The herald., 1897-01-08


scheme should rest on a junior incum-
brance. If 1t did the government was
forced practically to guarantee the first
mortgage Of $110, 600, 900 or lose its claim
He also insisted that any bill should deal
with the foundation titles and the hold
ers of them. The Union Pacific, he said.
was irretrievably ruined because of its
guarantees of interest and dividends
on bonds and stocks of other compan-
les.
The bill, he said, admitted it in the
sixth section, but the government SIM
ply got the promise of an insolvent for
a post mortem performance. 1t was
ridiculous, he said, to rely on such a
bill and decline to foreclose.
Mr.. Hubbard criticised severely some
of the financiering of the Union Pacific,
especially in the matter of certain liens
given and collateral deposited He went
into the question of the diversion of bus
mess to the Southern Pacific. The abso-
lutte net earnings of the Central from
1874 to 1884 were $50 100000 and during
that period it paid $34. 100000 in divi-
dends. The road was then almost en-
tirely in the hands of Stanford, Hunt
irgton, Hopkins and Crocker, so that
they received practically all of the div
idends When they had unloaded, the
Southern was built which leased the
Central, and then the latter stopped pay
ing dividends, This lease would con-
tnue under this bill. Under the bill the
Central Pacific debt would be extended
to eighty-siX years, that of the Union
Pacific eighty-three years, and the gov
ernment get worthless second mort
gage When Mr.. Hubbard concluded
there was a round of applause from the
opposition to the bill.
Mr. Bell Democrat, of Texas. a men,
Der of the Pacific railroad committee,
10, l. ~ 1..r~ 300 ,te-tx,
to the measure. He began by saying the
builders of the Pacific roads were enti-
tied to no consideration. The scandals
growing out of the manipulationS We're a
blot on the civilization of the age. None
of those men, he said. had a right to
ask congress to extend to it the great
privilege granted by this bill. He ad-
dressed himself to the question as to
whether the government held a lien on
the terminals. He insisted that the gov
ernment did and that by express pro-
vision in the original act and confirmed
by the ninth section of the Thurman act.
He admitted that the roads had not been
making satisfactory earnings for years.
Why" he shouted dramatically.
because it is not in the interest of those
in control to make money for the roads"
(Applause.)
That's it. exactly" cried Mr.. Bowers
of California.
Mr.. Bell said the pending bill pro-
ceeded on the wrong theory. The pres
ent earnings We're figured and the bill
made to conform with the present earn
ings. He said the guarantee in the bill
of the Southern Pacific for $21 900, 900
was made much of. But the Southern
Pacific of Kentucky was one thing ard
the Southern Pacific of California an
other. The former made the guarantee
in the bill: the latter was the railroad.
The Southern Pacific of Kentucky was
mere corporation to operate railroads,
not to own them. 1t leased the Southern
Pacific and other roads. Did anyone be-
lieve, he asked. that that corporation
would not wind up its business rather
than pay S21, 900, ,000? He described the
alleged manner in which Mr.. Huntington
had manipulated the road in his inter-
est, saying at the same time he had no
desire to denounce capital.
Mr.. Bell then explained the substitute
he had proposed which provided that
if the roads would make the United
States secure on paying off the first
mortgage bonds. the government would
extend the debt any reasonable period
at per cent. These roads could do this.
In the course of his remarks he said
he did not want to commit the govern
ment in any way to the doctrine of the
government ownership of railroads, a
sentiment that was literally applauded.
Mr.. Grow. Republican, of Pennsyl-
via occupied the remainder of the day
to the hour of adjournment in favor of
the bill He argued that the govern
ment holding, as it did, a junior mort
gage, was in position where it had to
make sacrifices in a reduction of the
rate of interest and an extension of the
principal of the debt in order to protect
its interest. What the roads could pay
depended upon their net earnings, and
the scheme of this bill was based on the
net earnings. 1t was conceded by the
minority that in the event of a fore
lose half the debt.
When the committee arose several
amendments to the bill agreed on by
the Pacific railroad committee were
adopted to perfect the measure.
At sos the house adjourned.
COMMITTEE CONCLUSIONS
The Republican and Democratic steer
ing committees today decided to make
the Pacific railroad refunding bill the
order of business in the senate after the
free homestead bill. The Republican
committee, with Senator Allison, it's
chairman, present, was in session for an
hour, when Senators German and Cock
rell were called in as the representatives
of the Democratic committee. There was
no opposition in either committee to the
proposition to give the bill considera-
,ion and to place the time of hearing at
as early a date as practicable. The
agreement was made only conditional
upon the passage OF the bill through the
house. If it fails there it will not be
considered in the senate. No attempt
was made to provide for the considera-
tion of any other bill.
SESSION NOTES
The senate in executive session has
adopte da resolution instructing the
committee on foreign relations to inves-
tigate the payment of the Mora claim.
The resolution was introduced by Sena-
tor Chandler, and instructs the COM
mittee to ascertain among other things
whether the settlement providing for the
payment of 81, 100000 on account of
claim was a fair one. II also directs the
committee to ascertain whether the pay
ment of the claim involves any issuance
fro this government as to the attitude this
country would aintain in the Cuban in
surrection.
Senator White of California today pre-
sented pamphlet prepared by the COM
mittee of fifty appointed by the mass
meeting held in San Francisco on Dec.
I, 1896 demonstrating against the pas
sage of the Pacific railroad funding bill
reported by the committee on Pacific
railroads.