Ottumwa semi-weekly courier. [volume] (Ottumwa, Iowa) 1899-1903, 1900-06-21
PACIFIC RAILROAD,
Settlement of It's Indebtedness a
Great Achievement.
HISTORY OF THE PACIFIC AFFAIRS

Made by the Government to Such
Good Financial Advantage
Credit Due Mckinley
Washington, June 1.-THE settle
ment of the Pacific railroad indebted
ness must be ranked as one of the
greatest achievements of President Nc
Kinleyss administration" said General
Charles Dick,member of congress from
the Nineteenth district of Ohio, and
secretary of the republican national
committee, today.
All efforts, either by congress or
the executive departments prior to
1897, were of little avail insprotecting
the governments interests in these
roads. In fact, there were grave doubts
whether the government would sue
coed in being reimbursed, even in part,
the vast sum expended by the United
States in aid of their construction.
But the government has realized in
cash or its equivalent, within two.
years, the sum of $124,421,6 n out of
about $130,0O0,000 that was due, and
more than half the money collected
was for accrued interest that had not
been paid.
"The discovery of gold in California,
the rapid increase in wealth and pop
ulation in the territory west of the
Rocky Mountains. and movement on
| the part of the older states to establish
closer connections during the civil war
congress in 1852. to authorize the con-
Of - No
Ocean. The direct benefit to be de-
for postal, military, and other pur-
ing the Union Pacific Railroad compa-
therefore nothing was accomplished
Pacific company was organized, no one
was found who would venture money
in the construction of the road. u
son July 2, 1864, congress amended
the act of 1862, by making provisions
more favorable to the companies. The
act of 1862 provided that the govern
ment should have first mortgage ion
the property of the company, while
the act of 1864 provided substantially
that, for the bonds the government
should issue in aid of the construction
of the road, it should take. "a second
mortgage. Two companies were organ
lied under the provisions of the act of
1864 and entered energetically upon
the work of construction. The road
was built from the California end
eastward by the Central Pacific Rail-
road company, and from the Missouri
river westward to the common meet
ing point at Ogden by the Union Pa
cifc company.
Their lines were united May 10,
1869, anticipating by more than seven
years the time required by congress.
The Union Pacific company constructed
1904 miles, and the Central Pacific 743
miles. i'he road of the latter company
was luently extended 140 5,
and les of the, two compa ties
from Missouri river to San Fran
cisco represented a mileage OF 1,917
miles. s. Il
In aid of these roads and connect
ing branches, the United States issued
bonds to the amount of 1923, SIP.
Failing to be reimbursed for the inter-
est paid on these bonds, it became nee
essary, in protection of the interests
OF the government, to pass the act of
May q, 1878, known as the Thurman
Act This act provided that the whole
amount of compensation which might
from time to time be due to the rail-
road companies for services rendered
the government, one-half to be applied
to the liquidation of the interest paid
and to be paid by the United States
upon bonds issued to each of the COM
panies, the other half to be turned in
to sinking fund. But it soon became
apparent that, with the approaching
maturity of bonds issued in aid of the
roads the provisions of the Thurman
\ Act We're not adequate to the protec-
| ton of the governments interests. Eff
forts were persistently made looking to
q settlement of this vast indebtedness,
but without success. So recently as
the tifty-fourth congress an attempt
was made to pass bill to refund the
debts of the Pacific railroad companies,
but it was defeated in the house by a
vote OF 1857 nays and 1O2 yeas.
"On January 10, 1897" continued
General Dick, "the day following the
defeat of the funding bill, the attorney
general was informed by the president
that default had occurred in the paw
ment of the Union Pacific and the Kan
sas Pacific indebtedness to the governs
ment, and he was directed to make ar
rangements to secure, as far as practi-
cable, the payment of their indebted
ness. An agreement was entered into
between the government and the reor-
ganization committee of the Union Pa
cific railroad, by which the committee
guaranteed, should the government I'M
dertake to enforce it's lien by sale, a
minimum bid for the Union and Kan
sas Pacific Indebtedness to the govern
4 ment, and he was directed to make ar
rangements to secure, as far as prac-
ticable, the payment OF their indebt-
edness. An agreement was entered in
to between the government and the re-
/. organization committee of the Union
Pacific railroad, by which the commit
tee guaranteed, should the government
4 undertake to enforce it's lien by sale, a
minimum bid for the Union and Kan
san Pacific lines that would produce to
the government, over and above any
4 prior lines and charges upon the rail-
roads and sinking fund, the net sum
OF 754,059.99. In performance of