The record-union., 1896-01-30

per mile per ton had fallen from 2.96
cents per ton in 1872 to / 30 cents per
ton per mile in 1895
Chairman Powers inquired if there
was any difference in the rate per mile
during the abnormal year 1891 and
Tweed said there was not.
Did the receipts of the Southern Pa
cific and other Pacific roads show d
similar increase during that year?'
asked Mr.. Boatner.
This question Mr.. Tweed was unable
to answer. He explained that in order
to fund the first mortgage a great deal
of expense must necessarily be incurred
by the roads which would diminish their
earnings, and suggested that during the
first ten years the portion of the charge
IN favor of the Government should be
funded instead of being paid during this
time
You claim that your road has
never defaulted?" said Mr.. Boat
ner. sBut the Government has
paid the principal on some of these
bonds. There was paid S2,361, 600 OF
subsidy bonds which matured in Janu-
airy, 1895, and / consider this default
under the terms of the Act
I think not" said Tweed. "By the
terms of the Act Of 1868 the Govern
ment created a. sinking fund now
amounting to $6,000,O0O, which under
the decision of the Attorney General
he has used to take up these bonds
Does the amount of the sinking
fund to the credit of the Central Pa
cific equal the amount of interest which
the Government has paid on it's ac-
count?" asked .Boatner.
mot in toto,' answered Tweed, upon
all the series of bonds, but it is ade-
quate to pay the interest which goes
with the first series"
Your contention, then" said Boat
ner, lis that the road will not be in de-
fault until that sinking fund in ex-
hausted?"
s'That is my understanding" an
swered Tweed
DO you make any suggestions to the
committee as to the legislation which
you think should be taken?" asked
Boatner
81 have not felt it incumbent upon
me to suggest whether the subject of
the principal and interest upon these
bonds should be taken together or
treated as separate propositions
Suppose" asked Representative Pat
terson of Tennessee, that the Frye bill
was modified so as to make it from the
beginning a bill bearing interest at
per cent, would that be acceptable to
the roads?''
Il do not say that it cannot be done,''
replied Tweed, ''but it could only be
done by carrying over moneys"
To question from Mr.. Boatner as
to whether he was able to state if the
Southern Pacific had suffered a SIM
liar loss in traffic and earnings during
the last four years, Mr.. Tweed said he
thought this was the case.
Does this diminution of the earnings
OF the Central Pacific grow out of the
falling off in passengers or freight
rates. or is it due to it's lease and man
agement by the Southern Pacific?"
asked a member of the committee.
THE lease has nothing to do with
it, promptly answered Tweed. He
claimed that Eastern lines had their
own agents in San Francisco for the
purpose of routing over Eastern lines
and that the Southern Pacific could
not divert passenger travel from the
Central Pacific. He also denied that the
Southern Pacific, by means of its lease
had obtained control of the rolling
stock of the Central Pacific.
Have you read the Smith and Frye
bills?" inquired Congressman johnson.
"I have" answered Tweed.
Suppose" continued Johnson, "Con-
gress should pass either of these bills
L believe they are nearly similar-could
the Central Pacific road work under it
and keep its agreement under it? Sup
pose either the Frye or Smith bill was
passed and the Union Pacific could not
accept it and the Central Pacific ac-
cepted it, could you work under it?"
Il do not see that there is any CORE
lation between the roads," replied
Tweed.
81 understand said Johnson, chat
the provisions of the Smith and Frye
bills are such that the company could
make the payments provided by these
bills and they would accept either Of
them and work under it. Is there any
one authorized to speak upon this sub
ject?"
81 have no doubt that such measure
would be satisfactory" answered
Tweed.
Suppose the proposition should be
made to pay this debt in lawful money .
queried Johnson, land forego the inter-
est, provided p5saznent was made within
a short time. Do you think the Central
Pacific could accept it?''
II should say it could not" was the
reply. There would be too much diff
Guilty in floating the bonds, and the
earnings are not enough on the prop
erty to support another issue''
/ understand you TO say" said Rep
resentative Johnson, sticking tena-
ciously to the one subject. that the
Central Pacific would accept the Smith
bill and work under its provisions and
pay the debt in good faith In doing
that would there be any increase on
rates of fare and freight on the road %
Il think we shall find the same condi-
ton as since 1872 answered Tweed.
Rates would keep going down and the
circumstances of which you speak
would have absolutely no influence
upon it
Il live in California, as you know
explained Johnson, where there is
some opposition to a funding measure,
particularly on the part of the news
papers, whose statements are always
right, and in the campaign speeches of
California Congressnen, whose state
ments, of course, are always reliable.
They have maintained that to fund
this debt would raise freight and pas
senger rates, and that the people of the