Show PACIFIC RAILWAYS An Interestliig Report Presented Ijy the Senate Committee I Washington D C Jan 6Senator I Brine chairman of the Senate Commit I tee on Railroads today presented a report I re-port from that committee concerning I the Pacific railroads The report is not I based on any bill before Congress and is intended simply to supply the Senate i i with all the information obtainable in i relation to the Indebtedness of the Pacific Pa-cific railroads together with a brIef sketch of history of both the Union Pacific ad Central Pacific systems which is done under the following heads as regards the Union Pacific I FirstThe charter construction of rpads and subsequent legislation I Second The roads composing the system at present and their financial status ThidPolcY of owning and controlling controll-ing branch lines of road and other outside inveistments Fourth Measures of relief The part of the report devoted to Pacific railroads deal with the charter and legislation roads embraced in the system indebtedness assets and earning earn-ing The report makes no direct recommendations recom-mendations but urges the importance of taking up the question of the Pacific I terms road indebtedness in the following I The present practical question of the Indebtedness on the bonded Pacific railroads is of vast magnitude arid of the highest importance Its solution and settlement and 0 final adjustment ad-justment of the relations of the government govern-ment wit these roads looking to the ultimate discharge of this indebtedness and of the rehabilitation of the roadsso that they may subserve the purpose for which they were originally created is imperatively demanded not only by I the United States and the roads themselves them-selves but also by the communities and people which they serve with rail road facilities and by the holders of valid securities issued or guaranteed byte by-te railroad companies The measure of relief to be provided ought to ha comprehensive and far reaching enough to embrace all these interest I should especially aim to preserve the rights of the United States in the premises and to be such as the roads can live under Whatever of partnership relations exist between the United States and these roads should be terminated in saab manner as shall be to the interests of both Dealing with this subject more regard must be had for present conditions than for past grievances Recollection of the credit jnobilier and other unjust manipulations should not overbalance the sober business busi-ness thought of today or outweigh considerations con-siderations and conditions obtaining at the present time I I After discussing various measures of making secure the government indebtedness on the Union Pacific the report says Another course seems to have been left open by the government under the sixth section of the act of 1862 which provided that the grants were made upon the condition that the company com-pany should pay the subsidy bonds at maturity This is condition subsequent subse-quent and for n breach of the same the United States may at the maturity matur-ity of the debt proceed to forfeit the charter of the company and wind up its business through a receivership and take its chances for a recovery of whatever portion of the debt it maybe may-be able to obtain From what we have said above we think it sure that the amount would be v r small indeed I is a question however on the whole if i might not be the best thing under the circumstances to do To this the report adds Your committee however do not wish to be understood a recommending this measure of relief but merely suggests gests it as an alternative in case other remedies believed now to be better should fail Positive ground is taken against the governments foreclosing the Hens and operating the roads To this plan they say there are many grave objections and add Mrv considerable numb nf ritisens of the United States certainly Ca majority have ever declared in favor of the government control of railroad and fewer yet have ever seriously entertained enter-tained the idea that the government should enter the field of railroading as the owner and operator of but one transcontinental lines operated by private individuals Besides the mainlines main-lines of the Union Pacific and Central Pacific which were entered toy Congress Con-gress to make and constitute one transcontinental trans-continental line there are now in the United States four other lines reaching from the Mississippi river to the Pacifi ocean and haying their connection with eastern trunk lines We think it clear beyond question that a a flnan dial investment the operation of the bondaided Pacific roads by the government govern-ment would be 01 flat failure All ware w-are abundantly satisfied that on the question of governmental policy I would be at present and under existing circumstances unwise and would be i fraught with serious consequences to the republic and with results far reach ing and In the end injurious II In case of the failure of these plans they suggest that the only alternative would seem to be to refund the Union Pacific debt for a considerable period of time at a rate of interest commensurate com-mensurate with the earning capacity of the road This says the report is the plan which has the most favor with finani iers and those who have given this subject much attention As to the period for which the debt should be extended and with respect to the rate of interest no special recommendation rec-ommendation is made That says the report will be a matter for future adjustment when the details of the plan shall be more fully developed At present our recommendations recom-mendations will be confined generally to the matter of refunding of the debtor debt-or such a period and at such 0 rate I of interest as shall enable the company com-pany under ordinary circumstances and business conditions to meet the current interest and a portion of the principal of the debt each year S that at the expiration of the period for wMch the extension is granted the debt may be wiped out In this arrangement arrange-ment two plans have beensuggested FirstThe continuation of the sinking fund and the payment into it of a larger share of the net earnings than are at present paid into i Second Periodical payments of a fixed amount into the treasury of the United States until the debt is liquidated liqui-dated datede The committee does not for the resent res-ent offer any suggestions as to the re ief to be afforded the Central Pacific |