Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1900-06-07


1.-THE settlement of the Pacific Railroad
Indebtedness must be ranked as one Of
the greatest achievements of President
McKinley's administration, said Gen.
Charles Dick, member of Congress from
the Nineteenth district of Ohio, and sec
rotary of the Republican national COM
mittee, in Washington the other day.
IAN efforts, either by Congress or the
executive departments prior to 1897, were
of little avail in protecting the Govern
ment's interests in these roads. In fact,
there were grave doubts whether the
Government would succeed in being re-
imbursed, even in part, the vast sum ex-
pended by the United States in aid of
their construction. But the Government
has realized in cash or it's equivalent,
within two years, the sum of $124, 421,
671 out of about $13O,OOO,O 900 that was
due, and more than half the money coll
lected was for accrued interest that had
not been paid.
''The discovery of gold in California !;
the rapid increase in wealth and popula-
ton in the territory west of the Rocky
Mountains, and movement on the part
of the older States to establish closer con-
nections during the civil war with those
outlying communities, led Congress in
1862 to authorize the construction of a
railroad to the Pacific ocean. The direct
benefit to be derived by the Government
was it's use for postal military and other
purposes. The act Of July 1. 1862, char
tering the Union Pacific Railroad Com
pany, was not sufficiently liberal, and
therefore nothing was accomplished un-
der it's provisions Though the Union
Pacific Company was organized no one
was found who would venture money in
the construction of the road.
"On 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 on 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 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
souri, river westward to the common
meeting point at Ogden by the Union Pa
cific Company.
Their lines were united May 10, 1869,
anticipating by more than seven years
the time required by Congress- The I'm
ion Pacific Company constructed 1,O34
miles, and the Central Pacific 743 miles.
The road of the latter company was sub
sequently extended 14O miles, and the
lines of the two companies from the Mis-
souri, river to San Francisco represented
mileage, of LOTT miles.
In aid of these roads and connecting
branches, the United States issued bonds
to the amount of $64, 623,512. Failing to
be reimbursed for the interest paid on these
bonds, it became necessary, in protection
of the interests of the Government, to pass
the act of May Z, 1873, known as the Thur
man Act This act provided that the
whole amount Of compensation which might
from time to time be due to the railroad
companies for services rendered the Govern
ment should be retained by the Govern
ment, one-half to be applied to the liqui-
dalton of the interest paid and to be paid
by the United States upon the bonds issued
to each of the companies, the other half to
be turned into a sinking fund. But it soon
Ing maturity Of bonds issued in aid of the
roads, the provisions of the Thurman Act
were notAadequate to the protection of the
Governments interests. Efforts were per-
sistently made looking to a settlement
of this vast Indebtedness, but without sue
cess. So recently as the Fifty fourth Con
gress an attempt was made to pass a bill
to refund the debts of the Pacific Rail-
road companies, but it was defeated in the
q n q nd
ION Jan. II, 1897" continued Gen. Dick
the day following 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
ment and he was directed to make arrange
ments to secure as far as practicable, the
payment of their Indebtedness An agree
ment was entered into between the Govern-
ment and the reorganization committee of
the Union Pacific Railroad, by which the
committee guaranteed, should the Govern
ment undertake to enforce Its lien by sale,
minimum bid for the Union and Kansas
Pacific lines that would produce to the Gov
eminent, over and above any prior liens and
charges upon the railroads and sinking
fund, the net sum of $45. 754 O59. 90. In per-
Torrance of this agreement the bid was
guaranteed by a deposit of 81 800, 900.
bills were then filed in the United States
Circuit Courts for the foreclosure of the
Government lien. The DEGREES entered
for the sale of the roads not being salts
factory to the Government, papers were
prepared for an appeal. Then the re-
organization committee came forward with
an offer to increase its bid to $50, 000, 600
instead of $40. 754, 059 80. Subsequently, to
settle all points in dispute, the reorganiza-
ton committee decided to abandon this
second bid and to increase the minimum
amount to be offered for the property to
SOS, 448, 223.75, being the total amount due
the Government on account of the Union
Pacific Road, as stated by the Secretary of
the Treasury, including the sum of $3.50,
86S.26 cash in the sinking fund. Such an
amount was bid by the reorganization COM
mittee on Nov. 1, 1897, and the sale was
confirmed by the court ON Nov. 6, 1897. AT
ter the confirmation Of the sale, the whole
amount was paid into the Treasury of the
United States in convenient installments,
thus relieving the Government from any loss
whatever upon its claim for principal and
interest due upon its subsidy, and bringing
q q final and most satisfactory termination