The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1897-01-08

Mr.. Powers replied that he did he
declared his own opinion to be tnat
the railroad companies had discharged
every obligation imposed upon them by
the government; they had fulfilled
every contract made by congress.
CONTRADICTION, NOT A THEORY.
Turning from the historical to the
actual features of the case, Mr.. Pow
ers said that on the LIST of July next,
to which date the bill was TO apply, the
Central Pacific would owe the govern
ment $500, III and the Union Pacific
500, 2S9, 500. Some of the bonds were
overdue and the question before con-
Sress was what was best to be done.
Should the government foreclOSe the
mortgage, which meant long litigation
and an increase of the debt by between
$50 600, 900 and $40, 000, 900 to pay off the
underlying first mortgage in order to
enter upon the very doubtful expert
ment of operating the roads upon gov
eminent account? The wiser method
would be for the creditor to determine
l. the debt-paying ability of his debtor
and making a settlement with him on
that basis. This was what the bill
proposed to do.
Asked why the committee had in
creased the first mortgage of the Cen
tral Pacific by about S21,000,000 and
that of the Union Pacific by about
$4,000. 900. Mr. Powers replied that it
was because the government got 81 for
81 of additional security.
NO BEGINNING. NO END.
If congress should seize the roads or
undertake to foreclose the mortgage by
judicial process and sale, it would find
itself in possession of a line without
terminals or branch roads to give it
business. or would force a sale at which
no one except the men now being
criticized could afford to bid. The prin-
cipal advantage gained by the govern
ment was that it secured a second
mortgage upon the entire property of
the railroad company, whereas now
it had lien only upon a link of the
read. The railroad company would be
permitted to make a first mortgage
upon the property equal to the face Of
the existing first mortgages. The gov
eminent mortgage was to be extended
at 2 per cent.
Mr.. Fairchild, (Rep., N. ". asked
as to the identity of the men who were
benefited or affected by the bill whe-
Their or not the Central and Union Pa
cific companies were composed of prac
tically the same individuals.
Mr.. Powers replied that the individ-
uals were the same. He further stated
that the bill was not acceptable to the
corporation.
Mr.. Mcguire Dem., Gala they
have TO do is to respect it, then.
Mr.. Powers-There is no certainty
that the companies will take it. We
may have to force the pill down them.
To Mr.. Smith (Rep., Mich.), Mr.. Pow
ers said he knew of no diversion of
traffic from the Union Pacific road
which ought to have been retained by
or for it. The statement would be
made in the course of the debate that
the Southern Pacific, upon whose prop
erty the government held notes but.
could not have a lien. had absorbed
the revenues of the Central Pacific.
He would not stop now, he said TO
demonstrate that the assertion was
untrue, but would so state tomorrow.
Mr.. Lacey (Rep.. la, asked why a
dividend Of 4 per cent was allowed on
the stock when the government was to
get but per cent for its bonds, which
were ahead of the stock.
Because answered Mr.. Powers. I'VE
want the stockholders to undertake this
obligation. and they won't do it unless
they are assured of reasonable return
u-on their money
At present, Mr.. Powers. said. Central
Pacific stock was quoted at about 10 and
Union Pacific was worth nothing. The
reorganization committee had issued GER
t.ficateS to stockholders liable to an
sessment of SIS a share, which had been
earnestly endeavored to make the rate of
interest on the governments debt ; per
cent. but after a thorough investigation
il had been compelled to fix the rate at
per cent The committee believed that
the companies could comply with the re-
cu;rements of the bill. The Central Pa
cifc would have to pay $3S25.0O0 per year,
fixed charges; the Union Pacific. $3.62S.-
Coz 4 year. Upon the basis of the earn
i=gS of the companies for a period of
Years past. it was estimated that they
could be depended upon TO earn net
revenue of s4,000000 2 year. Indeed. it
was Uncomfortable that the roads could
ever again pass through such period of
depression as they have for the past
TIL ee years.
UP IN THE MILLIONS.
Asked what estimate the committee
placed upon the additional property to
be brought within the new mortgage. Mr.
Powers said il was difficult to state. 4
senate committee in 1890 fixed the value
a S92 900, 900. The division superintendent
OF the road said that the Denver termi-
nails alone could not be duplicated for less
than S10000,900. while the Union Pacific's
coal lands were estimated to be worth as
much as the total amount of the govern
70 Mr.. Perkins Rep). Iowa, Mr..
Pawers stated that the pending bell did
not include within its provisions the
Sioux City & Pacific or the Central
branch in Kansas, neither of which was
part of the Union Pacific.
In conclusion. Mr.. Powers said the COM
nlittee in its conclusions embodied in the
bill. was entirely in harmony with the
recommendations of every committee that
ever investigated the subject The house
had no business with the quarrelS be-
tween the Central Pacific and Mayor
Sutro of San Francisco: its business was
to provide for the payment of debts due
the government, q plan for doing which
the committee submitted to the good
sc::se of the members.
ATTACK OPENED.
The attack on the bill was opened by
M Hubbard (Rep.). Missouri, who pre-
pared the views of the minority of the
committee. Following MI Powers his
tory of the legislation relating to the
Ur.on and Central Pacific roads, he said
he desired to call the attention of the
1S6a. which requested that all the capital
stock of the corporations should be paid
in cash. The facts were that the Union
Pacific was capitalized at $50. 800 600, of
Central Pacific at S5S 000. coo. Of which 10
per cent was paid in; the Western Pa
cific at 81 900 900 of which 2l5 per cent was
paid in and the Kansas Pacific at $780,
OGe. of which not cent was paid in. In
the construction of the Union and Central
Pacific roads, Mr.. Hubbard stated there
accrued to those in charge a profit of $62,-
COS. GOO: and there had been id in divi-
dends on the Union Pacific, ludirg the
Kansas Pacific. S23 OC0. 600. DO not
state these facts" said Mr. Hubbard " in
any sense of antagonism to he cei.sle-
mon who received these profits and divi-
dends If they have violated any law,
the proper officers will attend to them; If
they have made the money fairly and
in accordance with law, neither you nor
1 have any reason to complain
REVIEWS POWERS.