The San Francisco call., 1896-01-16

principal and interest, and without means, ae-
cordlng to its own statement, of meeting any
portion of this liability which was originally
incurred about thirty years ago. Yet TINS cor
poration has the effrohteIy 10 come TO its cred
itor, the Government of the United States and,
III III the lace of its notoriousy fraudulent man
per OF operation during these three decades,
ASKS ASKS that creditor for an extension OF time,
Witnout indicating in any way how 1t was in
tue tue Iuture to provide for the Obligations winch
II mas persistently and successfully planned to
eEade In the past.
The, present Indebtedness is S75 900, 000 in
round numbers, though in reality something
more The interest on this for fifty years at
per reent yenr means just $75,00O,000 more,
or an aggregate of $3.50, 900 900 that must be
pSid partly during and partly at the expiration
OF the fifty years.
1t means that the Central Pacific Railroad
must reserve on an average every year for the
next half century So 600 900 to meet lis obll-
gatlons; that every month it must earn not
Tess than $500 900 over and above all It's oper-
atng expenses and fixed charges; that it must
make net profit, in other words, of nearly
$1,000 day for the next fifty years to come II
II really intended 10 meet the proposed new
obligations.
Now, let US admit that they are asking the
passage OF this funding bill in good faith with
the intention of fulfilling its conditions. 1t is
Iafr TO presume that they will expect to pay
the Obligations OF the Central Pacific Railroad
company only from the earnings of that prov
an fmpossibility.
The latest report OF the Central Pacific Rail
road company made public is that submitted
to the Railroad Commission of this State
That was the annual report of operations end
Ing with June 30, 1894. This showed that the
net income Tor that year was $1,377,720 S8.
out OF this $672,755 was paid to stockholders
as per cent dividend, leaving a net surplus
OF $7O4, 1868 for that year to be applied to such
contingencies as, say, this funding bill, or
about $2,300,000 less than the necessary
amount.
But even let them deprive their stockholders
OF al al M dly1dends and use the entire net income
oI P1,oI1.Zo % 10 meet the obllgatlonS OF the
proposed funding bill, and they would still
fall short fer that year.
ttAnother thing TO be considered, and one
that bears heavily against the possibility Of
the corporation being able to meet the require
! ments OF the proposed extension, is that the
| Southern Pacific Company, which leases the
| Central Pacific Railroad has claimed that the
annual rental of 81 100000 paid that road has
| been source of loss 10 the lessee And it is
| generally understood that this rental was a
| year ago reduced, so that the net income of the
! Central Pacific Railroad is undoubtedly less
| to-day than it was in 1894.
| 1t might be thought by some that they
! would resort TO an increase OF rates; but that
would prove futile and even disastrous, for in
! stead of augmenting the roads income it
would tend to divert traffic to other less favor
! ably situated competitors.
but rates might be advanced simultane-
ously by all the transcontinental lines, as was
| done recently" can hear some one say. Yes,
! but any advance sufficient TO provide The net
| surplus of So 900, 600 per annum would be i'm
practicable with the Panama Railroad Com
pany in the field as an independent and active
| competitor for through business.
Admitting though that even the Panama
people could be induced to serve the purpose
OF the Central Pacific Railroad, it is held in
check by the always present danger OF q COM
petlng line OF steamers or clipper-ShipS via
Cape Horn. And this is the key to the whole
situation. So long as the ocean highway re-
mains 1t will effectually prevent any eXtor-
t1onate measures being inflicted on the ship
pers ofthe country for any length of time.
All that have said assumes that c. P. Hunt
ington would be willing to build up the inter
ests OF the Central Pacific Pailroad at the eX-
pense of his own pet property, the Sunset
route. 1t also assumes that the people of the
chain OF States between here and the Atlantic
would permit the other transcontinental lines
to advance rates TO point that would mean
ruin to the farmers and the manufacturers.
And another presumption, equally as wild
as these other two, is that the Interstate Com
merce Commission would permit the railroads
10 charge such necessarily eXtortiOnate rates.
Nor would the State Railroad Commission al
low the local rates to be placed so high as 10
be unreasonable. | am aware that the power
of the State Railroad Commission is in dues-
ton now before one of the Federal courts but
the action that brought on the present legal
controversy was the attempt to reduce rates
by the commission. q vastly different PROPOSE.
to restrain the railroad from advancing rates
Unless the commission is declared to be uncOn-
stitutional in its very existence, there is no
question but it has the right to prevent un-
reasonable rates being put into force. The
railroad company cannot pay its debts and the
mortgage should be foreclosed by the Govern
ment.