silver in
stead Of gold had not been used and
Senator Stewart replied for Mr.. Hunt
ington that at the time the road was
built silver had been worth per cent
more than gold.
David Littler furnished the commit
tee with some additional details con-
corning the Sioux City & Pacific road