PACIFIC RAILROAD DEBT
*
ITS SETTLEMENT ONE OF M'KIN
'.EY'S GREATEST .ACHIEVEMENTS.
Tile Government linn lteallxed 8124,421,-
a?l From ThU Source—Tliat Kvery
tlitng Wu Collected I* Due to tlie
Wtidoin of the Preneut Administration*
"The settlement of the Pacific Rail
road indebtedness must be ranked as
one of the greatest achievements of
President McKinley's administration,"
J said General Charles Dick, member
of Congress from the Nineteenth dis
trict of Ohio, aud secretary of the Re
publican National Committee, In
Washington, the other day. "All ef
forts, either by Congress or the execu
tive departments prior to 1897 were of
little avail iu protecting the Govern
ment's interest 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 its equivalent, within two
, years, the sum of $124,421,071 out of
about $130,000,000 that was due, and
more than half the money collected
was for accrued interest that had not
beeu paid.
"The discovery of gold in Califor
nia, the rapid increase in wealth and
population in the territory west of
the Itocky Mountains, and a movement
on the part of the older States to es
tablish closer connections during the
civil war with those outlying commu
nities, led Congress In 1802 to author
ize the construction of a railroad to
the Pacific Ocean. The direct benefit
to be derived by the Government was
its use for postal, military and other
purposes. The act of July 1, ISO 2,
\ chartering the Union Pacific Railroad
Company, was not sufficiently liberal,
and therefore nothing was accom
plished under its provisions. Though
the Union Pacific Company was or
ganized no one was found who would
venture money iu the construction of
the road.
"On July 2, ISO 4, Congress amended
the act of 1802 by making provisions
more favorable to the companies. The
act of ISO 2 provided that the Govern
ment should have a first mortgage on
the property of the company, while the
act of ISO 4 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 1804, 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 liues were united May 10,
ISO 9, anticipating by more than seven
years the time required by Congress,
i he Union Pacific Company construct
ed 1034 miles, aud the Central Pacific
743 miles. The road of the latter
company was subsequently extended
140 miles, and the lines of the two
companies from the Missouri River
to San Francisco represented a mileage
of 1917 miles.
"In aid of these roads and connect
ing branches the United States issued
bonds to the amount of $04,023,512.
Failing to be reimbursed for the in
terest paid on these bonds it became
necessary, in protection of the inter
?sts of the Government, to pass the act
of May 7, 1878, known as the 'Thur
mau Act.' This act provided that the
whole amount of compensation which
might from time to time be due to the
railroad companies for services ren
dered the Government should be re
• tained by the Goverument. 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 a 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 a settlement
of this vast lndeGtr-dness, but without
success. So recently as the Fifty
fourth Congress an attempt was made
to pass a bill to refund the debts of
the Pacific Railroad companies, but it
was defeated in the House by a vote
of 107 nays and 102 yeas.
"On .Tan. 12, 1897," continued Gen
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 far
as practicable, the payment of their
indebtedness. An agreement was en
tered into betweeq the Government
* and the reorganization committee of
the Union Pacific Railroad, by which
the committee guaranteed, should the
Government undertake 'to enforce its
lien by sale, a .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
ing fund, the net sum of $45,754,059.90.
In performance of this agreement the
bid was guaranteed by a deposit of
' $4,500,000.
"Bills were then filed in the United
States Circuit courts for the foreclos
ure of the Government lien. The de
crees entered for the sale of the roads
not being satisfactory to the Govern
ment, papers were prepared for an ap
peal. Then the reorganization com
mittee came forward with an offer to
Increase its bid to $50,000,000 Instead
of $45,754,050.99. Subsequently, to
settle all points in dispute, the reor
ganization committee decided to aban
don this second bid and to increase
the minimum amount to be offered for
the property to $58,448,223.75, being
the total amount due the Government
on account of the Union Pacific Road,
as stated by the Secretary of the
Treasury, including the sum of $4,-
540,368.20 cash in the sinking fund.
Such an amount was bid by the reor
ganization committee on Nov. 1, 1897,
and the sale was confirmed by the
court on Nov. C, 1897. After the con
firmation of the sale the whole amount
was paid into the Treasury of the
United States in convenient install
ments, thus relieving the Government
from any loss whatever upon its claim
tor principal and interest due upon its
subsidy, and bringing to a final and
most satisfactory termination one of
these long-standing and troublesome
questions.
"In the case of the Kansas Pacific
Indebtedness, by decree of the court
an upset price on the sale of the prop
erty was fixed at a sum which would
yield to the Government $2,500,000.
The reorganization committee in con
ference with the Government declared
its purpose of making no higher bid
than that fixed by the decree of the
court, so that the Government was
confronted with the danger of receiv
ing for its total lien upon this line,
amounting to nearly $13,000,000, prin
cipal and interest, only the sum of
$2,500,000. Believing the interest of
the Government required that an ef
fort should be made to obtain a larger
sum, and the Government having the
right to redeem the incumbrances
upon the property, which were prior
to the lien of the Government subsidy,
by paying the sums lawfully due in re
spect thereof out of the Treasury of
the United States, the President, on
February 8, 1898, authorized the Sec
retary of the Treasury to pay the
amounts lawfully due upon the prior
mortgages upon the eastern and mid
dle divisions of said road.
"Then the reorganization committee
of the Kansas Pacific offered to bid
for the road a sum which would real
ize to the Government the whole
amount of the principal of the debt,
$0,303,000. It was believed that no
better price than this could be ob
tained at a later date If the sale
should be postponed, and it was
deemed best to permit the sale to pro
ceed upon the guarantee of a mini
mum bid which would realize to the
Government the whole principal of
its debt. The sale thereupon took
place, and the property was pur
chased by the reorganization commit
tee. The sum yielded to the Govern
ment was $0,303,000. It will thus be
perceived that the Government se
cured an advance of $3,803,000 on ac
count of its lien, over and above the
sum which the court had fixed as the
upset price, and which the reorganiza
tion committee had declared was the
maximum which they were willing to
pay for the property.
"The result of these proceedings
against the Union Pacific system, em
bracing the main line and the Kansas
Pacific line, is that the Government
has received, on account of Its sub
sidy claim, the sum of $04,751,223.75,
which is an increase of $28,997,103.70
over the sum which the reorganiza
tion committee first agreed to bid for
the joint property, leaving due the
sum of $0,588,900.19 interest on the
Kansas Pacific subsidy. The prose
cution of a claim for this amount
against the receivers of the Union Pa
cific Company in 1898 resulted in se
curing to the Government the further
amount of $821,897.70.
"The indebtedness of the Central
Pacific Kailroad Company to the Gov
ernment became due January 1, 1898,
when default in payment was made
by the company. The deficiency ap
propriation act of July 7, 1898, ap
pointed the Secretary of the Treasury,
the Secretary of the Interior, and the
Attorney-General a commission with
full power to settle the indebtedness
to the Government growing out of the
issue of bonus to aid in the construc
tion ol' the Central Pacific and West
ern Pacific roads, subject to the ap
proval of the President.
"An agreement for the settlement of
this indebtedness was entered into be
tween the commissioners and the rail
road companies ou February 1, 1899.
The amount then due to the United
States for priucipal and interest upon
its subsidy liens upon the Central Pa
cific and Western Pacific railroads was
$58,812,715.48, more than one-half of
which was accrued interest upon the
principal debt. The agreement for
settlement provided for the funding
of this amount into promissory notes
bearing date of February 1, 1899, pay
able respectively on or before the ex
piration of each successive six months
for ten years, each note being for the
sum of $2,940,035.78, or one-twentieth
of the total amount due. The notes
bore interest at the rate of 3 per cent,
per annum, payable semi-annually,
and had a condition attached to the
effect that, if default be made either
in the payment of principal or inter
est of either of said notes or in any
part thereof, theu all of the notes out
standing, principal and interest, imme
diately became due and payable, not
withstanding any other stipulation of
the agreement of settlement.
"It was further agreed that the pay
ment of priucipal and interests of the
notes should be secured oy the depos
it with the United States Treasury
of $57,820,000 face value of first re
funding mortgage 4 per cent, gold
bonds, to be thereafter issued by the
Central Pacific or its successor having
charge of the railroads then owned by
the company, such bonds to be a part
of an issue of not exceeding $100,000,-
000 in all, aud to be secured by mort
gage upon all railroads, equipments
and terminals owned by the Central
Pacific Railroad Company, the mort
gage being a first Hen upon the prop
erty.
"In pursuance of another provision
of the agreement, the four earliest ma
turing notes were purchased by Spey-
er & Co., Marcb 10, 189!), and the pro
ceeds, amounting to $11,702,543.12, and
accrued Interest to the date of pay
ment, $36,771.02, in all $11,798,314.14,
were received by the Treasury March
27, 1899, as part payment of the In
debtedness of the Central Pacific and
Western Pacific Railroad Companies.
The properties of the various compan
ies comprising the Central Pacific sys
tem were subsequently conveyed to a
new corporation called the Central Pa
cific Railway Company, which latter
executed the mortgage and bonds pro
vided for by the agreement of i Jttle
ment.
"On October 7, 1599, bonds we e de
livered to the Treasury Departmrat by
the Central Pacific Railway Company
to secure the outstanding notes held
by the Treasury. The United States,
therefore, holds the notes of the Cen
tral Pacific Railroad Company guar-,
anteed bythe Southern Pacific Rail
road Company to the amount of $47,-
050,172,30, bearing interest payable
semi-annually at the rate of 3 per cent,
per annum, and secured by the deposit
of an equal amount of first mortgage
bonds of the Pacific Railway Com
pany, thus providing, beyond any
doubt, for the sure and gradual pay
ment of the whole of this subsidy
debt, and providing in the meantime
for the payment of interest at the rate
of 3 per cent, upon the unpaid bal
ances. The United States, through the
settlement agreement tnus entered in
to, will be reimbursed the full amount
of the principal and interest of the
Central Pacific and Western Pacific
debt, aggregating $58,812,715.48.
The amounts due to the United
States March 1, 1900, from Pacific rail
roads on account of bonds issued in
aid of their construction, were as fol
lows:
J 83 ISi
a OS 112» hi
£ -AST 3
5 288 8
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"Efforts ae now pending looking to
the collection of this indebtedness.
"Out of au indebtedness of about
$130,000,000, more than one-half of
which consisted of accrued interest,
the Government has realized in cash,
or its equivalent, the sum of $124,421,-
070.'J5, within a period of less than
two years. No other administration
in the history of the United States
lias ever so quickly, so thoroughly,
and so satisfactorily enforced the set
tlement of large claims held by the
Government against business corpora
tions, nor has any similar settlement
ever previously been made by the
Government to such good financial ad
vantage. The claims were due. The
President insisted upon their collec
tion. and this was done in a prompt
aud business-like manner."
The Democratic Millstone.
The adoption by the Democrats ot
Nebraska of a Populist platform, at
the dictation of Bryan, shows that the |
free silver agent is still willing to
take up with "any old thing" for the
sake of catching a few votes, but his
fool performance has riyped the Dem
ocratic party up the back, aud they
are wondering how they can get rid
of the millstone that hangs about tlieir
necks. Next November will see the
end of Bryan.—Norwich (Ohio) Re
llector.
Our Porto Rican Governor.
La Correspondeneia de Puerto Rices
in its issue of May 3, liKX), said: ''Un
less reports are false, Mr. Allen will
walk with slow paces until he be
comes acquainted with the path. He
will then do that which a good gov
ernor should do. lie is not commit
ting himself unconditionally to any
party, and is governing with the aid
of Portoricaus of recognized ability
aud character. In this he is discreet,
aud we welcome our new governor."
Spoiling Croker'g Vacation.
The New York official who so se
riously disappointed Boss Croker by
conducting his office In an honest man
ner after having secured bis election
on the Tammany ticket is being men
tioned as a Democratic candidate for
Governor. Such unpleasant rumors
are calculated to detract materially
from the pleasure of Boss Croker'a
European outing.
Wliere li That Slninit?
We would humbly inquire or the
Minneapolis Journal and some other
ghost dancing contemporaries where
they find the great anti-Republican
slump that was to punish the perpe
trators of the Porto Rican bill? The
election returns show heavy Republi
can gains almost everywhere.— Sioux
Falls (S. D.) Leader.
Not of That Kind.
Texas has been thoroughly soaked
with water, but there is no probability
of its becoming a prohibiten State,
Mysterious Mine* In Afrlcm.
Besides the reefs which have been
discovered, there exists in Rhodesia an
enormous quantity of "old workings,"
mines which were worked in ancient
times, but have long since been aban
doned, says the London Telegraph.
By whom these mines were worked is
and will probably remain forever a
mystery. From old pottery and tools
which have been found it is evident
that these old workings were exca
vated by or under the direction of
men of knowledge and intelligence su
perior to those possessed by the pres
ent inhabitants of the country. Gold
was extracted from these mines by
smelting, many furnaces having been
found, and alongside of them ancient
molds in which ingots were cast. Sev
eral ruins have also been discovered
in Rhodesia, the magnitude and work
manship of which proves that men of
superior civilization either inhabited
or else occupied this part of the world
a few thousand years before us. To
them are probably due the ancient
workings which have been found.
With the primitive instruments at
their command these miners of a past
age were only able to scrape the sur
face of the gold-bearing reefs, so that
the quantity of gold which has been
taken from the mines hardly affects
their value, -.vhile they are a precious
indication to the prospector and ena
ble him to test the reef below the sur
face. and, as a rule, the 112 ite of most
of these olu workings seems to have
been selected by competent men, who
chose the richest reefs.
Odd Causes of a Queer Wedding.
One of the most roninntic marriages
that has occurred In Bowling Green,
Ohio, for some time took place when
Harrison Cheney, who is about seven
ty years of age, was married to Miss
Agnes May, aged eighteen years. The
marriage was in the way of the fulfill
ment of a promise made many years
ago.
Cheney, when a young man, lived in
a Pennsylvania town, and was a lover
of one who married another. She took
sick afterward, and upon her deathbed
she asked Cheney to look after a little
daughter. This he did, and she in
time grew up and was married. She
was taken sick with consumption, and,
too. passed away, but not before she
had pledged Cheney to look after her
little girl, then two years old. Ills de
votion to-the little child culminated in
their marriage.
Hoar* of Went Point Cnrtetn.
The students of the West Point Mil
itary Academy have just one hour
and a half recreation a day, except
Wednesdays and Saturdays, when they
have six hours. They are called at
5:30 in the morning, and breakfast at
fl in the summer, and In the winter
they are called at C and breakfast at
0:30, and their day is divided into
tasks that continue until taps is
sounded at 10 o'clock at night and all
lights must go out.
"Bob*" I* Not Superstitions.
Field Marshal Roberts has no belief
in tlie thirteen superstition, yet he no
tices occurrences of thirteen at table.
He has related how, one New Year's
Day, thirteen sat down to dinner.
Eleven years afterward they were all
alive, though most of them had been
through ilie Indian mutiny and eight
of them had been severely wounded.
A cemetery for pet animals has re
cently been opened near Paris. It has
separate quarters for dogs, cats and
birds.
RICH, BUT WRETCHED
a <- V ) Fight on for wealth, old "Money Bags/'
/ \ your liver is drying up and bowels wear-
p—7—,* .. .■ll - ..yl _ 7 ing out, some day you will cry aloud for
(mi 11 " health, offering all your wealth, but you
\¥J)/ 1 *vill not get it because you neglected Nature
Vx in your mad rush to get gold. No matter
iJJLL what you do, or what ails you, to-day is
the day—every day is the dav —to keep
' Wv 1 XjCvl J/ watch of Nature's wants —and help your
- bowels act regularly — CASCARETS will
/JM&LA rdl/ help Nature help you. Neglect means bile
in the blood, foul breath, and awful pains
jr in the back of the head with a loathing
and bad feeling for all that is good in life.
iSSpM r nf Don't care how rich or poor you are, you
— f W I 112 /ivy--If can't be well if you have bowel trouble,
\ A) j/ r 'li \ \\\ you will be regular if you take CASCA
i II !V? \ RETS—get them to-day— CASCARETS—
p n V \_ JV7 I in metal box; cost JO cents; take one, eat
® like candy and it will work gently while
1111 > 12y . - . you sleep. It cures; that means it strength
ens the muscular walls of the bowels and
gives them new life; then they act regularly and naturally; that is what you want —
it is guaranteed to be found in—
THE IDEAL LAXATIVE .
raftcoftcto
CANDY
25c*.
To any needy mortal suffering from bowel troubles and too poor to buy CASCARETS we will lend a box free. Address
Sterling Remedy Company, Chicago or New York, mentioning advertisement and paper.
1 I
• 'in Elephant Aolnit the HlfpipM.
It is a fact that pipers in Highland
regiments ar» posted to companies,
and always follow them wherever they
go. On one occasion a company of the
Gordons were marching from a place
caued Jellunder to Fort Kangra, situ
ated at one of the lower ranges of the
Himalayas. Accompanying them was
an elephant, on which were placed
sick and exhausted men. After a few
days' march we were deprived of
music on account of the piper's feet
becoming blistered, and he was rele
gated to the back of the elephant. On
the last day's march, before entering
a new station, some one suggested
that in order to brighten us up the
piper might be requested to play on
the elephant's hack at the head of
the company. To this the officer as
sented, and accordingly the piper was
handed n.s pipes. When he began to
tune them it was evident that the ele
phant had no appreciation of such
sounds, for he shook his head, flapped
his big ears menacingly, raised his
trunk, with which he embraced the
piper round the waist, and violently
threw him and his pipes into a ditch
as a mark of his disapproval of such
music
EnglUh Bank Note Peculiarities.
It is not everyone who is aware that
a Bank of England note is not of the
same thickness all through. The pa
per is thicker in the left-hand corner,
to enable it to retain a keener Im
pression of tlie vignette there, and It
Is also considerable thicker In the dark
shadows of the centre letters and be
neath the figures at tlie ends. Count
erfeit notes are invariably of one t sick
ness throughout.
Vonn; People'* Clirl*4laii Union#
The Transportation A (rents from Now Eng
land States. Connecticut. T.ew 1 crk and
New Jersey, of the Young Peop.e's Christian
Union, which meets in Atlanta, Ga., July 10,
1900. have selected as the official route the
Southern Railway-the route through the
" Land of the Sky.' l Special trains have been
arraneed and it will be one of the most suc
cessful meetings ever held by the Vnion.
Full particulars from Transportation Agents
or Southern Ry. Ticket Olfce9, 271 and 1185
Rroadwav, New York. Alex. S. Thweatt,
Eastern Pass. Agt.. 11K5 Broadway, New \ ork.
Fargo, N. D., with a population of less
than 11,000, has eigHty-seven secret socie
ties.
Jell-O, the New Dessert
Pleases all the family. Four flavors:—
Lemon, Ornngo, Raspberry and Strawberry.
At your grocers. 10 cts.
It's only fare that the conductor should
have a little change.
To Care a Cold In On* Day,
Take LAXATIVE RROMO QCIKIWB TABLITS. All
I druggists refund the money if it falls lo cure.
K. W. Gaova's signature Is on each box. 2Sc.
* Whistling is the ill wind that blov.B no
body good.
Rev. J. R. Bridees, Columbia, Mo., says
Please send me one bottle of Frey's Vermi
luge. None to be had here.
The end seat in a summer car has lost
none of its popularity.
1 Have you ever experienced the joyful
sensation of a good appetite? You will if
you chew Adams' Pepsin Tutti Fruttl.
An lowa concern is making farm wagons
wholly of steel.
DON'T STOP TOBACCO SUDDENLY
Tt injures nervous system to <lo so. DAOfl ft||Dfl
i is the only cure that ItenUy Cui-™ DHUU'UUnU
and notifies you when to stop. Sold with a
guarantee that three boxes will cure any case
RAPfI MUM J* vegetable and harmless. It has
DAUU'UUnU cured thousands, it will cure TOU.
At all druggists or by mail prepaid, Sfl.OO a box;
3 boxes, £ 2.50s Booklet free. Write EUREKA
CHEMICAL CO.. La Crosse, Wis.
ADVERTISING
nDAD QY NEW DISCOVERT; Civet
l/K\ VI ■ quick relief and cures worst
eases. Boo* ol testimonials and 10 days'treatment
Ins. a*. a. SUU l SOUS. Som S. iUuu. »>
i the reason? Hair
N needs help just as
% anything else does at
% times. The roots re- <
► quire feeding. When \
► hair stops growing it K
? »■* mh
% looks |fl% ■
nal P
vigor
acts almost instantly \
ion such hair. It ►
\ awakens new life in /
the hair bulbs. The
► effect is astonishing. <
Your hair grows, be
< comes thicker, and all \
\ dandruff is removed. ►<
\ , And the original
► color of early life is „
► restored to faded or *
/ gray hair. This is <
* always the case. <
k and am really astonished at the 1
r . good it has done in keening my
► best tonic 1 have tried, aud I .
< shall continue to recommend it to "4
y my friends." k
J Mattie Holt, ►.
k Sept. 24,1808. Burlington, N. C. '
<
l If you do not obtain all the benefits
w j you expected from the use of the liair
L Vigor, write the Doctor about it. 4
T DR. J. C. AT£ll, Lowell, Mass. .
ygggggsgms
f.' W!OUT!)
For your family's comfort W
1 HIRES Rootbeer k
will contribute more to it than HH
■KN, tons of Ice and a gross of fan*. JKSm
SfrallonsforMcents.
Writ* for list of prcmiamt offerol
CnABLESLHIKES CO. JHU
Happy!
Crlppe and Liver Disease*. --
KNOWN 4U.OBISSHTI. J3(,
Beet Cough Syrup. Tastes Good. Cat W
in time. Sold by druggists. m