Kansas City daily journal., 1896-12-08
BoND-klDED RAILROADS.
Unless Congress- Acts Quickly Pro-
eeedinEs for Foreclosure VIII
Be Instituted.

Be InstlLuNeu-
sacretarv Francis calls attention 10 the
public interest involved in an adjustment
of the obligations of the Pacific railroads
10 the government deem 1t 10 be an i'm
portant duty TO especially present this sun
1ect 10 the consideration Of congress- Ol
January II, 1881, with the amount aIready
rnatured. more than Sl3,0O0J0o Of the prln-
cipaI Of the subsidiary bond lssuea
by the United States in aid or the con-
Etruction Of the Union Pacific railway III
gliding It's Kansas line, and more thah
Fs OOe 90 Of Ike bonds issued In aid OF the
Central Pacific railroad, including those is
sued TO the Western Pacific Railway Com
rauy. will have fallen due and been paid
or must on that day be paid by the govern
Ynent without any reference TO the ap-
plcation Of the sinking fund now In the
treasury, this will create such a default on
the part OF the companies to the govern
Jnent as will give it the right to at once
institute proceedings to foFeclose its mort
gage lien.
In addition 70 this Indebtedness, which
viii be due January l. 1897. there will ma
1ure between that date and January l, 1893,
the remaining principal of such subsidy
bonds, which must also be met by the gov
eminent These amount to more than So
6D0,OO0 on account of the Union Pacific lines
and exceed 81, ,O0oOo0 on account of the
Central Pacific lines
The situation of these roads and the
condition of their Indebtedness 10 the gov
ernment have been fully set forth in the
reports Of various committees to the pres
ent and prior congresses; and, as early as
1887, they were thoroughly examined by a
special commission, appointed pursuant to
an act of congress. The considerations re-
quirnE an adjustment of the governments
relations to the companies have been clear
Iy presented and the conclusion reached
with practical uniformity that If these re-
iatjons are not terminated they should be
revised upon q basis securing their safe
continuance
Under section OF the act OF congress
passed March g. 1887, the president is
charged with the duty, in the event that
any mortgage or other incumbrance para
mount TO the interest of the United States
In the property Of the Pacific railroads
shall exist and be lawfully liable 10 be
forced 10 direct the action OF the depart
1nents OF treasury and justice in the pro-
lection Of the interest OF the United States
by redemption or through judicial proceed
inEs. including foreclosures of the govern
znent Hens. In view OF the fact that the
conFress has for a number of years al
most constantly had under consideration
various plans for dealing with the condl-
1ions existing between these roads and the
government, I have thus far felt justified
fn Withholding action under the statute
above mentioned.
In the case Of the Union Pacific com
pany. however, the situation has become
especially and Immediately urgent. Pro-
ceedings have been instituted to foreclose
first mortgage upon these aided parts
of the main lines upon which the govern
-nent holds q second and subordinate mort
gage lien In consequence of these pro-
ccedings and Increasing complications
added TO the default occurring on the 1st
day OF January, 1897. a condition Will be
presented at that date, so far as this COM
pany IS concerned. that must emphasize
the mandate of the act OF 1887 and give to
executive duty under its provisions a more
Imperative aspect. Therefore. unless con-
eress shall otherwise direct or shall have
previously determined upon a different So
iutIon OF the problem. there will hardly
appear to exist any reason for delaying
beyond the date OF the default above men,
1ioned such executive action as will prom
sse to subserve the public interests and
save the government from the loss threat
ened by further inaction.