The San Francisco call., 1897-01-05
PETTIGREW CRIES
OUT AGAINST. FRAUD
Speaks of the Injustice
of the Refunding
Scheme.
Branch Lines Enriched by Feed.
ing From the Main
Railroads.
Systematic Robbery and a Dodging
of Debts Should Be Checked
at Once.

CHICAGO, ILL, Jan. Am evening
paper prints the following from its Wash
ington staff correspondent: "The COM
mittee is packed in the interest OF the
people who control the Pacific roads, and
it is useless to hope for favorable report
on my resolution"
/ had asked Senator Pettigrew if he
thought the Senate Committee on Pacific
roads would make a favorable report On
his resolution to appropriate $l0,000,000 to
take up the Union Pacific Railway COM
pany's six per cent trust notes, He
replied as quoted. Then he said:
THAT is pretty strong language. l don't
think / ought to use it. Still, it is the
the Sc nate if occasion requires. l dom t
say that every member of the committee
is under the control of the road, but l do
say that majority of the committee is
packed and will not report legislation
adverse 10 the people controlling the
roads"
Senator Morgan suggested that the
committee sit during the holiday recess.
Has it done so?"
No." Senator Pettigrew replied. "Sen-
ator Gear, the chairman, said that he
would have a meeting to consider the
resolution if he could get quorum. But
he tells me that he was unable to get a
quorum. so that there was no meeting"
What are you going to do about it?'
'Wait until the funding bill comes up
and l will move to add my resolution as
an amendment, unless / get it up in some
other way"
Upon what contention do you base
your resolution?"
"On this: Suppose you owned a river
which received most of its water from
tributaries on either side along its course.
Suppose some one directs those tribu-
taries to another river running in the
same direction so that your only supply
is from the head of the river. It would
damage the value of your river very
much by lessening its navigable powers
Well, take the Union Pacific road. The
richest source of its revenue are from its
branch lines. Suppose the business of
those branch lines should be given to a
rival line, parelleling the Union Pacific.
The latter would suffer greatly, would it
not?"
swell every one knows Of the large
sums Of money due the Government from
the Pacific roads. Every one knows, too,
that the time has come Tor the Govern
ment to foreclose on the roads. The ma
nipulators Of the roads wish 10 have the
Government extend the time of payment
of the money due it. Moreover, the ma
nipuIators want not only an extension of
time but a lowering of the rate OF interest
PAYABLE to the Government on the princi-
pal. If the Government refuses TO extend
the time of payment it will foreclose.
But if in selling the main road the
branches are not included the price which
the fore eclosure would bring would be COM
! paratively small.
1.-The prospect of getting such a small
| price would have weight in inducing the
Government TO listen more favorabIy to
| the proposition to extend the time of paw
ment, even at a reduced interest. There
| fore it is not surprising at these manip-
ulators should do whatever they can to
bring such an unpleasant prospect square
before the eyes of the Government,
especially when by so doing they could
feather their own nests, additionally well,
even should the Government foreclose
and sell the main line to some other than
the manipulators to whom | have re-
ferred.
Now, how is this to be done2 Just this
way: In 1891 the Union Pacific Railroad
| Com pany issued its per cent gold notes
| for $8, 5000 000 or at least, the principal
and interest amount to that sum. To Sc
cure these notes the company deposited
the bonds and securities of the branch
| lines. as well as those of the main line
The notes have been past due for two
wears. The interest has been unpaid, l
! understand. 1t is now proposed on the
part of the owners of these notes to fore
! close upon the securities, issue bonds to
the amount of $10,000000, and issue
! S5 000, 900 worth of STOCK, and deliver the
stock to the people, who take the bonds
and furnish the money to pay these trust
notes.
"These securities ard bonds of the
branch roads, given for security of the
trust notes. are on their face worth $93
100000. Their market price to-day is
am informed, from $35, 100000 TO $40,0C0,
! 00U Yet 1t IS proposed to sell them tC
pay these trust notes, to get possession o.
the branch lines, and then, should the
Government take possession of the main
lines of the Union Pacific. divert the
branch lines to the Northwestern or some
other road which nearly parallels the
Union Pacific, and so, besides enrichine
themselves greatly decrease the value O.
the Government property, as can be very
easily seen.
This situation seems to have surprised
great manv people. Senator Morgan
who has given such close attention tc
the Pacific roads funding bill, said on the
Senate floor the other day that this mai
ter was entirely new to him. Ny purpose
! Is to have the government apprOpr1at Il
money to take up these notes of trus
and so prevent the holders of the notes
obtaining possession of the branch lines"
But you say that these notes are past
due. How can you prevent the holder:
foreclosing before Congress could appro
pirate the money necessary to take up the
notes even were Congress so disposed? p
well, the foreclosure has not taker
place aud Congress should take steps i'm
mediately to appropriate money to take
up the notes. The whole scheme is one
of the grossest outrages ever perpetratec
on the people.
What was the debt for which the trus
notes were issued contracted for?"
For the notes, l should say. The
branch lines were and are making money
They could have paid the interest on the
notes. and the principal, too. My belle
is that there is no need OF the debt. Ii
fact, do not believe that any money wa.
paid on the notes. It's all a gigantic
fraud; an outrage on the public"
do you contend that the people wht
issued the notes are the same who now
hold them and the securities?
"They all belong TO fhe same crowd
They have been robbing this Government
for years, and the pity of it is that the
Government continues to have anythin,
to do with them"
you intend 10 fight for your resolu
tion?'
with all my might"
|