The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-11-05
THE FACTS ABOUT THE PACIFIC
RAILROADS.

The Sentinel and other Democratic papers
are assailing Representatives Overstreet
and Faris because they voted for the bill
to fund the indebtedness of the Union and
Central Pacific Railroads, in January, 1897.
When this bill was presented in the House
in 1896 it was generally regarded as the best
thing that could be done for the public in
terests. The issue was between losing a
large part of the investment of the United
States and foreclosing a second mortgage.
To foreclose, the government would be
forced to become responsible for the $59,9u,-
600 Of first mortgage bonds upon the Cen
trail Pacific and the $76, 600 of similar
bonds upon the Union and Kansas Pacific.
AS the second mortgage bonds of the United
States were approaching maturity, Congress
was in duty bound to take some steps to
take care of it's obligations when they
should fall due. AT that time President
Cleveland had an offer from syndicate to
accept from the Union and Kansas Pacific
about half of the amount due the United
States for the whole claim. Many believed
that this offer should be accepted. The
question: at the time the bill was voted on,
was between paying off the $1S6, 100000 of
first mortgage bonds and foreclosing, so that
the government would come into possession
of the road, and the refunding bill, which
provided for per cent. bond and sink
ing fund to wipe out the indebtedness after
a long period. A considerable element in
Congress desired the foreclosure and pos
session of the road by the United States,
to the end that the visionary theory of fed
eral management of roads might be tried.
Between the two propositions the Journal at
that time advocated the former, because it
was Hobson's choice The United States had
not $136.OOOOOO to take up the first mortgage
bonds; furthermore, the government had
enough money in these railroads.
about the time of the taking of the vote
a government director, ex-Representative
Coombs of New York, in an inter-
view made some statements to the eff
feet that it would be better to foreclose,
as the property could be sold for enough
to pay the governments liability in full.
This statement and the hostility to the Pa
cific people caused a change in sentiment,
and the bill was defeated. The Sentinel says
that Mr.. Overstreet voted against an
amendment increasing the rate of interest.
So did a majority of the house, because it
knew that the Pacific people would not ac-
cept such a measure. AS the result the en-
tire matter was dropped.
The Sentinel cannot tell the truth about
such matters, so it declared that the govern
ment had already received in full what ii
had paid out on account of the Pacific rail-
roads. This is not quite half the truth.
When Mr.. Mckinley became President the
Cleveland proposition was ignored. Bust
ness on the Pacific roads had improved, so
that, after long negotiation, an agreement
was made by which the full amount due
from the Union Pacific Railroad was re-
ceived, and later the entire principal due
from the Kansas Pacific. The Central Pa
cific has not settled. as any fairly intelligent
newspaper man should know. Jan. 1, 1897,
the Central Pacific obligation on bonds and
interest paid by the United States was $751;