The record-union., 1897-01-08
PACIFIC RAILROADS
FUNDING BILL
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sired to call the attention Of the COM
Hntuee TO the provision Of the law Oh
1907, which required that all the capltai
STOCK Of the corporations should be palo
IN cash. The facts were that the Union
racine was capitalized at sou, ,SOO,OOu, OF
winch but l6 per cent was paid IN; une
Central Pacific at S6S, 600, 900, of which
IO per cent. was paid in; the Western
Pacific at S7,9OO,OO0, of which 21a per
cent. was paid in, and the Kansas Pac1-
nc at 50, 100000 of which not cent was
paid in
In the construction of the Union ana
Central Pacific roads Hubbard stated
uhere accumulated to those in charge
Profit Of sixty-two millions, and ohere
mad been paid in dividends on the
Union Pacific, including the Kansas
Pacific, S2S,000,000 "I do not state
these facts said Hubbard, "in any
sense of antagonism to the gentlemen
who received these profits and olvl-
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 the law, neither you
nor I have any reason to complain.
Hubbard reviewed Powers assertion
that the companies could carry out the
provisions of the committees S bill. From
the statements made to the committee
by Mr. Tweed and the representative of
the United States Railroad Commits
sioner, he showed that instead of the
company earning about four millions a
year net, it ran in debt to the amount
of nearly a million dollars ON the OPP
erations of 1895 while for the previous
few years the net earnings had not ex-
ceeded 50, IA 900 in 1891, which was a
phenomenal year. On the other hand,
Poor's Manual, a. railroad authority,
gave the net earnings at about the fig
Ures given by Powers. And analyZing
the report of the Railroad Commission
erS Hubbard reached the conclusion
that the Central Pacific did earn about
$4,000, 600 net over and above operat-
ing expenses and taxes. The other eX-
penditures tabulated by the Railroad
Commissioner either needed explana-
ton or were to be offset by items not
considered. The bill of the committee
was satisfactory to the railroad Off
cials, the assertion of the gentleman
from Vermont (Powers) to the contrary
notwithstanding.
In this connection Hubbard related at
some length various propositions for
the settlement of the debt, in support
of his claim that the provisions of the
pending bill We're not the best offers
made by the companies. He gave it as
his opinion that the corporations were
financially able to do better than the
bill had proposed, and that the Union
Pacific was much stronger than the
Central Pacific. The proposition con-
tanned in the bill was not so good for
the Government as the requirement of
the present law The Union Pacific was
row paying 81, 100000 a year. By the
terms of the bill its payments would
amount to but 81 100000 a year, run
ming over a period of eightythree
years.
1t was useless to expect anyone to
raise the money required by the bill to
make it effective. The probabilities of
the future We're too uncertain to make
the security of the Government stable.
IT depended altogether upon the indis-
sclubility of the tie between the Central
and Union Pacific companies. The fall
ure of one or the other in the future
and that could easily be brought about
under certain conditions-would abSo-
Iutely destroy the security of the Gov
elnment under the pending bill. The
fatal point in the bill was the failure TO
make a continuous mortgage upon the
property Of both lines from the Mis-
st-uri River to the Pacific Ocean. That
ought to be done and could be done, be-
cause the Government owned the con-
troll from the MORTGAGE.
Watson (R) of Ohio-What does the
gentleman mean by controlling mort
gage?"
Hubbard-The largest mortgage. A
man who has the greatest amount i'm
vested in property controls 1T, be-
cause he won't let it go for less than
that.
Continuing, Hubbard said that all the
roads indebted to the Government
should have been brought into court
and the mortgage foreclosed By the
expenditure of less than $50, 10000 the
Government could at foreclosure gain
possession of either property, terminals
and all, of both the Union and Central
Pacific Railroads.
Ellery Anderson, a Government di-
rector, had recommended that the mort
cages should be foreclosed and the Cen
trail and Union Pacific consolidated. No
Government ownership was involved in
that proceeding, for such a property,
cleared of debt, would attract bidders
who would take 1t off the Government $
hands at a profit.
Discussing the matter Of his objection
that the pending bill did not provide for
a consolidation or combination Of the