The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1897-01-08

the hope and expectation that it would
secure the repayment of the Governments
debt, but the reasons which operated to
prevent the successful working of the
plan for repayment of the debt proposed
in the charter acts prevailed to set at
naught the scheme so deliberately wrought
by Senator Thurman. They were the
division OF the Governments business be-
tween the existing lines instead of giving
it all to the line which it should nourish
and encourage.
Boatner CD of Louisiana asked Powers
If he maintained that The companies had
/ paid all to the Government that an
honest and capable management would
have per nitted them to do.
Powers replied that he did. He de-
clared his own opinion to be that the rail-
obligation imposed on them by the
Government; they had fulfilled every
contract MADE by Congress.
Turning from the historical to the &C
tual features of the case Powers said that
on the LIST of July next, to which date the
BILL was TO apply, the Central Pacific
would owe the Government $57, 904, III
and the Union Pacific $53, 289, 593. Some
OF the bonds were overdue and the ques-
ton before Congress was what was best to
be done. Should the Government fore
close the mortgage which meant long liti-
CATION and an increase of the debt of the
Government by between sixty and seventy
millions TO pay off the underlying first
mortgage in order 10 enter upon the very
doubtful experiment of operating the road
upon Government account? The wiser
method would be for the creditor to deter
mine the debt paying ability OF his debtor
and make q settlement with him on that
basis. That was what the bill proposed 10
do.
Asked why the committee had increased
the first mortgage of the Central Pacific
by about S21, 00O 900 and that of the Union
Pacific by about $29, 000, 600, Powers replied
that It was because the Government got
50 for 81 of additional security.
Ii Congress snouid seize the roads or
undertake to foreclose the mortgage by
judicial process and sale, it would find
itself in possession of a line without ter
minals or branch roads to give it bust
ness. or would force a sale at which no one
except the man now being criticized
could afford TO buy. The principal ad-
vantage to be gained by the Government
was that it gained second NOR tgage on
the entire property of the roads, whereas
it now had lien only upon link of
the road. The railroad company would
be permitted to make a first mortgage
upon the property equal to the face of the
existing first mortgage The Govern
ment mortgage was to be extended at 2
per cent.
Fairchlld RI of New York asked as to
the identity of the men who were bene-
flied or affected by the bill; whether or
not the Central and Union Pacific COM
panies were composed of practically the
same individuals.
Powers replied that the individuals
we're the same. He further stated that
the bill was not acceptable to the corpora
tons.
Mcguire CD of California-All they
haveto do is to reject then.
Powers-There is no certainty that the
com panies Will take ii. We have to force
the pill down them.
To Smith (R.) of Michigan Powers said
he knew of no diversion OF traffic from
the Union Pacific road which ought to
have been retained by or for it. The state
m emit would be made in the course of the
debate that the Southern Pacific, upon
whose property the Government held
notes and could not have lien, absorbed
the revenues OF the Central Pacific. He