REPORT OF THE COMMISSIONER OF RAILROADS. . DEPARTMENT OF THE INTERIOR, OFFICE OF COMMISSIONER OF RAILROADS, Washington, October 27, 1885. SIR: I have the honor to report that the property and accounts of the railroad companies under the supervision of this office have been carefully examined, especially those of the companies that were aided with the bonds of the United States. Their officers readily furnished all necessary facilities. The property inspected, including railroads, rolling stock, and workshops, was in good working order. The financial condition of the companies and their accounts with the Government are exhibited in the following statements: BOND AND INTEREST ACCOUNT. The condition of the accounts with the several Pacific railroad companies as to moneys actually standing to their credit is shown by the public debt statement, issued by the Treasury Department June 30, 1885, but this statement does not include moneys in the sinking fund held by the Treasurer of the United States, or the compensation for services not at that time settled by the accounting officers, as shown by the following statement: CONDITION OF SINKING-FUND ACCOUNTS. The sinking funds of the Union and Central Pacific companies, held by the Treasurer of the United States under the act of May 7, 1878, amounted to $8,560,807.60 on June 30, 1885, the Union Pacific having to its credit $5,522,343.74, and the Central Pacific $3,038,463.86. Investments have been made by the Secretary of the Treasury as fol There remained in the United States Treasury uninvested on June 30, 1885, the following amounts: Credit of the Union Pacific Credit of the Central Pacific. Total.... $220,448 68 2,020,900 13 2,241, 348 81 Of the above investments, two were made in the year 1884 for the Union Pacific Company, one in January of $2,400,000 in the 4 per cent. funded loan of 1907, premium $524,312.50; the other in April, of $691, 000 in the same funded loan, premium $153,440.63. The interest on that company's sinking fund investments is $226,965.20. The Central Pacific Railroad Company having protested against the investment of its sinking fund at the usual high rates of premium for Government bonds, no investments have been made for it since November 27, 1882. The interest on its sinking-fund investments to June 30, 1885, amounted to $210,558.83. More than a fourth of the sum now in the sinking-fund is uninvested because under the law this fund can be invested only in United States bonds, which are at a high premium and pay low interest. If larger discretion were allowed the Secretary of the Treasury, the whole fund might be invested and at a higher rate of interest. In the seven years since 1878, only the sum of $8,560,807.60 has been paid into the sinking fund; which has produced in interest but $437,524.03. This proves that the law of 1878 cannot accomplish the object intended, that of furnishing a sum sufficient to pay the debts due from the Pacific railroad companies to the United States. It is therefore suggested that it might be alike advantageous to the Government and to the Pacific railroad companies to substitute for the present law one fixing an annual or semi-annual payment by the companies concerned, which should extinguish their debts to the Government in a reasonable time, as is proposed in two bills reported by Senator Hoar in the last session of the Senate, viz, S. 2663 and H. R. 6771. The total indebtedness of the several subsidized Pacific railroad companies to the United States on June 30, 1885, is as follows: Transportation services performed and money paid into the Treasury: Union Pacific: Transportation applied to bond and interest ac Transportation applied to bond and interest account. Central Branch Union Pacific: 1,421,714 46 $19, 737, 380 32 5, 143, 552 31 648,271 96 2, 193, 912 55 633,992 48 210,558 83 8.830,288 13 178,659 68 Balance in favor of the United States, but not due until maturity of principal 1895-'99 . 28, 973, 001 52 102, 627, 425 38 |