New-York tribune., 1901-02-11
TIE NATIONS FREIGHT.
TRANsCONTINENTAL LINES CAN
oouPFTE FOR GOVERNMENT BUsI-
xrss-MoNOPoLY OF BoND-AIDED
ROADS TERMINATED.
rEr TELEGRAPH TO THE TRIBUNE. ]

ROADS TERMINATED.
Try TELEGRAPH THE rRIBUNKl
-,-.sh,ngton Feb. l0-FFereafter all transconti-
..sl lines may compete with the bond-aded rail-
49, - he enormous freight transportation or the
s-,r,ent between the Atlantic and the Pacific
tr,ern1edate points. The innovation involves
-, oldiers and sailors Of the Army and Navy.
.s,snoe armor food supplies for both military
Los and for Indisns. we'll as all the East and
-, business OF the War. Navy. Interior Treasury
a other executive departments, with bills
,,.,ng 10 millions OF dollars annually Hereto
-. +here has been a sort OF monopoly. the custom
=. 70 various branches OF the Government having
as 10 ship between the Mississippi and the Pa
"a. be,ng 10 use only the Union Pacific and South
-, Pacific lines paying the published rates. and
b,ing the cost credited on the debt owed by these
.as N the United States. When this Indebtedness
rs funded. two years or so ago. II was consid-
- no longer necessary 10 observe this rule and
=. ouartermaster-General advertised for bids FOR
he transportation OF supplies San Francisco.
The santa Fe Railroad. being the lowest bidder.
csved the contract. The Southern Pacific people
,otested and the contract was cancelled by order
=, tbe Secretary Of War, on the ground that il was
,usral and inexpedient to use any but the bond
,8ed railroads until their Indebtedness to the Gov
,roeut had been cancelled. The freight bills OF
-. War Department had increased to such pro-
rt,ons that the advantages of encouraging cOmpe-
,ition became obvious TO the ouartermasters Of
scisls especialIy as regarded slow freight ship
r,ents which were I'm no hurry. and which. If sent
nv the Northern Pacific or Great Northern to Port
land or Seattle could be put aboard transports
.,,e ~ switched south TO San Francisco without
much expense
SECRETARY ROOTS ACTION.
I, was impossible. however. for the War Depart
nent authorities to secure any assurance from the
.usiting and other officials of the Treasury that
accounts would be approved for shipments over
o.ber ,han bond-aided roads until Secretary Root
finally brought the matter head by sending the
following letter TO the Secretary Of the Treasury
War Department. washington. p. G.,
Sir. In examining the question whether the
ms Government in giving a preference to bond
aided railroads In making contracts Tor the trans
tnued I have found among the papers what pur-
ports To be copy OF letter from you 10 fHui
Morton the second vice-prestdent OF the Atchison'
Topeka and Santa Fe Railroad, dated May l6, 1900.
saying that your Department does not feel Justi-
letter from you TO the same. dated june . 1900 10
had come a different conclusion. and saying that
sfiect sSe ''0 "1' '7'1 '-'' '''0'''''' %
can find no communication from you on the
except very brief and desultory remark some
months ago. ] should be glad to learn what is
10 me thar the practice OF treating transportation
over the hond-sided roads if it the Govern
other hand, there is undoubtedly some advantage
10 the Government in keeping SO large creditor
as the Central Pacific in q solvent condition. and
helping il pay its debt to the Government Just
what weight should be given to this consideration.
and what its practical effect should in awarding
contracts. Is q matter of considerable difficulty,
upon which I should be glad 70 have any suEges-
spectfuly, ELIHU ROOT. Secretary OF War.
THE TREASURY DEPARTMENTS REPLY.
This letter promptly produced the desired result
as shown in the following reply:
Treasury Department Office OF Secretary
Sir: Replying 10 your letter OF January ii in re-
sara to the policy OF giving preference 10 bond
tor. ] have sag that the letter referred by
goG written by ASSISTANT secretary kanaeriip 10
PAU Morton second Nlce-presdent OF the Atchson,
Topeka and Santa re Railroad; dated July 90 1900
taken up the subject with the Secretary OF War,
and has advised tie Secretary OF War" ETC. refers
70 conversation that had with you two three
days prior to July 20. and not TO a written COM
munioation.
Aly attitude. however. is substantially as stated
IN Mr. Nanderllps letter to MIR. Morton. when he
says that II consider the debt owed by the Central
vel secured and if the interests OF the Government
as represented by the War Department may lie
served thereby. there IS important reason so far
as the Treasury Department as concerned for not
awarding contracts for freight. etc. lines in
ooInpetition with The Central Pacific"
ln settling with the Central Pacific Railroad the
oeht owed by that railroad 20 the Government the
Government took notes 10 the amount Of SIS $40
Lnese notes were secured by the deposit of hrst
feianalhe mortgage per cent bones 10 an equal
iece value. The present marker quotations for
tnese BONDS are aWl2 TO lOl@s The company has
paid promptly a matured notes ~ they came due
ana has anticipated the payment OF some Of the
notes before they came due In fact, all the notes
Que this year have already been paid. and there
IRE no notes that VIII be due before February l.
1892 Thus the principal Of the debt has been re-
duced from S5S. $4,000 to about s44. 600 600
Under these circumstances the Government hav-
ING It's claims secured By these notes and the notes
secured by collateral deposits Of bonds il does not
seefn that the Government has need for any OF her
security SO long we have the privilege Of ap-
phsng the whole OF the transportation money over
JUS bond-alced lines 10 the liquidation this debt
''eFythine else being equal, II would appear that
We ought 70 patrOnze The Central Pacific first for
ne sake of the edyantage OF having these trans
p'rtauon charges applied upon the indebtedness
ana second, 10 promote the business of a line IN
Nhcse securities We interested TO the extent
.. many millions, buJ that IL would be TO the ad-
Nahlase o. The Government paw higher rafes 10
ne Central Pacific than competing lines will n,er-
l2sm The service for il would be difficult TO show
IN advertising or letting contracts for the trans
toflauon OF troops or material the War Denart-
H-e4lL may be comparatively indifferent. so far as
-le AreasuTeg or the interests of the Government
are concerned, 70 the regulations which have here
,yiofe been an force providing for the trarsporta-
-un, OF iTegnt ana passengers over bond-sided
Loaus. II py olsregarding such practice the Gov
!Ii.ihehts interests would be served in the direc-
Neh OF securing more favorable terms OF trans
poriauon. Very truly YOURS.
l. J. GAGE Secretary.
secretary Root indorsed this letter an instruc-
"oh 70 the Quarterma er-Cieneral 10 follow the
coutse indicated by Secretary Gage in all future
,'tac's lot transportation. and General Luding-