The herald., 1896-02-09
TRACK AND TRAFFIC NOTES
Senate Committee Listens to
Funding Bill Arguments
Mr.. HUNTINGTON PROMISES
That the Central Pacific Will Pay Dol.
lar for Dollar
Expression of Committee Members Indicate
an Inclination to Foreciose the Tort.
gage and Settle Up
Mr.. HUNTINGTON PROMISES
Associated Press Special Wire.

Associated Press Special Wire.
WASHINGTON, Feb. S.-The hearing by
the senate committee on Pacific railroads
of persons interested in securing the reor-
ganization of the Pacific railroads was re-
sumed today. Mr.. Pierce, representing
the Union Pacific reorganization commit
tee, was put through sharp questioning by
Senators Wolcott and Morgan. He stated
that it had been the purpose of the COM
mittee on reorganization to leave consid-
cradle latitude to the government, but the
plan proposed would give the government
about 80 per cent of its debt, principal and
interest, which would not amount to quite
as much as the principal itself. He said
while Depewtand Hewitt were on the reor-
ganization committee, he could not say
whether Gould and Vanderbilt were inter-
ested in the proposed reorganization.
Morgan pressed Pierce to know whether
1t was not possible, under the reorganiza-
ton 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 reor-
ganization committee should itself take the
property. He was doubtful whether if
alien purchasers should secure the property
they would be able under the laws to hold
finite proposition except that 3 per cent
bonds for the principal and bonds to cover
the accrued interest to run fifty years
without interest.
Mr.. Anderson said. as government d-
rector, he was an advocate of a particular
plan of reorganization. He favored q re-
organization which should embrace the
Union Pacific and Central Pacific; he was
confident they were not able to meet both
principal and interest due the government.
He estimated the property was worth $751;
OOO.OOO to $l00,O00.OOO. In 1894 its re-
turns were about $43, ,OOO,O 900, which, he
stated, we're the lowest in years. To arrive
at the value of the government lien, it is
necessary to deduct about $50,OOO,0OO
due on first mortgage bonds and other ac-
counts. He would, he said, recommend
the government accept a cash offer of $780,
O0O, 1000, and it would be better to do this
than enter into 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, because they
would bring mora that way. Mr.. Ander-
son expressed the opinion that the Oregon
Short Line should be foreclosed within six
months and taken out OF the system. He
also expressed the opinion that the fore
closure of the first mortgage bonds would
not only close the government out, but cut
off equity redemption.
Senator Morgan made an effort to secure
Mr.. Anderson's opinion as to the increase
of value of the Union Pacific property in
the next hundred years, in view of the re-
sources of ,he country penetrated, and
asked him if he did not think the invest
ment of S35, 100000 would in that time
prove profitable. Mr.. Anderson replied
that he thought it would be good invest
ment, but mot enormously good" He
said that the experience of investors in the
-fr.vvv, - Il
posite of profitable.
Senator Brice asked Mr.. Anderson to ex-
plain how it was that, with the net earn
lngs equal to twice the amount necessary,
the road management had allowed the road
to approach the point of foreclosure. To
this Mr.. Anderson replied that tire road
was to be foreclosed because the bonds had
reached their maturity. He thought that
the interest could have been taken care of,
however. In the net earnings was included
about 81 100000 for business done for the
United States, which had been withheld,
leaving only about SO 100000 of actual
earnings. 1t 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 concerning
the Central Pacific at q later day, and the
permission was granted. He took occa-
sion, however, to repeat his statement at
the last meeting, that the Central Pacific
meantito pay 100 cents ON the dollar. He
also repeated his statement that the Cen
tral Pacific was in good condition, and
added some facts concerning the cost of
the construction of his road. He said that
less than two hundred miles of the Central
Pacific road across the mountains had cost
more to bnild than had more than a thou
sand miles of the Union Pacific from
Omaha to Ogden. He said the road had
been built with gold, and that many of the
dollar. Senator Morgan asked why silver
instead Of gold had not been used, and
Senator Stewart replied for Mr.. Hunting
ton that at the time the road was built
silver had been worth per cent more
than gold.
David Little furnished the committee
with some additional details concerning
the Sioux City and Pacific road.