CONGRESS. (PACIFIC RAILEOAD INVESTIGATION.) 



199 



the Union Pacific Railroad Company the United 

 States has issued its own honds to the amount 

 of $27,236,512 ; that interest accrued and not 

 yet paid by the United States because the cou- 

 pons have not been presented, amounts to 

 $817,095.36; that the interest already paid by 

 the United States to the 1st of July, 1885 

 and this report was made up to that date was 

 $27,409,136.49. Out of that is to be taken, 

 according to this tabular statement, for trans- 

 portation and cost of the 5 per cent, of the net 

 earnings in the first place, $10,647,579.36, and 

 the 5 per cent, of the net earnings reserved in 

 the Treasury $283,162.99, making a balance of 

 interest paid by the United States, besides the 

 $817,095.36 of outstanding coupons yet to be 

 paid, $16,478,394.14. 



" So, as the Commissioner states it, the state 

 of the accounts between the United States and 

 the Union Pacific Railroad Company on the 

 1st of July, 1885, sums up in this way: The 

 total debt of the Union Pacific, including the 

 Kansas Pacific, is $33,539,512 of principal ; 

 accrued interest on the bonds that we are pay- 

 ing the interest on, $35,111,924.94, making on 

 the 1st of July, 1885 there being still twelve 

 years on an average of interest yet to be paid, 

 which would make 72 per cent, of the original 

 $33,000,000 of the debt $68,651,436.94. 



* There is twelve years of interest yet on 

 $33,000,000, which would be, at 6 per cent., 

 72 per cent, on $33,000,000, which, in round 

 numbers, is three quarters of that, which would 

 be about $24,000,000 more, which added to 

 your $68,000,000, leaving off the odd hundred 

 thousands, would make $92,000,000, that with- 

 in ten years from this date will be due to the 

 United States from this corporation for actual 

 cash that the United States will have paid out. 



"Now, what else did it get? Let us see. 

 The land question is stated in the same report. 

 The net proceeds of land-sales, after deducting 

 all expenses of management, commission, etc., 

 to Dec. 81, 1884, were $25,668,806.65. Add 

 that twenty-five million dollars to the ninety- 

 odd millions that I had before and you have, 

 in round numbers, just about $120,000,000 of 

 cash that this company will have had from the 

 United States. 



" The estimated value of the unsold lands is 

 $13,602,696.25. 



"Take that to be a fair estimate of that 

 value and add that to your $120,000,000, and 

 you have $134,000,000 that the people of the 

 United States have paid into this thousand 

 miles of road from Omaha to Ogden." 



After citing the Supreme Court decision to 

 the effect that the 25-per-cent. payment from 

 the Pacific Railroads on their net earnings un- 

 der the provisions of the Tliurrnan act was sim- 

 ply computed on the earning of the "aided" 

 part of the lines, the Senator said : 



fc ' What became of the balance of the 75 per 

 cent. ? For some years after this act of Con- 

 gross was passed, and which denounced pen- 

 alties against any director or officer of the 



company who, until they met the obligations 

 of the United States and to the creditors by 

 paying into the sinking-fund, should declare 

 any dividend, the companies proceeded year 

 after year to declare dividends, and to pay 

 them, and but for this statute they might do 

 it; it was 'net,' everything to carry on the 

 road and keep it in the best possible condition 

 was authorized to be drawn out before the 25 

 per cent, was computed, and it was drawn out, 

 and then that being computed and the 25 per 

 cent, paid in or not paid in, as it was not, the 

 balance was divided among the stockholders; 

 and I will assume that every stockholder was 

 a widow, and that every other stockholder, to 

 use a phrase which is exuberant, was an orphan 

 and innocent, paid 200 per cent, to buy their 

 stock, what of it ? 



"What right has a widow to wrong her cred- 

 itors ? What right has an orphan to wrong his 

 creditors or her creditors ? I do not understand 

 it. I am in favor of the widow not that I wish 

 anybody's husband to die ; I am in favor of or- 

 phans not because I wish anybody's father or 

 mother to die ; but I do not quite understand 

 on what principle it is that widows and orphans 

 and all the other people who are supposed to 

 be represented by Mr. Charles Francis Adams 

 are entitled to be allowed by Congress to go 

 on year by year as they are quite likely to do 

 and they have done it for many years to take 

 money that belongs to their creditors and put 

 it in their own pockets." 



Mr. Hoar, of Massachusetts, interrupting, 

 said: 



" The Senator said just now that if he made 

 any misstatement he would be glad to be cor- 

 rected, and I think he made unwittingly a mis- 

 statement in answer to the Senator from South 

 Carolina, who asked if all above 25 per cent, 

 now passed into the pockets of the stockhold- 

 ers, and the Senator said yes; and also when 

 he stated though he stated the fact with lit- 

 eral correctness that there was a dividend 

 year after year when they did not pay what 

 was due. There has not been a dividend paid 

 to the stockholders for several years. All the 

 earnings have gone into the improvement of 

 the property." 



Mr. Edmunds continued : 



" I did say that the 75 per cent, went into 

 the pockets of the stockholders. Very likely 

 I was incorrect about that, for a good many 

 of the net earnings of corporations that are 

 net earnings do not quite get into the pockets 

 of the stockholders. It may be that I over- 

 stated that a little. I am not sure that it all 

 went into the stockholders' pockets, but it was 

 net earnings all the same. 



"Year after year, I repeat, after the passage 

 of the Thurman act, the Union Pacific Railroad 

 Company did not obey it. and proceeded to de- 

 clare dividends when the statutes of the United 

 States said if they did they should suffer pun- 

 ishment, and the Administration a Republican 

 one, too in some way or other failed to bring 



