The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1897-10-28


because it was not due for 10 or IL
years, and which then amounted to
nearly $40,000,000, to extend the re-
mainder in payments OF so years, and
permit such semi-annual payments
from the companies for the length OF
time as would not pay per cent per
annum interest on the then present
worth of the debt. In full settlement Of
1t. For these deferred payments the
government was to take non-interest
bearing bonds from the companies,
permitting the companies to take them
up, abatlng interest on these bonds at
the rate of per cent per annum.
On this plan these corporations, If
they could have borrowed the money,
which undoubtedly they could, would
have paid off their debts to the United
States at probably less than 20 cents
on the dollar. The Democratic bill
presented by Mr.. Cultivate did not
discount the debt, but required the
payment Of the principal and interest |
for 80 years at per cent to be the
principal upon which the interest was |
to be computed for the rest Of the |
average time of extension at per cent |
| after 1896 when the bonds-debt- |
became due. 1t required payments to
be made large enough to pay off both
| principal and interest 1t also stip-
ulatod that the sinking fund, which
then amounted to about S10,0O0,000,
should instantly be applied as a pay
ment on the debt due the government.
1t also stipulated that the companies
should refund their first mortgage
debt at a rate Of interest not higher
than 4 per cent
Met with Defeat.
Under the law as it now stands the
lien Of the government is only upon
about $500 miles. The Cultivate bill
extended rhs lien to all the lines,
either leased or controlled by these
companies. 1t further provided that
no dividends should be paid by any
of these companies until the other
provisions of the act were complied
with. This was done because they had
paid out millions upon millions as div
idends while they permitted their debt
to the government to steadily increase.
Under this bill, the government under
all circumstances was to be paid first,
and upon the failure on the part of the
companies to comply with any of the
provisions of the act the rights and
securities OF the United States we. g
to be at once enforced. This measure,
like all the other measures that were
} introduced to try and make these cor
, poratiOns pay what they justly owed
to the government, met with defeat.
Early in the year 1897 the debts fell
, due and a foreclosure suit was insti-
? tuted by the first mortgage bondhOld-
, erS, and the attorney general, upon the
order of President Cleveland, entered
. appearance upon the part OF the gov
ernment. In the meantime, a syndi-
, cate was fOrmCd for the purpose OF
. reorganizing the whole of the Union
, Pacific system. This was to be done
: by first acquiring all OF the liens prior
! 10 that of the government. Second, by
, settling the government claim. Third
q by readiusting the claims Of all othel
, lien holders.
= The plan proposed will not pay the
: amount due the government by a.
: least $40, 900, 900. It is pretended tha
Z the suit for foreclosure has been con
o Quoted in the regular way, and tina
any person will be permitted to bic
upon the road or the day it is Offered
2 for sole. Undoubtedly this is so, bu
q the arrangements made by the pres
z ent attorney general with the syndi
a cate above referred to would makt
= such a thing almost a farce, because
q the payments called for by the govern
q ment and the time designated by tn,
A government to make them in is 81
a short that 1t will exclude all bidder
: other than the syndicate.
t Statement Not Substantiated.
It The claim is made that unless thi
: reorganization scheme is carried out
y the government will suffer still create
d loss. This statement cannot be sub
l. stantiated, for it is certain that tn,
3 reorganization syndicate do not intent
n making this purchase unless a Iarg
|
IS and there has been no reasons givei
It to show that the government could no
II do this same thing by itself purchasing
It the prior liens to its own and then as
l. suming charge Of the properties.
n the reorganization syndicate cal
ID take possession and upon a tremend
10 ously increased capitalization max
> this road a paying investment, no goo,
a reason can be given why the govern
5 ment should be deprived of a dola
q, OF Indebtedness that is due to it b!
et these companies.
70 But it is said that the government
l. cannot protect itself in the same wa
% the syndicate proposes without takin
l. charge Of these roads as an owner
g and that such q proposition is out O
IS the question. The answer to this
10 that the government has charge now
ID and has been operating this same roa
l. for years by receiver appointed b
+ United States court. It is ais
d. true that under the supervision OF tn
n courts the administration of its al
p fairs have been conducted much NOR
at honestly and efficiently than ever be
,d .ore. II agents or the United State
A governmentap appointed by United State
n. courts can successfully run railroad
:, why can not agents appointed b.