The San Francisco call., 1896-05-02
FORECLOSURE
PREPOSTEHOUS." /"
Such Is the Opinion Of the
Senate Committee on
Pacific Roads.
GEAR MAKES A REPORT.
Ingenious Argamss.1 L rpas.
of the Proposed Scheme of
Refunding Debts.
PERILS OF FEDERAL VENTURES
Reasons Given for the Objection to
the Government Control of
!. Bond.Aided Lines.
PERILs OF FEDERAL VENTURES

WASHINGTON, D. c., May 1.-Gear,
from the Senate Committee on Pacific
Railroads, this afternoon submitted re-
port on the bill to refund debts of the
Central and Upion Pacific railroads to the
Government.
The bill itself was reported several days
ago. The committee does not recommend
any departure from the settled policy Of
the Government to keep inself free from
any connection with the ownership and
operation of railways.
1t does not recommend and feels sure
that the good sense of the people would
not approve any legislation looking to the
control and operation by the Government
of single systems of railways in competi-
ton with those controlled ana operated
by private enterprises or to the inaugura-
tion of a policy, the logical outcome of
which must be the ultimate control and
operation by the Government of the great
railway systems of the United States.
In the opinion of the committee the
Government had far better abaudon it's
entire interest in these properties than
take the first step in a scheme SO vast and
perilous. The foreclosure of the lien of
the Government is disapproved for practi-
cal reasons. The Government-aided parts
of the various roads, upon which the Gov
ernment lien rests, are incomplete at the
outlets and practically without terminals
and other indispensable adiuncts.
These could not be embraced or con.
trolled in proceedings for the foreclosure
of the liens. and could only be avalied of to
complete the lines which might be acquired
forn naIa L
the outlay of large sums of money in addi-
ton to those which would be required to
discharge the prior liens upon the aided
lines.
Foreclosure of the Governments lien
would of course involve the necessity of
providing for the retirement of the first
mortgage debt upon the aided parts of the
property, but under such foreclosure the
Government could only acquire fractional
parts of the system, to the successful ope-
ration in which other lines and terminals
wholly unaffected by the Government lien
is essential.
In the opinion of the committee no fore
| closure of the Governments lien should
be undertaken without full provision pre-
viously made by Congress for the discharge
of superior lens and for the acquisition OF
the other important and valuable proper
ties, which must be acquired in order to
make possible any successful operation Of
the aided parts of the system.
1t is estimated by the committee that al
least 800, 600, 600 exclusive of the amounts
held in the sinking funds would be requi-
site for this purpose. Any proposed ap-
preparation of so large sum of money, sol
the issue OF securities of the United State:
to provide such sum for the purpose o.
making such an experiment, would be lit
tie less than preposterous.
The committee is satisfied that the solu
ton of the existing questions between the
Government and the Pacific railroad cor
porations is to be found in an extension o
the debts due to the United States upor