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النشر الإلكتروني

REPORT

OF THE

GOVERNMENT DIRECTORS OF THE UNION PACIFIC RAILROAD,

FOR THE YEAR ENDING JUNE 30, 1877.

WASHINGTON, D. C., October 12, 1877.

SIR: Three of the government directors of the Union Pacific Railroad (Brewer, Millard, and Wilson) made the regular annual inspection of the road in the month of July last. The entire line was passed over and examined by daylight, and found to be in good condition. The Western Division had suffered severely from high water and wash-outs during the early part of the season of 1876, and the Eastern Division had suf. fered much from like causes during the spring of the present year. The fall and flow of water on the two divisions had been unprecedented, and it was a gratifying surprise to find them in so good condition when the inspection was made. The general condition of the road, shops, equipment, &c., was quite satisfactory. The improvements, which the govern. ment directors have noted and reported from year to year, indicate the steady advance of the road toward the standard maintained by firstclass roads in the Eastern States.

During the year ending June 30, 1877, the company expended for the renewal of rails $504,827.13; and in the month of July of present year, $147,244.73; total, $652,071.86. Since July 1, 1876, there have been renewed 5,154 tons of steel rails to August 1, 1877, and during the month of August 985 tons; or, in all, 6,139 tons; and it is expected that an aggregate of 140 miles will be reached for the year 1877 before its close. Steel rails are being placed on the heavy grades and mountain divisions. From 1st of March last to August 1, there have been rerolled at Laramie mill 4,942 tons of iron rails, at a cost of about $15 per ton. On the lighter grades, bad iron is being replaced with the rerolled rails. For the year ending June 30, 1877, ties have been renewed as follows, viz: Pine, 410,721; hard wood, 89,424; total, 500,145; and the renewal is constantly going on.

In the same period of time the company has constructed at its shops: Outfit and boarding cars, 4; small baggage-cars, 2; box freight cars, 42; total, 48. The company has not a sufficient number of cars of its own to meet the demand for shipment of cattle, but the deficiency is met by the roads leading from Council Bluffs to Chicago sending large numbers of their cars out to points of loading on the Union Pacific Road.

The company has long needed commodious and safe general offices at Omaha. This want is now being met, and when the work on the building shall have been completed the general offices of the company will be exceedingly well and safely provided for.

There had been expended on the general office building at Omaha to August 1, 1877, $13,468.38; amount additional necessary to complete it, $27,000; total, $40,468.38. The building will be amply provided with fire proof vaults for the safe-keeping and preservation of the company's records, books, papers, &c., and will be very complete in all of its appointments.

The decision of the Supreme Court of the United States, hereinafter mentioned, having determined that the eastern terminus of the road is or the Iowa shore of the Missouri River, and requiring the company to operate its road to said terminus as a continuous line, rendered it necessary for the company to provide a building thereat for the accommodation of its large and growing business, and for the comfort and convenience of the public. The work is under way and rapidly progressing toward completion, and the company has expended on the same to August 31, 1877, $13,208.68; amount required to complete it, $70,000; total, $83.208.68. This work is necessary, and the outlay judicious, as the want of proper accommodations at the terminus of the road has been a constant source of complaint.

During the month of August the Missouri River bridge sustained serious damage. A wind-storm of almost unparalleled force carried away bodily, and cast into the river, the two eastern spans of the bridge. Fortunately, neither the abutment nor piers were injured, and the company at once put in a temporary structure for use until a permanent one can be put in place, which will be done without delay. The accident interrupted business for a time, and occasioned considerable cost to the company. On the 18th of September trains commenced crossing on the temporary structure, and there has been no delay since that time. The temporary structure will cost $31,216.78; amount necessary to replace permanent structure, $50,000; total, $81,216.78.

A large expenditure has been made for the protection of the Missouri River bank on the east side. This was required for the preservation of the eastern approach to the bridge. The total amount expended for this purpose to August 31, 1877, is $190,992.14, and the tendency of the river to encroach upon its banks will require constant watchfulness and a continuous expenditure in greater or less amount.

During the present year the Missouri River made a "cut off" just north of the cities of Council Bluffs and Omaha, through which an exceedingly rapid and forceful current was set directly against the west bank of the river, threatening the large general shops of the company. The company has expended $30,000 to avert the present danger, and a subsidence of the water has, for the present, afforded relief; but a large expenditure will be required to protect and preserve the shops in their present location. The work will need to be substantial and thorough, and will probably cost about $250,000. The city of Omaha and the Omaha Smelting and Refining Company are both directly interested in averting this danger, and will doubtless provide for the greater part of the necessary outlay. If this should not be done, then the railroad company must elect between paying the entire expense, with the risk of ultimate failure, and a removal of its extensive shops to a more secure locality. In either event the cost to the company must be considerable.

It is the purpose of the company to replace the present wooden bridge over the Loupe Fork of the Platte River with an iron structure; but the estimate of cost is not yet received.

In 1869 the then management of the company contemplated farming out the express business over the road to Wells, Fargo & Co. This was objected to by the government directors, and finally, on motion of Mr. Wilson, (then and now a government director,) the company resolved to do its own express business. The result of this action has proved most satisfactory. The earnings from that source have been as follows,

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The expense, loss, and damage account has been exceedingly lightprobably in all, to date given, not exceeding $250,000. In the month of September of the present year a loss fell upon this department of the company's service of some $60,000. A band of train-robbers stopped the express-train, robbed the express car, and carried off about the amount stated of money being forwarded east. About $20,000 of the money has been recovered to present date, and every effort is being made to recover the remainder. In making the recovery mentioned, two of the robbers were killed.

It would have been well for the company had it pursued the same course with the s'eeping-cars on the road that it did with the express department. But, instead of doing so, it contracted this interest away at a very early day in its history. The Pullman sleepers were put upon the road under said contract. The terms of the contract were most favorable to Mr. Pullman. He furnishes the cars, conductors, and porters. The railroad company keeps the cars in repair. The total amount expended by the company for repairs under the contract from time the cars were placed on the road to the present time is $444,595.21. During the last year the amount expended on reconstruction and repairs was $14,764.32. It would have been far better for the company had it placed its own sleepers on the road, and run the same to its own profit. The present management is anxious to be rid of said contract, and certainly will not renew it, as it is now plain to be seen what a grave mistake was made by entering into it at all. The contract will expire October 1, 1882.

As stated in former reports of the government directors, the company is operating its own coal-mines. The coal produced during the year was 264,779 tons, at a cost of $1.294 per ton on cars. Of the amount produced the company used 183,337 tons, and sold for general use 81,442 tons.

The land granted to the company is mortgaged to secure the payment of the land-grant bonds. Number of acres sold, 1,341,779.30; amount due company on contracts, $3,049,134.53. Principal received, $2,618,293.71; interest, $442,681.79; total, $3,060,775.50. Acres sold during last year, 67,971.53; average price per acre, $2.92.

In view of the grasshopper-scourge which has afflicted Nebraska for several years past, the number of acres of land sold by the company during the last year is a gratifying surprise, and now that the scourge seems to have passed away, and immigration is again pouring into the State, the sales in the future must increase rapidly.

The amount of land-grant bonds originally issued was
Amount outstanding June 30, 1877..

Amount retired from sales of land.......

$10,400,000 00 7,374,000 00

3,026,000 00

Undoubtedly the land-grant will retire the land-grant bonds, and leave a large surplus over for the extinguishment of other indebtedness of the company.

The number and class of employés of the company is as follows, viz:

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This statement does not include coal-miners, nor men connected with the Laramie Rolling-Mill, but only railroad employés proper.

In their report of last year the government directors criticised the action of the company in reducing the track-force, and said: "There has been too great reduction of the section-gangs, which should be increased by from one to three men to the gang on the greater part of the line. In reducing the track-force, the company has but followed the policy adopted by most railroad companies since the panic of 1873 and the unfriendly legislation of several of the States. There has been a general effort to economize all round, which is well enough in most respects, but in the one indicated is a mistake."

The foregoing statement shows that the company has heeded this criticism, and placed 1,250 section and track men on its line of 1,038 miles, or more than a man to the mile.

The floating debt of the company June 30, 1877, was as follows, viz:

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The company hold other assets, which, after eliminating from its state

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And taking the company's estimate of the value of the remaining assets embraced in the statement, amount to $3, 911,443.85.

These assets consist of stocks and bonds in other railroad companies, telegraph and steamship shares, county bonds issued by counties in Nebraska and Colorado, &c. The railroad stocks and bonds are of companies which the Union Pacific Company have aided in constructing their roads, in order to bring business to its line mainly, though in some cases, but in no great amount, of companies with which it has no connection. It is deemed proper to eliminate from said statement of assets the items specified above, because the amount from operating department would be required to meet payments of dividends and interest falling due in July, the amount due from United States for half transportation, because it is held to await the determination of the suit now prosecuting by the government for the recovery of 5 per cent. of net earnings, and to discharge such judgment as may be obtained; the firstmortgage bonds, bridge bonds, &c., because, if issued, they would be but an addition to the debt of the company; the shares of the company's own stock not issued, as the same may fall under the inhibition of the act of March 3, 1873, and the interest in the Wyoming Coal and Mining Company, because it never should be accounted a distinct asset to be used for the discharge of any indebtedness of the company, and may be entirely destroyed as a distinct property by the result of litigation now pending. But in any event, there is an abundance in the assetaccount to extinguish the floating debt, with a remainder over.

Upon the subject of the aid extended by the Union Pacific Company to other companies, the government directors, in their report for 1873, remarked:

"With regard to the advances which the Union Pacific Company has made in aid of the roads mentioned, we can but repeat what we said in our report of 1872: 'We do not question the wisdom of a policy which tends to secure to the trunk-line the business which the said several roads may command. It could not well afford to have said business diverted from it. The policy, however, should be so ordered as not to interfere with whatever present or future claim the government may have for reimbursement.' The ability of the company to make the advances referred to shows that it could have returned more to the government than it has, and raises the question of the power of the company to divert its means into channels not authorized by the law."

The

The total advances made, and the companies aided, appear in the following table and those in last year's report:

Investment in Summit County Railroad Company: $134,500 bonds; 622 shares fullpaid stock; 2,759 shares assessable stock, and valuable coal-lands. Estimated value and cost, $60,000.

Colorado Central Railroad has been aided to the extent of......
Credits secured by Union Pacific Railroad Company

Balance without interest

$1,610,497 86

767,156 20

843,341 66

The investments in the Utah Central, Utah Southern, and Utah Northern Companies have not been increased during the past year, and remain as stated in the report of the government directors for the year ending June 30, 1876.

The statement of investments in the Republican Valley Railroad has not yet been received, and will not be in time to be embraced in this report. The Union Pacific Company's investment in this road is regarded as a safe and remunerative one, as very considerable aid has been secured from the counties into which it has been constructed, and the country will supply it with a large local business.

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