The record-union., 1896-12-12
gage.

WASHINGTON, Dec. 1.-Unless the
Pacific funding bill now before the
House is amended to meet the objec-
lions urged against it by the minority
of the Pacific Railroad Committee, it
will be opposed bitterly. The minority,
in a report submitted to-day, recon-
mends that the bill be amanded so as to
provide that the debts due by the roads
be extended at 3 per cent. instead of
per cent. per annum, and that the ex-
tension be granted only on condition
that the companies arrange to secure
the Governments debt by a first mort
gage, upon which it is proposed in the
bill it shall have a second mortgage.
1t is also recommended that a provi
sion be inserted requiring the law Off
GERS of the Government to institute pro-
oeedings looking to a foreclosure of its
lien and the sale of the property, in the
event that the terms of settlement are
not accepted by the respective COM
panies.
Among the objections urged against
the bill in its present form are the ap-
plications provided for in the funding
bill for the sinking fund; the require
ment that the 50, ,4O9,S1S which stands
credited to the Central Pacific Com
pany for services on non-aided lines
should be applied to the payment of the
Central Pacific's debts to the Govern
ment; to the default provision of the
bill, and the prohibition against the
payment of dividends upon the stock
unless actually earned, and unless the
companies shall have paid all interest
due on their bonded debt and all ma
tured installments of the interests.
In reaching these conclusions the mi
nDrity report reciteS the history of the
legislation authorizing the building of
the Pacific roads. The Union Pacific
road and the Kansas Pacific are treated
as one, and, the report states, have been
consolidated, and to them have been
issued S33, 539, ,512 of subsidy bonds. 1t
was, the report states, that when the
bonds loaned these companies were is
sued one-half of the compensation due
by the Government for services rem
dered it by the companies, and that <
per cent. of the net earnings, which WIS
to be applied to the payment of the
bonds and interest, would paw the in
terest and leave something over for the
gradual extinction of the debt. This
the report says, has proved delusive. the
companies having defaulted interest
and suit having been entered for the
same.
The Supreme Court has decided" !" the
report says, that the amount paid by
the Government was not due until the
bonds matured. There is now held in
the treasury available for the purpose
OF paying off the mortgage debts of the
central Pacific Company Sc. 493. .127.
and OF the Union Pacific S15. .325 9S5. 1t
is proposed by the bill to apply the
amounts in the respective sinking funds
TO the extinguishment protanto of the
Governments debt, and to this sug-
seStlon there can be no opposition
The report makes the debt Of the
Union Pacific to the Government after
oeductlng the amount which would be
realized from the securities in the sink
ing fund, 500, ia, ,40S, and of the Cen
trail Pacific, S57 .6S1,514.
The report treats at length of the
sufficiency Of the settlement proposed
by the Union Pacific road. and finds
that that property is appraised at much
more than its cash value. which is
stated by the railroads at SD. 600 600
OF unsubsidized property.
The report states that when the first
mortgage lien of S33 ,o32 600 is consid :