The herald., 1897-09-15
UNION PACIFIC RAILROAD SALE

If the sale of this property takes place
seems inevitable that the government
will suffer large loss. The indebted
ness of the road to the government
amounts to $751; ,O00 which is secured
by a second mortgage only. An ar
rangement has been made with the re-
organization committee of the bond and
stockholders by which the government
is to receive s2S,0O0,O0O, leaving s25OOO,-
900 unprovided for A sale of the prop
erty will divest it of all mortgages and
liens, and creditors will have oIook to
the furds derived from the sale for
satisfaction. The governments claim
is subordinate to a large mortgage, and
it can obtain nothing except from the
surplus that may remain, and according
to the agreement this salvage is fixed al
$2S000,0O0 after paying costs and the
first mortgages. Senators Foraker and
Harris of the Pacific railroads commit
tee, and others are giving attention to
the subject with a view of devising some
plan for averting loss to the govern
ter terms can be obtained from the re-
| organizatio ton committee.
Postponement of the sale is suggest
| ed until congress meets, that it may
take action in the matter. Just what
congress can do that will protect the
| government is not apparent. 1t certain
| ly cannot interfere With the prior lien
| to an extent that would extinguish the
vested property right of the first mort
gage bond holders.
There may be some other way to pro-
ltect the government, but the only feas-
ible one so far as one can see is for the
government to bid for the road sum
that will cover antecedert claims and it's
own, which would make it the owner of
the property, for it is not probable that
the first mortgage creditors will bid so
large sum. If the executive depart
ment has not now the authority to do
that, then the sale should be postponed
till congress has time to confer it, If
the government should bid on the prop
erty it will be in better situation to
make terms than it now occupies
There are many who advocate the ac-
QUESTION of both the Union and Central
Pacific roads and their operation by the
government. They believe it would be
good start towards general govern
ment ownership of railroads. On the
other hand it is asserted that it would be
an unfortunate experiment for the
reason that those roads do not extend
to any important terminal points, and
the government would be embarrassed
| in business on account of unfriendly
connections. There is not much in this,
| however, because transportation from
one state into another is a feature of
interstate commerce which congress
| has constitutional power to regulate.
Connecting roads can be compelled to be
impartial and to grant every reason
able facility to commerce. There would
be no motive for unfriendly discrimina-
tion unless it would be to embarrass the
experiment of the government in owning
and. operating railroads.
Every good citizen hopes that the
government will not be subjected to
loss in connection with the roads, whose
bonds are indorsed by It, We see no
| way out OF the dilemma except in the
purchase of the roads by the govern
ment and their operation for the benefit
of the public. Though ponderous for
tunes have been made by the builders
and operators of those roads, there
seems to be no law which makes them
| personally liable for what they have un-
conscionaby obtained The transpor-
tation question is among the most i'm
portant before the country, and its So
luton in the interest of the public is
engaging the thought Of all intelli-