Republican news item. [volume] (Laport, Pa.) 1896-19??, 1900-06-28
PACIFIC RAILROAD DEBT
IT'S SETTLEMENT ONE OF MKIN.
..EYS GREATEST ACHIEVEMENTS.


1.-The settlement of the Pacific Rail-
road indebtedness must be ranked as
one of the greatest achievements of
President Mckinley's administration. )"
said General Charles Dick, member
of Congress from the Nineteenth dis
trict of Ohio, and secretary of the Re-
publican National Committee, in
Washington, the other day. "All eff
forts, either by Congress or the execu-
tive departments prior to 1897 were of
little avail in protecting the Govern
ment's interest in these roads. In
fact, there We're grave doubts whether
the Government would succeed 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 it's equivalent, within two
years. the sum of $124, ,421, ,G71 out of
about $130,000,00O that was due, and
more than half the money collected
was for accrued interest that had not
been paid.
THE discovery of gold in Califor-
MIA, the rapid increase in wealth and
population in the territory west of
the Rocky Mountains, and a movement
on the part of the older States to es-
tablish closer connections during the
civil war with those outlying commu-
mites, led Congress in 1862 to author
ize the construction of 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,
chartering the Union Pacific Railroad
Company, was not sufficiently liberal,
and therefore nothing was accom-
plished under it's provisions. Though
the Union Pacific Company was or
ganized 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 a 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 a second
mortgage. Two companies were or
ganized 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
Railroad Company, and from the Mis-
souri, River westward to the common
meeting point at Ogden by the Union
Pacific Company.
Their lines were united May 10.
1869, anticipating by more than seven
years the time required by Congress.
Ihe Union Pacific Company construct
ed 1884 miles, and the Central Pacific
T43 miles. The road of the latter
company was subsequently extended
14O miles, and the lines of the two
companies from the Missouri River
to San Francisco represented mileage
of 1917 miles.
I'm aid of these roads and connect
ing branches the United States issued
bonds to the amount of S64 ,623.512.
Failing to be reimbursed for the in
terest paid on these bonds it became
necessary, in protection of the inter-
asts of the Government, to pass the act
of May Z, 1878, 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 rem
dered the Government should be re-
tanned by the Government. one-half
to be applied to the liquidation 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 sinking fund.
But it soon became apparent that, with
the approaching maturity of bonds is
sued in aid of the roads, the provi-
sions of the Thurman Act were not
adequate to the protection of the Gov
ernment's interests. Efforts were per-
sistently made looking to settlement
of this vast Indebtedness, but without
success. So recently as the Fifty
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 vote
of 167 nays and 102 yeas.
"On Jan. IL, 1897" continued Cen
eral Dick, 'the day following the de-
feat of the funding bill. the Attorney
General was informed by the Presi
dent that default had occurred in the
payment of the Union Pacific and the
Kansas Pacific Indebtedness to the
Government, and he was directed to
make arrangements to secure, as Tar
as practicable. the payment of their
Indebtedness. An agreement was en-.
tered into between the Government
and the reorganization committee of
the Union Pacific Railroad. by which
the committee guaranteed. should the
Government undertake to enforce it's
lien by sale, minimum bid for the
Union and Kansas Pacific lines that
would produce to the Government.
over and above any prior liens and
charges upon the railroads and sink
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