New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-01-08
PACIFIC RAILROAD DEBTS.
pEBArE ON THE REFUNDING BILL BE-
GUN IN THE HOUSE.
CHAIRMAN POWERS AND MR.. GROW sPEnK IN
SUPPORT OF THE MEASURE. AND MEsses


terms O. the order passed last month. entered on
the discussion OF the Pacific Railroad Refurhding
bill. Mr. Powers (Rep, VermonD, chairman OF 'he
committee. and Mr.. Grow (Rep. PENN supported
the measure and Messrs. Hubbard NRep.. MOI ana
Bell (Dem Tex) opposed 1t. The latter ana MI
Harrison dem. Ala) each presented SUBSTITUTE
for the committee measure. with the announcement
that Il would be formally offered for conSoeraA'o"
at the proper time. General discussion VIII De con-
tinued tomorrow. and on Saturday the Dill VIII
be open 10 amendment A vote on Its passage VIII
be taken Monday.
The benefits accruing to the Government anu "
the people from the construction OF the ro'os were
graphically sketched by Mr.. Powers. II the Gov
eminent should lose every dollar 1t had ADVANCED
to the companies ne SAID II could credit Its ELI win
at least times much In the material advance
men: and progress and development whihh mao
resulted TO the country from the opening up OF
territory made possible alone by the existence OF
the roads why" he said. ~ It had not been
for building OF these railroads we should never
have heard OF a silver party But Gehectively)
don't know that that is any argument IN iaVor OF
the passage OF the BILL" CLaughter)
Turning from the historical to the actual features
Of the case Mr. Powers said that on July next.
TO which date the bill was to apply the Central
Pacific Company would owe the Government so''-
soti77 and the Union Pacific $oS.2S9.59S Some OF
the bonds were overdue. and the question before
Congress was what was best to be done Should
the Government foreclose the mortgage. wnich
meant long litigation and increase OF the DEBT
OF the Government by between $50 100000 and w.
0oo 00o 20 pay of the underlying first mortgage III
order TO enter upon the very doubtful experiment
OF operating the roads upon Government account?
The wiser method would be for the creditor to
determine the ebt-paying ability OF his debtor and
make a settlement with him on that basis That
was what the bill proposed to do II congress
should seize the roads undertake TO foreciose
the mortgage BY judicial process and SALE II would
find itself In possession OF line without terminals
or branches to give II business, or would force
ale M which no ono except the men nov being
criticised could afford to bid. The principal ad-
vantage gained by the Government was that IL
secured a second mortgage OF the entire property
OF the railroad company whereas now II mad
lien only or link in tho road The raiiroad CON-
pany would be permitted to make frst mortgage
uoon the property equal TO the face OF existing
frst mortgages The Government. mortgage was TO
be extended at per cent
At present Mr. Powers said. Central Pacih, stock
was quoted at about l5 and Union Pacific was worth
nothing The Reorganization Committee had issued
certificates stockholders liable to an assessment
of SIS a share which had been quoted at ABOUT
10 The committee had earnestly endcavored 10
make the rate OF interest on the government
debt 3 per cent, but after "A thorough investigation
II had been compelled fix the rate at per cent;
The committee believed that the companies couid
coupjy with the requirements OF the bill. The
Central Pacific would have 10 pay s3S25.no year
fixed charges. the Union Pacific $Sozs"" year
on the basis OF the earnings OF the companies iof
a period o. years past II was estimated tha' '"e'
could be depended 10 earn net revenue OF
q 900 900 = wear Indeed II inconcevable that
the roads could ever again pass through such
period O: depression that OF the last three
years.
the additional property TO be brought wl'hm the
new mortgage Mr.. Powers said it was difficult 70
state A Senate committee in 1880 fixed the value
at s92 900 900 The divslol superintendent OF the
road said that the Denver terminals alone couo ho'
be duplicated for less than slcW~o" "hie ths
Union Pac:acs coal lands were estimated TO be
worth as mucn as the total amount of the Govern
ment debt.
To Mr. Perkins REP. Iowa.. Mr. Powers said that
the pending bill did include within its provisions
the Sioux City and Pacific or the Central branch III
Kisas neither Of which part or the union
Pacific.
In conclusion MI Powers said that the committee.
In Its conclusions embodied in the bill, was entireIy
In harmony with the recommendations OF every
that had ever investigated tne hc
The House had business with the quarters pc
tween toe Central Pacific and Mayor sutro OF san
msni Of the deSt due to the Government. A plan
for doing that the committee submitted u inc eoo0
The attack on the bill was opened by Mr., HUBBARD
ep Mo- who PREPARED the Sle% I 2ey lne Mr.
Powers's assertion that the companies could carry
out the provisions OF the committees Dill rom inc
and The report of the United States Commissioner
Of Railroads. Mr.. Hubbard showed tnat nsteao %
the companies earning about A.U10o a year net.
thev ran in debt to the amount OF nearly $1,000
on the operations of 1896, while for the previous
NlA0OO in 1891. which was pheromenIai year. On
the other hand Poors Mann; rar ,ra riv,,
BY Powers and anayzng the rTpor, Cd The me con
ciusion that the Central Pacific did earn about
1900 90 net over and above operating expenses anc
taxes The bill of the committee was satisfactory
20 the railroad officials the assertion Of the gentle
man from Vermont to the contrary Notwithstanding
Mr. saye al n able to do than
the bill had proposed. and thai the Union racine
proposition contained in the bill was not so good
Tor the n as 'fs ss now paying
81 10000 year. by the terms Of tn bill It's pay
n; sHs w9ud pe4od oft 9a!
useless to expect any one to raise the money rel
point in the bill the failure TO maks a contin.
ucus mortgage upon the property OF both INES
ough, TO be done, and could be done. because the
Government owned the controliing mor'gage
mani Ml mean nsS by Ae sani ling mortgage?
has The gpSatest amount invested in property
rrof IT, because he won't let 1t go for less than
Continuing. Mr.. Hubbard said that all the roads Dads
indebted to the Government should have been
BY the expenditure Of less than sSoooO.oM the Coy,
eminent could at foreclosure gain possession OF the
property. terminals and ALL Of both the Union and
Mr. Bell Dem. Tex, who also printed views ais,
sentinc from the report Of the committee. followed
in opposition to the bill. He said that the stock
to come to Congress and ask Of 1t any considera-
ton whatever. much less TO ask a grant Of sub
stanf,al character matter OF rigf'. And II
astonished him TO know that there any
in the United States who believed that the men who
bult the railroads and were now stockholders had
dealt fairly honestly with the Government The
roads had not been operated TO make money
FOR the owners and therefore II unsafe TO
sumo the corporations were insolvent and I'M
able TO paw their debts He thought II pre-
MYSTERIOUS 10 propose such settlement that pro-
vided in the bill. 'Oh, no.. said Mr.. Bell; III the
companies want any such favof>as asked for. let
them 20 down into their pockets. sell some Of the Ill
gotten gains. securities and other property. and
make the Government secure. and then will
treat with them" (Applause)
The accumulation OF wealth by the projectors Of
these enterprises and the owners. Mr. Bell
asserted. q matter of Interest the