The Wichita daily eagle., 1896-12-08
Pacific Railroads.


public interests involved in an adjust
ment of the obligations OF the Pacific
railroads to the government. l deem 1t
TO be an important duty to especially
present this subject to the consid eration
of the congress.
On January II, 1897, With the amount
all Ieady matured, more than $4,000 oC0
CT the principal and subsidy bonds issued
By the United States in a'c OF the con-
struction of the Union Pacific railways
Kansas line and more than $6.a0o.0oo OF
ike bonds issued in aid Of The Central
Pacific railroad, including those issued
to the Western Pacific Railway COM
pany, have fallen due and been paid. Or
must on that day be paid. by the gov
ernment. Without any reference 70 the
application of the sinking fund nov in
thu treasury, this Will create such de-
fault en- the part of the companies to the
government as will give ii the right TO at
once institute proceedings to foreclose
its mortgage lien. In addition to This
Indebtedness, which will be due Jai.uary
1. 1897 there will mature between that
date and January /, 1899. the remaining
principal of such subsidy bonds, whicn
must also be met by the government.
These amount to more than s20,o09,000 or.
account of the Union Pacific lines and
exceed So, ,000, coo on account OF the Cen
trail Pacific lines.
TERMINATION OR REVISION.
The situation of these roads and the
condition of their Indebtedness TO the
government have been fully set forth in
the reports of various committees pre-
sented to prior congresses and as early
as 1887 they were thoroughly examined
by a. special commissioner appointed
pursuant to an act of congress.
The considerations requiring an ad-
iustment of the governments relations
TO the companies have been clearly pre-
sented and the conclusion reacned with
practical uniformity that IL these reia-
tions are nor terminated they should De
revised upon q basis securing their safe
continuance.
LEGISLATION APPLYING.
Under section of the act of congress
passed March S, 1887, the president Is
charged with the duty, in the event that
any mortgage or other incumbent para
mount to the interest of the United
States in the property of the Pacific rail-
roads shall exist and be lawfully liable
to be forced to direct action of the de-
par:ments of treasury and of justice In
the protection of the interest of the Unit
ed States by redemption or through judi
cial proceedings including foreclosure or
the government liens.
In view os the fact that the congress
has for a number OF years almost con-
stantly haG under consideration various
plans for dealing with the conditions ex-
listing between these roads. the govern
nlent has thus far felt justified in with
holding action under the statute above
mentioned.
UNION PACIFIC CASE URGENT.
In the case of the Union Pacific COM
pany. how ever, the situation has become
especially and Immediately urgent. Pro-
ceeGings having been instituted to fore
close a first mortgage on these aided
parts of the main lines upon which the
government holds a second and subordi-
nate mortgage lien. In consequence OK
these proceedings and complications,
added 10 the default occurring on the
first day of January. 1897, condition
will be presented at that time, so fas as
this company is concerned, that must
emphasize the mandate Of the act of 1887.
and give to executive duty under its pro-
visions q more imperative aspect.
Therefore, unless congress shall other
wise direct or shall have previously de-
termined upon different solution OF the
problem, there will hardly appear to ex-
ist any reason for delaying beyond the
date af the default above mentioned such
executive action as will promise 10 sub
serve the public interest and protect the
government from the loss threatened by
further iraction.