The record-union., 1896-03-04
THE RAILROAD, THE GOVERN
MENT AND RAILROAD ENE-

In Mr.. Huntington'S statement be-
fore the Senate Committee on Pacific
railroads he expressed the conviction
that, with a reasonable extension of
time, the Central Pacific Company can
pay every dollar of its Indebtedness
to the Government.
This matter has now been SO thor
oughly debated that we are justified in
the statement that such is the judg-
ment of all fair-minded men who have
business perception and wisdom.
Meanwhile, as the company is paying
its debt, principal and interest, it will
be paying upon the funded aggregate
as much interest currently as the Gov
ernment would have TO pay were it
to borrow a sum equally as large on
long time.
It is an indispensable fact that when
the first transncontinental road was
built no one expected another road to
parallel the line for very many years,
yet hardly was it completed before the
Government gave to a road immedi-
ately north of it land subsidy larger
than the value of the land and bond
subsidy granted to the Central Pa
cific. In the business transactions of
the world this would be regarded as
unfair, if not culpable, on the part of
a creditor. It would be deemed, un-
quesuonably, depreciation of a secur-
ity by the holder thereof and would
give the debtor an equity as against
the creditor that would not be ignored.
But in this case the Government act
ually went beyond that breach of
faith and subsidized third line, one
lying south of the original, as heavily
in grants of land.
Mr. Huntington is far more gener-
Gus in Judgment regarding this mat
ter than most men would be. for he
says that probably the Government
did well in this action, since it ex-
pected the other roads to do as well
foa it as the Central Pacific, and it
had before it the evidence of vast
benefits to the Government from the
construction of that initial line, in
the building up of the country through
which it runs, in transportation service
and enormous savings to the Govern
ment resulting from the new economy.
The land grant to the Central Pa
cific has been greatly exaggerated; in
fact, it was not nearly so valuable as
has been popularity supposed. Very
much of the best California acreage
was covered by Spanish grants. guar
anteed under the treaty with Mexico,
so that the most of the lands received
by the Central Pacific Company were
in the higher mountains of California,
Nevada and Utah, and these were not
of notable value; indeed, it is the opin-
ion of good judges, and the appeal was
made to the knowledge of the COM
mittee on that subject, that half of
these lands with the railroad con-
structed is worth more than the whole
of them without the railroad.
A fact is to be taken into account at
this point, to which the witness does
not refer, that the construction of the
read gave great value to Government
lands along its line and near by,
which before that had really no value,
since they were mainly inaccessible,
and there were near to them no or
few civilizing influences or agencies
to give value to them. SO that in that
respect the Government would have
been an enormous gamer had it never
contemplated any return of indebted
ness from the Central Pacific.
The next point made is that there
wish the Federal Government to take
the transcontinental roads and op-
crate them for the benefit of Califor-
MIA, or to do anything else that viii
work injury TO the owners of the
roads and those who built them when
no others would undertake the great
work. These people have a grievance
or imagine that they have. and they
have led off into their way of think
ing some others who are satisfied with
a one-sided view Of the question, are
misIed by false statements, misrep-
resentation of facts, Justification OF
matters of record and by the sophis-
teal arguments of demagogues.
Some are unquestionably entirely sin
cere in their demand for Government
seizure and operation. They doubtless
believe it TO be a wise and possible
economy, and some others are equally