Year: 1871

To the Edftor Of The Tribune.


SIR In your issue OF 18th January, you
bear ample testimony the benefits derived by both the
people and the Government from the completion of the
Union Pacific Railroad but hold that the stockholders
and not the people United States should suffer the
losses growing OUT of tho prodgalities incapaces,
and rescalites" Of its original managers. But now


these losses should chiefly al innocent bondhoders
who had nothing to do with the construction OF the
road further than the loan OF their money! Let US see
These bondholders told by the managers ana on
GERS OF the corporation that the Government had loaned
them from s25OoOOOO to s3O,COO,OOO on second
mortgage OF the road. with the stipulation thaC
neither principal interest should be demanded untl
the expiration of 80 years. excepting so for their dues
| should he met by the one-haf part OF the amounts
charged by the road for Government transportation
Having little money to invest, your correspondent
learned twelve months ago that the IT, r. Company had
been compelled ten millons OF bonds, the
payment Of the interest and principal OF which depended
solely upon the earnings Of the road The interest
offered for tho loan was tempting, and he inquired
into tho nature of tho Governments claims
on theI receipts of the road, and found that
tho representation made by the officers OF
the Company were substantially sustained, not
only by the enactments Of Congress- he understood
them but by the practice Of the executive officers Of Gov
under them up to that period only the one
half part of Government freight had been demanded;
the remaining half part having been paid to and applied
by Company its other creditors Under these cir
curnstance he was induced part with his money for
che bonds of the Company. How stands tho case nowf


Unless Company had been furnished by the present
bondhOlders with the ten millions of dollars the ROAD
could have been completed and put in running con-
dton and been abandoned to the holders Of
the bonds under the first mortgage unless the Gov
ernment stepped and paid them and took possession
of the unfinished road Instead Of this we hndits officers
quietly submitting to the construction placed by the
Company itself the nature of its obligations to the
Government and regularly paying the one-half part OF
its TRANSFORMATION expenses the road until the money
has been received of the purchasers Of the bonds to an
amount sufficient for its entire completion ana equip
ment.


Bat now comes change! No is the Govern
ment mado it, loan to the road by its entire COM
peton and equipment at 1.-THE expense of the deceived
and innocent bondholders than the Secretary Of the
Treasury discovers that his under the laws OF Con-
ress hitherto been altogether erroneous, and that he
should collect from the Company the whole amount OF
neres on its bonds advanced to the Company ii be-
comes due. Now let mo ask you In all candor, Mr.
Editor whether the bondholders should bc made to
su in this way because Of the mismanagement or mis-
conduct OF the original projectors and stockholders Of
the Union Pacific Road il such in fact exstsI Have they
not rght to complain Of the action of the Government
a. well m OF the conductors Of the roadthrough whose
seenia couson they have been deceived and ehonsed
ont Of t.etr money! TR.u


Comments By The Tribune.


We most Respectfully deny thaJ the ABOVE ~
fair statement of the facts in the case. We
deny that the action of the Government ever
declared OF implied that it had stipulated to
wait thirty years for the payment of its inter-
est on The bonds it issued to the U. p. Com
pany. That il forbore, because of the intan-
tile state Of the company's resources, to de-
mand its dues, by emo means implied that
it had no right to them, and would never de-
mand them


Yet we believe the holders of the First
Mortgage Bonds have a prior lien to the Gov
ernment's, and that they mot the Company
can claim that the Government should get
nothing till they are satisfied. After that, we
hold the Governments mortgage to rank next,
alike in law aud equity. As against the Com
pany, the Government has right to take the
road whenever its interest is in default. I'd.