The record-union., 1896-12-25

| sinking funds accumulated under the
Thurman funding bill, but on January
| 1St, and succeeding years, the re-
mainde. of the Indebtedness repre-
sented by the bonds natures: and the
Pacific railroads being unable to re-
| deem these bonds, and the Government
of the United States having guaranteed
their payment, the question arises as
to whether further time shall be given
these roads to meet their obligations
or whether the Government shall incur
a loss of from eighty to ninety millions
| Of dollars by an immediate forced col
| lection.
From the facts herein presented, ev
cry thoughtful mind will be prepared
to accept the conclusion that an extern
sion of the time is the only policy
which will protect the Government
against this loss. 1t has already been
sufficiently demonstrated that fore
| closure proceedings entaiIed a loss in
| the amount stated. 1t has already been
clearly demonstrated that Government
ownership and operation is impractical
BILE, and it has been as clearly demon
Strated that the sale of the Govern
ment's claim will result in a further
subsidy to the Pacific railroads of from
$50 600. 600 to 500, ,0O0, 600 The issue
raised then by the funding bill is, Shall
the railroads be permitted to discount
| the claims of the Government or shall
there be granted additional time by
which the second mortgage creditor
may hope to recover the full face of it's
claim?
This condensation Of the issue is ir-
refragable. 1t will be contr0verted
only by those who desire to obscure and
miSrepresent the real status of the
question.
The interest of the people of the Pa
cific Coast in this matter is paramount.
and their interests clearly lie in the df-
rection of extending the time for the
payment to the longest limit and at the
lowest rate of interest. The smaller the
annual installments of principal and
interest TO be paid. the less will be the
annual charge gagainst the transporta-
ton of the commerce of this coast
We may reasonably expect a constant
augmentation Of the volume of trans
portat1on by the central route and fu-
ture generations should share the bur
dens of a debt which is not at this time
by any possibility recovera BILE. From
the standpoint Of the highest interests
of the people of California therefore,
the longer the extension of time and
the lower the rate of interest the bet
ter it is for them
Nor is the proposition assailable on
the ground that the Government takes
a low rate Of interest The &101 900 900
OF the Governments claim is for inter
est which has accumulated practically
at the rate of 10 per cent per annum
upon the amount made available in the
c. instruction of the roads by the sale of
the bonds. At any time since 1870 the
Government Of the United States could
have called in the Pacific railroad
bonds and could have refunded them at
from > to , per cent. There is, there
fore, a false and fictitious factor in the
amount of the claim of the Govern
nlent In actual equity at least 30 Der
cent. of that claim has no basis.
1t is scarcely worth while in this
presentation of the case to refer To the
benefit which the Government derived
from the construction of these roads. A
single instance, however. will be cited. |
IN 1863, the year after the passage of
the first Act, and one year before the
passage of the amendatory Act. the ag-
gregate collection Of customs duties at |
the port Of San Francisco was S631 =
S31. The development conferred by con-
recting California with the East by rail |
SO augmented the commerce of the Pa
cific Coast that the customs duties col |
lected at the port Of San Francisco in |
1883 amounted to S10.1S 393. 1t had |
arisen to this figure gradually. Even |
during the last five years of depression. |
the custom duties collected at the port |
of San Francisco averaged 81, ,299. 900 !