The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1897-01-09

cSbt1eHeHG OF the QeDE was tnaC III was
practically impossible for members of
Congress to thoroughly inform themselves
upon the condition of the corporations.
This was in accordance with the recon-
mendation of President Harrison and the
present Commissioner of Railroads and
his predecessor. The principal duty de-
volving upon Congress now was action of
some kind.
Boatner CD of Louisiana who opposed
the bill. said the house was asked to ac-
cept the terms OF settlement dictated by
the railroads themselves and based upon
their alleged poverty, because the Govern
ment had mortgage security for its debt
upon disjolnted portions of railroad sys-
tenn.
If section 9 of the Thurman act was not
in contravention of the constitution the
Government did have a substantial lien
upon the entire property OF the railroads,
and in the face of this fact proposition
was advocated here to accept the compa-
MES offer of settlement on the theory
that the Government was helpless cred
ltor OF inso!vent corporations, whose BUSH
ness had been so managed as to divert all
their assets beyond the power of recovery.
Boatner reviewed the history of the COM
panles to prove his assertions that the
stock of the corporations had been ille-
gally issued to the officers and that the
members of these boards were individu-
ally liable to the United States for the
value of the stock thus fraudulently and
illegally issued after the ability of the cor
porations TO meet the Government debt
I. - "a 81 Iv,%r1 0f
the law officers of the Government to pro-
coed against these officials and directors,
and any member who voted for this or any
other funding bill simply voted to quit
claim the Governments right TO proceed
against the men who had violated the
laws of Congress and to confirm them in
the holding of their illegally gotten
wealth.
Swanson (D.) of Virginia asserted that
the bill was not half so good an offer for
the Government as Senator Brice reported
that Alexander E. Orr, chairman of the
Union Pacific Reorganization Committee,
made to Congree two years ago. Then it
was proposed to extend the Government
debt at per cent, the company TO retire
present prior obligations and give the
Government first mortgage. The pres
ent bill, the declaration Of the gentleman
from Vermont (Powers) to the contrary
notwithstanding did not give the Govern
ment a single dollar for additional secu-
rity. while it increased the principal of
the Union Pacific debt $21, 0O0,0 and of
the Central Pacific $24, 100000. Swanson
insisted that the railroad companies could
do much better for the Government than
the bill proposed and ought to be made to
do so. Union Pacific stock, subject to an
assessment of SIS share. was quoted to-
day at 50 so and $40 in the New York
Herald, showing that the stockholders of
the com pany were willing to assume the
payment of the frst-m ortgage bonds and
the Government debt and put SIS q share
more in the treasury.
Mccall (R.) of Massachusetts desired to
bring one thing to the attention of the
House. The reports of the committee on
this bill and of The previous committees
in Congress were based upon the assump-
ton that the Supreme Court had decided
that the Government had no lien upon
the terminals of the road. especially upon
the Omaha bridge. This was, in his
opinion an error. The court had decided
in the Kansas Pacific Railroad case that
the Government was entitled to demand
per cent of tho net earnings only OF
that portion of the road which had re-
ceived from the Government aid in its
construction; but in the case of the United
States VS.. the Denver Pacific decided the
same day and by the same Justice, the
Supreme Court held in express terms that
The earnings of the Omaha bridge and
terminals were to be included in making
the calculation, specifically declaring
under the rule in the Kansas Pacific case
that the Government did have a lien upon
the Omaha bridge and terminals.
Mccall said he was in sympathy with
the proposition that the debt of the roads
should be refunded, but he believed the
proposition in the bill was not as favorable
10 the Government as it should be. The
Government ought not to expect that its
second mortgage would be exchanged for
a first mortgage; but he submitted that
if the gentleman from Vermont would
move to amend his bill by making the
rate Of interest on the Government debt 3
per cent instead of he would be doing
Justice to the Uniteo States and no injury
to the companies.
Wheeler CD of Alabama spoke against
the bill as not good business proposition
and was followed by Johnson (R. of Cali
fornla in a speech for the bill full of bitter
sarcasm, directed against the gentleman
who had charged that the projectors
of the roads had made money out of the
construction of the enterprises. He drew
u humorous picture of these men, in place
OF builders of the road, coming 10 Wash
ington after the work had been completed
and turning over to the treasury the
money which they had miraculously
made in their project.
Would they have done it?" he asked
incredulously.
johnson said the practical question be-
fore the House to-day was, How could the
Government get its money? If the roads
were forced to a sale, it was demon
strata bic fact that the proceeds of the sale
would not pay the first mortgage, let
alone satisfying the Government Indebted
ness. The only feasible and practicable
thing to do was 10 give the companies
time IN which to pay their debts. They
we're no worse off, Johnson said, than the
Government OF the United States or Ma
tional banks in which some of his col.
leagues from California were directors,
and which could not pay their debts If
all their obligations should be presented
at once. There was no sense, he said, in
trying to force the debtor to pay mil
lion dollars when he has not the money.
The only business-like thing to do WAS 10
oil him IN aorn fha