The herald., 1896-04-30

The Pacific railroads reIunolnS OIL 10
now before the public and will soon be
the subject of some very animated dis
cussion in the house Of representatives
II the utterances regarding it by Con-
aressman Hubbard Of Missouri and
Congressman Mcguire of California in
dicate anything, and the chances are
they indicate good deal that will be
distasteful to Mr.. Huntington and his
associates in business.
It is quite apparent that the funding
bill has been prepared in about the same
way the Mckinley tariff law was built.
In the latter instance Mckinley and a
few other Republican members Of the
house ways and means committee con-
structed the outline Of the measure and
the protected interests" and infant in
dustries" did the filling in. 1t ought to
have been entitled an "Act for the
Plucking Of the American People" e"draft-
ed by the Associated Monopolies of the
United States. In the case of the Pa
cific railroads funding bill the work has
been a little easier Mr.. Huntington
has been practically the only individ-
ual to be dealt with. He knew what he
wanted-he always has clean cut and
decisive notions of what he wants, not
withstanding the magnitude of his de-
sires-and a majority of the committee
were prepared to grant his prayer. Thus
the thing could be expeditiously done.
In fact. it might be said that while the
committee held the pen that wrote the
funding bill, Mr.. Huntington did the
propelling.
The Powers bill is much more favora-
BILE to the indebted railroads than the
Reilly measure defeated in the last con-
gress, so that if Mr. Huntington regret
ted the failure of the Texas congress-
mans attempt to aid him, he can now
be glad that he was sorry. The Powers
bill extends the time in which the aided
roads can pay what they owe the gov
ernment to something over eighty years,
or more than thirty years longer than
the period provided for in the Reilly
bill. 1t is better for the defaulting COM
panies than the plan proposed by Gen.
Hubbard, one of the Southern Pacific
directors and counsel. It is more lib
eral than the scheme suggested by the
attorney Of the reorganization COM
mittee of the Union Pacific company.
In fact, in the Powers bill the apparent
ly invincible Huntington carries the en-
tire works and the wonder is that the
government has any mortgages left at
all. The acceptance of the Powers bill
virtually amounts to the government
loaning the subsidized roads the amount
OF the principal and accrued interest
Of their debt for nearly a century at
per cent per annum, or one-half to
three-quarters per cent less than the
government itself can borrow money on
gold bonds and two to three per cent
less than Mr.. Huntington can borrow
for in the open market with twice the
security he has to offer the government,
taking the security at his highest val
uation. This provision of the bill
should alone be enough to kill it.
The subserviency Of the majority of
the Pacific railroads committee to Mr..
Huntington is shown in the way their
report juggles with the facts concern
ing the financial relations of the roads
with the government and by the mis-
leading presentation made of the differ
ences between the chief parties in inter-
est. The following from the San Fran
cisco Examiner in this connection
makes interesting reading:
"As we pointed out yesterday, Mr. Pow
ers' statement of the three alternative
ways In which the government can treat
the Pacific railroads debt is grossly in
complete and misleading. If the govern
ment enters into possession of the prop
critics 1t does not Involve the immediate
payment Of s61, ,3S5,000 first-mortgaga
bonds; the government would have no
dimculty In extending these bonds at its
pleasure at 81 per cent interest or less
as Secretary Window extended the per
cents and the per cents that fell due in
1881. And the arrangement with the
companies" to which Mr.. Powers and
his associates are committed does not
secure to the government payments "as
large as the reasonably anticipated earn
ings would bear; the Powers Gear bill
provides for payments on the Central Pa
cif1c's debt beginning at $1,5S3, ,52O and
having maximum Of 81, 1856, 514, while
the financial statements of the company
show that the aided portion of the Cen
trail Pacific has earned about $3.50. 900.
net, per year, for the past five years--a
oufdcient sum to leave $2,798, $40 after
paying interest on the first-mortgage
debt at 81 per cent.
It y plain. however, that figures are