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purchasers of said railroad, franchises, and property, to the Union Pacific Railroad Company.

In the decrees for the sale of the Union division and the Kansas division it is stipulated that they are sold subject to the following provision:

“Saving and excepting the right of the United States Government to have the preference at all times in the use, at fair and reasonable rates of compensation, not to exceed the amounts paid by private parties for the same kind of service, of the said telegraph line and railroad for the transmission of dispatches over said telegraph line and the transportation of mails, troops and munitions of war, supplies, and public stores upon said railroad for the Government whenever required by any department thereof."

The entire indebtedness of the Kansas Pacific Railroad Company to the United States was $12,891,900.19. There remained, after deducting $6,303,000, the amount realized from the sale, a balance of $6,588,900.19 still due the United States. Proceedings were instituted last year against the receivers of the Union Pacific Railway Company, a claim being filed on behalf of the United States on account of the above deficiency against certain funds remaining in their hands. The matter has since been brought to a conclusion with the satisfactory result that the United States procured a decree directing the receivers to pay on account of this deficiency, out of moneys in their hands, the sum of $821,897.70, which sum has recently been paid into the Treasury of the United States and is to be credited against the deficiency above mentioned.

The Union Pacific Railroad Company was incorporated June 23, 1897, and has become the successor to the lines of the Union Pacific Railway Company. The entire main line was opened to public business April 15, 1898.

By the acts of 1862 and 1864 lands were granted by the United States to the companies forming the present corporation as follows:

Acres. Union Pacific

12,000,000 Kansas Pacific

6,000,000 Denver Pacific Railway and Telegraph....

1,400,000

Total

19, 400,000

The following points are the land-grant termini: Union Pacific, Bridge Junction, Omaha, Nebr., and Union Depot, Ogden, Utah; Kansas Pacific, Kansas City, Mo., and a point on the railroad between Monument and Gopher stations and Eighteenth street, Denver, Colo.; Denver Pacific, Denver, Colo., and Cheyenne, Wyo.

The records of the General Land Office show that during the fiscal year there were patented to this company 8,279.85 acres.

The num

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ber of acres patented to June 30, 1899, as shown by the books of the General Land Office, is as follows:

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The report of the company shows that to June 30, 1899, they had acquired in the reorganization, by purchase, unsold lands, including lands not yet patented, amounting to 4,061,154.02 acres, and by cancellation of contracts 86,701.61 acres. Of this there had been disposed of for cash on time contracts 206,307.58 acres.

The total cash receipts from all sales from the date when the lands were acquired amounted to $460,583, and there were outstanding on account of time sales $455,329.81. The average price per acre now asked for land is 75 cents.

At the close of the fiscal year the total number of miles operated was 2,848.38. The track is laid with steel rails of various weights, from 52 to 90 pounds per yard. There are, however, 130.55 miles laid with iron rails, from 50 to 58 pounds per yard. The cross-ties are of oak, fir, pine, and cedar, and average 2,952 to the mile. Their average price at present is 41 cents. The track is fenced for 1,450 miles. The ballast consists of 22.65 miles of stone, 315.35 miles of gravel, 136.90 miles of cinder, 23.03 miles of burnt clay, 18.20 miles of crushed slag, and 2,339.29 miles of natural soil. The bridges aggregate in length 163,830 feet.

The assessed valuation of roadway, bridges, track, buildings, rolling stock, etc., for taxation, averages $8,247 per mile, or a total of $23,492,001.

The express business is transacted by the Pacific Express Company, the railway company receiving 50 per cent of the gross earnings.

The 5 miles of track from Ogden, Utah, to the western terminus of the road are leased to the Central Pacific Railroad Company, under a contract dated February 10, 1888, for a consideration of $20,000 per The following statements show the operations of the company for the fiscal year and the company's general balance sheet on June 30, 1899:

annum.

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This company was originally chartered June 28, 1861, as the Central Pacific Railroad of California. On June 23, 1870, it was consolidated with the Western Pacific Railroad Company under the name of the Central Pacific Railroad Company. By another consolidation, on August 22, 1870, with the California and Oregon Railroad (organized January 16, 1868), the San Francisco, Oakland and Alameda Railr (organized October 15, 1868), and the San Joaquin Valley Railroad (chartered February 5, 1868), the present company was formed. The road of this company is now operated by the Southern Pacific Company under a lease for ninety years from January 1, 1894, by the terms of which the operating company pays from the earnings all the expenses of operation, fixed and other charges, including sinking fund and United States requirements, and $10,000 yearly for organization expenses, the Central Pacific to receive net earnings up to 6 per cent of the stock, and all excess to be equally divided between the companies.

Under the acts of July 1, 1862 (12 Stat., 489), and July 2, 1864 (13 Stat., 356), thirty-year 6 per cent bonds were issued by the United States to aid in the construction of the Central Pacific, amounting to $25,885,120, and of the Western Pacific, amounting to $1,970,560, making a total of $27,855,680, which were secured by second mortgage on the properties, the company's first mortgage being a prior lien to that of the United States.

As the company defaulted in the payment of these bonds upon their maturity, and also of the interest then due, a commission, consisting of the Secretaries of the Treasury and the Interior and the AttorneyGeneral, was appointed by Congress to settle this indebtedness. This commission reported the following plan, which was adopted and is being carried out:

REPORT OF THE COMMISSIONERS APPOINTED TO SETTLE THE INDEBTEDNESS TO THE GOV

ERNMENT GROWING OUT OF THE ISSUE OF BONDS IN AID OF THE CONSTRUCTION OF THE CENTRAL PACIFIC AND WESTERN PACIFIC RAILROADS.

WASHINGTON, D. C., February 15, 1899. To the House of Representatives :

The undersigned commissioners, appointed by the deficiency appropriation act approved July 7, 1898, to settle the indebtedness to the Government growing out of the issue of bonds in aid of the construction of the Central Pacific and Western Pacific railroads, would respectfully report that they have concluded a settlement of the said indebtedness with the Central Pacific Railroad Company, the owner of the said railroads. A copy of the agreement of settlement is herewith transmitted.

The settlement is made as of the 1st day of February, 1899, at which date the amount due to the United States for principal and interest upon its subsidy liens upon the Central Pacific and Western Pacific railroads amounted to the sum of $58,812,715.48, that being the full amount necessary to reimburse the United States for the moneys paid for interest or otherwise in aid of the construction of said railroads.

Said indebtedness is, by the agreement of settlement, funded at the amount aforesaid into twenty promissory notes, dated February 1, 1899, payable, respectively, on or before the expiration of each successive six months for ten years, each note being for the sum of $2,940,635.78, which is one-twentieth of the total amount due. Said notes bear interest at the rate of 3 per cent per annum, payable semiannually, and have a condition attached thereto to the effect that if default be made in any payment of either principal or interest of any of said notes, or any part thereof, then all of said notes then outstanding, principal and interest, shall immediately become due and payable, notwithstanding any other stipulation of the agreement of settlement.

It is further provided that the payment of the principal and interest of said notes shall be secured by $58,820,000 of face value first refunding mortgage 4 per cent gold bonds to be hereafter issued by the Central Pacific Railroad Company, or its successor having title to the railroads now owned by said company and specified in said agreement, such bonds to be part of an issue of not exceeding $100,000,000 in all.

Said bonds are to be secured by a mortgage upon all railroads, equipments, and terminals now owned by said Central Pacific Railroad Company, which mortgage shall be the first lien upon such property, or shall be secured by the deposit as collateral security therefor of certain percentages of the now outstanding bonds upon said property, or the different divisional parts thereof. The form of such mortgage is subject to the agreement of the parties to said agreement of settlement, and has been approved by the Attorney-General.

The agreement further provides that Speyer & Co., who are a party thereto, shall, within one month after the delivery to the United States of the settlement notes, accept from the Secretary of the Treasury the four earliest maturing notes, and pay to the United States the face value thereof, with accrued interest thereon to the date of payment, without recourse further than that Speyer & Co. shall, until the delivery of the refunding. bonds as collateral, be entitled to share pro rata with the United

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