The herald., 1896-02-25
TRACK and TRAFFIC NOTES
The House Committee on Rail.
roads Hears Hubbard
OBLIGATIONS PERFORMED
On the Part of the Central Pacific
Railroad
Pacific With War In csIifornis Rstss.
Very Low Rstes to Settlers

! Associated Press Special Wire
| WASHINGTON, Feb. 24.-The Pacific rail.
road committee of the house today con-
tinued its hearings. Thomas h. Hubbard
appeared to argue that as far as the Cen
trail Pacific was concerned it fully per-
formed it's obligations to the government.
He undertook to answer the allegations OF
the Anderson report. Whatever existed in
the minds of the public averse to the road
was embodied in that report. The differ
ence between the two suggested modes OF
settlement in the report OF the
commission, and the Frye bill was
that the former proposed to ex'
tend the debt fifty years at 8 per cent, the
latter one hundred years at per cent.
Taking up the minority report of the COM
mission made by Governor Patterson, he
characterized it's statements as exagger-
ated, producing fabulous figures as to the
| profits of the con structors of the road based
on compound interest for thirty years. APP
plying the same method of reasoning to
the advantages which accrued to the gov
ernment in the increase in land values,
ETC., he said the result would be equally
fabulous.
The report placed the amount realized
| from sold lands at $7,3OO,000, when in
fact the last estimate was but $4,000 900
was realized. He then took up the majori.
| ty report and called attention to its con-
clusion regarding the several requirements
of the act in aid of the road. He said 1t was
apparent the road had been built according
to requirements and completed six years
before the agreement. 1t had performed
its obligations also in the transportation OF
troops and in payments from it's earnings.
In the light of these facts, he said. it seemed
strange the companies were constantly re-
| ferred to as insolvent or as undeserving,
| and the question was constantly asked ::
| "Why not make the Pacific railroads dis
gorge; why net force them to make resti-
| tution?"
| The grounds upon which these questions
were constantly reiterated were not that
! the obligations of the company had not
( been performed, but that the assets had
been diverted by undue profits during the
construction. But unless profits to the
contractors were limited by provisions of
the act, who was to measure what the
profits should be? Az a matter of fact,
ment of value of stocks which we're entire
ly unsaleable when the roads we're COM
| pleted. Several years afterward, however,
much of this stock was sold abroad and its
| value increased until it was worth 80. IT
has since been as high as 90 and as low as
| 10 or 10.
| General Hubbard thought the question
of settlement should be considered as a
business proposition, and the contract as
one between individuals. The question
what profit each party to it made should
not enter. THE fundamental error in the
minds of the public was that the men who
built the road were treated as trustees,
| xyq IN road
the continent and it did not want to build
one itself. 1t agreed to contribute bonds,
the latter to be ultima ely redeemed. The
constructors were expected to do he rest
certainly not without the expectation of
profit.
The sensible settlement would be just
euch settlement As business men could
| make. They would not get angry and de-
nounce each other with having made un-
due profits. If they were angry they would
foreclose. If they were not they would do
what was done in the case of every rail.
road mortgage. No one ever thought ct
paying a railroad mortgage in cash with
cut perms sion to issue more bonds. II
railroads had to meet their obligations in
cash every one of them would be insolvent.
The United etstes treasury would be In
solvent. The proper thing to do was to
make an extension with such a rate of in
terest as would enable the company to
carry out the contract. The govern
ment wanted to avoid the payment of
its bonds. The proper thing for the
government was to avoid the payment of
principal. This proposition was that the
government should take care of the inter.
ests and the railroad would take care of the
principal as it became due. For the rail-
road to do both would be for the present
too much of tax on the roads. In answer
TO questions from Mr.. Patterson and others,
he ampliiied his proposition. The sinking
fund, he eaid, could be applied on the prin.
cipal, which would reduce it to a point
where the roads could take care of it. FoI
| the payment of the accrued interest he
would issue ffty-year per cent income
bonds, one-haif of the excess of the earn
ings over 2 per cent to 60 to the sinking
fund and one.half to the stockholders Il
was important, be thought, that the stocl
should pay dividends and not be extin
guiabaa. The railroads, he asserted, could
comply with auc6 pan.
Genersl Hubbard said he would confer
w''h representatives of the Union Pacific
'a!road and it possible devise some plaI
satisfactory to both to settle the difficulty
General Hubbard will appear before ths
committee again next Wednesday.
CAUSE FOR COMPLAINT
CHICAGO, Feb 21.-Western roads hav,
found fresh cause for complaint agains
the Southern Pacific. In conseauenc,
threa. ii war IN California rates are be
ing hl-'ed around with The greatest vigor
THE trautle arises out OF the discovery tina
the Southern Pacific 10 negotiating for tn,
trans = eNation Of large party OF settler
from philadelphia to Colorado at Greatl.
reduced rate. 1t proposes to convey then
by the Morgan line steamers to Galveston
and to carry them over the Sunset rout
and the Denver and Gulf to destination
Trunk Line association roads have notifie,
the Southern Pacific that they will no Ion
ger pay it commissions on the emigran
business IL turns over to them. This will
Indirectly be of great assistant
: to the Western Immigration clear
ing house. The Southern Pacifi
has a number of European aeencie
working up immigrant business for it
Sunset route. Its interests III this direction
are an antagonistic to those of the Wes,
ern In1pfgrant clearing house. 1t has ha
} ! II. employ agents of its own in Europe, an
to pay commissions which will compel
, with those of the southern Pacific.
/ The trunk lines have. up to now. share
} the payment of the Southern Pacific
commission, because they get the frs
part of the hall after the immigrants al
rive in this country. BY their refusal t
do so any longer, The whole burden of tn
support of the European agencies will b
, thrown on the Southern Pacific. and it wi
be less able to compete with the Wester
roads than it was before.
OMAHA, Neb FEB. .24.--Assistant Unite
States Attorney Rush has returned fror
st. Louis, where he secured an order fror
Judge Caldwell from the court of appeal,
: to make the receivers of the Union Pacifi
=. t. L.. e.