Evening star., 1896-12-28
PACIFIC RAILROADS
The President Has Had Conferences
About Them.
EXTENT OF THEIR INDEBTEDNESS
Foreclosure Proceedings Likely to
Be Instituted.
L III E FUN DING PLAN

The President has had several confer
ences of late with the Attorney General
the Secretary of the Interior and the Sec
rotary of the Treasury, with a view To
speedy action for the adjustment of the OBJ
legations of the Pacific railroads to the gov
eminent. Ii is said to be settled that stems
Will shortly be taken for the foreclosure of
the governments mortgage on these roads
unless Congress shall make other provision
Tor the settlement of the question at its
present session.
with the amount already matured more
than Sl3.V0.oo0 of the PRINCIPAL of the sub
sidy bonds issued on behalf of the Union
Pacific line. and more than $60nosl of
similar bonds issued in aid of the Central
racine road will have fallen due and been
psld, or must he paid on before the LIST
OF January next Without any reference
10 the application of the sinking fund nov
IN the treasury, this state of affairs will. I'm
the opinion OF the President, create such
a detault on the part of these companies 70
the government as will give it the right 10
its mortgage lien"
In addition to the above stated indebted
ness, maturing January 1 next, thereswiu
mature thereafter by January l. lSse1 the
remaining principal of such subsidy bonds
winch must also be met by the government,
Ihese aggregate about SAL 600 900 of which
s.o,o~,ooo are on account of the IrpIon
racine and s2l,@o.00o on account of the
Central Pacific company. ''
The President's Position.
fhe PRESIDENTS position on this subject
Is stated In his last annual report TO Com
sress IN the Following vigorous language:
ne situation of these roads and the
condition of their indebtedness to the GOV,
ernment have been fully set forth I'm the
reports of various committees TO the nras
ent ana prior Congresses
1891 they We're thoroughly examined by a
speciai commission appointed pursuant TO
an sct OF congress. The considerations re-
qulrlng an adjustment of the governments
feiationS TO the companies have been clear
ly presented, and the conclusion reached
with practical uniformity that IL these re-
lauons are not terminated they should he
revised upon basis securing their safe
continuance.
nder section of the act of Congress
passed March 3. 1887, the President is
charged with the duty, in the event that
any mortgage or other incumbrance nara
mount to the interest of the United states
IN the property of the Pacific railroads shall
exist ana be lawfully liable TO be enforced
10 direct the action of the Departments of
Treasury and Justice In the protection of
the interest of the United States by re-
demption or through judicial proceedings.
including foreclosures of the government
liens.
I'm view of the fact that the Congress
mas Tor number of years almost con-
stdhiiy nan under consideration various
plans Tor dealing with the conditions ex-
isting between these roads and the govern
ment, 1 have thus far felt justified i'm with
holding 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-
ceedinss have been instituted to foreclose
a first mortgage upon those aided parts
of the main lines upon which the govern
ment hold second and subordinate mort
gage lien. In consequence of those pro-
ceedinSs ana increasing complications add
ed 10 the default occurring on the LIST day
OF January. 1897, condition will be pre-
sented al that date, so far as this COM
pany is concerned, that must emphasize
the mandate of the act of 1887 and give 10
executive duty under its provisions a more
imperative aspect. Therefore, unless Con-
gress shall otherwise direct, or shall have
previously determined upon different So
luton of the problem, there will hardly
appear to exist any reason for DELAYING
beyond the date of the default above mem
toned such executive action will promise
to subserve the public interests and save
the government from the loss thra atened by
further inaction."
The Funding Plan.
A plan for the funding of this indebted
ness is now under consideration in both
houses of Congress. 1t was formulated by
the Pacific railroads committee and pro-
vides generally that the debt of the Pacific
railroads now due shall be paid in install
ments. bearing two per cent interest, ex-
tending ever period of about fifty years.
The House of Representatives has set aside
January Z. and . for the consideration of
this measure. Pending the consideration
of legislation on this subject, IL is not at
all likely that the President will feel il
necessary to take any immediate action.
but il is stated that he desires to have the
question settled before the end of his term,
and that If he concludes thet there is
reasonable prospect If remedial legis la ton
at this session of Congress he will GER
tainly direct the institution of foreclosure
proceedings against the railroad companies.