Iowa state bystander. [volume] (Des Moines, Iowa) 1894-1916, 1900-06-08
The Growing Achievement
Of the Mckinley
Administration.

Ia w dSuluSlO ACIIcI. g4s s AO pSsSAC
ment of the Pacific railroad indebted
ness must be ranked as one OF the
greatest achievements Of President
McKinley's administration said Cen
eral Charles Dick, member Of Con-
gress from the Nineteenth district Of
Ohio. and secretary Of the Republican
National Committee. to-day:
All efforts, either by Congress or
the executive departments prior to
1897, were Of little avail in protecting
the governments interests in these
roads. In fact, there were 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.-
421.671 out Of about $3.50. 1000 900 that
was due, and more than half the
money collected was for accrued in
terest that had not been paid.
''The discovery Of gold In Cali
fornia; the rapid increase in wealth
and population In the territory west
Of the Rocky mountains, and move
ment on the part Of the older states
to establish closer connections during
the Civil war with those outlying
communities, led Congress in 1862 to
authorize the construction Of a rail-
road to the Pacific ocean. The direct
benefit to be derived by the govern
ment was its use for postal, military
and other purposes. The act Of July
/, 1862, chartering the Union Pacific
Railroad Company was not sufficient
ly liberal, and therefore nothing was
accomplished after its provisions
Though the Union Pacific Company
was organized no one was found who
would venture money in the construc-
ton of the road.
ION 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 construc-
ton Of the road it should take a sec
ond mortgage. Two companies were
organized under the provisions of the
act of 1864, and entered theoretically
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.
The Union Pacific Company construct
ed 1904 miles, and the Central Pa
ciflc 743 miles. The road Of the latter
company was subsequently extended
40 miles, and the lines Of the two
companies from the Missouri river to
San Francisco represent mileage Of
1917 miles.
In aid Of these roads and connect
ing branches the United States issued
bonds to the amount OF $64,623, 512.
Failing to be reimbursed for the in
terest paid on these bonds, 1t became
necessary, in protection Of the inter-
ests of the government, to pass the
act of May Z, 1878, known as the
Thurman Act This act provided
that the whole amount Of compensa-
ton which might from time to time
be due to the railroad companies for
services rendered the government
should be retained by the gov
eminent, one-half to be applied
to the liquidation Of the inter-
est paid and to be paid by the
United States upon the bonds is
sued to each of the companies, and
the other half to be turned into a
sinking fund. But 1t soon became ap-
parent that, with the approaching ma
turity OF bonds issued in aid of the
roads the provisions of the Thurman
Act were not adequate to the pro-
lection of the governments interests.
Efforts were persistently made look
ing . settlement of this vast indebt-
edness, but without success. So re-
Gently as the Fifty-fourth Congress
an attempt was made to pass bill
to refund the debts of the Pacific
Railroad Companies, but it was de-
feated in the House by vote Of 167
nays to 102 yeas. r.
ION January ~, 1897" continued
General Dick, 'the day following the
defeat Of the funding bill, the at
torney general was informed by the
President 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, az
far as practicable. the payment OF
their Indebtedness. An agreement was
entered into between the government
and the reorganization committee o!
the Union Pacific Railroad, by which
The committee guaranteed, should the
government undertake to enforce Its
lien by SALE minimum bid for the