Hot Springs weekly star. (Hot Springs, S.D.) 1892-1917, 1900-06-08

zASxt ~ EZ1tANO1
5 Ranks as One Of the Great.
McKinley's 4
nsss,
'.Thes settlement Of the Pacific Railroad
Indebtedness must be ranked us one Of
the greatcst achievements Of President
MclAinley's administration" said Gen.
Charles Dick. member of Congress from
the Nineteenth district of Ohio. and Sec
retary of tho Republican national COM
mittec, In Washington the other day.
AN efforts. either by Congress or the
executive departments prior to 1897, were
Of little avuil in protecting the Govern
mcnt's interests in these roads. In fact,
there weSe, grave doubts whether the
Government would succeed in being re-
imbursed, even in part. the vast sum ex-
pended by the United States in mid of
their construction. But the Government
has realized In cash or It's equivalent,
within two years, the sum of 1924 49,
GIL out OF about S130,O00.00O that was
due, and more than half the money COL
lectcd was for accrued interest that had
not beer paid.
1.-The discovery of gold In California;
the rapid incrense in wealth Inc popula-
ton in the territory west Of the Rocky
Mountains. and a movement on the part
OF the older States to establish closer con-
nections during the civil war with those
outlying communities, led Congress in
1852 to authorize the construction of d
railroad to the Pacific ocean,. The direct
benefit to be derived by the Government
was its use for postal, military and other
purposes. The act OF July 1, 1852, char
tering the Union Pacific Railroad Com
pany, was not sufficiently liberal, and
therefore nothing was accomplished UNI
der its provisions. Though the Union
Pacific Company was organized no one
was found who would venture money in
the construction of the road.
"On July ., 1854, Congress amended
the act of 1852 by making provisions
more favorable to the companies. The
act OF 1897 provided that the Govern
ment should have IL first mortgage on the
property of the company, while the net
Of 1854 provided substantially that, for
the bonds the Government should issue
In nid OF the construction of the road, it
should take Il second mortgage. Two COM
panies were organized under the provis-
ions of the act of 1864, and entered ener-
getically upon the work OF construction.
The road was built from the California
end eastward by the Central Pacific
Railroad Company. and from the Mis-
souri, river westward to the common
meeting point ut Ogden by the Uniow1a-
cite Company.
Their lines were united May 10, 1860,
anticipating by more than seven years
the time required by Congress. The I'm
Ion Pacific Company constructed 1904
miles, and the Central Pacific 743 miles.
The road of the latter company was sub
s%cuuently extended 40 miles, and the
lines Of the two companies from the Mis-
souri, river to San Francisco represented
a mileage of 1,917 miles.
I'm aid Of these roads and connecting
branches the Uaited States issued bonds
to the amount of $64,G23,51 IL Failing to
be reimbursed for the interest paid on these
bonds, 1t became necessary, in protection
OF the Interests of the Government, to pass
the act OF May Z. 1878, known as the Thur
man Act This act provided that the
wEole amount OF compensation which might
from time. to time be due to the railroad
companies for services rendered the Govern
n'ent should be retained by the Govern
meat, cne-half TO be applied to the liqui-
dalton OF the interest paid aud to be paid
by the United States upon the bonds issued
to each of the companies, the other half to
De turned Into & ginEing fund. But 1t soon
became apparent thar, with the approach
ing maturity of bonds issued in aid of the
roads, the provisions OF the Thurman Act
were not adequate to the protection OF the
Governments interests. Efforts were per
s!stcntly made looking to u settlement
OF this vast Indebtedness, but without sue
cess. So recently us the Fifty-fourth Con-
gress m attempt was made to pass a bill
to refund the debts of the Pacific Rail-
road companies, but 1t was defeated in the
House by a vote Of l67 nays and 1O2 yeas.
o Jan. II. 1897" continued Gen. Dick,
the day followtn. the defeat of the fund
Ing bill, the Attorney General was Informed
by the President that default had occurred
In the payment Of the Union Pacific and the
Kansas Pacific Indebtedness to the Govern
n1ent. and he was directed to make arrange
nents to secure. as far as practicable, the
payment Of their Indebtedness. An agree
r,ent was entered into between the Govern
ment and the reorganization committee Of
the Union Pacific Railroad, by which the
committee guaranteed, should the Govern
NEXT undertake to enf0rce.its lien by sale, a
minimum bid for the Union and Kansas
Pac!sc lines that would produce to the Gov
ert.tacnt, over aud above any prior liens and
charges upon the railroads and sinking
fund. the net sums OF 49, a4. 059. 90. In per-
formance Of this agreement the bid was
guaranteed by a deposit OF 81 500. 900.
Ellis were then fled In tho United States
Circuit Courts for the foreclosure of the
Government lien. Tile DEGREES entered
Tor the suie Of the roads not being salts
factory to~the Government, papers. j were
prepared for M appeal. Then the re-
Organization committee came forward with
an offer to increase Its bid 70 5 1000, 900
instead of sz5. 7o4, oaa.M, Subsequently, to
tion committee decided to abandon this
second bid and to increase the minimum
an:onit to he offered for the property to
SIS. AS223.73 being the total amount due
the Government on account Of the Un!on
Pacific Road. us stated BY the Secretary Of
the Treasury. Including the sum of 81, 49,.
Sss. &c cash Mi the sinking fund. Such an
amount was bid by the reorganization COM
nlittce, III Nov. 1, 1857. and the sale was
conHrmed by the court, on Nov.ss6, 1897. AT.
ter the confirmation gof7 the sale. the whole
amount was paid into the Treasury OF the