The Portland daily press., 1897-01-09
TO FORECLOSE OR NOT.
House Discusses Pacific Railroads
Debts.
THE POWERS FUNDING BILL
CAUSES LIVELY DEBATE.

Ownership Strongly Opposed
by Those Favoring the Measure-Con-
pressman Mccall and Others Think the
Government Can Make Better Bargain.
Washington, January SIN the House
today upon request of Mr.. Turner a
resolution was agreed to instructiDg the
attorney general to add to his last annu-
al report full copies Of all corrsspon-
dence and kilograms between the depart
ment and public officers and all persons
relative to the great railroad strike in
Chicago in 1894 and the action OF the
government in snpprsssing the same.
The House then went into commit
toe of the whole to further consider the
Pacific railroads funding bill.
Mr.. Patterson opened the days proceed
ings in brief speech supporting the bill
He said he did not subscribe to the theo-
ry of the sentimental side of the con-
troversy, that the builders of thsse roads
were great public benefactors, opening
I'D a vast territory to the growth of the
Improvement and prosperity Of the ma
tion. There was another side, which
might be called the popular side, that
held these men up to scorn as public rob-
bers. He did not subscribe to that view.
either.
MI. Patterson said the government had
loaned It's credit to the companies by
issue of its bonds. taking as security for
the repayment of money, second mort
gage upon certain property. The bonds
issued amounted to something over sixty
millions and the security WAS second
mortgage upon about 5000 miles OF rail
road. This mortgage did not include
terminals of railroads, an assertion In
harmony tn the opinion OF the Su-
United States The obligations resting
upon the railroads in addition to the
government lien, amounted to about
$50, COO mile, which together with the
causes mentioned by Mr.. Powers, made
il impossible for the railroad companies
to earn and pay interest on their debts,
not to speak of the principal OF their
obligations, amounting a'sogetner sue
about $175, 600, 0O0 The question was
stwhat is the government going to dc
with this enormous indeptednessg' Two
practical propositions presented them
selves. One contemplated government
ownership and management to the rail-
roads, the other, and only, alternative
was settlement with the owners. 10
the first be was unalterably opposed, pre-
ferring the whole debt should be can.
celled rather than that Congress snoulo
take the roads.
"All my public life" Mr. Patterson,
said, Il have been trying to get the GOV
ernment to go out OF the banking busl-
ness and most earnestly protest against
its going into railroad business. Time.
was an important and essential element
in the settlement of a question. Tht
companies should be accorded a perioo
of sufficient length..to enable them to pay
the debt. In return for that concession
the companies include within their mort
| cages to the government all the1l
property including terminal and about
| Thousand additional miles of road.
| He endorsed fully the provisions OF tht
| bill, AS constituting a just, reasonable
| and business-like basis for settlement, IL
view of the earning capacity of the cor
poratiols.
MIR. Harrison, Democrat of Alabama
believed tbs time had come for Congress
to take action. He could not support thu
pending measure because 1t was far toe
| favorable to the companies. Re had pre-
pared substitute for the bill and would
ask the house to consider it, making th'
secretary of the treasury. secretary OF tht
interior and attorney general. com NIT
tee with full power to investigate ano
settle the debt of the Pacific Railroad
companies subject to approval by th'
| President.
This was in accordance with the re
com mendation of President Harrison aDt
of the present railroad commissioner and
HIS predecessor The principal duty de
volving upon Congress nPw was action o
some kind.
Mr.. Boatner, Democrat Of Louisiana
said the House WAS asked to accept, thu
terms of the settlement dictated by th'
railroads themselves and based upol
their alleged poverty, because the. gov
ernment bad mortgage security Tor lt
debt upon the disjointed portions of th
railroad system. If section nine Of TN
Thurman act was not in contraventlo'
of the constitution, the government dl'
have su bstantial lien upon the ent1r
property of the railroads and in the fac
of this fact proposition was advocated
here to accept the companies offer OF
settlem ent of the theory that the govern
mant was q helpless creditor OF an IN
solvent corporations, whose business ma
been go mortgaged as to divert all asset
beyond the power of recovery. Mr. Boat
ner reviewed the history of the conpanle
to prove his assertion, that the STOCK 9
the corporations have been lile9aii
issued to the officers and directors an
members of those boards were lndlVloua
ly liable to the United States for IN
value of stock thus fraudulently ana Ills
gally issued, after the ability ofthe corpol