The record-union., 1896-01-30
PACIFIC RAILROAD DEBTS.
An Investigation by the House Com
mittee.
Arguments in Favor of Funding the
Indebtedness-Sharp Cross
Examination.

EXdmlnaC1Ou.
The first meeting of the House Com
naittee on Pacific Coast Railroads for
the purpose of hearing arguments was
interesting to the people of the Pacific
Coast from the time Chairman Powers
called the committee to order until the
close of the session late in the after
noon.
The principal arguments submitted
were by men who advocated funding.
There were two men heard who were
strong advocates of a funding measure.
These gentlemen referred to are Henry
T. Thurber Of New York and G. II.
Tweed of the same city, both of whom
made the best possible effort to impress
upon the members of the committee
that a refunding measure of some sort
is the only way to satisfactorily set
tie this important controversy.
Henry T. Thurber was the first
speaker. He was followed by Attor-
ney Tweed, who argued in favor of
some plan to fund the debts of the Pa
cific railroads. The members of the
California delegation were present at
the session, and put very many pointed
questions to him bearing upon ques-
tions at issue.
Mr.. Thurber, the New York grocer,
commended Senator Frye's bill for
hundred years extension of the debt at
3 per cent. The settlement of the Pa
cific railroad finances, he said, affected
the business interests of the entire
country He had aroused the CONNER
cial bodies of the country to the sup
port of the anti-pooling clause of ex-
Senator Reagan's Interstate commerce
BILL but the logic of events had con-
vinced Senator Reagan and himself
that the prohibition of pooling was un-
necessary, and that railroad rates were
forced as low by competition and other
forces as they could be. The rates on
the Pacific railroads were less than one
third of the standard at the establish
ment of the lines, and this fact should
be considered in paying obligations in
Cured on the basis of those conditions
Congress should do three things to set
tie the business interests of the country
pass a tariff bill to increase the rev.
enue. a. Pacific railroad funding bill and
q bankruptcy bill.
Mr.. Thurber was followed by Attor-
ney Tweed, who consumed the balance
of the afternoon largely in answering
questions of members of the committee
and interested parties present at the
hearing. Mr.. Tweed went into de-
tailed explanation Of the various
branches of the Central Pacific and
Western Pacific, those which were
bond-aided and those which were not,
stating the exact amount of the IN
debtedness of each portion Of the sys-
tenn as well as the amount of the Gov
ernment subsidy bonds. He also gave
the amount Of the various land grants,
calling the attention of the committee
to the fact that great bodies OF these
lands were in Utah, Nevada and on the
mountains, and were of little value
The valuable lands, he stated, was
nearly all upon the western slope OF the
mountains running down to the sea-
and many of these lands were already
covered by Spanish grants.
In reply to a question from Repre-
sentative Patterson as to what he estl-
mated the value Of these lands to be,
Tweed said there were many acres
which could not be sold for 70 cents.
NOW. the next question: said Tweed,
s'is to ascertain how much these lines
can afford to pay the Government after
providing for the charges which are
only way to get at that is to look at the
question of earnings. The statements
for the past six years are as follows:
1890, SS9S, 900; 1891, 81, ,114000; 1892,
SS61. 900; 1893, $7S4, 900; 1894, $144,000;
1895, $4,000.
1.-The year 1891 was an abnormal year,
and since then there has been great
diminution in the earnings. Including
1891, the average per annum has been
SS12.O 900. If we disregard this alb
normal year, it leaves S546,000 as the
average for five years, which would
then be included. SO we can fairly see
what is to be treated as a fair average
of the earnings of the company during
this period. Besides these amounts we
have paid to the Government under the
Advertisement Acts of 1862 and 1864,
and the Thurman Act, a contribution
averaging about S530000 year, which
goes into the sinking fund, but this is
part of the fixed charges in making de-
ductions and giving figures.
There is one other addition which we
hope to get" continued Tweed. THE
first mortgage bonds ahead of the Gov
eminent lien are running now to their
maturity at the rate of 6 per cent. per
annum so that 6 per cent upon these
S27. $4,000 worth of bonds is to be
taken out of the gross earnings in order
to reach the figures of the net earnings.
This must be paid until the maturity
of the first mortgage bonds, and they
are falling due, and will all fail due,
before the end of the century 1t is
hoped that these bonds can be extended
at a rate of interest below 6 per cent. so
that we may be able to obtain a saving
in the future of 115 or 2 per cent. upon
the first mortgage bonds when they
mature"
Mr.. Tweed called the attention of the
committee to the fact that there had
been persistent diminution in the rates
over the line during the past twenty
two years. He gave a table to the