Omaha daily bee., 1897-01-10
THE PACIFIC RAILROAD DEBT.

| Ihh FdCIfIO hAIBHDdD DEBIT
After nearly weeks discussion of the
Pacific railroad funding bill the ma
tional house OF representatives is about
to vote once more on the passage of o
measure designed as q final solution
Of the Pacific railroad debt problem
While the debate has been pointed and
even acrimonious at times, II has de.
veloped few new facts and drawn out
few new arguments that have not been
| previously discussed both In congress
and in the press.
The Pacific railroad question rests on
q condition and not a theory. Clrcum-
stances have arisen which compel the
| government to take some action with
reference to the matured and defaultcd
| loans owing from these insolvent rail-
road companies, and what is demanded
Is that this action be such as will fully
protect the public with the least sacrl-
flee of the governments finaucial inter-
ests. That there are most important
side issues which cannot be entirely ex-
cludcd from consideration will be gen
orally admitted but the deciding factor
ought to be not the prospective profits
of the stock jobbers nor the collection
of part of the money overdue, but
the benefits that will accrue to the pub
lie from a speedy restoration of these
properties TO operation on basis of
actual value and reasonable rates to
shippers and travellers.
What the promoters of the funding
bill persistently ignore and what con-
gress passes over with mere casual men
ton is the indisputable fact that the
people will have to pay the Pacific rail
road debt whether it is extended at a
low rate of interest for long period
of years or is taken out of the national
treasury at once through the loss of
part or all of the governments claim
by foreclosure. The only income of
the roads must be their receipts for
transportation of passengers and freight,
and if the present inflated capitalization
is maintained the transportation
charges must be kept high enough
for fifty years to come to pay
not only operating expenses but |
also interest and sinking fund for all |
bonded obligations. If the patrons must |
bear this burden then the lower the rate |
of interest exacted the better 1t would |
be for them. But if the whole burden |
could be lifted ut once great obstacle |
to the expansion of the west would be re-
moved. And the advantages that would |
accrue to the entire country from the |
development of hitherto neglected re-
sources would alone more than counter
balance any loss within a very few years.
Even though the funding bill passes
the house. its success in the senate re-
mains questionable, as it is sure to meet
with as determined opposition there as
in the lower branch of the national
legislature. With the expressed inten-
ton of President Cleveland to order
instituted for foreclosure
under the second mortgage in the event
)f failure of action by congress- the re-
committees will be stimu-
ated to complete and execute their plans
or the requirement of the roads by
of the government claims. The
public is concerned in this only so far as
t might perpetnate and perhaps increase
he colossal capitalization of the proper
les and close the door to all possible re-
luctions in the charges for tranSpofta-
ion. Whatever agreement the govern
nent may enter into in settlement of its
laims, it owes it TO the patrons of the
'acific roads to insist as a fundamental
that the lines be operated Oh
N actual value basis and additional
took and bonds be issued only to rep
esent additional capital actually in
ested.