The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-01-06


the satisfaction of it's debts. That it
will not bring enough to cover both sets
of bonds is perfectly certain. The Unit
ed States must then do one of two
things. Eithe. it must bid in the prop
erty for the experiment, In which case
it must assunse or pay off the enor-
nous amount of the first mortgage
bonds, adding, that much more to our
bad investment or it must let the
holders Of the first mortgage bid in
the property for the amount Of their
debt and lose the entire $3.50, 900 due
to the people. BY another peculiar ar
rangement, characteristic Of such legis-
lation, the most valuable and neces-
sary parts of these railroad systems
are found to be exempt from a federal
lien. The government bonds rest upon
the main lines of these systems. They
do not cover valuable terminal prop
critics, nor do they extend to branch
lines. If the nation should enforce its
mems ana pay out the vast sums re-
quired to own the property outright,
IL would find itself in possession of
some thousands of miles of railroad, be-
ginning nowhere and ending nowhere,
without terminal facilities and in no
position to do business except on such
terms as those who held these neces-
sary adjuncts might prescribe.
That is how, in these days Of general
distress, Uncle Sam finds himself fixed.
The whole question might have been
settled long ago. Every man who
looked into the matter at all knew that
the central Pacific and the Union Pa
cific could not pay their debts. He
knew, also, that vast fortunes had been
made out of these properties by divert
Ing capital and revenue that should
nave gone to the treasury. But the in
tense hostility justly aroused against
the roads on this account was made to
DO duty against the interests of the
government itself. Whenever any set
tlement was proposed there was a cry
from all over the country that it was
proposed ito grant, favorable terms to
those who had plundered the roads,
ana every man in public life who
favored, the refunding of the debt was
charged with being in the pay of the
corporations. Now we have come to the
jumping-off place. We must pay up or
lose 1t is doubtful if those who hold
the first mortgage bonds would TODAY
make a
as has been proposed in the past. They.
as preferred creditors have the
whip hand Of the situation. For the
government there is nothing to do
but to let them foreclose the road. take
1t on their own terms and pocket its
loss, or to pay this enormous debt for
a transcontinentaI system, crippled in
many essential particulars, and to en-
ter the government, under these IN
favorable conditions, upon the business
OF operating railroad lines directly.
This is the problem with which the
president and congress must now deal
formally. The maturing Of the first
mortgage loans makes impossible the
poilcy OF representation that has pre-
vailed heretofore. The situation is not
creditable to our governmental system.
1t has to be faced, and some way or
other the perpetuai problem must now
be settled. In. ANY event, the people
VIII be heavy losers. 1t might be worth
the price if this experience were to
teach them to. avoid for all time to
come every plan for substituting private
enterprises, and every connection be-
tween the federal treasury and the
schemes of ambitious promoters.