44TI CONGRESS, HOUSE OF REPRESENTATIVES. REPORT 1st Session. N o, 440. REPORT ON TIE SUd;JECT OF A SINKING FUN1D FOR THE PALX {W A;'LR'L OB AD COI\PANIES; TOGETHER WITII THE ACTS OF CONGRESS, DECISIONS OF COURTS, AND DOCUMENTS RELATING TO SAID RAILROAD COMPANIES. TranspcLa, ion 44TH CONGRESS, s HOUSE OF REPRESENTATIVES. f REPORT 1st Session. f No. 440. PACIFIC RAILROADS. APRIL 25, 1876.-Recommlitted to the Committee on the Judiciary and ordered to be printed. Mr. LAWRENCE, from the Committee on. the Judiciary, submitted the following REPORT: The Committee on the Tudiciary, to whom were referred resolutions directing an inquiry "' what legislation, if any, may be necessary, just, and proper to secure indemnity to the United Statesfor advances of interest paid and to be paid by the'reasury Department on account of subsidy-bonds issued to the several so-called Pacific Railroad Companies, and to secure indemnity against liability to pay theprincipal of such bonds, either by requiring the creation of sinking-funds or otherwise, as may be proper," and to make inquiry as to other sulbjects relating to said companies, have considered the same, and report: That the act of Congress of July 1, 1862, created a corporation under the name of " The Union Pacific Railroad Company," with authority to construct and maintain a continuous railroad and telegraph-line from a point on the hundredth meridian of longitude west from Greenwich in the then Territory of Nebraska to the western boundary of the then Nevada Territory.1 By the same act the Central Pacific Railroad Company of California, a corporation existing under the laws of the State of California, was authorized to construct a railroad and telegraph-line from San Francisco to the eastern boundary of California, there to meet and connect with the railroad and telegraph-line of the Union Pacific Railroad Company. 12 Statutes at Large, 489. ACTS OF CONGRESS RELATING TO BONDED RAILROADS. Union Pacific.-July 1, 1862, 12 Stat., 489; July 2, 1864, 13 Stat., 356; July 3, 1866, 14 Stat., 79; July 26, 1866, 14 Stat., 367; April 10, 1869, 16 Stat., 56; May 6, 1870, 16 Stat., 121; July 15, 1870, 16 Stat., 305; March 3, 1873, 17 Stat., 508; June 20, 1874, 18 Stat., 111. Central Pacific.-July 1, 1862, 12 Stat., 489; July 2, 1864, 13 Stat., 356; March 3, 1865, 13 Stat., 504; July 25, 1866,14 Stat., 239; July 26, 1866,14 Stat., 367; April 10, 1869, 16 Stat., 47; April 10, 1869, 16 Stat., 56; May 6, 1870, 16 Stat., 121; June 20, 1874, 18 Stat., 111. Western Pacific.-July 1, 1862, 12 Stat., 489; July 2, 1864, 13 Stat., 356; March 3, 1865, 13 Stat., 504; May 21, 1866, 14 Stat., 356. Consolidated with the Central Pacific Railroad Company on the 22d day of June, 1870, as per copy of articles of consolidation on file in Department of the Interior. Kansas Pacific, (formerly Leavenworth, Pawnee and Western, and Union Pacific, Eastern Division.)-July 1, 1862, 12 Stat., 493; July 2, 1864, 13 Stat., 365; May 7, 1866,14 Stat., 355; July 3, 1866, 14 Stat., 79; July 26, 1866, 14 Stat., 367; March 3, 1869,15 Stat., 324, 348; June 20, 1874, 18 Stat., 111. Sioux City and Pacific.-July 2, 1864, 13 Stat., 364; July 26, 1866, 14 Stat., 367; June 20, 1874,18 Stat., 111. Central Branch Union Pacific, (formerly Hannibal and Saint Joseph, and Atchison and Pike's Peak.) —June 10, 1852, 10 Stat., 8; July 1, 1862, 12 Stat., 489; July 2, 1864, 13 Stat., 356; July 26, 1866, 14 Stat., 367; June 20, 1874, 18 Stat., 111. 2 PACIFIC RAILROADS. This act was materially amended by another, approved July 2, 1864.2 By the act of July 3, 1866, the Union Pacific Railroad Company was authorized to construct its road from Omaha, Netbraska, westward, without reference to its original initial-point. For the purpose of securing railroads in connection with or as branches to these great lines of railroads, subsidy-bonds were issued to and landgrants made ill aid of the Kansas Pacific Company,3 (formerly Union Pacific, Eastern Division, and originally Leavenworth, PaWnee and Western;) the Central Brallch Union Pacific4 (formerly Hannibal and Saint Joseph, and Atchison, Pike's Peak, &c.) Company; the Sioux City and Pacific Company;5 alld the Western Ptacific Company,6 now consolidaled withl the Central Placific Comlpany.7 By these acts Congress intended to secure a continuous line of railroad and telegralph froml Omaha to San Francisco, a distance of 1,776.18 miles, with branches or connections extending over an immenseJ space of country. Tlhe magnitude and grandeur of this vast enterprise challenge the admiration of the world, and find no parallel in ancient or modern times. A part of the purpose of Congress undoubtedly was to bind tile Atlantic and Pacific States together, to. afford the means of speedy transit for commerce and passengers, and to develop the wealth of a continent for the inhabitants of this and the other hemisphere. To secure these objects by aiding these companies in the construction of their respective lines of road and telegraph, these acts of CongresA provided that, on the completion of any section of 20 miles8 of road, there should be issued to the company constructing it, bonds of the United States, payable 30 years after date, with interest at six per cent. per annum, payable semi-annually in lawful money (greenbacks) to the amount of $16,000 per mile, and as to the Union Pacific and Central Pacific for 300 miles,the most difficult of construction, $4S,000 per mile, and for 150 miles, $32,000 per mile. These bonds are popularly known as "'subsidy-bonds,' and were not designed as a gift to the companies, but only as a loan, to be repaid principal and interest by the companies. The Government designed to loan its credit to the companies. The act of 1862 expressly provides thatTo secure the repayment to the United States, as hereinafter provided, of the amount.of said bonds so issued I with all interest thereon, which shall have been paid by the United States, the issue of said bonds and delivery to the company shall ipso facto 213 Statutes, 356. DEPARTMENT OF THE INTERIOR, OFFICE OF THE SECRETARY, Washington, D. C., April 22, 1876; DEAR SIR: The bonded Pacific railroad companies are as follows, as given in their annual reports: "Union Pacific Railroad Company," "' Central Pacific Railroad Company of California," "Western Pacific Railroad Company," " Central Branch Union Pacific Railroad Company," " Kansas Pacific Railway Company," "Sioux City and Pacific Railroad Company." l The Central Pacific Railroad Company of California and the Western Pacific Railroad Company were consolidated, in conformity with the laws of the State of California, on the 22d of June, 1870. These are the only bonded railroad companies that have, to my knowledge, been consolidated. Very respectfully, Z. B. STURGUS. Hon. WM. LAWRENCE, House of Representatives. 3See sec. 9, act of 1862; act 3d March, 1869, 15 Stat., 348. 4Sec. 13, act of 1862. 5Sec. 14, act of 1862. eAct March 3, 1865, 13 Stat., 504. 7Bv articles June 22, 1870, on file in Interior Department. sSecs. 5 and 11 of act of 1862, and sec. 10 of act of 1864. PACIFIC RAILROADS. 3 constitute a first mortgage on the whole line of the railroa,d and telegraph, together with the rolling-stock, fixtures, and property of every kind and description.. The character of this security as a first mortgage was changed by the act of 1864, which declared that the companies should be authorized toIssue their first-muortgage bonds on their respective railroad and telegraph lines to an amount not exceeding the bonds of the United States, and of even tenor and date, time of maturity, rate and character of interest. i * And the lien of the United States bonds shall be' subordinate to that of the bonds of any of said companies hereby authorized to be issued on their respective ro:ads, property, and equipments, except as to the provisions of the 6th section of the act to which this is an amendment, (act of July, 1862,) relating to the transmission of dispatches and the transportation, of' mails, troops, munitions of war, suppl'ies, and public storesfor the Government of the United States.'~ At the time the act of 1862 was passed it was well understood in Congress that its purpose was to require the railroad cornmpanies to pay the interest on the subsidy-bonds as it accrued, and the principal at maturity. This was expressly declared in debate when the measure was pending in Congress.' The Attorney-General, in an opinion to the Secretary of the Treasury, on the 15th of December, 1870, decided that the law required the companies to pay the interest as it accrued.l2 By the acts of Congress of 1862 and 1864, there was also granted to these companies, for the purpose of aiding in the construction of their respective roads — Every alternate section of public laud designated by odd numbers to the amount.of ten alternate sections per mile on each side of said roads, on the line thereof, and within the limits of twenty miles on each side,'3 including iron and coal, but not other mineral lands. These roads have been accepted by the Government as completed, though if it were now material to ascertain, there might be controversy whether all have been made, as the law requires, "first-class roads.714 The land-grant is in extent and value immense.15:9Sec. 5, act of 1862. ~ Sec. 10, act of 1;864. 11 58 Congressional Globe, part 2, (1861-2,) p. 1911. "2 House Ex. Doe. No. 24, 3d. sess. 41 Cong.; House Mis. Doc. No. 16. 3d sess. 41 Cong.; Report by Mr. Lawrence, of Ohio; 13 Opinions, 361; 13 Opinions Atty. Genl., 360. "3 Sec. 3, act of 1862, and sec. 4, act of 1864. 14 Sec. 4, act of 1862; Joint Res., April 10, 1869. 1 The Commissioner of the General Land-Office grives the following estimates: DEPARTAIENT OF THE INTERIOR, GENERAL LAND-OFFrIC E, ~Washington, D. C., March 8, 1876. Sin: I am this day in receipt of a request from Hon. William Lawrence, of your committee, for information to be reported to the House respecting the Pacific railroads, and have the honor to submit the following in answer to his inquiries:' 1. The amount of land to which each company is supposed to be entitled under acts of July 1, 1862, and July 2, 1864, is as follows: Acres. Union Pacific......................... 0......00......, 000, 000 Central Pacific, including late Western Pacific, now consolidated................................... 9, 100, 000 Kansas Pacific........................................................................... 6, 000, 000 Denver Pacific-1.......... 1, 100, 000 Central Branch Union Pacific............................................................... 245,166 Burlington and Missouri River, in Nebraska....-...., 41.............................., 441,600 Sioux City and Pacific......................... 45, 000 These figures are from approximate estimates merely, the adjustment of the grants not having been so nearly completed as to justify an attempt to state accurately the amount of lands inurino to each. 2. Of these lands the following amounts have been patentedl to the respective companies: Acres. Union Pacific.1............, 6-25, 402. 28 Central Pacific, including the Western Pacific; consolidated.................... 764, 607. 74 Kansas Pacific-.................................................................. 516, 555. 19 Denver Pacific.-.................................................... 49,811.59 Central Branch UFnion Pacific.....,.............................................................. 186, 453. 28 Burlington and Missouri River.............9................................. 2, 373, 749.92 Sioux City and Pacific....................40,196. 64 4 PACIFIC RAILROADS. These grants of lands, of corporate franchises, and loans of credit, were rnade to each of the railroad companies, as the act of 1862 declaresUpon condition that said company shall pay said bonds at maturity, and shall keep said railroad and'telegraph line in repair and use, and shall at all times transmit dispatches over said telegraph line, and transport mails, troops, and munitions of war, supplies, and public stores upon said railroad for the Government, whenever required to do so by any Department thereof, and that the Government shall at all times have the preference in the use of the same for all the purposes aforesaid, (at fair and reasonable rates of compensation, not to exceed the' amounts paid by private parties for the same kind of service;) and all compensation for services rendered for the Government shall be applied to the ayment of said bonds and interest until the whole amount is fully paid. Said company may also pay the United States, wholly or in part, in the same or other bonds, Treasury notes, or other evidences of debt against the United States, to be allowed at par;. and after said road is completed, until said bonds and interest are paid, at least fiveper cenwtum of the net earnings of said road shall also be annually applied to the payment thereof. [Foot-note-Continued. ] 3. Mr. Lawrence asks the "date on which each company became finally entitled to land." I am not able to decide from this language whetherhe desires the date on which the grant vested in each company, liable to forfeiture for failure to build the road, or the date when each became finally entitled to receive its patents after the final completion of the road, the selection of the lands, and the payment of cost of selection, survey, and conveyance. as required by the granting acts. Presuming, however, that he refers to the investment of title to particular lands by the definite location of the lines, I give the following as conveying the best iuforma/tion in the possession of the Department upon the subject: Union Pacific.-First one hundred miles west from Omaha, October 19, 1864. Second one hundred miles, June 20, 1866. From the 200th to the 380th mile-post, November 23, 1866. From the 380th mile-post to Brown's Summit, (nearly to the 700th mile-post,) survey in field, which was from April 1 to November 15, 1867. From Brown's Summit to Ogden, survey in field, which was from May 1 to July 30, 1868. Central Pacific.-From Sacramento east to the south line of township 13 north, range 8 east, within ten miles of the road, Juiie 1, 1863, and within twenty miles July 2, 1864, date of act. From that point to the east line of township 17 north, range 13 east, September 14, 1866. From that point to the Big Bend of the Truckee River, in township 20 north, range 24 east, Nevada, October 25, 1867. From that point to Humboldt Wells, December 18, 1866. From that point to Monument Point, (head of Salt Lake,) January 16, 1867. From that point to Ogden, July 18, 1868. Western Pacific. —First twenty miles northward from San Jos6, October 3, 1866. From that point to Sacramento, from survey in the field, which was between January 28 and December 15, 1868. Kansas Pacific. —From the boundary-line between Missouri and Kansas to section 17, township 11 south, range 18 east, Kansas, February 13, 1864. From that point to Fort Riley,.from survey in the field, which was between February 13, 1864, and February 18, 1865. From Fort Riley to the 405th mile-post, (Sheridan, Kans.,) March 3, 1869, date of act. From that.point to Denver City, from survey in the field, beginning June 29, 1869, and ending April 25, 1870, at the 635th mile-post. Denver Pacific.-Mairch 3, 1869; date of act. Central Branch Union Pacific.-January, 1864, with the ten-mile limits, and July 2, 1864, date of act, within the twenty-mile limits. Burlington and Missouri River. —J:une 15, 1865. Sioux: City and Pacific.-November 9, 1866. 4. The date of definite location is determined from the authenticated maps of the respective roads filed by the companies in this Department, verified by the certificates and seals of the proper officers, and from other data furnished for that purpose. Uponi this point I have the honor further to state with reference to the general question, that the precise dates at which the rights of railroad companies vest to the lands granted by acts of Congress vary according to the terms and conditions of the several acts making the grants. In nearly all the acts the date of the definite location of the line of the road is fixed as the time to be considered. Others require some other act, as the filing of the map of location in this Office or that of the Secretary of the Interior. PACIFIC RAILROADS. 5 Under these acts subsidy-bonds have been issued to the railroad companies to the amount of $64,623,512, as follows: Rate of Principal Name of railway. Authorizing acts. interest. When payable. Interest payable. outstanding. Central Pacific.- July 1, 1862, and 6 per cent 30 years from date. January and July. $25, 885, 120 00 July 2,1864. Kansas Pacific. July 1, 1862, and 6 per cent 30 years from date. January and July. 6, 303, 000 00 July 2, 1864. Union Pacific... July 1, 1862, and 6 per cent 30 years from date. January and July. 27, 236, 512 00 July 2, 1864. Central Branch, July 1, 1862, and 6 per cent. 30 years from date January and July. 1, 600, 000 00 Union Pacific. July 2, 1864. Western Pacific. July 1, 1862, and 6 per cent. 30 years from date January and July. 1, 970, 560 00 July 2, 1864. Sioux City and July 1, 1862, and 6 per cent. 30 years from date January and July. 1, 628, 320 00 Pacific. July 2, 1864. Total............................................... 62 3,512 00 Total- ------ ----— 64, 623, 512 00 On these bonds there has been paid by the United States, of interest, $30,141,513.06, and there is interest accrued and not yet paid to March 1, 1876, $646,235.12.16 The railroad companies now claim 17 that they are not bound or liable to pay any of the interest advanced or to be advanced by the Government until the maturity of the;" subsidy-bonds," thirty years from their date, except as -the application of (1) one-hal'f of the charges for transportation and other services may be so applied, with also (2) the application of five per cent. annual net earnings of the roads. But these will fall far short of paying the interest. There is no law which in such cases gives to the United States interest on advances made in paying the interest on the " subsidy-bonds," nor, indeed, on any liability of any company to the Government. The effect, therefore, will be, if the claim of the railroad companies prevails, and even IF they should at the maturity of the subsidy-bonds, about twenty years from this time, then repay any balance of advances, the Government would be without compensation for the use of the money advanced, and not so re-imbursed. This loss to the Government would in value and amount reach many millions. The Government pays currency interest at six per centum per annum, payable half-yearly. Assuming Foot-note-Continued. What constitutes a definite location is the only question of difficulty; respecting which the rulings of the Department must necessarily be based upon the facts and evidence submitted in each particular case. When the engineer of the road has been previously authorized to fix the line, his approval of the survey and staking of the line on the face of the earth is considered sufficient. When such power has not been conferred upon him, but merely authority to survey and report upon a practicable route, the approval of the officers of the company, under sanction of the board of directors, is required. In some cases the time has been fixed by the approval of the governor or of the legislature of the State receiving the grant. The practical question has been to ascertain a time when, by authority of the grantee, the line has been so fixed that it cannot be subsequently changed in any materialparticular without the express authority of the granting power, and when so ascertained this date has been held by the Department as the period of the definite location, and the consequent vesting of the rights bestowed by the grant. Copy of this communication has been furnished Mr. Lawrence. Very respectfully, S. K. LIPPINCOTT, Acting Commissioner. Hon. J. PROCTOR KNOTT, Chairman Judiciary Committee, House of Representatives. 16 See Report Secretary of the Treasury for 1875, p. 36. 17 See House Ex. Doc. No. 24, 3d sess. 41 Cong. See House Mis. Doe. No. 6, 3d sess. 41 Cong., p. 4, and Appendix I and II, Report by Mr. Lawrence of Ohio, House Ex. Doec. No. 127, 1st sess. 44th Cong., p. 12. 6 PACIFIC RAILROADS. this rate which the Government actually pays, as the value, the actual cost to the Treasury of thile advances made and to be made, compounding the interest thereon to the maturity of the " subsidy-bonds," would be $316,112,571.79, as follows: Statement of the amount of bon.ds issued to the Pacific Railroad Conpalnies, with interest co7mputed thereon half-yearly at six per cent. pew- annum.'8 The interest in this statement is compounded. Union Pacific Railroad Company: Amount of bonds issued... 27, 236, 512 00 Interest due at maturity, September 3, 1897 -.-.-.- 133. 230, 206 60 - $160,466,718 60 Central Pacific Railroad Company: Amount of bonds issued..-........................ 25, 885, 120 00 Interest due at maturity, November 18, 1897.-..... 126,619,733 30 - 152, 504,853 30 Kansas Pacific Railroad Company: Amount of bonds issued...... 6,303,000 00 Interest due at maturity, November 17, 1896........ 30, 831, 774 36 37,134,774 36 Western Pacific Railroad Company: Amount of bonds issued........................... 1, 970,560 00 Interest due at maturity, September 5,1-89........ 9, 639, 197 41 11,609,757 41 Sioux City and Pacific Railroad Company: Amount of bonds issued.. 1, 628, 3-20 60 Interest due at maturity, January 1, 1898.. 7, 965, 095 16 9,593,415 16 Central Branch Union Pacific Railroad Company: Amount of bonds issued.................... 1,600,000 00 Interest due at maturity, October 20, 1896..-..- 7l, 826,564 96 9,426,564 96 Total principal.............................. 64, 623, 512 00 Total interest.............................. 316,112,571 79 Grand total............................. 380,736,083 79 The principal of the " subsidy-bonds" is, as already stated, $64,623,512, with an annual interest of $3,877,410.72, which, for the thirty years the bonds are to run from their date, will aggregate $116,322,321.16. If no part of the interest should be re-imbursed by the companies to the Government until the maturity of the subsidy-bonds, the actual loss to the public Treasury would be $199,790,250.63, being the difference between the face of the advances, $116,322,321.16, and their amount with interest thereon compounded, $316,112,571.79. The railroad companies concede that (1) one-half of the compensation for services and (2) perhaps five per cent. of the net earnings of the roads should be applied, so far as these will go, in reducing the interest account, but they claim that they are not required in any other manner to pay any of the interest until the maturity of the subsidy-bonds, and not even then. It is important, ftherefore, to inquire: I. How far this claim is sustained by law. II. t'he extent to which the Government has been and can be re-imbursed from these sources. III. What security there may and should be for the ultimate payment of anwy un'paid balance of interest and the principal of the subsidy-bonds? 18 See Senate Ex. Doc. No. 25, 1st sess. 44th Cong., pp. 11, 12. The report of the Secretary of the Treasury submitted to Congress in December, 1865, shows in detail the amounts and time of issue of the subsidy-bonds. And see Congressional Record, January 6, 1876. PACIFIC RAILROADS. 7 I. As to the means and time of reimbursing the United States and of paying subsidy-bonds. The act of 1862 provides two sources for re-iinbursing the United States for interest on " subsidy-bonds," and to create a sinking-fund for their payment at maturity..First, the compensation for services rendered the Government is to be applied to pay interest; and, Second, after the completion of the road of each company, five per cent. of its net earnings are to be applied annually in paying interest and principal. And Congress reserved the right to "' add to" and "' amend" the act in case these sources proved insufficient, or if for other reasons it became necessary to do so. 1. Comnpensation for services. The act of 1862 requires that "all" compensation for services ren — dered the Government shall " be applied to the payment of" the subsidy "' bonds and interest, until the whole amount is fully paid." The act of 1864 declares: That only one-half of the compensation for services rendered for the Government by said companies shall be required to be applied to the payment of the bonds issued by the Government in aid of the construction of said roads.20 The Attorney-General decided on the 15th of December, 1870, as to the Union Pacific Company, that The Government may retain the entire amount of compensation for services rendered to it, applying the same to the interest paid by the United States, unless such interest shall have been repaid'by the company, and in that event, one-half of the compensation for such services may be reserved and applied to the principal of the bonds.21 The same rule equally applied to all the companies. The act of March 3, 1871,22 however, required the Secretary of the Treasury to pay to the companies one half of the compensation for services before and after that time rendered, but with a provisoThat this section shall not be construed to affect the legal rights of the Government, or the obligations of the companies, except as herein especially provided.23 The act of March 3, 1873,24 on its face apparently required the Secretary of the Treasury to withhold from the companies all payments for their services, " to the amount of payments made by the United States for interest upon" subsidy-bonds, "'and which shall not have been re-imbursed, together with the five per cent. of the net earnings due and unapplied, as provided by law;" but as it authorized a suit in the Court of Claims, the Supreme Court, at the October term, 1875, decided that it made no change in the prior laws as to the payment of compensation for services, and that hence the companies could only be required to apply one haY' thereof on interest-account.25 The monthly "' statement of the public debt" for February, 1876, to March 1, shows the interest paid by the United States on subsidy-bonds, 19 Sec. 6, act of 1862. 20 Sec. 5. 21 13 Opinions, 360. 22 See 16 Stat., 625; sec. 6, act of 1862; sec. 5, act of 1864; Opinion Attorney-General, Dec. 15, 1870, 13 Opinions, 361. 23 16 Stat., 525. 24 17 Stat., 508. 25 U. S. v. The Union Pacific Railroad Co., Oct. terni, 1875, 1 Otto Reports. 8 PACIFIC RAILROADS. interest accrued and not yet paid, amount repaid by services of companies, and balance, as follows: Int erest ac- Interest paid repaid Balance of Name of railway. crued a n d by the by transporinterest paid not yet paid. United States. mais, of by the mails, &c. United States. Central Pacific....................... $. 258, 851 20 $11,804, 251 27 $1,191,765 86 $10, 612, 485 41 Kansas Pacific....................... 63, 030 00 3, 292, 983 09 1, 442, 885 80 1, 850, 097 29 Union Pacific..................... 272, 365 12 12, 701, 420 01 3, 996, 778 85 8, 704, 641 16 Central Branch, Union Pacific....... 16, 000 00 829, 808 26 44, 408 05 785, 400 21 Western Pacific...................... 19, 705 60 781, 496 94 9, 367 00 772, 129 94 Sioux City and Pacific............... 16, 283 20 731, 553 49 39, 112 36 692, 441 13 Totals......................... 646, 235 12 30,141, 513 06 6, 724, 317 92 23, 417,195 14 From this it appears that the aggregate payments made by the companies to March 1, 1876, by services rendered to the Government, amount to $6,724,317.92. These services cover the period including 1867, and since, to March 1, 1876. Up to the act of March 3, 1873,26 which required the Secretary of the Treasury to withhold all payments to the companies, he had applied half the compensation for services on interest-account, and paid the companies the other half. Since that time he has withheld all payments. Upon the principle announced in the recent decision of the Supreme Court, the companies would have a right to be paid $1,269,168.39, as half the compensation for services since March 3, 1873. This sum is still retained in the Treasury, to await the result of suits brought by the United States under the act of June 22, 1874, to recover five per cent. of the net earnings of the companies, which they refuse to pay.27 The total compensation for services applicable to interest-account, during the period stated, including 1867 and since, is $6,724,317.92, less $1,269,168.39, or only $5,455,149.53 for about nine years; or an average of $606,127.72 annually. The half earnings for 1874 were $467,891.69, and for 1875, $533,542.62. These figures are taken from official sources.28 2. The five per cent. of net annual income of companies. The Supreme Court, in the case referred to, also ruling against the opinion of the Attorney-General of 1870, declared in effect that five per cent. of the net annual earnings of the roads after their completion should be appropriated to the payment of the bonds "and interest." 26 17 Statutes, 508. 27 See act June 22, 1874, 18 Stat., 200; Senate Ex. Doec. No 18, 1st sess. 44th Cong.; Senate Ex. Doc. No. 22, 1st sess. 44th Cong. 28TREASURY DEPARTMENT, Washington, D. C., March 9, 1876. SIR: The following inquiries relative to Pacific railroads, contained in your note of yesterday, have been duly considered: 1. Statement of 5 per cent. of net earnings of each company from commencement to date. 2. Statement each year of each company of amount earned for carrying. mails, troops, supplies, telegraph services, &c. 3. A column in the table showing half this, so as to see how much can be credited under recent decision of Supreme Court to the interest-account on the subsidy-bonds. 4. What is the claim of the Government as to the time each company "completed" its road, and what is the claim of the companies? 5. What is the claim of each company as to the mode of computing its net earnings, and what the claim of the Government? 6. What would be the difference in the result? In reply thereto, I have the honor to state as follows: 1. The Department has no data from which the net earnings of the different roads PACIFIC RAILROADS. 9 This is required by the act of 1862 fromn each company after its "road is completed." A controversy exists between the Government and the companies, or some of themn, as to the time when the roads were, " cornpleted,7" and consequently as to the time when they respectively became liable to pay this percentum of earnings.29 The right of the Government to this five per centum is now in litigation as to some of these companies.30 It is claimed by the Government that when the last section of any road had been built and accepted by the President, the road was then'" completed"' within the meaning of the statutes to entitle the Government to five per cent. of annual net earnings. can be determined. (See letter of Secretary of the Treasury, January 15, 1875, Senate Ex. Doe. No. 18, Forty-fourth Congress, page 9.) 2. I inclose a statement showing the half and whole earnings for each year of each company for carrying mails, troops, supplies, telegraph services, &c. 3. A column is set apart in the above statement, showing amount which may be credited to each company under recent decision of Supreme Court. 4. The time of completion of each road, as claimed by the Government, is also appended to the above statement. 5. To arrive at their net receipts, the companies claim that, in addition to the operating and other expenses of the roads, they should be permitted to deduct from the gross amount the interest on their bonds. (See Senate Ex. Doec. No. 25, Forty-fourth Congress, page 7.) Very respectfully, CHAS. F. CONANT, Assistant Secretary. Hon. WVM. LAWRENCE, Hoese of Rep}resen tatires. Years. a CZ CC HALF EARNINGS. 1867........ $29, 899 07 $148, 935 26'249, 191 98-$............. $428,026 31....... 1868. 16, 259 03 219, 471 71 470, 022 89...... $16 27 705, 769 90........ 1869........ 70, 607 76 262, 818 02 388, 212.67 $5, 301 92.... 353 13 727, 293 50............ 1870.......124, 872 84 136, 923 67 327, 524 79 2, 100 00 8.281 25 26 68 599, 729............ 1871...... 180, 917 63 159, 680 64 529, 897 75 1, 875 00 1, 069 00 5 80 873, 445 82............ 1872........ 191, 500 73 139, 349 73 332, 025 82 8, 437 50 -423 81 671, 737 59............ 1873....... 100,887 06 15, 229 53 60, 612 04 937 50 14 25 2,298 42 179, 978 80............ Total.... 714, 944 12 1, 082, 408 56 2, 357, 487 94 18, 651 92 9,364 50 3, 124 11 4, 185, 981 15.. WHOLE EARNINGS. 1873..... 93,727 18 124,169 92 254, 019 67 5,116 35 2 50 3,611 43 480,647 05 $240, 323 53 1874........356,143 68 121,688 98 448,676 14 8,156 *23........ 1,118 36 935,783 39 467, 891 69 1875... 26,950 88 112,942 58 883, 560 17 12, 483 55. —. —31,152 06 1,067,089 24 533,544 62 1876............... 1,675 76 53, 034 93......... 106 40 54,817 09 27, 408 55 Total.... 476, 821 74 360, 477 24 1, 639, 290 91 25, 756 13 2 50 35, 988 25 2, 538, 336 77 1, 269,168 39 Grandtotals 1, 191, 765 86 1, 442, 885 80 3, 996, 778 85 44, 408 05 9, 367 00 39, 112 36 6, 724, 317 92 1, 269, 168 39 Time of completion of each road. Central Pacific, July 16, 1869; Kansas Pacific, November 2,1868; Union Pacific, November 6, 1869; Central Branch, Union Pacific, January 20, 1868; Western Pacific, January 22, 1870; Sioux City and Pacific, March 3, 1869. TREASURY DEPARTMENT, WARRANT DIVISION, March 9, 1876. 29 Senate Ex. Doc. No. 25,1st sess. 44th Cong., p. 7; House Ex. Doc. No. 127, 1st sess. 44th Cong. 30 Senate Ex. Doe. No. 22, 1st sess. 44th Cong.; House Ex. Doc. No. 127, 1st sess. 44th Cong. 10 PACIFIC RAILROADS. By sections 4 and 5 of the act of 1862, it is expressly declared "' that whenever said company shall have completed forty consecutive miles of any portion of said railroad "'that patents shall issue for lands granted and "' subsidy-bonds " shall be issued to the companies. Immediately following, and in the same conuection, is the provision for five per cent. of net earnings.31 This construction makes the Union Pacific Road completed July 15, 31DEPARTMENT OF THE INTERI()R, -Washington, D. C., March 8, 1876. SIR: I have the honor to acknowledge the receipt of your letter of this date, in which you ask to be furnished with a "statement showing when each of the Pacific roads was completed;" also, the mode the Department adopted to fix the date. In reply, I have the honor to state that the Pacific Railroads were examined by commissioners, reported on, and accepted by the President, in sections. On such acceptance, bonds were issued and lands ordered to be approved to the comlpanies. No acceptance of the whole line of either of said roads was either asked for or made. Pursuant to joint resolution of April 10, 1869, five eminent citizens examined the whole line of road from Omaha to Sacramento, and made their report on October 30, 1869. On the third of the following month, Mr. Secretary Cox directed the Commissioner of the General Land-Office to withhold half the patents for lands inuring under the grant to the Central Pacific and Union Pacific Railroad Companies, " as security for the completion of said roads in the matters reported deficient, or not up to the standard, by said commission." My immediate predecessor appointed two other commissions to examine, one the Union Pacific, and the other the Central Pacific Road, with a view to ascertain whether the deficiencies reported by the five eminent citizens had been supplied. These commissions reported, that on the Union Pacific, on October 7, 1874, and that on the Central Pacific, on November 2, 1874. These reports were submit ed -to the President by MrSecretary Delano on November 12, 1874, with recommendation that the order of Mr. Cox be revoked. The revocation was issued by the President on November 5, 1874, for the Union Pacific, and on November 14, 1874, for the Central Pacific. I transmit herewith a statement showing the date of acceptance of each of the sections of the Union Pacific and Central Pacific Roads. I am, sir, very respectfully, your obedient servant, Z. CHANDLER, Secretary. Hon. WM. LAWRENCE, Judiciary Committee, House of Representatives. UNION PACIFIC RAILROAD. Section. Miles. Date of acceptance by the Section. Miles. Date of acceptance by the President. President. 1......... 40 January 24, 1866. 23....... 20 Jly 23,1868. 2........ May 1, 1866. 24..... 20 August 8,1868. 3......40. June 25,1866. 25..... 20 August 27, 1868. 4... 20. July 12,1866. 26...... 20 September 5,1868. 5........ 35 August 8, 1866. 27...... 20 September 5,1868. 6.......45 Report dated September 1, 28..... 20 September 22,1868. 1866; no date to the Presi- 29...'20 October 21,1868. dent's acceptance. 30....... 20 November 19, 1868. 7........35 October 12, 1866. 31... 40 December 5,1868. 8..... 30 November 6,1866. 32..... 20 December 12, 1868. 9........ 35 January 2,1867. 33..... 20 December 16,1868. 10........ 40 June 10,1867. 34..... 20 December 23, 1868. 11......40 July 5, 1867. 35.....- 20 December 23,1868. 12........35 August:27, 1867. 36..... 20 January 28, 1869. 13...... 35 October 1, 1867. 37..... 20 February 9, 1869. 14........ 3November 4, 1867. 38... 20 February 9, 1869. 15........20 December 11, 1867. 39 85. 88 From the 1,000th to the 16........30 January 25,1868. 1085 88-100th mile-post. Ac17.......20 May 15,1868. cepted by the President 18......- 20 May 16, 1868. July 15, 1869, without prej19. 20 June 12, 1868. udice to the rights of either 20. 20 June 16, 1868. the Union or Central Pacific 21.... 20 July 21, 1868. Company beyond Ogden. 22.......20 July 23, 1868. PACIFIC RAILROADS. 11 1869; Central Pa(ific, October 19'3, 1872; Central Branch, January 20, 1868; Sioux City and Pacific, March 2, 1869; and Western Pacific, January 21, 1870. The companies, however, claim that their respective roads were comrnpleted at these dates for the purpose of obtaining subsidy-bonds and lands, but not for the purpose of being liable to pay 5 per cent. of net earnings to the Government! By virtue of joint resolution of April 10, 1869, commissioners were appointed at different periods to examine the roads.32 The companies _Foot-note-Continued. CENTRAL PACIFIC. Sections. Miles. Date of acceptance by the Sections. Miles, Date of acceptance by the.President. President. 1........ 74 Reports made to U. S. Treas- 13...... 20 November 10, 1868. ury; date of acceptance not 14.... 20 December 1, 1868. found on our files. 15.... 20 December 5,1868. 2. —... 20 October 24,1867. 16.... 20 December 28, L868. 3........ 20 July 9, 1868. 17.. 2..0 January 13,1869. 4....... 24 December 10,1867. 18. 20 January 27,1869. 5....... 20 June 8,1868. 19.... 20 February 16, 1869. 6.... - 20 August 3, 1868. 20.... 20 May 27,1869. 7....... 37 August 12, 1868. 21.. 20 May 27,1869. 8 -..... 40 September 7, 1868. 22... 20 May 27,1869. 9..... 35 September le, 18.68. 23..... 100 May 27, 1869. 10...... *40 October 10, 1868. 24... 20. 3 July 15, 1869. 11 20 October 23, 1868. t2..2... 20 November 3, 1868. Total. 690. 3 KANSAS PACIFIC. (Tormerly Union Pacific, Eastern Division; originally Leavenworth, Pawnee and Western.) 1........ 40 October 28,1865. 10. 25 Sentember 19, 1867. 2........ 22 December 20, 1865. 11....... 26 October 25,1867. 3........ 23 May 8,1866. 12....... 20 December 2, 1867. 4........ 20 July 7, 1866. 13...... 30 January 9, 1868. 5...... 25 October 15,1866. 14. 25 April 27,1868. 6. 2 )..... January 22,1867. 15 20 May 30,1868. 7... 30 May 4,1867. 16....... 20 October 31, 1868. 8...... 25 June 10, 1867. Last part 244. 6575 October 19, 1872. 9...... 24 August 12, 1867. CENTRAL BRANCH UNION PACIFIC. 1....... 20. July 12,1866. 4. 20 December 3,1867. 2. 20 December 6, 1866. 5........ 20 January 20, 1868. 3........ 20 April 29,1867. SIOUX CITY AND PACIFIC. 1.....- 20 March 27, 1868. 3. 32.27 March 2,1869. 2........ 49.5 March 9, 1868. WESTERN PACIFIC. 1.... 20 September 1, 1869. 3......... 20. 16 January 21, 1870. 2........ 63 October 27,1869. 3216 Stat., 56. 12 PACIFIC RAILROADS. claim that their final report determines the completion of the roads. The oblject of this joint resolution was to require the companies to supply deficiencies believed to exist, and the claim of the companies practically is, that if they imposed on the President as completed a road which in fact was not so, and so obtained lands and subsidy-bonds, they coudl take advantage of their own failure of duty to complete the roads, and the imposition practiced on the President, to delay their obligation to pay the Government the required five per cent. of net annual earnings. In ordinary business matters as between citizens, a principle of this sort would not be tolerated. It remains to be seen if it will be successful as to these companies. But the companies refuse alike to pay, as well the five per cent. of net annual earnings from the time they admit their respective roads completed, as for the prior period. The result is that as there is no statute requiring interest on-their indebtedness they retain the money they owe, making no compensation therefor while the Government is taxing its own citizens to pay interest on its liabilities. The claim of the Government for the time in dispute is very large. In the case of the Union Pacific Company it amounts to $1,040,056.29. There is a wide difference, too, between the Government and the companies as to the amount of net earnings which shall be paid. The Government claims " that net earnings are such as are left after paying the operating expenses of the road, and deducting from the remainder the interest on the first-mortgage bonds."33 The companies claim that in estimating the net earnings they shall " deduct interest on their first-mortgage, land-grant, and sinking-fund bonds."34 This would very materially reduce the fund from which the five per cent. is to be taken. There seems to be difficulty in ascertaining what the net earnings of the companies are. The Secretary of the Treasury, in a communication to the AttorneyGeneral, made January 15, 1875, says: In this connection I desire to say that the 20th section of the act of July 1, 1862, required these companies to make certain annual reports to the Secretary of the Treasury. By the subsequent acts of June 28, 1868, these reports were to be made to the Secretary of the Interior. If the requirements of the law in this regard had been complied with, the annual net earnings of these companies would have been shown, and these would have furnished a basis upon which to make a demand for the five per centun. thereof. The companies did not, howoever, comply with the requirements of the act, and did not, upon a further demand of the interior Department, furnish a statement of the net earnings.83 But some estimate may be made from such imperfect reports as have been furnished by the companies to the Interior Department, and from other sources.36 33 This is the claim as stated by the Government directors of the Union Pacific Co. in their report for 1875, House Ex. Doe. No. 127, 1st session 44th Congress, page 9, which concedes that interest on first-mortgage bonds is to be deducted from gross earnings to ascertain the net earnings. This concession is one open to argument and is possibly not without objections. 34 Senate Ex. Doc. No. 25, 1st sess. 44th Cong., page 7; House Ex. Doc. No. 127, 1st sess. 44th Cong., page 9. 3.~ Senate Ex. Dec. No. 18, 1st sess. 44th Cong., p. 10. 36 The following is from the Secretary of the Interior: DEPARTMENT OF THE INTERIOR, Washington, D.. C., January 18, 1876. SiR: In answer to the inquiries contained in your letter of yesterday, I have the honor to state that the 7th head of the 20th section of the act of July 1, 1862, to aid in the construction of the Pacific Railroad, which requires of the corporation PACIFIC RAILROADS. 13 By the reports of the companies, the following result would appear for the year 1875: Fivre per Company. Net earnings. Fine per cent on. Union Pacific.. —,.........: —..............-. -... $6. 148, 365 00 $307,418 25 Central Pacific. 8,031,498 00 401,574 90 Kansas Pacific......-... 1, 212, 722 00 60,636 10 Sionx City and Pacific. —--. —-----.. — ---—.. ——. - 50,160 00 2,508 00 Total 5 per cent. for 1875...........: —---------—. —---—. —---- 772, 137 25 The companies profess to have a capital stock paid in as follows: Company: Union Pacific.. —........ $....... —-$ —----------—.. —..-. —. —-. I36,762, 300 Central Pacific.-. —. — -—. —-.. — -------—. —-.. — -—. —-—. —---- 54,275,500 Kansas Pacific............ 9, 689, 950 Sioux City and Pacific-............-..... -....... 1,791,400 Foot-note-Continued. "A statement of the expense of said road and its fixture, has been understood by some of the companies as requiring only the total cost of the road and fixtures; by others as requiring only the annual expense; while some have reported both. The tabular statement hereto annexed shows the figures reported by each company from year to year, under this head. Of late years, in calling for the annual reports, the Department has asked that they should embrace both the total and annual expense. The difference between the annual receipts and expenditures of any company would seem to show the net earnings. When the reports contain the entire cost of the roads and fixtures, it, would not be difficult to calculate the per centum the net earnings would be of such cost. That such earnings have reached such a per centurn of such cost as to require the intervention of Congress in reducing the rates of fare, as provided in the 18th section of said act, I am not prepared to assert or deny. I am, sir, very respectfully, your obedient servant,, Z. CHIANDLER, Secretary. Hon. J. R. WEST, Chairman Committee on Railroads, United States Senate. Cost of railroads; UNION PACIFIC. Total cost to~ Year. Receipts. Expenditures. Net earnings, date. date. 1865.........................................3,500, 000 00 1866................................ 9,690,082 01 1867................................ $1,015,195 29 $658, 880 54............... 21, 757, 488 79 1868.................................. 4, 186, 832 09 3, 213, 565 83................................ 1869................................ 7, 342, 271 16 5, 894, 268 63 $1, 448, 002 53 92, 748, 762 14 1870....................... -.... —... 8, 344, 371 08 5, 649, 573 45 2, 694, 797 63 108, 722,134 35 1871................................. 7,362,015 19.............................. 112,793,618 29 1872............................ 7,962,170 78...1 2.......5.9.7....... 114,258,535 9 1873................................ 9, 633, 965 09 4, 697, 999 50................ 112,'259, 336 53 1874............................... 10, 246, 760 16 5, 089, 789 17 5,156, 970 99 112, 427, 277 46 1875......................... 11,522,021 54 5,373,655 87 6,148,365 67 112,596,252 00 CENTRAL PACIFIC. 1865................................... 401,965 32 132,375 30 279,590 03................ 1866............................... 864,976 82 200; 722 96 664,253 86 *12, 000, 000 00 1867................................. 804,826 53 199,974 13 606,852 40................ Six months ending June 30,1868...... 409, 459 11 157, 063 89................................ 1869t................................. 1870............................ "6, 070, 172 90 3, 542, 212 59 2, 537, 960 31'.............. 1871.................. 7, 326, 327 36 3, 745, 766 24 3, 580, 560 12................ 1872..............................- 9, 373, 765 33 4, 317, 332 32 5, 056, 433 01.. 1873.................................. 11,668,789 47 5,349,425 21 6,316,364 26.............. 1874.................... 12, 028, 492 45 4, 816, 082 40 7, 212, 410 05......... 1875............:........... 13, 932, 861 14 5,901,363 01.8,031,498 13................ 14 PACIFIC RAILROADS. From this it will be seen these cmpanies, on their owa shoing, are making large profits, and are abuudantly able to pay and indemnify Foot-note- Continued. KANSAS PACIFIC, (formerly Union Pacific, Eastern Division.) Total cost to Year. Receipts. Expenditures. Net earnings, date. Month of September, 1866.... $42, 000 00.................. Ten and one-half months from' October 15,1866...... 1,226,483 08...................... September, 1867, to August, 1868...... 1, 878, 588 33 $1, 247, 816 38 $630, 771 95................ September, 1868, to August, 1869...... 2, 141, 198 47......... 946, 635 11 $923, 705, 757 43 September, 1869, to June, 1870...... 2, 530, 283 90 1, 488, 815 75 1,041, 468 15 26, 000, 000 00 1871............................... 3,146,661 82.29,517,999 75 1872.................................. 3, 551, 628 47................................. 29, 602, 974 28 1873.................. 3,748,289 82................................. 33,392,840 66 1874................3, 409, 336 18................................ 34, 359, 540 66 1875.............................. 3, 309, 396 96 2, 096, 674 33 1,212, 722 63................ CENTRAL BRANCH UNION PACIFIC, (formerly Atchison and Pike's Peak, &c.) 1866................................... I..............................07,650 00 August, 1868, to August, 1869....... 109, 064 31........................ 3, 723, 700 00 August, 1869, to June 30,1870......... 182, 563 46...................... 3, 723, 700 00 1871-..........................2..1... 205, 9744.....3,723,70000 1872.................... 144, 49 68... 3, 723, 700 00 1873.............................. 119,662 91 72,................ 3,723,700 00 1874.........................8.. 1 1128, 1 4................ 3,763,700 00 1875............................. 113, 519 88 123, 188 43..............., 763, 700 00 SIOUX CITY AND PACIFIC. 1868............................ 96,699 90 53,184 98...... October, 1868, to September, 1869...... 233, 724 25 151, 920 25..4, 236, 503 49 Ending June 30,1870.......... 301, 428 10 189,900 10 111, 528 00 4, 644, 320 00 187................. 313,559 55 216,807 34 96, 452 21 4, 650, 000 00 1872................................ 162,405 71 152,062 98 1873'.................................. 261, 93012 201,16460 60,76552 1874................... 319,819 12 263,703 52 56,115 60 1875.................................. 268,07759 217,91701 50,160 58. DENVER PACIFIC. Ending June 30,1872.............. 355, 088 69........,......... 6, 443, 800 00 1873....... —--- - 335,948 25........................,493,800 00 1874................286,525 79 130,975 68 155,550 11 6,493,800 00 1875.............. 332, 895 66 122, 675 00 210,220 66 6, 43, 800 00 WESTERN PACIFIC. Ending June 30, 1869................. 6,173 37 260 87......................-..-..... In the Senate Executive Document No. 25, first session Forty-fourth Congress, certain estimates are made from the Treasury Department and otherwise, as follows: UNION PACIFIC RAILROAD-PERCENTAGE ACCOUNT. SOLICITOR'S ESTIMATE. Net earnings as claimed by the Government, difference between gross rec pts andloperatingexpenses. November 6, 1869, to Jannary 1, 1870........... $441, 179 19, at 5o $22, 058 96 Fiscal year 1870.2,.................... 2,947-,862 27, at 52o 147, 393 11 Fiscal year 1871..,.......... 3, 921, 115 30, at 5% 196, 055 77 Fiscal year 1872.... 4, 092,032 05, at 5'y 204,601 61 Fiscal year 1873...............................,5,291, 242 64, at 5%o 264, 562 13 January 1, 1874, to October 31, 1874............. 4,107,694 36,at 5% 205,384 71 Total......1..............040,056 29 PACIFIC RAILROADS. 15 the Government against future loss, and pay liberal dividenlds besides on the par value of stock which, as has been shown by a commitFoot-note — Continued. CENTRAL PACIFIC RAILROAD. Calculations to arrive at percentage of net earnings coming to. United States in each of four years. 1870. Gross earnings: Coin-.... $4,083,132 48 Reduced to currency at 10 per cent... 408, 313 24 - $4,491,445 72 Currency.-. 3, 355, 837 72 Total..-.....-..-.-.-.. 7, 847, 283 44 Operating-expenses: Coin........3, 549, 032 60 Reduced at 10 per cent........................ 354, 903 26 Currency.-........ 114,986 11 4,018,921 97 Currency net earnings......................... 3, 828, 361 47 Other expenses not stated. Five per cent. to United States.-... 191, 418 07 1871. Gross earnings: Coin.. 4, 991, 529 04 Reduced to currency at 10 per cent..... 499,152 90 -.___- $5,490,681 94 Currency. —.......-.-......... 3, 870, 525 42 Total............................................... 9, 361,207 36 Operating-expenses: Coin.......... 3, 799, 280 54 Reduced 10 per cent.379, 928 05 Currency expenses..-..-.................... 41, 522 38 4, 220,730 97 Other expenses not stated............................................... Currency net earnings.....-................ 5,140, 477 39 Five per cent. to United States.. 257, 023 86 Per company's statement, superintendent's report, 1873-'74. 1872. Gross earnings: Coin.,,...., $7,400,089 35 Currency...................-.......... 4, 563, 551 22 Equal to currency,1..2.......... 12, 734,729 88 Operating-expenses: Coin-.....................4, 953, 612 42 Currency................... 57, 666 43 Equal to currdhcy........................................... 5, 527, 455 25 Net earnings, (over operating-expenses,) currency.... 7, 207,284 63 Other expenses, per profit and loss account: Taxes.....................2..... 239, 972 00 General and miscellaneous.................... 233, 272 17 Legal....................................... 63, 676 16 Engineering 2..2...................... 5, 900 97 562, 821 30 Net over all...-.............................. 6, 644, 463 33 Five per cent. to United States.......... 332, 223 16 1873. Gross earnings: Coin... 7,643, 469 58. Currency..........................5, 220,483 40 Equal to currency..$.............................13,851,489 24 16 PACIFIC RAILROADS. tee of the House as to the Union Pacific Company, cost its original holders not more than 30 cents on the dollar in road-making," which Foot-note-Continued. 1873. Operating-expenses: Coin. $4,929,684 09 Currency.-....................... 39,587 43 Equal to currency.- $.......................... $5, 606,186 70 Over operating-expenses, currency... -........... -... 8, 245, 302 54 Other expenses, per profit and loss account: Taxes........................................ $315,821 94 Miscellaneous.............-.................... 178, 089 80 Legal..............-....,.......... 61,327 71 Civil engineering.............................. 20, 312 68 Steamers...................................... 35,485 79 Shops......................................... 58,608 40 669, 646 32 Earnings over all, (currency)................ 7,575,656 22 Five per cent. to United States-................ 378, 782 81 CENTRAL PACIFIC RAILROAD. Fiscal-year earnings from United States., Current q year. e a, Years. Pc 1 a a 8 d 41 a c D June 30, 1870, to June 30, 1871.. $39, 481 88 $222, 665 62 $101 28...... $705 00 $257, 023 86 $519, 977 63 June 30, 1871, to June 30, ]872.. 133, 269 82 232, 512 48 83 92.. 3, 524 00 332, 223 16 701, 613 38 June 30, 1872, to June 30, 1873.. 257, 626 95 174,384 36 74 88 $585 38 1, 762 00 378, 782 81 813, 216 38 June 30, 1873, to June 30, 1874.. 50, 464 56 288 041 90........ 806 11 2 36 353, 662 08 642, 977 01 480, 843. 21 917,604 36 260 06 1, 391 49 5, 993 36 1, 321, 691 91 2, 677, 784 39 866-1219ths 9 981...14................................................ 938, 951 84 1, 901, 460 86.Fouryears' average estimated retention and percentage on 866 miles.475, 365 21 866 miles................................................ 475, 365 21 In the foregoing, "' discount on currency receipts" is not taken into account as an expense, as the percentage is calculated on the basis of currency, although a large proportion of earnings was in coin. Likewise "United States Government transportation disallowed" is not an expense. Statement as to average earnings of tihe Central Pacific Railroad Company for four (4) years. By Storrs, counsel for company. For the year ending December 31, 1870: Earnings over operating-expenses............................. $3,828,361 47 For the year ending December 31, 1871: Earnings over operating-expenses 5, 140, 497 39 For the year ending December 31, 1872: Earnings over operating-expenses.................................. $7,207,284 63 Other expenses in coin......................$562, 821 30 Ten per cent. premium.................. 56, 282 13 619,103 43 - 6, 588, 181 20 For the year ending December 31, 1873: Earnings over operating-expenses................................. 8, 245, 302 54 Other expenses in coin.....................669, 646 32 Add 10 per cent. premium................ 66, 964 63 736, 610 95 -..- 7,508,691 59 23,065,731 65 SAz+y-'ths being the proportion of the roads aided by Government bonds. 16, 386, 313 44 Yearly a-erage for the four years................... 4, 096, 578 36 PACIFIC RAILROADS. 17 road-making itself paid enormous profits —profits realized through the notorious Credit Mobilier of America. These net earnings, as reported by the companies, are OVER SIXTEEN PER CENT. ON THE NOMINAL CAPITAL STOCK of the Union Pacific Company, or, in.fact, about FIFTY PER CENT. for the year 1875 on the real cost of the stock, while as to the Central Pacific Company the net earnings are NEARLY FIFTEEN PER CENT. ON THE NOMINAL CAPITAL STOCK, and how much on the real cost of the stock is not disclosed. IFoot-note-Continued. Annual interest on bonds secured by mortgages on the eight hundred and sixty-six miles aided by Government bonds, which should be deducted before the 5 per cent. is calculated: State aid, 7 per cent., $1,500,000; convertible 7 per cent., $1,483,000; total, $2,98::,000; interest.............. $0, 810 Interest on first-mortgage bonds, 6 per cent. on $27,885,000................ 1, 673, 100 Interest on three-fourths of $9,153,000 land-bonds, being about the proportion applicable to the main line-$6,863,750, 6 per cent.................. 411, 885 2, 293, 795 Add premium on gold, 12 per cent-................................ —--- 275, 255 2, 569, 050 The interest on the United States currency-bonds, being $1,673,140.80, though not paid at once, is accumulating against the company, and must be paid eventually. We should not pay 5 per cent. on any sum which we have paid, or are at any time topay out, as expenses or interest on mortgages. The 5 per cent. is not chargeable against the company until the termination of the current fiscal year, at any rate; but the foregoing is given as the yearly average of earnings for four years. The Government commissioners certify that the road should be considered as completed in October, 1874. Statement as to average earnings of Central Pacific Railroad Contpany for four (4) years. For the-year ending December 31, 1870: Earnings over operating-expenses.........$.................................. $3, 828, 361 47 For the year ending December 31., 1871: Earnings over operating-expenses.. —........... -.. --.5,140,497 39 For the year ending December 31, 1872: Earnings over operating-expenses............................. 7,207, 284 63 Other expenses in coin.................... - 562,821 30 Ten per cent. premium... 56, 282 13 619, 103 4;3 6,588,181 20 For the year ending December 31, 1873: Earnings over operating-expenses.................. 8,'245, 30. 54'Other expenses in coin$.6 6...9...... $669,646 3-2 Add 10 per cent. premium-...........66, 964 63 -- 736,610 9i5 7,508,691 59 23,065,731 65 8-l2"6 Aths being the proportion of the roads aided by Government bonds. 16, 386, 313 44 Yearly average for the four years.-............................ 4, 096, 578 36 Annual interest on bonds secured by mortgages on the eight hundred and sixty-six miles aided by Government bonds, which should be deducted before the 5 per cent. is calculated: State aid, 7 per cent., $1,500,000; convertible, 7 per cent., $1,483,000: Total, $2,983,000; interest.............. $208, 810 Interest on first-mortgage bonds, 6 per cent. on.$27,885,000 -.. —........ 1, 673, 100 Interest on three-fourths of $9,153,000 land-bonds, being about the proportion applicable to the main line-$6,864,750, 6 per cent.......... 411, 885 2, 293, 795 Add premium on gold, 12 per cent... -................. 275,255 2, 569, 050 H. Rep. 440- 2 18 PACIFIC RAILROADS. The reports of these companies to the Interior Department give their condition, as claimed by them, as follows 37 Union Pacific Railroad Company.-Stock subscribed, $36,783,000; paid in, $36,762,300. The bonded indebtedness, $79,457,912, of which $27,236,512 is due to the United States. Central Pacific Railroad Comnpany.-Stock subscribed, $62,608,600; paid in, $54,275,500. Indebtedness, $86,168,688.11, of which!$27,855,680 is due to the United States. This company now comprises, by consolidation, the Western Pacific, the. California and Oregon, the San Francisco, Oakland and Alameda, and the San Joaquin Valley Companies, in addition to the original Central Pacific Company. Central Branch, Unionw Pacific Company.-Stock subscribed, $1,000,000; paid in, $9"0,600.'Indebtedness, besides $1,600,000 to the United States, is $303,902.63. Kansas Pacific Company.-Stock subscribed, $9,992,500; paid in, $9,689,950. Total indebtedness, $30,965,975.41, of which $6,303,000 is due the United States. Sioux City and Pacific Company.-Stock subscribed, $4,478,500; paid in, $1,791,400. Bonded indebtedness, $3,256,320, of which $1,628,320 is due the United States. The floating debt is $60,571.67. Foot-note-Continued. The interest on the United States currency-bonds, being $1,673,140.80, though not paid at once, is accunmulating against the company, and must be paid eventually. We should not pay 5 per cent. on any sum which we have paid, or are at any time. to pay out,, as expenses or interest on mortgages. The 5 per cent is not chargeable against the company until the termination of the current fiscal year, at any rate; but the foregoing is given as the yearly average of earnings for four years. The Government commissioners certify that the road should be considered as cdmpleted in October, 1874. 37 ndebtedness of the bonded Pacific Railroad Conipanies, as appears front their annual reports for the year 1875. UNION PACIFIC. First-mortgage bonds.-.............................. $27, 232,000 00 Sinking-fund mortgage-bonds..........- - - -..... 14, 299, 000 00 Income-bonds.-......................-..-... 68, 000 00 Land-grant bonds.................................................. 7, 812, 000 00 Omaha bridge bonds ——. e..... b..-..... 2, 330,000 00 Certificates for bonds... -. --- 480, 400 00 United States bonds loaned. —-............-.-.... -..... -. 27,236, 512 00 Total........-. -.... 79, 457, 912 00 CENTRAL PACIFIC. United States Government bonds........................... $'27,855, 680 00 First-mortgage bonds, Central. Pacific Railroad............-.- 25, 883,000 00:First-mortgage bonds, Western Pacific, series A..................... 1, 970, 000 00 First-mortgage bonds, Western Pacific, series B........-............ 765, 000 00.Convertible bonds, Central Pacific Railroad.......................... 1, 483, 000 00 -California State aid, Central Pacific Railroad......-.... 1,500, 000 00 Land-bonds............................................ 8, 884, 000 00 First mortgage, California and Oregon Railroad..................... 8, 000, 000 00 First mortgage, San Francisco, Oakland and Alameda Railroad 5.... 5 00, 000 00 First mortgage, San Joaquin Valley Railroad......................... 6, 080, 000 00 Bills payable-......... 1, 148, 817 15 Personal accounts..................................... 2, 099, 190 96 Total........................................................ 86, 168, 688 11 KANSAS PACIFIC. First-mortgage bonds, main line........................ $6, 303, 090 90 First-mortgage bonds, Denver extension.......-... 6, 411, 000 00 First-mortgage land-grant bonds..........................-.-..... 1,722,250 00 First-mortgage Leavenworth branch................................ 600, 000 00 Second-mortgage land-grant bonds.............. 1,500,000 00 Income-bonds, main line and branches............................... 4,275, 350 00 Land-grant bonds.................................................. 128, 000 00 United States bonds.............. -............................. 6, 303, 000 00 Total funded debt. —--............................................ 27,242,600 00 Other liabilities and indebtedness.............................. 3, 723, 375 41 PACIFIC RAILROADS. 19 Upon the basis of the Government claim the five per cent. of net,annual earnings would be much larger than above stated. This leads to the next inquiry: II. The extent to which the Government has been and can be re-imbursed from services and five per cent. of net earnings. It has already been shown that the Government has been re-imbursed from earnings only $5,455.169.53 in a period of nine years, and that the same source will probably not average over half a million of dollars a year. From what has been said it will be seen that, according to the claim of the companies, the Governiiment cannot expect to realize more than about $800,000 per annum from the 5 per cent. of net earnings. The total of these two sources, then, on this basis, would be about $1,300,000 per year. But it is not probable the services will continue so large as heretofore. The total sum realized by the Government to the maturity of the t' subsidy-bonds," including tlte amount heretofore received, would reach probably about $36,000,000. The principal of the subsidy-bonds is................. $64, 623, 512 Interest to maturity without compounding or counting any interest on advances of interest................. 116, 322, 321 Total claim of Government............... 180, 945, 833 The amount provided to meet this, as kabove stated.... 36, 000, 000 Deficiency............................ 144, 945, 833 And as the law now stands, the Government unable to collect interest on its dues, and the companies steadily refusing to pay what they concede to' be legally and justly payable, with a probability that they will continue'to pursue the same course, the real deficiency to meet the acknowledged indebtedness, with interest thereon, would be many millions more, but the exact amount of course cannot be accurately stated. And if the companies are permitted to go on refusing, as they do, to pay their acknowledged indebtedness, all this will increase the loss to the Government. There is an imperative necessity for prompt and decisive action to secure. the just demands of the Government and to save it from loss. The president of the Union Pacific Company, in a letter to the Secretary of the Treasury dated February 9, 1875, says: The mortgage held by the Government, in its terms and by judicial decision of the United States circuit court, cannot be enforced until the maturity of the bonds, which' is near the close of the present century. The bonds are accumulating an interest-account, also uncollectible until the principal is due. The principal and interest when due will amount to the very large aggregate of over seventy-seven millions of dollars, though the actual amount advanced by the Government was only $27,236,512. loot-note-Continued. CENTRAL BRANCH, UNION PACIFIC. United States bonds..............-............................. $1, 600,;000 00 First-mortgage bonds.....................' 1, 600, 000 00 Unpaid interest, not given. Other indebtedness, items not given.............. 303, 902 63 SIOUX CITY AND PACIFIC. United States subsidy-bonds............................. $1,628,320 00 First-mortgage bonds........................................... 1, 628, 000 00 Floating debt............................... 60, 571 67 Total......................................... 3, 316, 891 67 20 PACIFIC RAILROADS. For this very large amount the Government has only a second mortgage, and if it be allowed to accumulate, without any provision being made to meet it, the com2pany will probably be utterly unable to pay it. At the same time, it is equally manifest that the Governlment will be uWnable to collect it, except upon the assumption that it will advance the money to discharge prior mortgages, and run the road on Government account-a policy which wise statesmanship could not advise. By standing still, therefore, the company has a load of debt accumulating for wh7ich no provision is made, and the Government is drifting further and further from the opportunity to secure a just return for its advances. -Todo nothing is to injure both the Government and the company, perhaps irretrievably to both.38 This statement is fully justified by the existing indebtedness of the company. The bonded indebtedness of the Union Pacific Company is $79,457,912, of which there is owing to the United States for "subsidybonds," $27,236,512. Of the residue, $52,221,400, about $27,236,512 are first-mortgage bonds, and the residue are income, sinking-fund, and land-grant bonds, the' latter secured by mortgage on the land-grant of the company. It is quite apparent that the road is in a condition in which it never can and never will pay its liabilities to the United States if they are permitted to accumulate until the maturity of the "subsidybonds." This is the fact, whatever may be its cause. It is the duty and the policy of the Government to deal liberally and justly with these great and useful corporations. They are agencies of good, and should be fairly dealt with, even if those who managed them heretofore have been regardless of their obligations to the United States, and even now refuse to fully and fairly perform any one duty to the Government or people. But if they have acted in bad faith and continue to do so, this may furnish some reason why Congress should now be'vigilant to secure the rights of the Government. In a report made tothe House on the 20th February, 1873, (House Report 78,) by a committee thereof,. it was said of the Union Pacific tjompany: That the moneys borrowed by, the corporation, under a power given them only to meet the necessities of the construction and endowment of the road, hare been distributed in dividends among the corporators; that the stock was issued not to men who paid for it at par in money, but who paid for it at not more than'30 cents on the dollar in road-making; that of the Government directors, some of them have neglected their duties, and others have been interested in the transactions by which the provisions of the organic law have been evaded; that at least one of the commissioners appointed by the President has been directly bribed to betray his trust by the gift of $'25,000; that the chief engineer of the road was largely interested in the contracts for its construction; and that there has, been an attempt to prevent the exercise of the reserved power in Congress by inducing influential members of Congress to become interested in the profits of the transaction. So that of the safeguards above enumerated none seems to be left but the sense of public duty of the corporators. The report shows that in fact the men engaged in this enterprise never risked a dollar of their own capital by the possibility of loss, and that they not only constructed the road from the resources which came from the Government, but that they made enormous profits from these, thereby leaving the United States with no adequate security for the re-imbursement of the subsidy-bonds. (And see House Report No. 77, 3d session 42d Congress. Also see Senate. Report No. 519, 3d session 42d Congress.) The Union Pacific Road is in length 1,085-o miles. It has liabilities, capital stock, $36,762,300; bonded indebtedness, $79,457,912, including $27,236,512 subsidy-bonds, or a total indebtedness of $116,220,212, thus making the road and equipments cost $107,016 per mile. It has been shown it never, in fact, cost the half of this sum. Now, what will be its probable condition at the maturity of the subsidy-bonds'. 38And see House Ex. Doec. No. 127, 1st. sess. 44th Cong. PACIFIC RAILROADS. 21 The simple interest to maturity on the subsidy-bonds will be $49,025,721.60. Of this not more than one-third can be paid from half earnings and 5 per cent. of net profits on the basis already taken, leaving of this interest unpaid $32,683,814.40. The lands will doubtless be sold out under the land-gragrant mortgage. If the stockholders should lose their stock, and all bonds be paid but the first-mortgage bonds, this company wrould, at the maturity of the subsidy-bonds, owe as follows: First-mortgage bonds —---- 7, 236, 512 Subsidy-bonds due "the Government.-............................. ---- 27, 236, 512 Interest on subsidy-bonds.. -......- 32, 683, 814 Total........................................................... 87, 156, 838 This is equal to $80,254 per mile. To pay this, the Government may find only a worn-out road, which, put up at auction, would not pay the first-mortgage bonds. And if these should happen to be in the hands of those who now control the road, they would doubtless become the purchasers and sole owners, for the objection to a Government purchase would be so great it would never be made, and there could be no other competitor who would be formidable as a purchaser. If there could be danger of this, the managers of the road could -permit the interest to accumulate on the first-mortgage bonds to any amount requisite to secure their purpose to become owners of the road without paying any of its debt to the Government. The necessity for. prompt measures to secure the Government cannot be doubted. It is unnecessary to pursue these inquiries as to the other companies. Their history and condition are well understood.38a 38aThe Hon. William A. Piper, of California, in a speech in Congress, April 8, 1876, said: "The Central Pacific Railroad of California in 1870 became consolidated with the Western Pacific, the San Joaquin Valley, and the San Francisco, Oakland and Alameda Railroad Companies, under the name of the Central Pacific Railroad. W" With a desire to own every pass and natural avenue to the Pacific, the directors, by well-known means, also secured control of the Southern Pacific Railroad Company, a corporation formed October 11, 1870, by the consolidation of the San Francisco and San Jose, the Southern Pacific of California, the Santa Clara and' Pajar6 Valley, and the California Railroad Companies. The Southern Pacific Railroad of California should not be confounded with the Southern Pacific Railroad of Texas." The schemes of these men to secure immense profits in the construction of roads to the Pacific were similar to those of the Credit Mobilier of America. He then refers to a suit in California relating to the Central Pacific, and says: "I Under these circumstances, the account given by Samuel Brannau, the plaintiff in this suit, may be considered as substantially true. He asserts that C. P. Huntington, Leland Stanford, Mark Hopkins, Charles Crocker, E. B. Crocker, and others, being a majority of the directors of the Central Pacific, formed themselves intq a company styled the Contract and Finance Company, for the purpose of taking contracts for the construction of the road at rates largely in excess of the sum at which the work could have been let out to responsible parties. The said directors then entered into a contract with themselves, as members of this fictitious corporation, for the construction of the Central Pacific, and transferred to the Contract and Finance Cominpany the entire subsidies of land, money, and bonds granted by the United States, the States of California and Nevada, and various municipal corporations of California in aid of the enterprise. They also granted to Wells, Fargo & Co. the exclusive right of running express trains for the transportation of freight, packages, and bullion over the Central Pacific, and received as pay for the concession stock in that company. They also bought up the stock of competing railroads, and, receiving the subsidy-bonds from the United States, appropriated to themselves the profits of said roads. They so managed their operations, principally through the Contract and Finance Company, as to earn immense profits, recklessly increasing the cost of building the Central Pacific to double or treble the amount necessary. "In order to obtain these immense grants of land and money, and to procure the reorganization of the competing railroads purchased by thenm, and to secure their re-election as officers thereof, they expended vast sums of money in lobbying; and in carrying 22 PACIFIC RAILROADS. Under the remedies now proposed, the Government can secure only its just rights and the protection of the people. The Government directors of the Union Pacific Company, in their report for 1875, say, referring to the recent case decided by the Supreme Court': The company claims that the doctrine of this case evidently is, that there is nothing due to the Government from the company on account of either principal or interest until the maturity of the subsidy-bonds, except one-half of such sum as the Governmernt may create by its demands for transportation, and that, in fact, the only mode of re-imbursernent now provided by law, either before, at, or after the ratufity of the bonds, is this one-half of Government transportation.39 This shows still further the necessity of making definite provision to secure payment to the Government. This claim, so far as it denies a general obligation to pay, after maturity, is so palpably unjust that it is unnecessary to properly characterize it. The sixth section of the act of 1862 declares that the grants to the companies are " made upon condition that'" they 1" shall pay said bonds at maturity." And this leads to the third inquiry: II, What security there may and should be for the ultimate payment of the principal of the " subsidy-bonds " at maturity, cand the interest thereonm paid by the Government to that time but not re-.imbursed?. It is entirely certain that the purpose of Congress in making munificent gifts and granting great privileges to these corporations was to, secure resulting advantages to the Government and people. One of the first rules of legal construction requires that effect shall be given to the acts of Congress accordingly. Congress manifestly intended to forever secure the transmission of Government dispatches over telegraph-lines, the transportation of mails, troops, supplies, and public stores, and the repayment of the " subsidybonds" and the interest thereon. And though Congress permitted the. railroad companies to place a first mortgage on their respective " railroad and telegraph lines " and "equipments," yet there was power reserved to compel the performance of all obligations owing the Governiment and people. It is not to be supposed that Congress designed to require obligations of the companies which they were to be at liberty to disregard, or that Congress would surrender the power to secure performance. It is not to be supposed Congress would give the companies power to evade their obligations, and no such authority was given. No company could mortgage its corporate franchise. The terms of the statute did not authorize it. On the contrary, they expressly excepted' from mortgage the obligation of the companies to transmit dispatches, and transport property for the Governmnent.40 out their schemes generally they rode rough-shod over the people of the Pacific coast, using every conceivable mode of oppression. These grave charges are substantially confirmed by the reluctant testimony of Richard Franchot and C. P. Huntington, given in the early part of 1873 before the special committee of this House appointed to iuves-?tigate the operations of the Central Pacific." 39 House Ex. Doc. No. 127, 1st session 44th Congress. 40Act of 1862, sec. 6; act of 1864, sec. 10. In House Ex. Doc. No. 127, first session Forty-fourth Congress, p. 12, the Government directors of the Union Pacific Company say, referring to the case recently decided by the Supreme Court: "The company claims that the doctrine of this case evidently is, that there is nothing due to the Government from the company on account of either principal or interest until the maturity of the subsidy-bonds, except one-half of such sum as the Government may create by its demands for transportation, and that, in fact, the only mode of re-imbursement now provided by law, either before, at, or after the maturity of the bonds, is this one-half ofGovernment transportation, which is made by the 10th section- of the act of July 2, 1864, to run so long in the future as there may be anything due to the Government, awd even as againstparties who may become possessed of the PACIFIC RAILROADS. 23 The courts have determined that the franchise cannot be mortgaged except in pursuance of express statute.41 This was decided in Coe vs. Columbus Railroad Company, 10 Ohio State Reports, 372. The railroad company had a grant of power to borrow money and to execute bonds therefor, and to secure the payment thereof by a pledge of the property and income of the company. A subsequent statute gave a like power, and the authority to pledge was expressed to be. " by mortgage or otherwise, the entire road, fixtures, and equipments, with all the appurtenances, income, and resources thereof." It was held that the company could not mortgage the franchise to be a corporation appertaining to the individual members of the corporation; and it was said "' no provision is made by which a transfer of the corporate existence can be effected." To secure the repayment of the." subsidy-bonds " and interest, Congress reserved the right, in case of failure, to take possession of the road, lands, property, and franchises of the companies for the benefit of the United States.42 The performance of all the obligations and duties of the companies to the Government was made a "'condition" of the grant of lands and franchises, and of the loan of credit.43 Each company became a trustee, charged with duties to tile Government and people.44 A failure to discharge the obligations and perform the duties required by law would operate a forfeiture of the franchises of any company both' by force of the acts of (ongress45 and on common-law principles.46 But to place beyond dispute the power of Congress over these corporations, the act of 1862 provides: SEc. 18. That whenever it appears that the net earnings of the entire road and telegraph, including the amount allowed for services rendered for the United States, after deducting all expenditures, including repairs, and the furnishing, running, and managing of said road, shall exceed ten per centurn upon its cost, exclusive of the five per centum to be paid to the United States, Congress may reduce the rates of fare thereon, if unreasonable in amount, and may fix and establish the same by law. And the better to accomplish the object of this act, namely, to promote the public interest and welfare by the construction of said railroad and telegraph-line, and keeping the same in working order, and to secure to the Government at all times (but particularly in time of war) the use and benefits of the same for postal, military, and other purposes, Congress may, at any time, having due regard for the rights of said companies named herein, add to, alter, anmed, or repeal this act. The last section of the act of 1864 is still more explicit in its terms as follows: SEC. 22. That Congress may at any time alter, amend, or repeal this act. road under and by virtute of a Joreclosure of the first mortgage-claiming that any other construction leaves nothing for the amendment relative to compensation for services rendered by the Government, contained in the 5th section of the said act, to operate upon."' 41Sangamoin R. R. Co. vs. Morgan, 14 Ills. R., 163'; Angel & Ames on Corporations, sec. 191; Pearce vs. Emery, 32 N. 1H., 486; 1Hall vs. Sullivan. R. R. Co., U. S. circuit court, N. H., 1857; 21 Law Reporter, 138; Howe vs. Freeman, 14 Gray, 566; Shaw vs. Norfolk R. Co., 5 Gray, 162. 42 Sec. 5, act of 1862. 43 Sec. 6, act of 1862. 44 House of Rep. No. 78, 3d sess. 42d Congress, p. 24. 45Act of 1862, secs. 5, 14, 17; act of 1864, sec. 7. 46In Angel & Ames on Corporations, section 774, (10th ed.,) it is said, "It is now well settled that it is a tacit condition of a grant of incorporation that the grantees shall act up to the end or design for which they were incorporated; and hence, through neglect or abuse of its franchises, a corporation may forfeit its charter as for condition broken, or for a breach of trust." The authorities are there collected. And again it is said, "All franchises are granted on condition that; they shall be duly. executed according to the grant." (Sec. 778.) 24 PACIFIC RAILROADS. Here, then, the power of Congress is ample. Even without this, the corporators hold their franchises "on condition" that they shall perform every obligation to the Government. And, as has been fullyshown, the franchise to be a corporation cannot be relieved of the condition by foreclosure or sale. Congress, even without the 18th section above referred to, could by a law say to each of these companies, and all who could claim under them, that "inasmuch as you hold your franchise on condition of performing all obligations to the Government, you shall not exercise it unless you do so perform them." The Government is under no necessity of advancing " the money to discharge prior mortgages." The power of Congress over thefranchise was the tabula ex naufragio which Congress reserved for the protection of the Government independently of the 18th section of the act of 1862. This section reserved additional power to be exercised for the protection of the Government. Congress should, and doubtless always will, have "' due regard for the rights of said companies." This duty is reciprocal. The companies should have "due regard for the rights of" the Government. In this respect they have been wanting. In view of all this, Congress has the power to require these companies to provide a sinking-fund to be paid semi-annually into the Treasury of the United States, in addition to that specified in the act of 1862. The sixth section of that act provides, as to each company, thatAfter said road is completed, until said bonds and interest are paid, at least five per centum of the net earnings of said road shall also be annually applied to the payment thereof. It does not say no more than five per centum shall be so applied. The words "at least" imply that more may be required by Congress. This was well understood by Congress.47 The companies have practically conceded this by asking the Government to agree on a sinking-fund.48 These corporations, as trustees of means placed in their hands, are bound in good faith to so execute the trust confided to them as to create a fund to meet the obligations due the Government at maturity.49 Even if the Government had not retained control of the franchise of each corporation, the sixth section of the act of 1862 and other provisions created such a trust and duty attaching to the franchise that any holder, by agreement or under foreclosure, would take it subject to the execution of the trust and the performance of all the obligations.50 Assuming, then, that Congress may properly require these companies to pay into the Treasury sufficient sums semi-annually to create a sinking-fund to meet the lprincipal of the subsidy-bonds at maturity, and the interest then not re-imbursed. it is but a simple calculation to ascertain the amounts which should be so paid. The following table shows the principal of subsidy-bonds issued to each company, the amount which each company would owe the Gov47House Mis. Doc. No. 16, 3d session 41st Congress, page 4; Globe, vol. 46, June 21,, 1862, pp. 2804, 2817, 2905; Globe, vol. 53, p. 3154, June 21, 1864. 48Senate Ex. Doe. No. 25, 1st session 44th Congress. 49Angell &Ames on Corporations, (10th ed.,) sees. 599-604; Wood v. DI)ulmer, 3 Mason R., 308; Vose v. Grant, 15 Mass., 505. 50 Curson v. African Company, 1 Vernon, 121; Cooper v. Frederick, 9 Alabama, 742; Dudley v. Price, 10 B. Monroe, 84; Bank of Natchez v. Chambers, 8 Sindes and Marsh, 49; State v. La Grange Railroad Company, 2 Humnph., 488; Bank of Saint Mary's v. Saint John, 25 Ala., 566; Johnson v. Marine Hospital, 2 Cal., 319; all cited in Angell & Ames Corp., jS 601. PACIFIC RAILROADS. 25 ernment at the maturity of the subsidy-bonds for interest paid by the Government with interest compounded thereon, the amount of interest paid to maturity of subsidy-bonds, without any interest computedthereon, and the sum which should be paid by each company, payable half-yearly, and re-invested at 5 per cent., with similar computation at 4 per cent., to create a sinking-fund, which would pay subsidy-bonds and interest at maturity, as follows: 5 Date of ruatur- Principal of Comnpound in- Simle interest Names of companies. ity of sub- Pubscidy-bon teres to maturityst sidy-bonds. subsidy-bonds. turity. Central Pacific-.... -............ NTov. 18,1897 $25, 885, 120 00 $126,619, 733 30 $46, 593, 216 00 Kansas Pacific...................... Nov. 17,1896 6, 303, 000 00 30, 831, 774 36 11, 345, 400 00 Union Pacific................... Sept. 3,1897 27, 236, 512 00 133, 230, 206 60 49, 025, 721 60 Central Branch, Union Pacific....... Oct. 20,1896 1, 600, 000 00 7, 826, 564 96 2, 880, 000 00 Western Pacific............ - S.......ept. 5,1898 1, 970, 560 00 9, 639, 197 41, 3, 547, 008 00 Sioux City and Pacific......... Jan. 1, 1898 1, 628, 320 00 7, 965, 095 16 2, 930, 976 00 Amount of sinking- Amount of sinking - fund Amount of sinkingfund required to pay required to pay off the fund required to pay off the principal at compound interest, pay- off simple interest, maturity, p a y a b I e half - yearly, f r o l able half - yearly from nrayable half- yearly half-yearly, from Names of companies. July 1,1876, interest July 1, 1876, interest re- fro m July 1, 1876, re-invested.eiinvested. interest re-invested. re-invested. At five per At four per At five per At four per At five per At four per cent. cent. cent. cent. cent. cent. Central Pacific.-.. $332, 408 00 $375, 409 00 $1, 626, 008 00 $1, 8:16, 354 00 1$598, 334 00 $675, 737 00 Kansas Pacific........ 87,327 00 97, 994 00 427, 172 00 479, 347 00 157,190 00 176,,389 00'Union Pacific........... 355261 00 400, 681 00 1, 737, 796 00 1, 959, 971 00 639,470 00 721, 225 00 Central Branch, Union Pacific................2, 299 00 25. 010 00 109, 077 00 122, 340 00 40, 138 00 45, 018 00 Western Pacific......... 23,855 00 27,080 00 11,,689 00 132, 464 00 42, 939 00 48, 744 00 Sioux City'and Pacific. 20; 723 00 23, 422 00 101, 370 00 114, 572 00 37, 302 00 42,161 00 Whatever sum the Government has retained or may retain on account of services, or 5 per cent. of net earnings, will to that extent reduce the several sums requisite to make the necessary sinking-fund. The railroad companies deny the power of Congress to so alter or amend the act of 1864, as to require a sinking-fund to be provided.52 They have been heard in elaborate and able arguments, both oral and by printed briefs, and it is proper, thereforej more fully to consider the.questions already alluded to. 51 TiREASUIiY DEPARTaMEN', OFFIcICE OF THE SECRETARY, March 8, 1876. SIR: In compliance with your verbal request, I have the honor to inclose herewith a statement prepared by Mr. W. F. Maclennan, assistant chief of the warrant division of this Office, and Prof. E. B. Elliott, showing the amount required to be invested for a sinkinkin-fnd, (at different rates of interest,) to pay off the principal at maturity of the bonds issued to the several Pacific Railroad Companies, and the interest thereon. Respectfully, CHAS. F. CONANT. Hon. WILLIAM LixWRENCIE, House of Representatives, TVashingtoil, D. C. 52 On the 13th of March a report was submitted to the House (Mis. Doc. No. 132, first session Forty-fourthl Congress) on this subject. The Judiciary Committee thereupon heard very elaborate argunmeuts during three sessions, on as many different days, by Hon. Lyman Trumbull, of Illinois, and Hon. James H.'Storrs, of New York, on behalf of the Central and Western Pacific Company, and by -Ion. Wm. M. Evarts, of New York, on behalf of the Union Pacific Company against the proposition for a sinkingfund. 26 PACIFIC RAILROADS. The purpose which is deemed the most essential to be accomplished is to secure a proper sinking-fund. It is believed that purpose would be secured by provisions in substance as follows: SEc. 4. That for the purpose of providing a sinkinug-fund to pay, at maturity, the principal of the bonds of the United States issued to railroad companies under an act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes, approved July 1, 1862, or by virtue of any other act or acts in relation to the companies therein named, or any other such company or companies, said companies shall severally be required to pay into the Treasury of the United States, and shall be indebted to the United States, in addition to the 5 per cent. of net earnings as now required by law, semi-annually, during each year until said bonds shall be fully paid,' commencing on the 30th of June, 1876, as follows: The Central Pacific Railroad Company, on its owns account, $332,408, and on account of the Western Pacific Railroad Company, $23,855; the Union Pacific Railroad Company, $355,261; the Kansas Pacific Railway Company, $87,327; the Central Branch'Union Pacific Railroad Company, $22,1299; and the Sioux City and Pacific Railroad Company, $20,723. The Secretary of the Treasury may, for sufficient reasons, extend the time for making any payment, or reduce the amount thereof, if he shall be satisfied that a less sum will be sufficient for the purpose aforesaid. SEC. 5. That for the purpose of providing a sinking-find to pay at the maturity of said. bonds the interest thereon, which has been or may from time to time be advanced and: paid by the United States, and may not be re-imbursed from compensation for services as now required by law, and from 5 per cent. of net earnings as now required by law, the said several companies shall severally be required to pay into the Treasury of the United States, and shall be indebted to the United States, semi-annually during each year,:until said bonds shall be fully paid, commencing on the 30th of June, 1876, such sums of money as with the 5 per centum of net earnings, and one-half of the compensation for services rendered for the Government, shall make the sums to be so. paid semi-annually, as follows: By the Central Pacific Railroad Company on its own account, $598,334, and on account of the Western Pacific Railroad Company, $42,939; by the Union Pacific Railroad Company, $639,470; by the Kansas Pacific Railroad Company, $157,190; by the Central Branch Union Pacific Railroad Company, $40,138; and by the Sioux City and Pacific Railroad Company, $37,302. And the Secretary of the Treasury may in addition require said companies to pay semi-annually into the Treasury of the United States such further sums as he may prescribe and deem necessary for the purpose aforesaid, and said company shall severally owe and be indebted to the United States in such sums so prescribed. And any company may pay any sum required to be paid by this or the preceding section, in bonds, Treasury notes, or other evidences of debt against the United States, to be allowed at par. SEc. 6. It shall be the duty of the Secretary of the Treasury to invest to the best advantage the money paid into the Treasury or collected in pursuance of this act on account of said sinking-funds, in any bonds issued by the United States, and to re-invest the same from time to time, with all interest and profits, and hold the same for the purpose of said sinking-funds respectively, and at the maturity of the bonds issued to said railroad companies to sell, dispose of, or otherwise apply said money and bonds, at not less than their par value, to the credit of said sinking-funds respectively, in paying and canceling said bonds issued to said companies and the interest thereon advanced by the United States not already re-imlursed. But nothing herein shall require said 5 per centumr of net earnings, or said one-half of the compensation for services rendered for the Government to be invested as herein mentioned. The questions which seem to arise on these areFIRST. Whether Congress has such power over these railroad corporations as to enact these provisions; and SECOND. If So, is it a necessary, just, and fair exercise of the power. I. THE QUlESTION OF POWVER. And first, as to the question of oower. The solution of this q.uestion requires a consideration of the acts of Congress of 1862 and 1864, and of certain provisions of the Constitution. PACIFIC RAILROADS. 27 The act of 1862 provides as follows: SEC. 18. That whenever it appears that the net earnings of the entire road and. telegraph, including the amount allowed for services rendered for the United States, after deducting all expenditures, including repairs, and the furnishing, running, and managing of said-road, shall exceed ten per centum upon its cost, exclusive of the five per centum to be paid to the United States, Congress may reduce the rates of fare thereon, if unreasonable in amount, and may fix and establish the same by law. And the better to accomplish the object of this act, namely, to promote the public interest and welfare by the construction of said railroad and telegraph-line, and keeping the same in working order, and to secure to the Government at all times (but particularly in time of war) the use and benefits of the same for postal, military, and other purposes, Congress may, at any time, having due regard for the rights of said companies named herein, add to, alter, amend, or repeal this act. The last section of the act of July 2, 1861, is as follows: SEC. 22. That Congress may at any time alter, amend, or repeal this act. These two acts are to be construed together as one act. (Kansas Pacific Company v. Prescott, 16 WVallace, 603.) The section 18 of the act of 1862 does not limit and control section 22 of the act of 1864, but the latter statute must modify and control the former one. If it does so where the interests of the companies are concerned, it must do so where the interests of the United States are concerned. These reservations of power in Congress are, of course, qualiified and limited by the Constitution as fully as if the clauses thereof having: any bearing on the subject were copied into and made a part of the two acts referred to. The Constitution provides thatNo person shall. be deprived of property without due process of law; nor shall private property be taken for public use without just compensation. (Article V, Amendments.) It may be conceded, too, that contracts are so sacred that a. power to impair their obligation is outside of legislative authority, and does not exist, unless by agreement or assent of both parties. (Loan Association v. Topeka, 20 Wallace, 663; 2 Southern Law Review, n. s., April, 1876, p. 23.) It might be conceded, too, that Congress could not by law cireate a debt and impose it on a citizen or corporation unless authorized by pre-. vious agreement; for that would, on execution, take property without due process of law. We have now seen what these railroad compainies have agreed that Congress may do under the reserved power to " alter, amend, or repeal" the act of 1864. In order to understand the power thus by agreement given to Congress, it is necessary to notice1. The grants made by Congress to the companies; and, 2.'The obligations assumed by the companies to the Government. THE GRANTS. 1. Congress granted to the Union Pacific Company all, and to the other companies some, of their most valuable corporate franchises. 2. By the act of Congress of 1862, there: was granted to these companies, for the purpose of aiding in the construction of their respective roadsEvery alternate section of public land designated by odd numbers to the amount of five alternate sections per mile on each side of said roads, on the line thereof, and, within the limits of twenty miles on each side; except mineral lands. 28 PACIFIC RAILROADS. This grant was enlarged by the act of 1864 to TEN sections per mile on each side of the roads, and the grant was extended to cover "coal and iron lands. " 3. For the purpose of aiding these companies in the construction of their respective lines of road and telegraph, the act of Congress of 1862 provided that on the completion of any section of 20 miles of road there should be issued to the company constructing it bonds of the United States payable 30 years after date, with interest at 6 per cent. per annum, payable semi-annually in lawfill money, (greenbacks,) to the amount of $16,000 per mile, and as to the Union Pacific and Central Pacific, for 300 miles the most difficult of construction, $48,000 per mile, and for 150 miles, $32,000 per mile. The companies assumed certain duties. These grants of lands, of corporate franchises, and loans of credit, were made to each of the railroad companies, as the act of 1862 declaresUpon condition that said company shall pay said bonds at maturity, and shall keep said railroad and telegraph-line in repair and use, and shall at all times transmit dispatches over said telegraph-line, and transport mails, troops, and munitions of war, supplies, and public stores upon said railroad for the Government, whenever required to do so by any Department thereof, and that the Government shall at all times have the preference in the use of the same for all the purposes aforesaid, (at fair and reasonable rates of compensation, not to exceed the amounts paid by private parties for the same kind of service;) AND ALL COMPENSATIONf0or services rendered for the Government shall be applied to the payrnent of said bonds and interest until the uwhole amount is fully paid. Said company may also pay the United States, wholly or in part in the same or other bonds, Treasury notes, or other evidences of debt against the United States, to be allowed at par; and after said road is completed, until said bonds and interest are paid, at leastfive per centum of the net earnings of said road shall also be annually applied to the payment thereof. (Sec. 6.) By section five of the act of 1864, this duty, to apply all compensation for services rendered the Government by the companies, was so changedThat oNTY ONE-HALF of the compensation for services rendered for the Government by said companies shall be required to be applied to the payment of the bonds. The act of 1862 provided that — To secure the repayment to the United States as hereinafter provided, of the amount of said bonds so issued I with all interest thereon, which shall have been paid by the United States, the issue of said bonds and delivery to'the company shall ipso facto constitute a first mortgage on the whole line of the railroad and telegraph, together with the.rolling-stock, fixtures, and property of every kind and description.9 The character of this security as a first mortgage was changed by the act of 1864, which declared that the companies should be authorized toIssue their first-mortgage bonds on their respective railroad and telegraph lines to an amount not exceeding the bonds of the United States, and of even tenor and date, time of maturity, rate and character of interest.' * And the'lien of the United States bonds shall be subordinate to that of the bonds of any of said companies hereby authorized to be issued on their respective roads, property, and equipments, except as to the provisions of the 6th section of the act to which this is an amendment, (act of July, 1862,) relating to the transmission of dispatches and the transportation of mails, troops, munitions of star, supplies, and public stores for the Government of the United States.'o Thus it was upon these VALUABLE CONSIDERATIONS PAID BY THE GOVERNMENT TO THE COMPANIES that THEY AGREED that the qualified right to alter, amend, or repeal, reserved to Congress by the act of 1862, should be ENLARGED into an ABSOLUTE RIGHT to "ALTER A-MEND, OR, REPEAL " in the act of 1864. In construing this power of Congress it is well to bear in mind a rule of law, thatWhenever a power is given by a statute, everything necessary to the making of it effectual or requisite to attain'the end is implied. "Quando lex aliquid counsedit, consedere videtur et id, per quod devenitur ad illud.'" (1 Kent's Commentaries, page 464.) PACIFIC RAILROADS. 29 It will be observed in the original act of 1862, and again in that of 1864, the railroad companies agreed to pay the subsidy-bonds at maturity. This duty was a condition upon which the grants were made to them. When they assumed this duty directly they impliedly assumed the duty to use all the necessary means to enable them to do so. (1 Kent, 464, above cited.) That it is the DUTY of the companies to provide a sinking-fund to'neet the payment of the subsidy-bonds at maturity, and that there is an urgent NECESSITY for it, must be manifest. The president of the Union Pacific Company, in a letter to the Secretary of the Treasury dated Febrfiary 9, 1875, says: The mortgage heid -by the Government, in its terms and by judicial decision of the United States circuit court, cannot be enforced until the maturity of the bonds, which is near the close of the present century. The bonds are accumulating an interest-account, also uncollectible until the principal is due. The principal and interest when due will amount to the very large aggregate of over seventy-seven millions of dollars, though the actual amount advanced by the Government was only $27,236,512. For this very large amount the Government has only a second mortgage, and if it be allowed to accumulate, without any provision being made to meet it, the company will probably be utterly unable to pay it. At the same time, it is equally manifest that the Go!ernment will be unable to collect it, except upon the assumption that it will advance the money to discharge prior mortgages, and run the road on Government account-a policy which wise statesmanship could not advise. By standing still, therefore, the company has a load of debt accumulating for which no provision is made, and the Government is drifting farther and farther from the olpportunity to secure a just return for its advances. To do nothing is to injure both the Government and the company, perhaps irretrievably to both.38 The duty to provide the means of paying these bonds is an obligation prior to any claim of stockholders for dividends, yet the two principal companies are making LARGE DIVIDENDS and providing no sinking-fund. The first-mortgage bondholders are, under the authority of section 10 of the act of 1864, secured by a mortgage on the " respective railroad and telegraph lines," but not on the REVENUES of the roads. The prior duty charged on these revenues, by virtue of the condition of section 6 of. the act of 1862, and which is again reserved in section 10 of the. act of 1864, is to. " pay said (subsidy) bonds at maturity," which, of course, includes principal and interest. The duty to pay carries with it the duty to provide the means of doing so. The principal companies are, in fact, able to pay the accruing interest of the first —mortgage bonds and provide a sufficient sinking-fund besides. The payment of dividends without providing a sinking.fund is a waste and misapplication of the revenues, which a court of equity would enjoin on behalf of private creditors of the companies sustaining to them the same relation which the Government does; Story, in his Equity Jurisprudence, vol. 1, ~ 730, says: Where property is covenanted to be secured for certain purposes and in certain events, and there is danger of its being alienated or squandered, courts of equity will interpose to secure the property for original purposes. And, generally, f in cases of contracts, express or implied, courts of equity will interpose to preserve the funds devoted to particular objects under such contracts, and decree what, in effect, is a specific performance, security to be given or the fuind to be placed under the control of.the court. See Refield v. Woodfolk, 22 Howard, 318. The power of a court of equity to require a corporation t apply its funds to perform obligations to the public is well understood. (2 Redfield on Railways, ~ 211, p. 359.) 30 PACIFIC RAILROADS.. The sections 5 and 7 of the proposed bill do not violate any provision of the Constitution. They do not divest any company of any title to land. They do not divest any company of any title to any part of their earnings. They do not invest the Government with any title to money or other property. They propose to make the Government a custodian of money-a trustee to manage it and apply it in payment of a debt when due, and not before. They do not propose to divest any holder of first-mortgage bonds of any lien or mortgage he may have. The mortgage lien continues and cannot be disturbed. If these holders of mortgages had a prior lien or. claim on earnings of any road, even that right could be protected by declaring that the companies should pay the proposed sinking-fund only out of net earn-.ings, but they have no such claim. If a refusal to pay the proposed sinking-fund should result in a judgment or decree, execution thereon could not divest any right of a holder of first mortgage bonds. The decree might, through a receiver or otherwise, transfer net income of the roads to the Government; but this would not divest the title of any company to it. The Government would be only custodian and trustee. If a judgment resulted in execution and sale, the proceeds would still be owned by the company and held by the Government as its custodian and trustee. Such sale would indeed divest a company of the title to the property sold, but this would be-to use the language of the Supreme Court in Miller v. State,.15 WallaceThe due adninistration of its affairs so as to protect the rights of * * creditors, and for the proper disposition of the assets. It will be shown hereafter that the contract of the companies made in the last section of the act'of 1861 has given the Government the right to seek a remedy in this mode. NO VIOLATION OF THE OBLIGATION OF ANY CONTRACT. And this brings us to the-question whether the creation of a sinking-fund in the mode proposed violates the obligation of any contract. it is clear it does not. I. There is in the statutes relating to these railroads no distinct provision which, in so many words and in direct terms, says any company shall provide a sinking-fund by the periodical payments proposed. There is a duty to pay the subsidy-bonds at maturity. This carries with it, as already stated, a duty to:provide the means, and a sinking-fund is absolutely necessary. It may be said the mode of enforcing this duty is judicial-the rem-edy is to invoke the power of the courts.. The United States can, no doubt, invoke this power, and, if necessary, it can be aided by legislation. And if the acts of 1862 and 1864 reserved no power to Congress to legislate, the question might be only a judicial one. II. There is no provision of these acts which, in terms or by implication, denies to Congress the right to require the proposed sinking-fund. It might be claimed that the obligation of the companies to pay the PACIFIC RAILROADS. 31 subsidy-bonds "at maturity" may carry an implication that they are not to be required to pay prior to that time. But this does not exclude the right of the Government to require a sinking-fund. This is not paynment. It is not necessary, therefore, to inquire whether, under the reserved power to alter the contract, the time of payment might not be changed. The valuable consideration paid by the Government for this new power to "' alter " the contract between the Government and the companies would seem to imply that some advantages were expected in return. Ill.. The power to " alter, amend, or repeal" the acts or contract, a8' reserved to Congress in the statute of 1864, authorizes Congress to pro. vide this sinking-fund, and upon several grounds or for different reasons. 1. This right to " aaeld'!" carries with it a power to trmake such changes or additions by law as will secure the application of the assets of the companties to protect the Government as a creditor or surety. Upon this question the authorities are abundant and clear. The whole subject is now before the Supreme Court of the United States in certain cases from the State of Wisconsin, which will probably soon be decided. But cases already decided prove the existence of the.power. Some of these will be noticed, as follows: Miller v. State, 15 Wallace, 478. A railroad company was organized under a law authorizing its creation, with thirteen directors to be elected by stockholders. A subsequent statute gave the city of Rochester, which had become a stockholder, power to appoint seven of the directors, leaving the other stockholders to elect six. The court held this was an authorized exercise of power under a reservation in the law of a right to alter or repeal. Judge Clifford said of such charter: The reserved power may be exercised, and to almost any extent, to carry into effect the original purpose of the grant, or to secure the due administration of its afauirs so as *to protect the rights of stockhold ers and creditors, and for the proper disposition of the assets. Hrolyoke County v. Lyman, 15 Wallace, 522. Clifford, Justice, in commenting on the reserved power to alter, amend, or repeal a charter, says: Power to legislate, founded upon such a reservation, is certainly not without a limit, but it may safely be affirmed that it reserves to the legislature the authority to make any alteration or amendment in a charter granted subject to it that will not defeat or substantially impair the object of the grant, or, any rights which have vested under it, which the legislature may deem necessary to secure either the object of the grant or any other public right not expressly granted away by the charter. Hyatt v. MeMiahon, 25 Barbour, 467. A mutual insurance company was organized under a statute which authorized the directors to make assessments on premium-notes to meet losses, but which reserved the legislative power to alter or repeal the charter. A subsequent law authorized receivers to make assessments. The plaintiff, as receiver, sued to recover an assessment. Rosekrans, Judge, said: Another objection to the complaint is that the receiver has no power to make an assessment upon the premium-notes belonging to the corporation; that, by the terms of the contract, it can only be made by the directors of the company; that the act of 1852, purporting to authorize receivers of mutual insurance companies to make assessments, is unconstitutional and void as to notes given before the passage of the act, (as was the case with the note in suit.) The conclusive answer to the objection of unconstitutionality of the act, is the power reserved to the legislature to alter or repeal the charter. The obligation of the contract was that the maker of the note should pay his:proportion of losses-and expenses of the company in proportion to the amount of his 32 PACIFIC RAILROADS. premium-note. The note was made payable at any time when the directors should deem the same requisite for the payment of losses and incidental expenses, (ch. 43,. 6.) It has been said the assessment is not a judicial but a ministerial act, and may as well be performed by a receiver as by the directors, (14 Barb., 373.) But whether this be so or not, the legislature, when they granted this charter,reserved the right to alter it.' The legislature exercised this right by declaring that when the assets of such corporation passed into the hands of a receiver, he should make the assessment instead of the directors. This was a legitimate exercise of the reserved power.' Even if it increased the liability of the membe)s, as it does not, it would be valid, (10 Barb., 2, 60.) It need not be claimed to be without limit, or that it may be capriciously or wantonly exercised, but it may be affirmed that it may be exercised, in all cases and to any extent, to carry out the original purposes of the incorporation, and to secure the due administration of justice inl regard to the rights of creditors of the corporation, and the proper disposition of its assets. (Northern R. R. Co. v. Miller, 10 Barb., 282; Schenectady Plank R. Co. v. Thatcher, 1 Kernan, 102-115; White v. Syracuse R. R., 14 Barb., 560; Troy R. R. v. Kerr, 17 Barb.) Assessments by receivers have been sanctioned. (Bangs v. Gray, 15 Barb., 264, S. C., 2 Kernan, 477; Hyde v. Lynde, 4 Cornst., 387; Devendorf v. Beardsley, 23 Barb., 656-666). In Miller v. The State, (15 Wallace, 497,) the court refer with approval to this case, and say: So where the legislature in granting a charter to an insnrance company reserved the right to alter it, and they subsequently exercised that right by declaring that if the assets of such corporation should pass into the hands of a receiver, he might make assessments upon the premium-notes, it was held that this was a legitimate exercise of the reserved power, and that it fully authorized the receiver to make assessments whenever it became necessary to carry the intention of the legislature into effect. 2. The right to I alter" the charter is a right to so far alter the contract as to impose a liability on the companies which did not previously exist, provided the new liability is designed to accomplish the original object of the lawu or fulfill a duty to the Government. The authorities go to this extent, though it is not now proposed to create any new liability, but only to provide the means of paying when due a liability already existing. Worcester v. Norwich R. R. Co., 109, Mass., 103. The statute of 1871 required five railroad companies to unite in a station in Worcester for the accommodation of the passenger-trains of all said corporations. This would require an exercise of the right of eminent domain by the corporations, and a large expenditure of, money to extend the roads and build a station. The city of Worcester and some of the corporations petitioned the court'for the appointment of commissioners to determine the location of the station. The Norwich Railroad Company resisted. Chapman, C. J., said: Proof is offered that to extend the several railroads named to a union passengerstation east of Grafton street would make it necessary for each of them to extend its tracks a great distance i and at a cost anmounting in the aggregate to-several hundred thousand dollars. i The validity of the act and of the proceedings under it are denied. The petitioners contend that the act is valid under the provisions of the general statutes, (oh. 68, l 41,) which are similar to prior statutes affecting all railroads that have been chartered since March 11, 1831, and subjecting them to alteration, amendment, or repeal at..the pleasure of the legislature. The court has repeatedly had occasion to consider the provisions of the general statutes referred to. (Fitchburg R. R. Co. v. Grand Junction R., 4 Allen, 198; Commontwealth v. Eastern B., 103 Mass., 254; Commonwealth v. Essex Co., 13 Gray, 239; Commissioners v. fHolyokW, 104 Mass. 446.) In conformity with these decisions, we think that the act of 1871 is a reasonable exercise of the right thus reserved to the legislature. Commonwealth v. Eastern Railroad Company, 103 Mass., 254. The syllabus is: "A statute requiring a railroad corporation whose charter under the Rev. Stat. (ch. 44, ~ 23,) (gen. stats., ch. 68, ~ 41) is subject to amendment, alteration, or repeal at the pleasure of the legislature to erect a stationhouse at a place on its road and cause trains to stop there, is not in vio PACIFIC RAILROADS. 33 lation of the Constitution of the United States as impairing the obligation of a contract." Chapman, Ch. J., said: The defendents say that the act of 1868 violates the contract made with them by the commonwealth, and requires them to expend their property for an assumed public use without compensation contrary to the Constitution of the United States and of this State. * * But the act is not subjected: to such an objection. Fitchburg Railroad Company v. Grand Junction Railroad Company, 4 Allen, 198. The court held that a law was valid which required a railroad comr pany to make extensive changes in the level, grade, and connections of.its road. In Wisconsin the authorities on this subject in that State are collected in the great case of the Attorney-General v. Railroad Companies, (35 Wisconsin, 570.) In Kenosha Railroad v. Marsh, (1.7 Wisconsin, 13,) the court said of the reserved power to alter: Undoubtedly the legislature might, under this power, imlpose netw duties and new restraints upon corporations in the prosecution of the enterprises already undertaken. Parker v. Metropolitan Railroad Company, (.109 Mass., 506.) It was held that under a power reserved to the legislature to amend, alter, or repeal a charter, the rates of toll prescribed in the charter of a ferry company might be reduced by a subsequent statute. Morton, Judge, said: The reservation of power is broad and comprehensive. Whatever may be its limitation, it at least reserves to the legislature the right to make any reasonable amendments regulating the mode in which the franchise granted shall be used and enjoyed, which do not defect or essentially impair the object of the grant, or take away any property or rights which have become vested under a legitimate exercise of the powers granted. (Roxbury v. Boston R., 6 Cush., 424; Commissioners v. Holyoke, 104 Mass., 446.) Whiting v. Sheboygan Railroad, 25 Wisconsin. 198, and the case in 35 Wisconsin, 570, hold thatThe legislature may limit the tolls and fares to be received by this railroad company to a reasonable sum, beyond which the company shall not go. The bill now proposed does not attempt to reduce the fares or rates on the Pacific railroads under the reserved power in the act of 1864. These companies should not precipitate any question of that kind by now refusing to make provision for the payment of their debts. Tomlinson v. Jesup, 15 Wallace, 454. A railroad company was' incorporated in South Carolina, in 1851, subject to a general law which reserved a right to alter, amend, or repeal. In 1855, an amendment of the charter exempted the stock from taxation, and did not reserve a right to alter this provision. The new constitution of 1868, and a statute under it, subjected the stock to taxation. Field, Justice, said: The charter; * constituted a contract. * * The amendment formed a part of the contract. * " " The exemption from taxation added greatly to the value of the stock and induced the plaintiff to purchase the shares. i But these considerations cannot be allowed any weight in determining the validity of the subsequent taxation. The power reserved to the State by the law of 1841 authorized any change in the contract, as it originally existed or as subsequently modified, or its entire revocation. I *I The reservation affects the entire relation between the State and the corporation, and places under legislative control all rights, privileges, and immunities derived by its charter directly from the State. Pennsylvania College Cases, 13 Wallace, 190. Under a reserved power to alter the charter of Jefferson College, the legislature authorized a change of its location from Cannonsburgh to H. Rep. 440 3 34 PACIFIC RAILROADS Washington, although it had sold scholarships to be satisfied in tuition at Cannonsburgh. Both the acts of 1832 and 1864 show that the railroad companies agreed to "keep the railroads and telegraph-lines in repair and use, and shall at all times transmit dispatches over said telegraph-lines and transport mails, troops, and munitions of war, supplies, and public stores upon said railroads for the Government." If the mortgage-debts of the companies are permitted to accumulate, with no provision for their payment, the roads must eventually be sold out and pass into other hands. These sinking-funds are necessary to keep the companies in a condition, as said. by the supreme court of New York, " to carry out the original purposes of the incorporation." 3. This power to alter, as affecting the " individual liability" of stockholders, has received consideration fromn the courts, which may throw some light on this subject. The proposed bill does not attempt to create a new individual liability on stockholders. It is not necessary to affirm that any such power exists. The railroad acts do not fix any limit to such liability, if it can be imposed. 3Many State constitutions and statutes treat the power to alter charters as a power to create, unlimited individual liability, and hence in express terms restrict the power so that the individual liability shall not be more than double the amount of stock held. If a power to alter carries with it a power to create individual liability of stockholders for debts of a corporation, it might with much more force and justice be urged that a new liability could be imposed on the corporation itself, which did not reach the stockholders. Hyatt v. 1]icMahan, 25 Barbour, 467. A charter was altered by the legislature, and the court said of the alteration: Even if it increased the liability of the members, as it does not, it woucl be valid. Northern Railroad Company v. 3Miller, 10 Barb., 282. This was an action to recover on a stock-subscription under a charter which reserved a legislative right to alter or repeal. The defense was that the legislature had altered the charter by authorizing the corporation to borrow money and to construct branch lines of railroad. The court said: The directors * by accepting the charter became bound by this condition or reservation; and every individual who subscribes to the stock of the company thereby makes himself a party to the contract, subject to the conditions and reservations of the charter. In effect, he stipulates at the time he subscribes that the legislature may alter or repeal the law, and thus change the obligation of his subscription, or defeat it altogether. Whatever modification is thus effected in the obligation created by his subscription, is made by his own agreement. I * V What a man authorizes another to do is as obligatory upon him when done as if it had been performed by himself. Sherman v. Smith, I Black., 587. The New York statute of 1838 authorized the organization of banking companies, and the law provided that the stockholders should not be individually liable for debts, but reserved the right to repeal or change the law. Afterward an amendment of the State constitution, in 184.6, and a statute of 1849, declared that the shareholders of all banks which should continue to issue notes after a certain time should be individually responsible. The creditors of a bank organized in 1844 sought to enforce the individual liability. The stockholders resisted, on the ground that the original charter was a contract, protected by that clause of the Con PACIFIC RAILROADS. 35 stitution of the United States which forbids the States to make any law impairing the obligation of contracts. The court held the stockholders individually liable for debts after the law of 1849. Mr. Justice Nelson said: The association was authorized to establish a bank' subject to the liabilities prescribed in the act [of 1838.] Now, the section which reserved to the legislature the power to alter or repeal the act, by necessary construction reserved the power to alter or repeal all or any one of these terms and conditions -or rules of liability prescribed in the act. In the matter of the Recipvocity Bank, 22 New York, 9. The Reciprocity Bank was incorporated in 1834, ltnder a law reserving a power to the legislature to alter, modify, or releal it. The act of 1849 imposed individual liability on stockholders for the debts of the bank.' The court say: Within the power here reserved the legislature would have had the right to pass the statute of 1849 and to impose the very liability now in question, even if the:constitution of 1846 had never been adopted. This applied to liabilities arising after the act of 1849. The bill now proposed is a provision for the payment of a debt created after the act of 1864 was passed. (See Rep. Sec. Treas. for 1875, p. 33.) Other authorities might be cited: 1C. E., Green, Eq. R., 13; 30 N. J., Law, (1 Vroom,) 368; 31 Id., 521-575; 51 N. HII., 504; 103 Mass., 10; 12 Indiana, 285; 37 Barb., 257-399; 44 Ills., 500; 104 Mass., 451; 4 Hill, 140; 15 B. Monroe, 340-642; 13 Gray, 239; 4 Allen, 198; 23 Pick, 334; 21 Barb., 513; 7 Greenl., 474; 23 Maine, 318; 30 Maine, 547; 39 Maine, 571; 6 R. I., 491; 9 R. I. 194; 1 Minn.,202; 19 Minn, 418; 1 Green, Iowa, 563; 26 Pa. St., 287-302; 1 Paige, 102; 10 N.Y., 102; 14 N. Y., 336; 21 N. Y.,9; 22N. Y., 9; 24 N.Y.,345; 14 Barb., 559; 6 Gush., 424. II. THE NECESSITY AND JUSTICE OF THE MEASURE. There is a necessity for the creation of a sinking-fund. This has already been shown. Without the creation of sinking-funds for each of the companies, the Government will at the maturity of the subsidy-bonds in all probability lose $150,000,000. The fact that none of-these companies are making any provision to meet the subsidy-bonds at maturity proves its necessity. The good faith of some of them might be called in question from the fact that they refuse to pay the Government an acknowledged indebtedness already due for five per cent. of net earnings, and for other reasons.53 This is a just and fair exercise of power. The justice of requiring these companies to provide for meeting their obligations at matur'ity by a sinking-fund can scarcely be doubted. It is the mode adopted by the Government to provide for the ultimate payment of the national debt. Some of these companies have adopted the mode of providing a sinking-fund to meet their first-mortgage bonds at maturity. This form of prescribing a sinking-fund is proper. Some authority must prescribe the amount to be paid. It must be done in a law or by virtue of a law. X As to the principal of the subsidy-bonds, it is possible to prescribe in the law the requisite amount, and this is done in the bill now proposed. z3 See speech of HIon. William. A. Piper, in House of Representatives, April 9, 1876. 36 PACIFIC RAILROADS. As to the interest advanced and to be advanced by the United States, the proper sum to be paid semi-annually can also to a certain extent be prescribed, and this is done in the bill now proposed. If the power to create an individual liability upon stockholders exists to the full extent which has at some time been claimed, Congress could even change the contract, so as to require all the net earnings of the roads to be applied to pay interest as it accrues on the subsidy-bonds; and, in default of a sufficiency of such earnings, the residue might be imposed: on stockholders individually. But the proposed bill asserts no such power. Its justice and moderation are such that it ought to be accepted with - out objection, lest opposition, in addition to undoubted omissions of duty by these companies, without reference to alleged frauds on the part of their managers, may precipitate a demand for personal liability against stockholders and new liabilities against the companies far beyond any now proposed. Since the resolution was introduced in the House, which required these inquiries to be made, bills have been introduced at the instance of the principal companies to provide sinking-funds, but they are deemed entirely inadequate and inadmissible.54 54 These bills are as follows: S. 687. Fourty-fourth Congress, first session. In the Senate of the United States, April 3, 1876.-Mr. Edmunds asked and, by unanimous consent, obtained leave to bring in the following bill; which was read twice, referred to the Committee on Railroads, and ordered to be printed. A BILL to create a sinkingfund for the liquidation of the Government bonds advanced to the Central and Western Pacific Railroad Companies. Whereas the United States Government has, in pursuance of the act of Congress entitled "An act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes," approved July first, eighteen hundred and sixty-two, and the acts amending the same or supplemental thereto, advanced to the Central Pacific Railroad Company of California, a corporation organized under the laws of the State of California, twenty-five million eight hundred and eighty-five thousand one hundred and twenty dollars, and to the Western Pacific Railroad Company, a co rporation also organized under the laws of said State, one million nine hundred and seventy thousand five hundred and sixty dollars, of Government bonds, payable in thirty years from their respective dates, with interest; -and whereas said companies have been consolidated under the laws of said State into one company, under the corporate name of the Central Pacific Railroad Company, and it is believed to be a wise and prudent measure to provide for the payment of the said bonds by arranging with said Central Pacific Railroad Company for the formation of a sinkingfund, which will provide for commencement of immediate semi-annual payments by said company, will gradually refund to the Government the amounts advanced, and will extinguish the debt by the date of the maturity of the last bonds issued to said companies; and whereas, under said acts, said railroads have been constructed and accepted, and said companies are entitled to twenty sections per mile of public land along the line of said Toads; and whereas said Central Pacific Railroad Company proposes to release to the United States, for the purposes of this act, the unsold lands to which it is entitled under the aforesaid acts of Congress in the State of Nevada and Territory of Utah which are not necessary for the purposes of the company: Therefore, Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in order to commence said sinking-fund, the said Central Pacific Railroad Company may,. and it is hereby, authorized to convey and release to the United States, all the lands in the State of Nevada and Territory of Utah which were granted by the act of Congress and the amendments aforesaid to the Central Pacific Railroad Company of California, saving and excepting any of said lands heretofore sold by said company in lieu of which the proceeds of: sale thereof received by said company, over two dollars and a half an acre, and the amount of costs which the said company shall have paid for surveying the same, shall be paid into.the United States Treasury:on account of said sinking-fund. The number of acres of said land so to bie conveyed and released to the United States, less the exceptions aforesaid, shall be ascertained by PACIFIC RAILROADS. 37 The following is submitted as the proper draught of a bill to accomplish the purposes of this report: A BILL to amend the act entitled "An at to amend an act entitled'An act to aid in the construction of a railroad and telegraph-line from thll Missouri River to the Pacific Ocean, and to secure to the Government the use of- the same for postal, military, and other purposes,' approved July 1, 1l62," and other acts in relation.to the railroad'3ompuanies therein mentioned. SEC. 1. Be it enlacted: by the Senate and House of Representatives of the 1United2 States cf.Arnerica in Congress assembled, That the Secretary of the: Treasury shall at all times withhold payment of any money due from the United States to any railroad company which has received any gift or grant of land, or grant of a right of way or easement, or gift or loan of money or credit from the- United States, whether such money so due be reduced to judgment, or not, to the amount of any and all claims due from such company to the, United. States. SEC. 2. In any action or proceeding brought in pursuance of law by any such company against the United States, any clim, or demand in favor of the United States against such company may, at the election of the United States, be a set- off and- pleaded as such, or may be made the subject of a separate action or actions in any court of competent jurisdiction. SEC. 3. All claims and demands for money due the United States from any such company, from the time they respectively become due, if payment be unreasonably withheld, shall bear interest at the rate of 6 per centum per annum. SEC. 4. That for the purpose of providing a sinking-fund to pay at maturity the bonds of the United States issued to railroad companies under "An act to aid in the construction: of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, the Secretary of the Interior, who shall take the number of constructed and accepted miles of said: railroad. in said State of Nevada and Territory of Utah, and multiply the same by the twenty sections per mile provided to be granted in said acts, and deduct the exceptions aforesaid, and the number of acres thus found shall: be certified by him to the Secretary of the Treasury, within three months from the passage of this act: Provided, That nothing in this act shall be deemed to include or affect the right of way, and other rights, and the necessary grounds for:statiolls, buildings, work-shops, depots, machine-shops, switches, side-tracks, turn-tables, and water-stations, granted. by the second: section of said act of July first, eighteen hundred and sixty-two, which grounds shall not exceed oue hundred and sixty acres. in any one place: And provided further, That this act: shall not be deemed to affect the right of said company to all necessary springs and water-courses, and the right of way thereto, for the use of said railroad, which are hereby granted and confirmed to said company by- this act. SEC. 2. That upon said conveyence and release being executed in due form, and delivered to the Secretary of the Treasury of) the United States, and: the amount being certified to him as aforesaid, he is hereby authorized, and directed to carry to the credit of a sinking-fund for the said Central Pacific Railroad Company the value or price of: the lands so, conveyed and released, to be computed -at the.price established for the even sections of Government lands within the limits of the grant to said company,. to wit, two dollars and a half an acre. SEC. 3. That the Secretary of the Treasury is also hereby authorized and directed.to carry-to the credit of said sinking-fund theam ount due,. or which may be due, the said' company for the carriage and, transportation of the mails, troops, munitions of war, supplies, and public stores for the Government under, the acts.aforesaid, up to: and including the thirty-first day of December, eighteen hundred and seventy-five, which, if not; amounting at said date to the sum of one million of dollars, shall be made up by the company to that sum. SEC. 4. That. the. said. company shall pay semi-annually, on the- first day of. April and October in each year, into the. Treasury of the IUnited States, such a sum, in lawful money or in any bonds or securities of the United.States Government: at, par, as shall with interests thereon, as hereinafter provided, be sufficient, when added to the other sums to the credit of said. sinking-fund, to pay off and extinguish the Government bonds advanced, as aforesaid, with six per centum interest-thereon, from their respective dates up to the maturity of the last bonds issued to said companies. Interest on all sums placed to the credit of said sinking-fiund shall be -credited. and added thereto semi-.annually at the rate of six per centum per annum. SEc. 5. That the payments so to be-made by said company shall be in lieu of -all payments or other requirements from. said company under said.act, and the amendments thereto, in relation to the re-imbursement to the Government of the bonds so issued. to said companies: Provided, however, That until said bonds and interest tre fully paid,: said company shall not in any manner, be released from its present liability to keep the said railroad and telegraph-line, constructed under the acts of Congress:aforesaid, in repair and use, and to:transmit dispatches over said. telegraph-line, and transport mails, troops, munitions of war, supplies, and public stores upon said railroad for the 38 PACIFIC RAILROADS. and to secure to the Government the use of the same ~for postal, military, and other purposes," approved July 1, 1862, or by virtue of any other act or acts in relation to the companies therein named or any other such companly or companies, said companies shall severally be required to pay into the Treasury of theiUnited States, and shall be indebted to the United States, in addition to the 5 per cent. of net earnings, as now required by law, semi-annually during each- year until said bonds shall be fully paid, commencing on the 30th of June, 1876, as follows:: The Central Pacific Railroad Company, on its own account, $332,408, and on account of the Western Pacific Railroad Company, $23,855; the Union Pacific Railroad Company, $355,261; the Kansas Pacific Government, whenever required to do so by any Department thereof, at fair and reasonable rates of compensation; the whole amount of which shall, upon the compliance by the company with the provisions hereof, be paidl by the Government to said company on the adjustment of the accounts therefor; and that the Government shall at all times have the preference in the use of the same fer all the purposes aforesaid; said rates not to exceed the amounts paid by private parties for the same kind of service: And provided also, That the mortgage-lien of the Government provided for by the act and amendments aforesaid shall not be deemed to be discharged until the bonds and interest are fully paid by said sinking-fund in the manner and according to the provisions of this act. SEC. 6. That all acts and parts of acts inconsistent with this act are hereby repealed H. R. 3138. Forty-fourth Congress, first session. In the House of Representatives, April 17, 1876.-Read twice, referred to the Committee on the Judiciary, and ordered to be printed. Mr. McCrary, by unanimous consent, introduced the following bill: A. BILL to create a sinking-fund for the liquidation of the Government bonds advanced to the Union Pacific PRailroad Company. Whereas the United States Government has, in pursuance of the act of Congress entitled "An act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the:same for postal, military, and other purposes," approved July first, eighteen hundred -and sixty-two, and the acts amending the same or supplemental thereto, advanced to the Union Pacific Railroad Company twenty-seven million two hundred and thirty-six thousand five hundred and twelve dollars of Government bonds, payable in thirty years from their respective dates, with interest; and whereas it is believed to be a wise and prudent measure to provide for the payment of the said bonds by arranging with said Union Pacific Railroad Company for the formation of a sinking-fund, which will provide for the commencement of immediate semi-annual payments by said corporation, will gradually refund to the Government the amounts advanced, and will extinguish the debt by the date of the maturity of the last bonds. issued to said company; and whereas, under said acts, said railroad has been constructed and accepted, and said company is entitled to twenty sections per mile of public land along the line of said road; and whereas said Union Pacific Railroad Company proposes to release to the United States, for the purposes of this act, the unsold lands to which it is entitled under the aforesaid -acts of Congress, westerly of the one hundred and fourth meridian of longitude, in the State of' Nebraska and in the Territories of Wyoming and Utah, which are not necessary for the purposes of the company: Therefore, Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in order to commence said sinking-fund, the said Union Pacific Railroad Company may, and it is hereby authorized to, convey and release to the United States all the lands on the main line of said railroad, and line westerly of thb one hundred and fourth meridian of longitude, in the State of Nebraska and in the Territories of Wyoming and Utah, which were granted by the act of Congress and the amendments aforesaid to the Union Pacific Railroad Company, saving and excepting any of said lands heretofore sold by said company, in lieu of which the proceeds of sale thereof received by said company over two dollars and a half an acre and the cost of surveying shall be paid into the United States Treasury on account of said sinkingfund. The number of acres of said land so to be conveyed and released to the United States, less the exceptions aforesaid, shall be ascertained by the Secretary of the Interior, who shall take the number of constructed and accepted miles of said railroad westerly of said one hundred and fourth meridian of longitude in said State of Nebraska and in the Territories of Wyoming and Utah, and multiply the same by the twenty sections per mile provided to be granted in said acts, and deduct the exceptions aforesaid, and the number of acres thus found shall be certified by him to the Secretary of the Treasury within three months of the passage of this act: Provided, That nothing in this act shall be deemed to include or affect the right of way and other rights, and the PACIFIC RAILROADS. 39 Railway Company, $87,327; the Central Branch Union Pacific Railroad Company, $22,297, and the Sioux City and Pacific Railroad Company, $20,723. SEC. 5. That for the purpose of providing a sinking-fund to pay at the maturity of said bonds the interest thereon, which has been or may from time to time be advanced and paid by the United States, and may not be re-imbursed from compensation for services as now required by law, and from 5 per centumn of net earnings as now required by law, the said several companies shall severally be required to pay into the Treasury of the United States, and shall be indebted to the United States, semi-annually during each year until said bonds shall be fully paid, commencing on the 30th of June, 1876, such sums of money as, with the 5 per centum of net earnings and one-half of the compensation for services rendered for the Government, shall make the sums to be so paid semi-annually, as follows: By the Central Pacific Railroad Company, on its own acnecessary grounds for stations, buildings, workshops, depots, machine-shops, switches, side-tracks, turn-tables, and water-stations, granted by the second section of said act of July first, eighteen hundred and sixty-two, which grounds shall not exceed one hundred and sixty acres in any one place, and not exceeding one full section at Cheyenne, Laramie, and Ogden: And psrovided furtherJ, That this act shall not be deemed to affect the right of said company to all necessary springs and water-courses, and the right of way thereto, for the use of said railroad, which are hereby granted and confirmed to said company by this act. SEC. 2. That upon said conveyance and release being executed in due form, and delivered to the Secretary of the Treasury of the United States, and the amount being certified to. him as aforesaid, he is hereby authorized and directed to carry to the credit of a sinking-fund for the said Union Pacific Railroad Company the value or price of the lands so conveyed and released, to be computed at the price established for the even sections of Government lands within the limits of the grant to said company, to wit, two dollars and a half an acre. SEC. 3. That the Secretary of the Treasury is also hereby authorized and directed tocarry to the credit of said sinking-fund of the amount due the said company for the carriage and transportation of the mails, troops, munitions of war, supplies, and public stores for the Government under the act aforesaid up to the thirty-first day of December, eighteen hundred and seventy-five, the sum of one million of dollars, payment of which has been withheld under the act of March third, eighteen hundred and seventythree, which, if not amounting at said date to the sum of one million of dollars, shall be made up by the company to that sum; any sum exceeding said one million of dollars to be forthwith paid to said company. SEC. 4. That the said company shall pay semi-annually, on the first day of April and October in each year, into the Treasury of the United States, sucha sum, either in lawful money or in any of the bonds and securities of the United States at par, as shall, when added to the other sums to the credit of said sinking-fund, and the interest thereon at six per centum credited semi-annually, be sufficient to pay off and extinguish the Government bonds advanced as aforesaid, with six per centum interest thereon from their respective dates up to the maturity of the last bonds issued to said ompany. SEC. 5. That the payments so to be made by said company shall be in lieu of all payments or other requirements from said company under said act and the amendments thereto in relation to the re-imbursement to the Government of the bonds so issued to said corporation: Provided, however, That until said bonds and interest are fully paid, said company shall not in any manner be released from its present liabilities to keep the said railroad and telegraph-line, constructed under the acts of Congress aforesaid, in repair and use, and to transmit dispatches over said telegraph-line, and transport mails, troops, munitions of war, supplies, and public stores upon said railroad for the Government, whenever required to do so by any department thereof, at fair and reasonable rates of compensation, the whole amount of which shall, upon the compliance of the company with the provisions hereof, be paid by the Government to said company, on the adjustment of the accounts therefor, and that the Government shall, at all times, have the preference in the use of the same for all the purposes aforesaid; said rates not to exceed the amounts paid by private parties for the same kind of service: And provided also, That the mortgage-lien of the Government provided for by the act and amendments aforesaid shall not be deemed to be discharged until the bonds and interest are fully paid by said sinking-fund in the manner and according to the provisions of this act. SEC. 6. That all acts and parts of cdts inconsistent with this act are hereby repealed. The foregoing bills, introduced at the request of the railroad companies, would seem to indicate that they or those who manage them have the ownership or control of the bonds secured by mortgage on the lands granted to the companies, and, if so, this may throw some light on the mode in which the roads have been constructed and managed. 40- PACIFIC RAILROADS. count, $598,334, and on account of the BWestern Pacific Railroad Company, $42,939; by the Union Pacific Railroad Company, $639,470; by the Kansas Pacific Railroad Company, $157,1;90; by the Central Branch Union Pacific Railroad Company, $40,138, aLde by the Sioux City and Pacific Railroad Company, $37,302. And the Secretary of the Treasury may, in addition, require said companies to pay semi-annually into the Treasury of the United States such further sums as he may prescribe and deem necessary for the purpose aforesaid, and said companies shall severally owe and be. indebtedi to the United States in such sums so prescribed. And any company may pay any sum required to be paid by this or the preceding section in bonds, Treasury notes, or other evidences of debt against the United States, to be allowed at par. SEC. 6. It shall be the duty of the Secretary of the Treasury to invest to the best advantage the money paid into the Treasury or collected in pursuance of this act. ou account of said sinking-funds in any bonds issued by the United States, and to re-invest the same from time to time, with all interest and profits, and hold the same for the purpose of said sinking-funds respectively, and at-the maturity of the bonds issued to said railroad companies to sell, dispose of, or otherwise apply said money and bonds, at not less than their par value, to the credit of said sinking-funds respectively, in paying and canceling said bonds issued to said companies and the interest thereon advanced by the United States not already re-imbursed. But nothing herein shall require said five per centum of net earnings or said one-half of the compensation for services renderedfor the Government to be invested as herein mentioned. SEC. 7. That if any such railroad company shall fail to pay any money or claim due or to become due the United States,. or payable in pursuance of this act, such company shall be liable to an action therefor in any court of competent jurisdiction, at the suit of the United States. And it shall be the duty of the Attorney-General to institute the. necessary suits and proceeding to collect said money and claims so due or payable, and otherwise obtain redress in respect of the same, and prosecute the same with. all convenient dispatch to a final determination. And all such suits and proceedinugs shall have precedence in the courts over other cases. SEC. 8. It shall beunlawful for any such railroad company, or director, officer, or agent thereof, to make or pay, or cause or authorize to be made or paid, any dividend from the earnings, profits, or resources of such company, so long as such company may for sixty days be in default in paying to the United States any nimoney due and owing by such company to the United States in pursuance of this or any act relating to such company or otherwise, the payment of which has been demanded of such company by the Secretary of the Treasury. Every person receiving such dividend shall be liable to refund the same to the United States, and every director, officer, or agent of such company, who shall: violate any provision of this section, shall be individually and personally liable to account and to pay to the United States the whole amount of such dividend. SEC. 9. That every such railroad company, and every person who, for the time being, is or may have been a director, officer, or agent thereof, and every other person, shall, on request of the head of any Executive Department of the Government, or of any person appointed for the purpose by such head of a Department, furnish, on oath or affirmation, any information and answer any and all questions and produce all records, books, documents, and papers pertaining to the property, business, or management and affairs of such company; and every court of the United States, and every judge or justice thereof, and each of the " commissioners of the circuit courts,, shall have power to issue process and enforce the attendance of all such officers,, agents, and persons, and compel them to answer all proper questions, and to compel the production of all, such records, books, documents, and papers at, such convenienttime and place as may be deemed proper. All-process shall be served and, all oaths and affirmations administered by such officer as any such court, justice, or judge may appoint. And the reasonable expenses and fees in the premises shall be certified and allowed by the head of the Department. SEC. 10. That whenever, in the opinion of the Secretary of the Treasury, the interests of the United. States may require that the corporate rights, privileges, and franchises of any such railroad company shall be adjudged to be forfeited, he shall certify that fact to the Attorney-General, who shall make due inquiry, and if, in his opinion, the circumstances render it proper, he shall institute in the proper court the necessary proceedings for that purpose, and to dispose of the effects and property of such company as law and equity may require.55 15 This neither creates nor declares any forfeiture. But when, on common-law principles, corporate franchises are forfeited, it directs the mode of ascertaining and declaring it when deemed necessary for the public interest. Thisis, as already shown, a remedy given by the act of 1862. It cannot be used to destroy any right of property. In House report No. 78, 3d session 42d Congress, it is said: " We think the facts we have stated would furnish ground for judgment of forfeiture of all the franchises of the corporation, (Union Pacific,) including the principal franchise'to be a corporation, on proper process. "According to the American decisions, judgment of forfeiture on quo warranto is not followed by an abso PACIFIC RAILROADS. 41 SEC. 11. That in addition to the mortgage created by said, act approved J.uly 1, 1862, and the acts. amendatory thereof, to secure the repayment to the United. States of the bonds and interest mentioned in said acts, the United States shall have a lien on the whole line of railroad and telegraph, with the rolling-stock, fixtures, lands, corporatefranchises, privileges, immunities, and property of every kind, of every railroad company named or referred to in any of said acts, and of every other such company, for the repayment of all such bonds and interest and of all money due, or to become due, from said companies. respectively to the United States in pursuance of this act or otherwise, subject, however, to all prior mortgages and liens heretofore lawfully created.65 And the lands granted or to be granted by the United States to any such company for the purpose of aiding in the construction of a railroad shall only be sold or conveyed with the approval. of the Secretary of the Treasury, and on conditions which will secure the application of the proceeds according to the priority of liens thereon, and no lands shall be sold which are necessary to maintain and operate said roads and the telegraph-lines along the same. SEC. 12. That the net earnings of the roads mentioned in the sixth section of "An act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes," approved. July 1, 1862, shall be deemed and taken to be such gross earnings, income, and profits of any railroad company as shall be left after paying the operating expenses of such road, and deducting from the remainder the interest on the bonds known as first-mortgage bonds, issued by virtue of section 10 of the act approved July 2, 1864, to amend the act approved July 1, 1862, aforesaid. SEC. 13. That the Secretary of the Treasury shall, from time to time, as occasion may require, ascertain and report to Congress what may be reasonable rates of compensation to said companies for transmitting dispatches and transporting mails, troops, munitions of war, supplies, and public stores, and shall also report such other information as he may deem essential to the public interests. He shall also ascertain and report whether any such company has received more bonds of the United States than said company was entitled to receive, and the amount thereof, if any. SEC. 14. That no company hereinbefore referred to shall make, issue, or sell any bond secured by any mortgage, lien, or pledge on any of the stock, income, lands, or property of any kind of such company, and no such company shall issue, mortgage, sell, or pledge any additional stock, or any certificate thereof, not already issued or paid for as required by law. Every officer or agent of any such company, or other person, who shall violate any provision of this section shall, on conviction thereof, be fined in any sum not more than ten thousand dollars, or imprisoned not exceeding one year, or both of said punishments may be inflicted. SEC. 15. That no director or officer of any company hereinbefore mentioned or referred to shall hereafter be interested, directly or indirectly, in any contract therewith, except for his lawful compensation as such officer. And every such person who shall violate the provisions of this section shall, on conviction thereof, be punished as provided in the last section of this act. SEC. 16. That any remedy herein provided shall not be deemed to deny, exclude, or impair any heretofore existing in favor of the United States. SEC. 17. That section 9 of "An act making appropriations for the support of the Army for the year ending June 30, 1872, and for other purposes," approved March 3, 1871, be, and is, repealed. There are appended to this report the laws relating to the Pacific railroads and other documents deemed material to a proper under. standing of the subject hereinbefore considered. This bill now proposed is intended to be just to the railroad companies and to allinterested in them. It is intended to invade no right of property or any privilege secured by law. It is designed to secure rights of the Government which Congress cannot neglect or fail to protect without lute forfeiture to the Government of all the property of a corporation, as was the earlier English practice but a court of equity in such case has jurisdiction to divide the assets among the creditors or stockholders." The report then states the objections to a forfeiture. It is a remedy certainly not desirable, and would not be resorted to except when all other modes of redress had failed. But the franchise is subject to the performance of corporate duties, and does not belong to stockholders, except on condition of performance; even when forfeited, all other rights of property are saved to them. Ange & Ames on Corporations, (10th ed.,) sec. 779a; Curran v. State of Arkansas, 15 Howard, 312; 2 Kent Com. 307u; Hightower v. Thornton, 8 Ga., 593; Bacon v. Robertson, 18 Howard, 480; Siem v. Robertson, 6Wall lace, 277; New Albany v. Burke, 11 Wallace, 96; Burke v. Smith, 16 Wallace, 390; Sawyer v. Hoog, 17 Wallace, 610. 56 The power to create this lien arises from the reserved right to alter the act of 1864, and from the general power of Congress, as shown in House Mis. Doc. No. 16, 3d session 41st Congress. 42 - PACIFIC RAILROADS. dereliction of duty. If the bill shall pass, it is believed it will save to the Government $150,000,000 or more, which otherwise will be forever lost. It will relieve the Government of all danger of being required to assume the mortgages to other parties on these roads. It may result in reducing the cost of Government freights and that of private parties by information which can be obtained under its provisions and in no other manner, and which will enable Congress to legislate on these subjects as justice may require. But few measures ever involved equal amounts of money and other interests to so great an extent. The foregoing report is submitted to be printed for the information and use of the Judiciary Committee, reserving the right to act thereon,as may be deemed proper. THE UNION PACIFIC RAILROAD.-ACTS OF CONGRESS RELATING THERETO, AND AMENDMENTS THEREOF; BY-LAWS OF THE COMPANY; AND THE SEVERAL MORTGAGES EXECUTED FOR THE SECURITY OF THE FIRSTMORTGAGE BONDS, LAND-GRANT BONDS, INCOME BONDS, AND BRIDGE BONDS. —CAREFULLY COMPILED FROM OFFICIAL COPIES, FOR THE UNION PACIFIC RAILROAD COMPANY. ACT OF 1862. AN ACT to aid in the construction of a rai'road and telegraph-line fro n the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes, approved July 1, 1862. Be it enacted by the Senate and House of Re)presentatives of the United States of Amlerica in Congress assembled, That Walter S. Burgess, William P. Blodgett, Benjamin H. Cheever, Charles Fosdick Fletcher, of Rhode Island; Augustus Brewster, Henry P. Haven, Cornelius S. Bushnell, Henry Hammond, of Connecticut; Isaac Sherman, Dean Richmond, Royal Phelps, William H. Ferry, Henry A. Paddock, Lewis J. Stancliff, Charles A. Secor, Samuel R. Campbell, Alfred E. Tilton, John Anderson, Azariah Boody, John S. Kennedy, H. Carver, Joseph Field, Benjamin F. Camp, Orville W. Childs, Alexander J. Bergen, Ben. Holliday, D. N. Barney, S. De Witt Bloodgood, William H. Grant, Thos. W. Olcott, Samuel B. Ruggles, James B. Wilson, of New York; Ephraim Marsh, Charles M. Harker, of New Jersey; John Edgar Thomson, Benjamin Haywood, Joseph H. Scranton, Joseph Harrison, George W. Cass, John H. Bryant, Daniel J. Morell, Thomas M. Howe, William F. Johnson, Robert Finney, John A. Green, E. R. Myre, Charles F. Wells, jr., of Pennsylvania; Noah L. Wilson, Amasa Stone, William H. Clement, S. S. L'Hommedieu, John Brough, William Dennison, Jacob Blickinsderfer, of Ohio; William M. McPherson, R. W. Wells, Willard P. Hall, Armstrong Beatty, John Corby, of Missouri; S. J. Hensley, Peter Donahue, C. P. Huntington, T. D. Judah, James Bailey, James T. Ryan, Charles Hosmer, Charles Marsh, D. O. Mills, Samuel Bell, Louis McLane, George W. Mowe, Charles McLaughlin, Timothy Dame, John R. Robinson, of California; John Atchison, and John D. Winters, of the Territory of Nevada; John D. Campbell, R. N. Rice, Charles A. Trowbridge and Ransom Gardner, Charles W. Penny, Charles T. Gorham, William McConnell, of Michigan; William F. Coolbaugh, Lucius H. Langworthy, Hugh T. Reid, Hoyt Sherman, Lyman Cook, Samuel R. Curtis, Lewis A. Thomas, Platt Smith, of Iowa; William B. Ogden, Charles G. Hammond, Henry Farnum, Amos C. Babcock, W. Seldon Gale, Nehemiah Bushnell, and Lorenzo Bull, of Illinois; William H. Swift, Samuel T. Dana, John Bertram, Franklin S. Stevens, Edward R. Tinker, of Massachusetts; Franklin Gorin, Laban J. Bradford and John T. Levis, of Kentucky; James Dunnlng, John M. Wood, Edwin Noyes, Joseph Eaton,. of Maine; Henry H. Baxter, George W. Collamer, Henry Keyes, Thomas H. Canfield, of Vermont; William S. Ladd, A. M. Berry, Benjamin F. Harding, of Oregon; William Bune, jr., John Catlin, Levi Sterling, John Thompson, Elihu L. Phillips, Walter D. McIndoe, T. B. Stoddard, E. H. Brodhead, A. H. Virgin, of Wisconsin; Charles Paine, Thomas A. Morris, David C. Brandham, Samuel Hanna, Jonas Votaw, Jesse L. Williams, Isaac C. Elston, of Indiana; Thomas Swann, Chauncey Brooks, Edward Wilkins, of Maryland; Francis R. E. Cornell, David Blakely, A. D. Seward, Henry A. Swift, Dwight Woodbury, John McKusick, John R. Jones, of Minnesota; Joseph A. Gilmore, Charles W. Woodman, of New Hampshire; W. H. Grimes, J. C. Stone, Chester Thomas, John Kerr, Werter R. Davis, Luther C. Challis, Josiah Miller, of Kansas; Gilbert C. Monell, and Augustus Kountz, T. M. Marquette, William H. Taylor, Alvin Saunders, of Nebraska; John Evans, of Colorado; together with five commissioners to be appointed by the Secretary of the Interior, and all persons who shall or may be associated with them, and their successors, are hereby created and erected into a body corporate and politic in deed and in law, by the name, style, an), title of " The Union Pacific Rail 44 PACIFIC RAILROADS. Nameandtitle. road Company;" and by that name shall have perpetual succession, and shall be able to sue and to be sued, plead and be impleaded, defend and be defended, in all courts of law and equity within the United States, and may make and have a common seal; and the said corporation is hereby authorized and empowered to lay out, locate, construct, furnish, maintain, and enjoy a continuous railroad and telegraph, with the appurtenances, from a point on the one hundredth meridian of longitude west from Greenwich, between the south. margin of the valley of Location, &c. the Republican River, and the north margin of the valley of the Platte River, in the Territory of Nebraska, to the. western boundary of Nevada. Territory, upon the route and terms hereinafter provided, and is hereby vested with all the powers, privileges, and immunities necessary to carT y Amount an d into effect the purposes of this act as herein setforth. The capital stock number of shares of said company shall consist of one hundred thousand shares of one of stock altered in section 1, act thousand dollars each, which shall be subscribed for and held in not 1864. more than two hundred shares by any one person, and shall be transferable in such manner as the by-laws of said corporation shall provide. The persons hereinbefore named, together with those to be appointed by the Secretary of the Interior, are hereby constituted and appointed commissioners,, and such body shall be called the board of commissionCommissioners, ers of the Union Pacific Railroad and Telegraph Company, and twenhow appointed ty-five shall constitute a quorum for the transaction of business. The and to hold meetaing. firstt meeting of said board shall be held at Chicago, at such time as the commissioners from Illinois herein named shall appoint, not more than three nor less than one month after the passage. of this act, notice of which shall be given by them to the other commissioners by depositing a call thereof in the post-office at Chicago, postpaid, to their address, at least forty days before said meeting, and also by publishing said notice in one daily newspa-per in each of the cities of Chicago and Saint Louis. Said board shall organize by the choice from its number of a Treasurer to president, secretary, and treasurer, and they shall require from said give bonds, &c. treasurer such bonds as may be deemed proper, and may from time to time increase the amount thereof as they may deem proper. It shall be B oo ks to be the duty of said board of commissioners to open books, or cause books kept open. See to be opened, at such times and in such principal cities of the United section 2,1864. States as they or a quorum of them shall determine, to receive subscriptions to the capital stock of said corporation, and a cash payment of ten. per centum on all subscriptions, and to receipt therefor. So soon as two thousand shares shall be in good faith subscribed for, and ten dollars per share actually paid into the treasury of the company, the said presi-. dent and secretary of said board of commissioners shall appoint a Commissioners time and place for the first meeting of the subscribers to the stock of stoc kholderst. said company, and shall give notice thereof in at least one newspaper in each State in which subscription-books. have been opened, at least thirty days previous to the. day of meeting, and such subscribers as shall attend the meeting so called, either in person or by proxy, shall To elect direct- then and there elect by ballot not less than thirteen directors for ors. See section said corporation; and in such election each share of said capital shall 13, actof1864. entitle the owner thereof to one vote. The president and-secretary of the board of commissioners shall act as inspectors of said election, and shall certify under their hands the names- of the directors Booksandprop- elected at said meeting; and the said commissioners, treasurer and erty to be deliv- secretary shall then- deliver over to said directors all the properties, erec to directors. subscription-books, and other books in their possession, and thereupon the duties of said commissioners and the officers previously appointed by them shall cease and determine forever, and thereafter the stockholders shall constitute said body politic and corporate. At the time of the first and each triennial election of directors, by the stockTwo directors holders, two additional directors shall be appointed by the President of to be appointed the United States, who shall act with the bod.y of directors, and to be by the President denominated directors on the part of the Government; any vacancy Sof the niatef happening in the Government directors at any time may be filled by the 1864altered tofive, President of the United States. The directors to be appointed by the section 13, 1864. President shall not be stockholders in the Union Pacific Railroad Company. The directors so chosen shall, as soon as may be after their election, elect from their own number a president and vice-president,.and shall also elect a treasurer and secretary. No person shall be a director Amended byin said company unless he shall be a bona-fide owner of at least five section 1, 1864. shares of stock in said company, except the two directors to be appointed by the President, as aforesaid. Said company, at any regular meeting * PACIFIC RAILROADS. 45 of the stockholders called for that purpose, shall have power to make by-laws, rules, and regulations, as they shall deem needful and proper, Company to touching the disposition of the stock, property, estate, and effects of the make by.-laws. company, not inconsistent herewith, the transfer of shares, the term of office, duties, and conduct of their officers and servants, and all matters whatsoever which may appertain to the concerns of said company; and the said board of directors shall have power to appoint such engineers, Directors to apa.gents, and subordinates as may from time to time be necessary to carry point agents, &c. into effect the object of this act, and to do all acts and things touching thelocation and construction of said road and telegraph. Said directors Directors to remay require payment of subscriptions to the capital stock after due no- quire payment of tice, at such times and in such proportions as they shall deem necessary sub u criptions. Section' 2, act of to complete the railroad and telegraph within the time in this act pre- 1864. scribed. Said president, vice-president, and directors shall hold their Officers to hold office for three years, and until their successors are duly elected and for three years, qualified, or for such less time as the by-laws of the corporation may alteredbysection prescribe; and a majority -of said directors shall constitute a quorum for 13,1864. the transaction of business. The secretary and treasurer shall give such bonds, with such security, as the said board shall from time to time.require, and shall hold their offices at the will and pleasure of the directors. Annual meetings of the stockholders of the said corporation, for the choice of officers (when they are to be chosen) and for the transaction of annual business, shall be holden at such time and place and upon such notice as may be prescribed in the by-laws. SEC. 2. And be it further enacted, That the right of way through the Right of way public lands be, and the same is hereby, granted to said company for granted. the construction of said railroad and telegraph-line; and the right, power, and authority is hereby given to said company to take from the See section 3, public lands adjacent to the line of said road, earth, stone, timber, and 1864. other materials for the construction thereof; said right of way is granted to said railroad to the extent of two hundred feet in width on each side *of said railroad where it may pass over the public lands, including all necessary grounds for stations, buildings, workshops, and depots, machine-shops, switches, side-tracks, turn-tables, and water-stations. The United States United States shall extinguish, as rapidly as may be, the Indian titles to to extinguish In-all lands falling under the operation of this act, and required for the dian titles. Sec. *said right of way and grants hereinafter made. tion 18, 1864.. SEC. 3. And be it further enacted, That there be, and is hereby, granted Land grants — to the said company, for the purpose of aiding in the construction oftions. -said railroad and telegraph-line, and to secure the safe and speedy transportation of the mails, troops, munitions of war, and public stores thereon, every alternate section of public land, designated by odd numbers, to the amount of five alternate sections per mile on each side of Changed to ten said railroad, on the line thereof, and within the limits of ten miles on by section 4,1864. each side of said road, not sold, reserved, or otherwise disposed of by C h an g e d to the United States and to which a pre-emption or homestead claim may 4w864. Setion not have attached, at the time the line of said road is definitelyvfixed:' * In the case of Samuel MI. Boyd vs. The Burlington and Missouri River Railroad in Nebraska, the Secretary of the Interior held (April 28, 1871,) that if a homestead claim had attached to a part of an odd section within the limits of the grant, -at the time the line was definitely fixed, and the claim was sub-.sequently abandoned, the land would revert to the Government. and would not pass to the railroad company. The same ruling was applied to cases of pre-emptions. The rule established in this case was.modified by a circular of instructions, of November 7, 1871, directed to registers and receivers of district land-offices, as follows, viz: "By the terms of the acts. of Congress granting lands to aid in the construction of railroads, there are'exempted from the grants lands to which the right of pre-emption had attached at the time when the grant may have become effective, and the -Department has ruled that the lands to which such pre-empltion claim or right has, attached, and such pre-emption subsequently abandoned, do not inure to the railroad grant, but revert to the United States. "A pre-emption filing of record on your books constitutes, of course, prima-facie evidence of a preemption claim; but it has been represented that in many cases these filings have been made without the preliminary settlement required by the pre-emption laws; that such filings do not in such cases constitute a pre-emption claim or right; that such right can only exist where the party has a -legal.status, which he does not have except by actual settlement prior to filing; and that such illegal filings cannot defeat the railroad claim where.the companies can establish the illegality of the filing, or, in *other words, that fraud in the inception of the pre-emption claim renders it absolutely null and void, -and that it does not therefore affect the right of the railroad. "I have carefully considered these propositions, and have reached the conclusion that a filing made with allegation of previous settlement, but where it can be clearly shown that such settlement was not in fact made, is a filing in derogation of law, and is fraudulent; consequently is not a pre-emption claim -or right recognized by the law, and does not withdraw the land from the right of the road. "Therefore, where application may be made to enter any such lands, you will order hearings, giving -due notice of the time of hearing to the original pre-emptor, (where the claim is unexpired,) the applicant and the railroad company, when the company will have the opportunity to prove the fraudulent character of the claim or filing. 46 PACIFIC RAILROADS. Minerals and Provided, That all mineral lands shall be excepted from the operation timber. Section of this act; but wherethe same shall contain timber, the timber thereon is hereby granted to said company. And all such lands, so granted by this section, which shall not -be sold or disposed of by said company within three years after the entire road shall have been completed, shall be subject to settlement and pre-emption, like other lands, at a price not exceeding one dollar and twenty-five cents per acre, to be paid to said company. On completion SEC. 4. And be itfurther enacted, That whenever said company shall of forty miles have completed forty consecutive miles of any portion of said. railroad [ch an g e d t o and telegraph-line, ready for the service contemplated by this act, and twenty by section 6, 1864] U n i t e d supplied with all necessary drains, culve rts, viaducts, crossings, sidings, States commis- bridges, turnouts, watering-places, depots, equipments, furniture, and sioners to e x-all other appurtenances of a first-class railroad, the rails and all the amine. other irons used in the construction and equipment of said road to be American manufacture of the best quality, the President of the United States shall appoint three commissioners to examine the same and report to him in relation thereto; and if it shall appear to him that forty consecutive miles of said railroad and telegraph-line have been completed and equipped in all respects as required by this act, then, upon And patents of certificate of said commissioners to that effect, patents shall issue conland to issue. veying the right and title to said lands to said company, on each side of the road as far as the same is completed, to the amount aforesaid; and patents shall in like manner issue as each forty miles of said rail-.road and telegraph-line are completed, upon certificate of said commisvacancies in sioners. Any vacancies occurring in said board of commissioners by See section 8, act death, resignation, or otherwise, shall be filled by the President of the of 1864. United States: Provided, however, That no such commissioners shall be appointed by the President of the United States unless there shall' be presented to him a statement, verified on oath by the president of said company, that such forty miles have been completed, in the manner required by this act, and setting forth with certainty the points where such forty miles begin and where the same end; which oath shall be taken before a judge of a court of record. Go v e r n ment SEC. 5. And be itfurther enacted, That for the purposes herein mentioned, bonds. See see- the Secretary of the Treasury shall, upon the certificate in writing of said also section 164; commissioners of the completion and equipment of forty consecutive N o w twenty miles of said railroad and telegraph, in accordance with the provisions miles. Section lO, of this act, issue to said company bonds of the Unitel States of one 1864. thousand dollars each, payable in thirty years after date, bearing six per See section 11 centum per annum interest, (said interest payable semi-annually,) of this act for which interest may be paid in United States Treasury notes or $32,000and$48,000 any other money or currency which the United States have or shall per mile. declare lawful money and a legal tender, to the amount of sixteen of said bonds per mile for such section of forty miles; and to secure the Lien of United repayment to the United States, as hereinafter provided, of the amount States b o n d s of said bonds so issued and delivered to said company, together with made subordinate. all interest thereon which shall have been paid by the United States, See section 10, act of 1864. the issue of said bonds. and delivery to the company shall ipso facto constitute a first mortgage on the whole line of the railroad and telegraph, together with' the rolling-stock, fixtures, and property of every kind and description, and in consideration of which said bonds may be issued; and on the refusal or failure of the said company to redeem said See section 10, bonds, or any part of them, when required so to do by the Secretary of act of 1864. the Treasury, in accordance with the provisions of this act, the said " You willalso, in all cases where the railroad company seeks to select such lands, require them to prove the fraudulent character of all pre-emption claims or filings that may appear by your records to have been in legal existence at the date the right of the road would have otherwise attached. "The proof in all cases must be confined to the action of the pre-emptor prior to the filing, as, if the filing or claim was legal in its inception, it withdraws the land from the grant. "There are other points on which a filing may be shown to have had illegal inception, as, for instance, where the party was a foreigner at the time, or had previously enjoyed the right of pre-emption, and you will admit the consideration of these points where they may be alleged against the pre-emption claim." Since the passage of the amendatory homestead act of March 21. 1864, many homestead claims are based upon affidavits made before clerks of the courts for the counties in which the applicants reside, instead of the officers of the local lAnd-office. In such cases it was held by the Commissioner of the General Land-Office, (Feb. 29, 1872,) in the case of Amos Tuck vs. The Atlantic and Pacific Railroad Company, that it must not only appear that the applicant was " prevented by reason of distance, bodily infirmity, or other good cause, from personal attendance at the district land-office," to make such affidavit, bhut it must also be shown that the making of such affidavit was preceded by bona-fide acts of settlement and improvement; otherwise the claims are held to be fraudulent and void. PACIFIC RAILROADS. 47 road, with all the rights, functions, immunities, and appurtenances, thereunto belonging, and also all lands granted to the said company by the United States, which, at the time of said default, shall remain in the ownership of the said company, may be taken possession of by the Secretary of the Treasury, for the use and benefit of the United States; Modified, see provided, this section shall not apply to that part of any road now con- section 5, act of structed. 1864. SEC. 6. And be itfurther enacted, That the grants aforesaid are made upon Bonds, w h e n condition that said company shall pay said bonds at maturity, and shall and how paid. keep said railroad and telegraph line in repair and use, and shall at all times transmit dispatches over said telegraph line, and transport mails, troops, and munitions of war, supplies, and public stores upon said railroad for the Government, whenever required to do so by any Department thereof, and that the Government shall at all times have the preference in the use of the same for all the purposes aforesaid, (at fair and reasonable rates of compensation, not to exceed the amounts paid by private parties for the same kind of service;) and all compensation for services rendered for the Government shall be applied to the payment of said bonds and interest until the whole amount is fully paid.' Said com- Go v e r nment pany may also pay the United States, wholly or in part, in the same or transportati o nother bonds, treasury notes, or other evidences of debt against the half to be paid in United States, to be allowed at par; and after said road is completed, cash. See section until said bonds and interest are paid, at least five per centum of the 5, act of 1864. net earnings of said road shall also be annually applied to the payment thereof. SEC. 7. And be it fuerther enacted, That said company shall file their Assent of comassent to this act, under the seal of said company, in the Department of pany to be filed, the Interior, within one year after the passage of this act, and shall &c. complete said railroad and telegraph from the point of beginning, as herein provided, to.the western boundary of Nevada Territory, before the first day of July, one thousand eight hundred and seventy-four: Provided, That within two years after the passage of this act said company shall Time of comdesignate the general route of said road, as near as may be, and shall file pletion extended. a map of the same in the Department of the Interior, whereupon the See section 4, Secretary of the Interior shall cause the lands within fifteen miles of act 1864. Map, said designated route or routes to be withdrawn from pre-emption, &c., designating private entry, and sale; and when any portion of said route shall be route to be fled, finally located, the Secretary of the Interior shall cause the said lands hereinbefore granted to be surveyed and set off as fast as may be necessary for the purposes herein named: Provided, That in fixing the point nLands, deig. of connection of the main trunk with the eastern connections it shall be fixed at the most practicable point for the construction of the - Iowa and Missouri branches, as hereinafter provided. SEC. 8. And be it further enacted, That the line of qaid railroad and tel- F r o m 100th.egraph shall commence at a point on the one hundredth meridian of meridian to Nelongitude west from Greenwich, between the south margin of the valley vada. of the Republican River and the north margin of the valley of the Platte River, in the Territory of Nebraska, at a point to be fixed by the President of the United States, after actual surveys; thence running westerly See section 10 upon the most direct, central, and practicable route, through the Terri- of this act. tories of the United States,. to the western boundary of the Territory of Nevada, there to meet and connect with the line of the Central Pacific Railroad Company of California. SEC. 9. And be it further enacted, That the Le{tvenworth, Pawnee, and Kansas c o m - Western RailroadCompany of Kansas are hereby authorized to construct Pany toconstruct a railroad and telegraph, line from the Missouri River, at the mouth of the Kansas River, on the south side thereof, so as to connect with the Pacific Railroad of Missouri, to the aforesaid point on the one hundredth meridian of longitude west from Greenwich, as herein provided, upon *Notwithstanding the amendment to this provision by sec. 5, act of 1864, the Secretary of the Treasury notified the companies that he would apply all their earnings on Government transportation to the payment of the interest accruing on the bonds issued by the Government to aid in the construction of their several roads. Thereupon Congress enacted the following section in the act of March 3, 1871, making appropriations for the support of the Army: " SEc. 9. That, in accordance with the fifth section of the act of July two, eighteen hundred and sixty-four, entitled'An act to amend an act entitled "'An act to aid in the construction of a railroad and telegraph line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes," approved July first, eighteen hundred and sixty-two,' the Secretary of the Treasury is hereby directed to pay over in money to the Pacific Railroad companies mentioned in said act, and performing services for the United States, one-half of the compensation at the rate provided by law for such services, heretofore or hereafter rendered: Provided, That this section shall not be construed to affect the legal rights of the Government or the obligations of the companies, except as herein specifically provided." 48 PACIFIC RAILROADS. the same terms and conditions in all respects as are provided in this act for the construction of the railroad and telegraph-line first mentioned, and to meet and connect with the same at the meridian of longitude aforesaid; and in case the general route or line of road from the Missouri River to the Rocky Mountains should be so located as to require a departure northwardly from the proposed line of said Kansas Railroad before it reaches the meridian of longitude aforesaid, the location of said Kansas road shall be made so as to conform thereto; and said railroad through Kansas shall be so located between the mouth of the Kansas River, as aforesaid, and the aforesaid point on the one hundredth meridian of longitude, that the several railroads from Missouri and Iowa, herein authorized to connect with the same, can make connection within the limits prescribed in this act, provided the same can be done without deviating from the general direction of the whole line to the Pacific coast. The route in Kansas west of the meridian of Fort Riley to the aforesaid point on the one hundredth meridian of longitude to be subject to the approval of the President of the United States, and to be determined by him on actual survey. And the said Kansas company may proceed to build said railroad to the aforesaid point on the Central Pacific one hundredth meridian of longitude west from Greenwich, in the TerRailroad C 0 m- ritory of Nebraska. The Central Pacific Railroad Company of California, panya, of Califorid to a corporation existing under the laws of the State of California, are constructroad on hereby authorized to construct a railroad and telegraph-line from the the same terms Pacific coast, at or near San Francisco, or the navigable waters of the and conditions. Sacramento River, to the eastern boundary of California, upon the same terms and conditions, in all respects, as are contained in this act for the construction of said railroad and telegraph-line first mentioned, and to meet and connect with the first-mentioned railroad and telegraph-line on the eastern boundary of California. Each of said companies shall file their acceptance of the conditions of thisact in the Department of ithe Interior within six months after the passage of this act. Time of doing SEC. 10. and be it further enacted, That the said company chartered by Work, &c. the State of Kansas shall complete one hundred miles of their said road, commencing at the mouth of the Kansas River, as aforesaid, within two years after filing their assent to the conditions of this act, as herein provided, and one hundred miles per year thereafter until the whole is comnCh an g e d to pleted; and the said Central Pacific Railroad Company of California t w e n t y - f v e shall complete fifty miles of their said road within two years after filing miles. See sec- their assent to the provisions of this act, as hereia provided, and fifty tion 5, act 1864. miles per year thereafter until the whole is completed; and after comCompanies may pleting their roads, respectively, said companies, or either -of them, may unite in building unite upon equal terms with the first-named company in constructing on equal terms. so much of said railroad and telegraph-line and branch railroads and Section 15, 1864; also section 16 of telegraph-lines in this act hereinafter mentioned, through the Territothis act. ries from the State of California to the Missouri River, as shall then remain to be constructed, on the same terms and conditions as provided in this act in relation to the said Union Pacific Railroad Company. And the Hannibal and Saint Joseph Railroad, the Pacific Railroad Company of Missouri, and the first-named company, or either of them, on filing their assent to this act as aforesaid, may unite upon equal terms under this act with the said Kansas company in constructing said railroad and telegraph to said meridian of longitude, with the consent of the said State of Kansas; and in case said first-named company shall complete their line to the eastern boundary of California before it is completed across said State by the Central Pacific Railroad Company of California, said first-named company is hereby authorized to continue in constructing the same through California, with the consent of said State, upon the terms mentioned in this act, until said roads shall meet and connect, and the whole line of said railroad and telegraph is comCentral Pacific pleted; and the Central Pacific Railroad Company of California, after Railroad C o m- completing its road across said State, is authorized to continue the continue, &c tomeet struction of said railroad and telegraph through the Territories of the other road.. United States to the Missouri River, including the branch roads specified in this act, upon the routes hereinbefore and hereinafter indicated, Authority con- on the terms and conditions provided in this act in relation to the said firmed. See sec- Union Pacific Railroad Company, until said roads shall meet and contion 16, act of nect, and the whole line of said railroad and branches and telegraph is 1864, last clause;;completed. also section 2,.1866. PACIFIC RAILROADS. 49 SEC. 11. AInd be it.further enacted, That for three hundred miles of said Subsidy-bonds; road most mountainous and difficult of construction, to wit, one hun- treble over the Rocky and Sierra dred and fifty miles westwardly from the eastern base of the Rocky Nevada MountMountains, and one hundred and fifty miles eastwardly from the west- ains. ern base of the Sierra Nevada Mountains, said point to be fixed by the President of the United States, the bonds to be issued to aid in the construction thereof shall be treble the number per mile hereinbefore provided, and the same shall be issued, and the lands herein granted be set apart, upon the construction of every twenty miles thereof, upon the certificate of the commissioners as aforesaid that twenty consecutive miles of the same are completed; and between the sections last named Subsidy-bonds; of one hundred and fifty miles each, the bonds to be issued to aid in the double between construction thereof shall be double the number per mile first men- mountains. tioned, and the samle shall be issued, and the lands herein granted be set apart,.upon the construction of every twenty miles thereof upon the certificate of the commissioners as aforesaid that twenty consecutive miles of the same are completed: Provided, That no more than fifty thousand of said bonds shall be issued under this act to aid in constructing the main line of said railroad and telegraph. SEC. 1PI. And be it further enacted, That whenever the route of said rail- Location at road shall cross the boundary of any State or Territory, or said merid- State - lines andl ian of longitude, the two companies meeting or uniting there shall agree upon its location at that point, with reference to the most direct and practicable through route, and:in case of difference between them as to said location the President of the United States shall determine the said location; the companies named in each State and Territory to locate the road across the same between the points so agreed upon, except as herein provided. The track upon the entire line of railroad and branches Track to be of shall be of uniform width, to be determined by the President of the unifolm width United States, so that when completed, cars can be run fromn the Missouri River to the Pacific coast; the grades and curves shall not exceed the maximum grades and curves of the Baltimore and Ohio Railroad; the whole line of said railroad and branches and telegraph shall be operated and used for all purposes of communication, travel, and transportation, To be used as so far as the public and Government are concerned, as one connected continuous line, continuous line; and the companies herein named in Missouri, Kansas, &C. and California, filing their assent to the provisions of this act, shall receive and transport all iron, rails, chairs, spikes, ties, timber, and all materials required for constructing and furnishing said first-mentioned line between the aforesaid point on the one hundredth meridian of longitude and western boundary of Nevada Territory, whenever. the same is required by said first-named conlpany, at cost, over that portion of the roads of said companies constructed under the provisions of this act. SEC. 13. And be itfurlther enacted, That the Hannibal and Saint Joseph Hannibal and Railroad Company of Missouri may extend its roads from Saint Joseph SaintJoseph road via Atchison, to connect and unite with the road through Kansas, upon may be extended, filing its assent to the provisions of this act, upon the same terms and &c. conditions in all respects, for one hundred miles in length next to the Missouri River, as are provided in this act for the construction of the railroad and telegraph-line first mentioned, and may for this' purpose use any railroad charter which has been or may be granted by the legislature of Kansas: Psrov'ided, That if actual survey shallrender it desirable, the said company may construct their road, with the consent of the Kansas legislature, on the most direct and practicable route west from Saint Joseph, Missouri, so as to connect and unite with the road leading from the western boundary of Iowa at any point east of the one hundredth meridian of west longitude, or with the main trunk road at said point; but in no event shall lands or bonds be given to said company, as herein directed, to aid in the construction of their said road for a greater distance than one hundred miles. And the Leavenworth, Pawnee and Western Railroad Company of Kansas may constrict their road from Leavenworth to unite with the road through Kansas. S1fc. 14. And be it further enacted, That the said Union Pacific Railroad' Iowaroad, from Company is hereby authorized and required to construct a single line western boundary of railroad and telegraph from a point on the western boundary of the of Iowa. The gauge was subsequently fixed by the following act of Congress: Be it enacted by the Senate and House of Representatives of the IUnited States of America in Congress assembled, That the gauge of the Pacific Railroad and its branches throughout their whole extent, from the Pacific coast to the Missouri River, shall be, and hereby is, established at four feet eight and one half inches. Approved, March 3, 1863. H. Rep. 440 —-4 50 PACIFIC RAILROADS. State of Iowa, to be fixed by the President of the United States,* upon the most direct and practicable route, to be subject to his approval so as to form a connection with the lines of said company at some point on the one hundredth meridian of longitude aforesaid, from the point of commencement on the western boundary of the State of Iowa, upon the same terms and conditions, in all respects, as are contained in this act for the construction of the said railroad and telegraph first mentioned; and the said Union Pacific Railroad Company shall complete one hundred miles of the road and telegraph in this section provided for in two years after filing their assent to the conditions of this act, Ais by the terms of this act required, and at the rate of one hundred miles per year thereafter, until the whole is completed: Provided, That a failure upon the part of said company to make said connection in the time aforesaid, and to perform the obligations imposed on said company by this section, and to operate said road in the same manner as the main line shall be operated, shall forfeit to the Government of the United States all the rights, privileges, and franchises granted to and conferred upon said company by this act. And whenever there shall be a line of railroad completed through Minnesota or Iowa to Sioux City, then the Pacific Railroad * The action of the President is disclosed by the following message and documents communicated by him to the Senate of the United States: To the Senate of the United States: In compliance with a resolution of the Senate of the 1st instant, respecting the points of commencement of the Union Pacific Railroad on the one hundredth degree of west longitude, and of the branch road from the western boundary of Iowa to the said one hundredth degree of longitude, I transmit the accompanying report from the Secretary of the Interior, containing the information called for. I deem it proper to add, that on the 17th day of November last, an Executive order was made upon this subject and delivered to the vice-president of the Union Pacific Railroad Company, which fixed the point on the western boundary of the State of Iowa, from which the company should construct their branch road to the one hundredth degree of west longitude, and declared it to be within the limits of the township, in Iowa. opposite the town of Omaha, in Nebraska. Since then the company has represented to me that, upon actual surveys made, it- has determined upon the precise point of departure of their branch road from the Missouri River, and located the same as described in the accompanying report of the Secretary of the Interior, which point is within the limits designated in the order of November last; and inasmuch as that order is not of record in any of the Executive Departments, and the company having desired a more definite one, I have made the order, of which a copy is herewith, and caused the same to be filed in the Department of the Interior. ABRAHAM LINCOLN. EXECUTIVE MANSION, March 9, 1864. DEPARTMENT OF THE INTERIOR, Washington, March 8, 1864. SIR: I have the honor to return herewith the Senate resolution of the 1st instant, which you referred to me for report, in the following words, viz: "Resolved, That the President of the United States is hereby requested, if not inconsistent with the public interest, to inform the Senate whether he has, as authorized by the 8th section of the act incorporating the Union Pacific Railroad Company, fixed the point of commencement of said road on the one hundredth degree of west longitude; and if so, to set forth a description of said point, and to furnish like information touching the point of commencement on the.western boundary of Iowa of the branch road from that point to the said one hundredth degree' of longitude, authorized by the 14tb section of said act." In obedience to your direction, I have to state that the point of commencement of said road on the one hundredth degree of west longitude has not yet been fixed. The point fixed for the commencement, on the western'boundary of Iowa, of the branch road, thence to the said one hundredth degree of west longitude, authorized by the 14th section of the act, was fixed by an Executive order of the 7th instant, a copy of which is herewith submitted, and is therein described as "east of, and opposite to, the east line of section 10, in township 15 north, of range 13 east, of the sixth principal meridian, in the Territory of Nebraska." I have the honor to be, with great respect, your obedient servant, J. P. USHER, Secretary of the Interior. The PRESIDENT OF THE UNITED STATES. In pursuance of the provisions of section 14 of the act of Congress entitled " An act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes," approved July 1, 1862, authorizing and directing the President of the United States to fix the point on the western boundary of the State of Iowa, from which the Union Pacific Railroad Company is by said section authorized and required to construct a single line of railroad and telegraph upon the most direct and practicable route, subject to the approval of the President of the United States, so as to form a connection with the lines of said company at some point on the one-hundredth meridian of longitude in said section named, I, Abraham Lincoln, President of the United States, do, upon the application of the said company, designate and establish such first above-named point on the western boundary of the State of Iowa, east of, and opposite to, the east line of section 10, in township 15 north, of range 13 east, of the sixth principal meridian, in the Territory of Nebraska. Done at the city. of Washington, this seventh day of March, in the year of our Lord one thousand eight hundred and sixty-four. ABRAHAM LINCOLN. PACIFIC RAILROADS. 51 Company is hereby authorized and required to construct a railroad and telegraph from said Sioux City upon the most direct and practicable Union Pacific route to a point on, and so as to connect with, the branch-railroad and Railroad Compatelegraph in this section hereinbefore mentioned, or with the said Union ny required to Pacific Railroad, said point of junction to be fixed by the President of cnstruct Sioux City Road. See the United States, not further west than the one hundredth meridian s e c. 16, act of of longitude aforesaid, and on the same terms and conditions as pro- 1864. vided in this act for the construction of the Union Pacific Railroad as aforesaid, and to complete the same at the rate of one hundred miles per year, and should said company fail to comply with the requirements of this act in relation to the said Sioux City railroad and telegraph, the said company shall suffer the same forfeitures prescribed in relation to the Iowa branch railroad and telegraph hereinbefore mentioned. SEC. 15. And be it further enacted, That any other railroad company Other cornpa now incorporated, or hereafter to be incorporated, shall have the right &c. to connect their road with the road and branches provided for by this act, at such places and upon such just and equitable terms as the President of the United States may prescribe. Wherever the word company Word company is used in this act, it shall be construed to embrace the words their as- explained. sociates, successors and assigns, the same as if the words had been properly added thereto. SEC. 16. And be itfurther enacted, That at any time after the passage Companies auof this act all of the railroad companies named herein, and assenting thorized to consolidate. See see. hereto, or any two or more of them, are authorized to form themselves 16, act of 1864. into one consolidated company; notice of such consolidati6n, in writing, Also, sec. 10 of shall be filed in the Departmept of the Interior, and such consolidated this act. company shall thereafter proceed to construct said railroad and branches and telegraph-line, upon the terms and conditions provided in this act. SEc. 17. And be it further enacted, That in case said company or comr- Congress may panies shall fail to comply with the terms and conditions of this act, by omOPltion seedf not completing said road and telegraph and branches within a reasona- road. ble time, or by not keeping the same in repair and use, but shall permit the same for an unreasonable time to remain unfinished or out of riepair and unfit for use, Congress may pass any act to insure the speedy completion of said road and branches, or put the same in repair and use, and may direct the income of said railroad and telegraph-line to be thereafter devoted to the use of the United States, to repay all such expenditures caused by the default and neglect of such company or companies: Provided, That if said roads are not completed, so as to form a continuous line of railroad, ready for use, from the Missouri River to the navigable waters of the Sacramento River, in California, by the first Main line to be thfinished in 1876. day of July, eighteen hundred and seventy-six, the whole of said rail- finishede se in 18d. roads before mentioned, and to be constructed under the provisions of act of 1864. this act, together with all their furniture, fixtures, rolling-stock, machine-shops, lands, tenements, and hereditaments, and property of every kind and character, shall be forfeited to and be taken possession of by the United States: Provided, That of the bonds of the United States in this act provided to be delivered for any and all parts of the roads to be constructed east of the one hundredth meridian of west longitude from Greenwich, and for any part of the road west of the west foot of the Sierra Nevada Mountains, there shall be reserved of each part and in- Repealed. See stallment twenty-five per centurn, to be and remain in the United States sec. 7, act 1864. Treasury, undelivered, until said road and all parts thereof provided for in this act are entirely completed; and of all the bonds provided to be delivered for the said road, between the two points aforesaid, there shall be reserved out of each installment fifteen per centumn, to be and remain in the Treasury until the whole of the road provided for in this act is fully completed; and if the said road or any part thereof shall fail of completion at the time limited therefor in this act, then and in that case the said part of said bonds so reserved shall be forfeited to the United States. SEC. 18. zAnd be it further enacted, That whenever it appears that the Under certain net earnings of the entire road and telegraph, including the amount al- c i r c u m stances lowed for services rendered for the United States, after deducting all Congress m a y expenditures-including repairs and the furnishing, running, and man- fare. aging of said road-shall exceed ten per centum upon its cost, (exclusive of the five per centum to be paid to the United States,) Congress may reduce the rates of fare thereon, if unreasonable in amount, and may fix and establish the same by law. And the better to accomplish 52 PACIFIC RAILROADS. the object of this act-namely, to promote the public interest and welfare by the construction of said railroad and telegraph-line and keeping the same in working order, and to secure to the Government at all times (but particularly in time of war) the use and benefits of the same for postal, military, and other purposes-Congress may at any time-having due regard for the rights of said companies named herein-add to, alter, amend, or repeal this act. M a y arrange SEC. 19. And be itfurther enacted, That the several railroad'companies with telegraph herein named are authorized to enter into an arrangement with the Paeopines now cific Telegraph Company, the Overland Telegraph Company, and the California State Telegraph Company, so that the present line of telegraph between the Missouri River and San Francisco may be moved upon or along the line of said railroad and branches as fast as said roads See sec. 15, act and branches are built; and if said arrangement be entered into, and of 1864. the transfer of said.telegraph-line be-made in accordance therewith to the line of said railroad and branches, such transfer shall, for all purposes of this act, be held and considered a fulfillment, on the part of said railroad companies, of the provisions of this act in regard to the construction of said line of telegraph. And in case of disagreement, said telegraph companies are authorized to remove their line of telegraph along and upon the line of railroad herein contemplated, without prejudice to the rights of said railroad companies named herein. SEC. 20. And be itfurther enacted, That the corporation hereby created and the roads connected therewith under the provisions of this act, Companies to shall make to the Secretary of the Treasury an annual report, wherein make iinnual re- shall be set forth: port. First. The names of the stockholders and their places of residence, so far as the same can be ascertained. Second. The names and. residences of the directors, and all other officers of the company. Third. The amount of stock subscribed, and the amount thereof actually paid in. Fourth. A description of the lines of road surveyed, of the lines thereof fixed upon for the construction of the road, and the cost of such survey. Fifth. The amount received from passengers on the road. Sixth. The amount received for freight thereon. Seventh. A statement of the expense of said road and its fixtures. Eighth. A statement of the indebtedness, bf said company, setting forth the various kinds thereof; which report shall be sworn to by the president of the said company, and shall be presented to the Secretary of the Treasury on or before the first day of July in each year." Approved, July 1, 1862. *AN ACT relative to filing reports of railroad companies. Be it enacted by the Senate and IHouse of Representatives of the iUnited States of America in Congress assembled, That the reports required to be made to the Secretary of the Treasury on or before the first day of July of each year, by the corporations created by or entitled to subsidies under the provisions of an act entitled "An act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific, Ocean, and to secure to the Government the use of the samefor postal, military, and other purposes," approved July first, eighteen hundred and sixty-two, and the acts supplemental to and amendatory thereof, shall hereafter be made to the Secretary of the Interior, on or before the first day of October of each year. Said reports shall furnish full and specific information upon the several points mentioned in the twentieth section of the said act of eighteen hundred and sixty-two, and shall be verified as therein prescribed, and on failure to make the same as herein required, the issue of bonds or patents to the company in default shall be suspended until the requirements of this act shall be complied with by such company. And the reports hitherto made to the Secretary of the Treasury under the said act of July first, eighteen hundred and sixty-two, shall be transferred and delivered by him to the Secretary of the Interior, to be filed by him. SEC. 3. And be it further enacted, That the reports required from the commissioners appointed to examine and report in relation to the road of any of the corporations whereto reference is made in this act, shall be addressed to and filed in the Department of the Interior; and all such reports heretofore made shall be transferred to and filed in said Department of the Interior; and so much of any and all acts as requires any reports from such companies or any officers thereof to be made to the Secretary of the Treasury, is hereby repealed. SEc. 4. And be it further enacted, That, in addition to the:eight subjects referred to in section twenty of the act of July, eighteen hundred and sixty-two, to be reported upon, there shall also be furnished annually to the Secretary of the Interior'all reports of engineers, superintendents, or other officers who make annual reports to any of said railroad companies. Approved, June 25, 1868. PACIFIC RAILROADS.:53 AN ACT to amend an act entitled "An act to aid in the. construction of a railroad and telegraph-line from the Missouri River to' the Pacific Ocean. and to secure to the Government the use of. the same for postal, military, and other purposes," approved July 2, 1862. Be it enacted by the Senate and House of Representatives of the -United Firstmeetingof. Slates of -America in Congress assembled, That the first meeting of the commissionerson commissioners named in the act entitled "An act to aid in the construe- Pacific Railroad tion of a railroad and telegraph-line from' the Missouri River to the to b e h el d in Pacific Ocean, and to secure to the Government the use of the same for Chicago. postal, military, and other purposes," approved July second, eighteen hundred and sixty-two, and of the five commissioners directed by said act to be appointed by the Secretary of the Interior, shall be held at Bryan Hall, in the city of Chicago, in the State of Illinois, on the first Tuesday of September next, at twelve o'clock at noon. A notice of said Notice. meeting, to be signed by at least ten of the commissioners named in said act, shall be published at least once a week during the six successive weeks, commencing on the twentieth of July, one thousand eight hundred and sixty-two, in one daily newspaper in each of the cities of Boston, New York, Philadelphia, Cincinnati, Chicago, and Saint Louis, and no other notice of said meeting shall be requisite. Approved, July 12, 1862. ACT OF 1863. AN ACT to establish the gauge of the Pacific railroad and its branches. [Chapter CXII. ] Be it enacted by the Senate and Ho1tse of Representatives of the United States of America in Congress assembled, That the gauge of the Pacific Gauge to be 4 Railroad and its branches throughout their whole extent, from the Pa- feet 81 inches. cific coast to the Missouri River, shall be, and hereby is, established at four feet eight and one-half inches. Approved, March 3, 1863. AMENDMENT OF 1864. AN ACT to amend an act entitled "An act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes," approved July first, eighteen hundred and sixty-two. Be it enacted -by the Senate' and Houese of Representatives of the United' States of America in Congress assembled, That the capital stock of the Shares of Union company entitled the Union Pacific Railroad Company, authorized by Pacific Railroad the act of which this act is amendatory, shall be in shares of one hun- Company changdred dollars, instead of one thousand dollars, each; that the number of ed from $1,000 to shares shall be one million, instead of one hundred thousand; and that $00 the number of shares which any person shall hold to entitle him to serve as a director in said company (except the five directors to be appointed by Government) shall be fifty shares, instead of five shares; and that every subscriber to said capital stock for each share of one thousand dollars, heretofore subscribed, shall be entitled to a certificate for ten shares of one hundred dollars each; and that the following words in section first of said act: "which shall be subscribed for and held in not more than two hundred shares by any one person," be, and the same are hereby, repealed. SEc. 2. And be it further enacted, That the Union Pacific Railroad Company shall cause books to be kept open to receive subscriptions to the Books tobekept capital stock of said company, (until the entire capital of one hundred open in several millions of dollars shall be subscribed,) at the general office of cities, 1860,sec. 2. said company in the city of New York, and in each of the cities of Boston, Philadelphia, Baltimore, Chicago, Cincinnati, and Saint Louis, at such places as may be designated by thePresident of the United States, and in such other localities as may be directed by him. No subscrip- Per cent. to be tion for said stock shall be deemed valid unless the subscriber therefol paid. 54 PACIFIC RAILROADS. shall, at the time of subscribing, pay or remit to the treasurer of the company an amount. per share subscribed by him equal to the amount Assessments of per share previously paid by the then existing stockholders. The said stockholders. company shall make assessments upon its stockholders of not less than five dollars per share, and at intervals of not exceeding sihe months from and after the passage of this act, until the par value of all shares How paid. subscribed shall be fully paid; and money only shall be receivable for any such assessment, or as equivalents for any portion of the capital Amount of capi- stock hereinbefore authorized. The capital stock of said company shall tal. not be increased beyond the actual cost of said road. And the stock of Stock personal the company shall be deemed personal property, and shall be transferproperty. able on the books of the company at the general office of said company in the city of New York, or at such other transfer-office as the company may establish. Additionalright SEC. 3. And be it further enacted, That the Union Pacific RaiTroad of way granted. Company, and all other companies provided for in this act and See se. 1862 the act to which this is an amendment, be, and hereby are, empowered to enter upon, purchase, take, and hold any lands or premises that may be necessary and proper for the construction and working of said road, not exceeding in width one hundred feet on each side of its center line, unless a greater width be required for the purpose of excavation or embankment; and also any lands or premises that may be necessary and proper for turnouts, standing-places for cars, depots, station-houses, or any other structures required in the construction and operating of said road. And each of said companies shall have the right to cut and remove trees or other materials'that might, by falling, encumber its road-bed, though standing Assessment of or being more than one hundred feet therefronl. And in case the owner damages. or claimant of such lands or premises and such company cannot agree as to the damages, the amount shall be determined by the appraisal of three disinterested commissioners, who may be appointed upon application by any party to any judge of a court of record in any of the Territories in which the lands or premises to be taken lie; and said commissioners, in their assessments of damages, shall appraise such premises at what would have been the value thereof if the road had not Payment ald been built; and upon return into court of such appraisement, and upon title. the payment to the clerk -thereof of the amount so awarded by the commissioners for the use and benefit of the owner thereof, said premises shall be deemed to be taken by said company, which shall thereby Appeal. acquire full title to the same for the purposes aforesaid. And either party feeling aggrieved by said assessment may, within thirty days, file an appeal therefrom, and demand a jury of twelve men to estimate the damage sustained; but such appeal shall not interfere with the rights of said company to enter upon the premises taken, or to do any Bonds on ap- act necessary in the construction of its road. And said party appealing peal. shall give bonds, with sufficient surety or sureties, for the payment of Costsof appeal. any costs that may arise upon such appeal. And in case the party. appealing does not obtain a more favorable verdict, such party shall Title after ap- pay the whole cost incurred by the appellee as well as its own. And peaL the payment into court for the use of the owner or claimant, of a sum equal to that finally awarded shall be held to vest in said company the title of said land and the right to use and occupy the same for the construction, maintaining, and operating of the road of said company. And Absentees and in case any of the lands to be taken as aforesaid shall be held by any infants. person residing without the Territory or subject to any legal disability, the court may appoint a proper person, who shall.give bonds, with sufficient surety or sureties, for the faithful execution of his trust, and who may represent in court the person disqualified or absent as aforesaid, when the same proceedings shall be had in reference to the appra isenment of the premises to betaken, and with the same effect as have been already described. And the title of the company to the land taken by virtue of this act shall not be affected nor impaired by reason of any ~Inoc cupied failure by any guardian to discharge faithfully his trust. And in case lands, how ac- it shall be necessary for either of the said companies to enter upon lands quired. which are unoccupied, and of which there.is no apparent owner or claimant, it may proceed to take and use the same for the purposes of its said railroad, and may institute proceedings in manner described for the purpose of ascertaining the value of and acquiring a title to the same; and the court may determine the kind of notice to be served on PACIFIC RAILROADS. 55 such owner or owners, and may. in its discretion, appoint an agent or guardian to represent such owner or owners, in case of his or their incapacity or non-appearance. But in case no claimant shall appear within six years from the time of the opening of said road across any land, all claim to damages against said company shall be barred. It shall be *Damage-, how competent for the legal guardian of any infant or any other person under disposed of. guardianship to agree with the proper company as to damages sustained by reason of the taking of any lands of any such person under disability, as aforesaid, for the use as aforesaid; and upon such agreement being made and approved by the court having supervision of the official acts of said guardian, the said guardian shall have full power to make and execute a conveyance thereof to the said company, which shall vest the title thereto in the said company. Smc. 4. And be it further enacted, That section three of said act be Sec. 3, 1862, hereby amended by striking out the word "five," where the same oc- amended, doubcurs in said section, and by inserting in lieu thereof the word " ten; linggrantofland. and by striking out the word " ten," where the same occurs in said section, and by inserting in lieu thereof the word " twenty." And section Sec. 7 1662, Seven of said act is hereby amended by striking out the word " fifteen," amended withsv lieu thereof edrawing 1 a n d where the same occurs in said section, and inserting in lieu thereof the from sale. word " twenty-five." And the term " mineral land," wherever thesame Coal and iron occurs in this act, and the act to which this is an amendment, shall not not minerals.be construed to include coal and iron land. And any lands granted by Certain lands this act or the act to which this is an amendment shall not defeat ornottobegranted. impair any pre-emption, homestead, swamp-land, or other lawful claim, nor include any Government reservation or mineral lauds, or the improvements of any bona-ftde settler, or any lands returned and denominated as mineral lands, and the timlber necessary to support his said improvements as a miner or agricnlturalist, to be ascertained under such rules as have been or may be established by the Commissioner of the General Land-Office, in conformity with the provisions of the pre-emption laws: Provided, That the quantity thus exempted by the operation of this act and the act to which this act is an amendment, shall not exceed 160 acres for each settler who claims as an africultnralist, and such 160 acres only quantity for each settler who claims as a miner as the said Commissioner exempted. may establish by general regulation: Provided, also, That the phrase, Timber to be " but where the same shall contain timber, the timber thereon is hereby company's, sec. 3, granted to said company," in the proviso to said section three, shall not 1862. apply to the timber growing or being on any laud farther than ten miles from the center line of any one of said roads or branches mentioned in said act, or inll this act. And all lands shall be excluded from the opera- Other lands extion of this act, and of the act to which this act is an amendment, which emptedl. were located, or selected, to be located, under the provisions of an act entitled "An act donating lands to the several States and Territories which may provide colleges for the benefit of agriculture and the mechanic arts," approved July 2, 1862, and notice given thereof at the prper lanld-office. SEC. 5. And be it further enacted, That the time for designating the general route of said railroad, and of filing the map of the same, and the time for the completion of that part of the railroads required by the Time extended terms of said act of each company, be, and the same is hereby, extended one year. Sec. 10, one year from the time in said act designated; and that the Central 1862, amended. Pacific Railroad Company of California shall be required to complete twenty-five miles of their said road in each year thereafter, and the 25 miles per whole to the State line within four years, and that only one-half of the year; 4 years to compensation for services rendered for the Government by said compa- State linent to nies shall be required to be applied to the payment of the bonds issued Gvpay oerne-half for by the Government in aid of the construction of said roads.t services. SEC. 6. And be it further enacted, That the proviso to section four -Sec. 4, 1862, of said act is hereby modified as follows, viz: And the President of modified; three the United States is hereby authorized, at any time after the pass-commissioners, age of this act, to appoint for each and every of said roads three commissioners, as provided for in the act to which this is amendatory; * By joint resolution of Congress, approved March 3, 1865, it is provided: " That all maps, profiles, and other drawings, together with estimates and reports connected with explorations and surveys for the Pacific Railroad, made uInder the authority of the Government, and all other information upon the subject of said road in the possession of any Department of the Government, be transferred to the Department of the Interior; and that the Secretary of the Interior be authorized to furnish copies of the same, free of charge, to the Union Pacific Railroad Company, so far as they may be useful in aiding said company in determining the proper route for said road," t See note to section 6 of the act of 1862. 56 PACIFIC RAILROADS. Affidavit, &c., and the verified statement of the president of the California Company, ofCerntaal Poa cfic required by said section four, shall be filed in the office of the United pany tobefiledin States surveyor-general for the State of California, instead of being California. presented to the President of the United States; and the said sur-'veyor-gener'al shall thereupon notify the said commissioners of the filing of such statement, and the said commissioners shall thereupon proceed to examine the portion of said railroad'and telegraph-line so completed, and make- their'report thereon to the President of the United States, as provided by the act of which this is amendatory. And such statement may be filed'and such railroad and telegraph-line be examined and reported on by the said'commissioners, and the requisite amount of bonds may be issued and the lands appertaining thereto may Lands patented. be set apart, located, entered, and patented, as provided in this act and See sec. 4, 186'2. the act to which this is amendatory, upon the construction by said railAls0 sec. 8, thUs road compa ny of California of any portion of not less than twenty consecutive miles of their said railroad and telegraph-line, upon the certificate of said commissioners that such portion is completed as required'by the act of which this is amendatory. And section ten of the act of Sec. 10. 1862,:Which this is amendatory is hereby amended by inserting, after the amended. words " United States," in the last clause, the words "and States intervening. Reservation of SEC. 7. And be it further enacted, That so much of section seventeen of bonds by sec. 17, said act as provides for a reservation by the Government of a portion of 1862, repealed. the bonds to be issued to aid in the construction of the said railroads is hereby repealed. And the failure of any one company to comply fully cmpailre on e with the conditions antd requirements of this act, and the act to which affectothers. Sec. this is amendatory, shall not work a forfeiture of the rights, privileges, 17,1862, altered. or franchise of any other company or companies that shall have complied with the same. SEC. 8. And be it further enacted, That for the purpose of facilitating the work on said railroad, and of enabling the said company as early as practicable to commence the grading of said railroad in the region of Partial issue of the mountains, between the eastern base of the Rocky Mountains and bonds on Ourncom- the western base of the Sierra Nevada Mountains, so that the same may pleted work. - Sec. 11, 1862, be finally completed within the time required by law, it is hereby promodified. vided that whenever the chief engineer of the said company, and said commissioners, shall certify that a certain proportion of the work required required to prepare the road for the superstructure on any such section of twenty miles is done, (which said certificate shall be duly verified,) the Secretary of the Treasury is hereby, authorized and reTwo-thirds on quired, upon the delivery of such certificate, to issue to said company a graded portions. proportion of said bonds, not exceeding two-thirds of the amount of. See sc. 6 of this bonds authorized to be issued under the provisions of the act, to aid ia act. the construction of such section of twenty miles, nor in any case exceeding two-thirds of the value of the work done. The remaining one-third to remain until the said section is fully completed and certified by the Union Pacific commissioners appointed by the President, according to the terms and Railroad C 0I - provisions of the said act. And no such bonds shall issue to the Union pany cannot receive for morePacific Railroad Companly for work done west of Salt Lake City under than 300 miles in this section, more than three hundred miles in advance of the cornadvance west of pleted continuous line of said railroad from the point of beginning on Salt Lake City. the one hundredth meridian of longitude. SEC. 9. tAnd'be it further enacted, That to enable any one of said corporations to make'convenient and necessary connections with other roads, it is herelby authorized to establish and maintain all Ferries an d necessary ferries upon and across the Missouri River and other rivers bridges. which its road may pass in its course; and authority is hereby given said corporation to construct bridges over said Missouri River and all other rivers for the convenience of' said road:' Provided, That any bridge or' bridges it may construct over the Missouri *AN ACT to authorize the Union Pacific Railroad Company to issue its bonds to construct a bridge across the Missouri River at Omaha, Nebraska, and Council Bluffs, Iowa. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That for the more perfect connection of any railroads that are or shall be constructed to the Missouri River, at.or near Council Bluffs, Iowa, and Omaha, Nebraska, the Union Pacific kRailroad Company'be, and it is hereby, authorized to issue such bonds, and secure the same by mortgage on the bridge and approaches'and appurtenances. as it may deem needful to construct and maintain its bridge over said river, and the tracks and depots required to perfect the same, as now autherized by law of Congress; and said bridge may be so constructed as to provide for the passage of ordinary vehicles and travel, and said company mav.levy and collect tolls and charges for the use of the same; and for the use and protection of said bridge and property the Union Pacific Railway Company PACIFIC RAILROADS. 57'sourijRiver, or any other navigable river on the line of said road,. shall'be constructed with suitable and proper draws for the passage of steamboats, and shall be built, kept, and maintained at the expense of said company in such manner as not to impair the usefulness of said river for navigation to any greater extent than such structures of the most approved character necessarily do: And proided further, That any com- Roads m a y pany authorized bythis act to construct its road and telegraph-lineconect west of ~from the Missouri-River to the initial point aforesaid, may construct its initial point. road and telegraph-line so as to connect with the Union Pacific Railroad at any point westwardly of such initial point, in case such company shall deem such- westward connection more practicable'or desirable; and in aid of the construction of so much of its road and telegraph-line as shall be a departure from the route hereinbefore provided for its road, such company shall be entitled to: all the benefits and be subject to all the' conditions and restrictions of this act: Provided further, however, That the bonds of the United States shall not be issuedto such company No increased for a greater amount than is hereinbefore provided, if the same had amount of' bonds, united with the Union Pacific Railroad on the one hundredth degree of &" longitude; nor shall such company be entitled to receive any greater amount of alternate sections of public lands than are also herein provided. SEC. 10. And be it further enacted, That section five of said act be so First-mortga-ge modified and amended that the Union Pacific Railroad Company, the lien prioratoGovCentral Pacific Railroad Company, and any other company authorized ernment's. to participate in the construction of said road, may, on the completion of each section of said road as provided in this act and the act to which this act is an amendment, issue their first-mortgage bonds on their re- Sec. 5, 1862, spective railroad and telegraph lines to an amount not exceeding the modified. amount of the bonds of the United States, and of even tenor and date, time of maturity, rate and character of interest with the bonds author- See sec. 1'act ized to be issued to said railroad companies respectively. And the lien of 1865. Lien of Unitel of the United States bonds shall be subordinate to that of the bonds of States bonds to any or either of said companies hereby authorized to be issued on their be subordinate, respective roads, property, and equipments, except as to the provisions &c. of the sixth section of the act to which this act is an amendment, relat-.ing to the transmission of dispatches and the transportation of mails, 20miles instead troops, munitions of war, supplies, and public stores for the Government of 40 miles, as in of the United States. And said section is further ainended by striking sec. 5, act of 1862. out the word "forty," and inserting in lieu thereof the words "on each and every section of not less than twenty." SEC. 11. And be it further enacted, That if any of.the railroad compa- Provision for nies entitled to bonds of the United States or to issue their first-nort- b on d s already gage bonds herein provided for, has, at the time of the approval of this issued by any act, issued or shall thereafter issue, any of its own bonds or securities in companie such form or manner as in law or equity to entitle the same to priority or preference of payment to the said guaranteed bonds, or said firstmortgage bonds, the amount of such corporate bonds outstanding and unsatisfied, or uncanceled, shall be deducted from the amount of such Government and first-mortgage bonds which the company may be entitled to receive and issue; and such an amount only of such Government bonds and such first-mortgage bonds shall be granted, or permitted, as, added to such outstanding, unsatisfied, or uncanceled bonds of the company, shall make up the whole amount per mile to which the company would otherwise have been entitled: And provided further, Affidavit o f That before any bonds shall be so given. by the Jnited States, the corn- amount of outp'any claiming them shall present to the Secretary of the Treasury an standing cm - affidavit of the president and secretary of the company, to be sworn to bonds before the judge of a court of record, setting forth whether said company has issued zany such bonds or' securities, anl d, if so, particularly describshall be empowered, governed, and limited by the provisions of the act entitled "An act to authorize the construction of certain bridges, and to establish them as post-roads," approved July 25, 1866, so far as the same is applicable thereto; and, Provided, That nothing in this act shall be so construed as to change the eastern terminus of the'Union Pacific Railroad from the place where it is now fixed under existing laws, nor to release said Union Pacific Railtoad Company, or its successors, from its obligation as established by existing laws:. Provided also, That Congress shall at all times have power to regulate said bridge, and the rates for the' transportation of freight and passengers over: the same, and the local travel hereinbefore provided for. And the amount of bonds herein authorized shall not exceed two and a half millions of dollars: Provided, That' if' said biidge shall be constructed as a draw-bridge, the-same shall' be constructed with spans not less than two hundred feet in length in the clear on ea-ch side of the central or pivot pier of the draw.' Approved, February 24, l671. 58 PACIFIC RAILROADS. ing the same, and such other evidence as the Secretary may require, so as to enable him to make the deduction herein required; and such affidavit shall then be filed and deposited in the Office of the Secretary of the Interior, and any person swearing falsely to any such affidavit shall be deemed guilty of perjury, and, on conviction thereof, shall be punN 0 1 a n d or ished as aforesaid: Provided, also, That no land granted by this act shall boany company on to be conveyed to any party or parties, and no bonds shall be issued to any any company on road made prior company or companies, party or parties, on account of any road, or part to act of 1862. thereof, made prior to the passage of the act to which this act is an amendment, or made subsequent thereto, under the provisions of any act or acts other than this act and the act amended by this act. L e avenworth SEC. 12. And be it further enacted, That the Leavenworth, Pawnee and a n d Lawrence Western Railroad Company, now known as the Union Pacific Railroad roads, no bonds. Company, eastern division, shall build the railroad from the mouth of Kansas River, by the way of Leavenworth, or, if that be not deemed the best route, then the said company shall, within two years, build a railroad from the city of Leavenworth to unite with the main stem at Ifbuiltto 100th or near the city of Lawrence; but to aid in the construction of said meridian ni ay branch the iaid company shall not be entitled to any bonds. And if the proceedindefault Union Pacific Railroad Company shall not be proceeding in good faith of Union Pacific Railroad. to build the said railroad through the Territories when the Leavenworth, Pawnee and Western Railroad Company, now known as the Union Pacific Railroad Company, eastern division, shall have completed their road to the hundredth degree of longitude, then the last.named company may proceed to make said road westward until it meets and connects with the By way of Law- Central Pacific Railroad Company on the same line. And the said railrence and Tope- road from the mouth of Kansas River to the one hundredth meridian ka0th, or opposite to of longitude shall be made by the way of Lawrence and Topeka, or on the West of thatline bank of the Kansas River opposite said towns: Provided, That no bonds no bonds shall be shall be issued or land certified by the United States to any person or issued, &c. company for the construction of any part of the main trunk line of said railroad west of the one hundredth meridian of longitude and east of the Rocky Mountains, until said road shall be completed from or near Omaha, on the Missouri River, to the said one hundredth meridian of longitude. Directors 15, SEc. 13. And be itfirther enacted, That at and after the next election Government di. of directors, the number of directors to be elected by the stockholders rectors 5. Sec. 1, shall be fifteen; and the number of directors to be appointed by the 1862, modified. President shall be five; and the President shall appoint three additional directors to serve until the next regular election, and thereafter five One Govern- directors. At least one of said Government directors shall be placed on commnt director on each of the standing committees of said company, and at least one on Governmentdi every special committee that may be appointed. The Government direGtors toreort, rectors shall, from time to time, report to the Secretary of the Interior, &c. in answer to any inquiries he may make of them, touching the condition, management, and progress of the work; and shall communicate to the Secretary of the Interior, at any time, such information as should To visit road, &c. be in the possession of the Department. They shall, as often as may be necessary to a full knowledge of the condition and management of the line, visit all portions of the line of the road, whether built or surveyed; and while absent from home, attending to their duties as directors, shall be paid their actual traveling expenses, and be allowed and paid such reasonable compensation for their time actually employed as the board of directors may decide. Directors when SEC. 14. And be itfurther enacted. That the next election for directors e I e c t e d and of said railroad shall be held on the first Wednesday of October5 next, where. (Sec., at the office of said company in the city of New York, between the hours 1862,) for one year. of ten o'clock a. m. and four o'clock p. m. of said day; and all subsequent regular elections shall be held annually thereafter at the same * Changed by joint resolution approved December 20, 1867, as follows: JOINT RESOLUTION changing the time of holding the annual meeting of the stockholders of the Union Pa'cific Railroad Company. Be it resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the time of holding the annual meeting of the stockholders of the Union Pacific Railroad Company, for the choice of directors, is hereby changed from the first Wednesday in October to the first Wednesday following the fourth day of March, and the stockholders are authorized to determine the place at which such annual meeting shall be held at the last annual meeting of the stockhold-,ers immediately preceding such annual meeting: Provided, The same shall be held at either of the cities of New York, Washington, Boston, Baltimore, Philadelphia, Cincinnati, Chicago, or St. Louis: And provided further, That on the election of directors herein provided for, to take place in March, anno Domini eighteen hundred and sixty-eight, the terms of office of all persons then acting or claiming theright to.ac.t as dir.ectors of said company, shall cease and determine. PACIFIC RAILROADS. 59 place; and the directors shall hold their offices for one year, and until their successors are qualified. SEc. 15. And be it further enacted, That the several companies author- Road tobe used ized to construct-the aforesaid roads are hereby required to operate and line. See sec. 1t, use said roads and telegraph for all purposes of communication, travel, act of 1862, and transportation, so far as the public and the Government are concerned, as one continuous line; and, in such operation and use, to afford and secure to each equal advantages and facilities as to rates, time, and transportations, without any discrimination of any kind in favor of the road or business of any or either of said companies, or adverse to the road or business of any or either of the others. And it shall not be Musttelegraph for all persons. lawful for the proprietors of any line of telegraph authorized by this See sell. 19, act of act, or the act amended by this act, to refuse or fail to convey for all 1862. persons requiring the transmission of news and messages of like character, on pain of forfeiting to the person injured, for each offense, the sum of one hundred dollars, and such other damage as he may have suffered on account of said refusal or failure, to be sued for and recovered in any court of the United States, or of any State or Territory of competent jurisdiction. SEC. 16. Alvd be it further enacted, That any two or more of the corn- Companies may panies, authorized to participate in the benefits of this act, are hereby 16, consolidate Seeof authorized at any time to unite and consolidate their organizations, as 1862, also sec. 10, the same may or shall be, upon such terms and conditions, and in such 186s2. manner as they may agree upon, and as shall not be incompatible with this act orn the laws of-.the State or States in which the roads of such companies may be, and to assume and adopt such corporate name and style as they may agree upon, with a capital stock not to exceed the actual cost of the roads so to be consolidated, and shall file a copy of, such consolidation in the Department of the Interior; and thereupon such organization, so formed and consolidated, shall succeed to, possess, and be entitled to receive from the. Government of the United States, all and singular the grants, benefits, immunities, guarantees, acts, and things to be done and performed, and be subject to the same terms, conditions, restrictions, and requirements which said companies, respectively, at -the time of such consolidation, are or may be entitled or subject to under this act, in place and substitution of said companies so consolidated, respectively. And all other provisions of this act, so far as applicable, relating or in any manner appertaining to the companies so consolidated, or either thereof, shall apply and be of force as to such consolidated organization. And in case, upon the completion by such consolidated organization of the roads or either of them, of the companies so consolidated, any other of the road or roads of either of the other companies authorized as aforesaid, (and forming, or intended or necessary to form a portion of a continuous line from each of the several points on the Missouri River, hereinbefore designated, to the Pacific coast,) shall not have constructed the number of miles of its companies liday said road within the tinle herein required, such consolidated organiza- build portion of tion is hereby authorized to continue the construction of its road and the line left intelegraph in the general direction and route upon which such incom- completedbyany plete or unconstructed road is hereinbefore authorized to be built, until company. * Having elected to continue the meetings in New York, the-harassing judicial experience to which the company and its members were subjected in that city, led to the enactment by Congress of the second section of the act of July 27, 1868, which provides,: "' That any corporation, or any member thereof, other than a banking corporation, organized under a law of the United States, and against which a suit at law or in equity has been or may be commenced in any court other than a circuit or district court of the United States, for any liability or alleged liability of such corporation, or any member thereof as such member, may have such suit removed from the court in which it may be-pending, to the proper circuit or district court of the United States, upon filing a petition therefor, verified by oath, either before or after issue joined, stating that they have a defense, arising under or by virtue of the Constitution of the United States, or any treaty or law of the United S ates, and offering good and sufficient surety for entering in such court on the first day of its session, copies of all process, pleadings, dispositions, testimony, and other proceedings in said suit, and doing such other appropriate acts as are required to be done by the act entitled' An act for the removal of causes in certain cases from State courts,' approved July twenty-seventh, eighteen hundred and sixty-six; and it shall be thereupon the duty of the court to accept the surety and proceed no further in the suit; and the said copies being entered as aforesaid in such court of the United States, the suit shall then proceed in the same manner as if it had been brought there by original process, and all of the provisions if said act in this section referred to, respecting any bail, attachment, injunction, or other restraining process, and respecting any bond of indemnity or other obligation given upon the issuing or granting of any attachment, injunction, or other restraining process, shall apply with like force and effect in all respects to similar matters, process, or things in the suits for the removal of which this act provides." The same clause led to the passage by Congress of the first section of the joint resolution of April 10, 1869, and which resolution is given entire on a subsequent page. 60 PAC1FI,.RAILROADS, such continuation of the road of such consolidatedl organization shall reach the constructed road and telegraph of said other company, and at such point to connect and unite therewith;.and for and in aid thereof the said consolidated organization may do and.perform, in reference to such portion of road and telegraph as shall so be in continuation of its consifucted road.'and telegraph, and to.the construction and equipment. thereof, all and singular the several acts and things hereinbefore authorized or granted to be done by.the company.hereinbefore authorized to construct and equip the same, and shall be entitled to similar and like grants, beuefts, immunities, guarantees, acts, and things to be done and performed by the.Government of the United States, by the President of the United States, by the Secretaries of the Treasury and Interior, and by commissioners, in reference to such company, and to such portion of the road hereinbefore authorized to be constructed by it, and upon the, like and similar.terms and conditions so far as the same are applicable Powers and thereto. And said consolidated company shall pay to said def;ultiug. iduties ofrgaconsl- company the value, to be estimated by competent engineers, of all the tion. work done and material furnished by said defaulting company, which may be adopted and used by said consolidated company.in the progress of the work Under'the provisions of this section.: Provided, nevertheless, That said defaulting company may at alny time before receiving pay for its said work and material, as hereinbefore' provided, on its own election, pay said consolidated company the value of the work done and material furnished by said consolidated company, to be estimated by competent engineers, necessary for and used in the construction of the road of said defaulting company, and resume the control of its said road; and all the rights, benefits, and privileges which shall be acquired, possessed, or exercised, pursuant to this section, shall'be to that extent an abatement of the rights,.benefits, and privileges hereinbefore granted to such, other company. And in case any company authorized thereto shall not enter into such consolidated organization, such company, upon the completion of its road as hereinbefore provided, shall be entitled to, and is hereby authorized to, continue and extend the same' under the circumstances and in accordance with the. provisions of this section, and to have all the benefits thereof, as fully and completely as are herein provided, touching such consolidated organization. And in case more than one such consolidatedl organization shall be made pursuant to this act, the terms and conditions of this act hereinbefore recited as to one shall apply in like manner, force, and effect to the other: Provided. hovw — ever, That rights and interests at any time acquired by one such consolWhen Central idated organization shall not be impaired by another thereof. It is furreaceaserninather provided that, should the Central Pacific Railroad Company of reach eastern line t pv of said State may California complete their line to the eastern line of the State of Califorgo on 150 miles if nia before the line of the Union Pacific Railroad Company shall.have road not met. been extended westward so as to meet the line of said first-named conlaSectionded Alsopany, said first-named company may extend their line of road eastward seesection2,1866. one hundred and fifty miles,' on the established route, so as to meet and connect with the line of the Union Pacific road, complying in all respects with the provisions and restrictions of this act as to said Union Pacific road, and upon doing so shall enjoy all the rights,' privileges, and benefits conferred by this act on said Union Pacific Railroad Company. Section 14,1862, SEC. 17. Aned be it furt her enacted, That so much of section fourteen of amended as to said act as relates to a branch from Sioux City be, and the same is hereby, Sioux C it road amended so as to read as follows: That whenever a line of railroad shall be completed through the States of Iowa or Minnesota to Sioux City, such company, now.organized, or may hereafter b3 organized, under the laws of Iowa, Minnesota, Dakota, or Nebraska, as the President of the United States, by its request, may designate or approve for that purpose, shall construct and operate a line of railroad and telegraph from Sioux City, upon the most,.direct and practicablle route, to suqh a point on, and so as to connect with, the Iowa branch of the Union Pacific Railroad from Omaha, or the Union Pacific Railroad, as such company may select, and on the sameeterms and conditions.as are provided in this act and:the act to which this is an amendment, for the construction of the said- Union and PaCific Railroad and telegraph-.line and branches; and said company shall complete the same at the rate of fty: miles per year: Provided, That said Union Pacific Railroad Company shall be, and is hereby, released from the con* Amended by the act of July 3, 1866, so as to allow the Central Pacific to continute constructing eastward until it should meet the line of the Union Pacific. PACIFIC RAILROADS. 61 struction of said branch. And said company constructing said branch shall not be entitled to receive in bonds an amount larger than the said Union Pacific Railroad Company would be entitled to receive if it had constructed the branch under this act and the act to which this is an amendment; but said company shall be entitled to receive alternate sections'of land for ten miles in width. on each side of the same along the whole length of said branch: And provided further, That if a railroad should not be completed to Sioux City, across Iowa or Minnesota, within eighteen months from the date of this act,' then said company designated by the President, as aforesaid, may commence, continue, and complete the construction of said branch as contemplated by the provisions of this act: Provided, however, That if the said company so designated by the President as aforesaid shall not complete the said branch from Sioux City to the Pacific Railroad within ten years from the passage of this act, then, and in that case, all of the railroad'which shall have been constructed by said company shall be forfeited to and become the property of the United States. SEC. 18. And be it further enacted, That the Burlington and Missouri Burlington and River Railroad Company, a corporation organized under and by virtue ilroauri C o iver of the laws of the State of Iowa, be, and hereby is, authorized to extend pany may extend iCt]Js road through the Territory of Nebraska from the point where it road, &c. strikes the Missouri River, south of the. mouth of the Platte River, to some point not further west than the one hundredth meridian of west longitude, so as to connect, by the most practicable route, with the main trunk of the Union Pacific Railroad, or that part of it which runs from Omaha to'the. said one hundredth meridian of west longitude.' And for the purpose of enabling said Burlington and'Missouri River Right of way, Railroad Company to construct that portion of their road herein author- &c. ized, the right of way through the public lands is hereby granted to said company for the construction of' said road. And the right, power, and'authority is hereby given to said company to take from the public lands adjacent to the line of said road, earth, stone, timber, and other materials for the construction thereof. Said right of way is granted to said company to the extent of two hundred feet where it may pass over the public lands, including all necessary grounds for stations, buildings, workshops, depots, machine shops, switches, side-tracks, turn-tables, and water stations. And the United States shall extinguish, as rapidly IUnited States as may be, consistent with public policy and the welfare of the said'In- to extinguish Indians,; the Indian titles to all lands lalling under the operation of this dian titles. Secsection and required for the said right- of way and grant of land herein tion 2, 1866. made. SEC. 19. And be it further enacted, That for the purpose of aiding in the Land-grants to construction of said road, there be,.and hereby is, granted to the said Muringssou and Burlington and Missouri River Railroad Company, every alternate sec- Railroad C o mtion of public land (excepting mineral lands as provided in this act) pany. 4designated by odd numbers, to the amount of ten alternate sections per mile on each side of said road, on the line thereof, and not sold, reserved, or otherwise disposed of by the United States,' and to which a pre-emption or homestead claim may not have attached at'the time the line of,said road is definitely fixed: Provided, That said company: shall accept this grant within one year fromn the passage of this act, by filing such acceptance with the Secretary of the Interior, and shall also establish the line of said road, and file a map thereof with, the Secretary of the Interior within one year of the date of said acceptance, when the said Secretary shall withdraw the lands embraced'in this grant from market. SEc. 20. And be it further enacted, That whenever said Brlingtonand Burlington and further enacd B Missouri'River Missouri River Railroad Company shall have completed twenty consec- Railroad C o mutive miles of the road mentioned in the foregoing'section, in the man- pany lands, &c. ner provided for other roads mentioned in this act and the act to Which' this is an amendment, the President of the United States shall appoint three conmmissioners to examine' and report to him in relation thereto; and if it shall appear to him that twenty miles of said road have been completed as required by this act, then, upon certificate of said commissioner[s] t, that effect, patents shall issue conveying the right and title to' said lands to said company on each side of said road, as far as the same is completed, to the amount aforesaid; and such examination. report, and conveyance, by patents, shall continue from time to time, in like manner, until said road shall have, been completed. And the Pressact of May 6, 1870, authorizes connection to be made at or near the Fort Kearney reservation. 62 PACIFIC RAILROADS. ident shall appoint said commissioners, to fill vacancies in said commission, as provided in relation to other roads mentioned in the act to which this is an amendment. And the said company shall be entitled to all the privileges and immunities granted to the Hannibal and Saint Joseph's Railroad Company by the said last-mentioned act, so far as the same may B:onds. be applicable: Provided, That no Government bonds shallbe issued to the said Burlington and Missouri River Railroad Company to aid in the construction of said extension of its road: And provided further, That said extension shall be completed within the period of ten years from the passage of this act. Land not to be SEc. 21. And be it further enacted, That before any land granted by this conveyed to any act shall be conveyed to any company or party entitled thereto under company unti this act, there shall first be paid into the Treasury of the United States they pay cost ofthe cost of surveying, selecting, and conveying the same by the said survey,'&c. Sec- t tion 4,1862. Sec- company, or party in interest;, asthe titles shall be required by said comtion 6, 1864. pany, which amount shall, without any further appropriation, stand to the credit of the proper account, to be used by the Commissioner of the General Land-Office, for the prosecution of the survey of the public lands along the line of said road, and so from year to year, until the whole shall be completed, as provided under the provisions of this act.* Section 18, 1864. SEC. 22. And be it further enacted, That Congress may at any time alter, amend, or repeal this act. Approved, July 2, 1864. AMEND-MENT OF 1865. AN ACT to amend an act entitled "An act to aid in the construction of arailroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes," approved July first, eighteen hundred and sixty-two, and to amend an act amendatory thereof, approved July second, eighteen hundred-and sixty-four. Mayissuebonds Be it enacted by the Senate and House of Representatives of the United 100 miles in ad- States of America in Congress assembled, That section ten of said act of pleted l ine - July second, eighteen hundred and sixty-four, be so modified and terest payable in amended as to allow the Central Pacific Railroad Company, and the any lawful mon- Western Pacific Railroad Company of California, the Union Pacific ey. Section 10, Railroad Company, the Union Pacific Railroad Company, eastern divis1864. ion, and all other companies provided for in the said act of the second of July, eighteen hundred and sixty-four, to issue their six per centumr thirty years' bonds, interest payable in any lawful money of the United States, upon their separate roads. And the said companies are hereby authorized to issue, respectively, their bonds to the extent of one hundred miles in advance of a continuous completed line of construction. Assign ent SEC. 2. And be it further enacted, That the assignment made by the confirmed to San Central Pacific Railroad Company of California to the Western Pacific mento Road. Railroad Company of said State, of the right to construct all that portion of said railroad and telegraph from the city of San Jos6 to the city of Sacramento is hereby ratified and confirmed to the said Western Pacific Railroad Company, with all the privileges and benefits of the several acts of Congress relating thereto, and subject to all the conditions thereof: Provided, That the time within which the said Western Pacific Railroad Company shall be required to construct the first twenty miles of their said road, shall be one year from the first day of July, eighteen hundred and sixty-five, and that the entire road shall be completed from San Jos6 to Sacramento, connecting at the latter point with the said Central Pacific Railroad, within four years thereafter. Approved, March 3, 1865. * In the act of July 15, 1870, which among many other appropriations contains those for the survey of the public lands within the limits of the grant of this company in Colorado, Wyoming, and Utah, it is "Provided, That the foregoing appropriations for the surveys of public lands within the limits of the Union Pacific Railroad Company's land-grant shall be conditional upon the compliance of said company or party in interest with the requirementsof the twenty-first section of the act of July second, eighteen hundred and sixty-four." PACIFIC RAILROADS. 63 AMENDMENT OF 1866. An act to amend an Act entitled "An act to amend an Act entitled'An act to aid in the construction of a railroad and telegraph-line from the Missourl River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes,' approved July first, eighteen hundred and sixty-two," approved July second, eighteen hundred and sixty-four. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assenbled, That the Union Pacific Railway Company, eastern division, is hereby authorized to designate the general route of their said road, and to file a map thereof, as now tequired by law, at any time before the first day of December, eighteen hundred and sixty-six; and upon the filing of the said map, showing the general route of said road, the lands along the entire line thereof, so far as the same may be designated, shall be reserved from sale by order of the Secretary of the Interior: Provided, That said company shall be entitled to only the same amount of the bonds of the United States to aid in the construction of their line of railroad and telegraph as they would have been entitled to if they had connected their said line with the Union Pacific Railroad on the one hundredth degree of longitude, as now required by law: And providedfurther, That said company shall connect their line of railroad and telegraph with the Union Pacific Railroad, but not at a point more than fifty miles westwardly from the meridian of Denver in Colorado. SEC. 2. And be it further enacted, That the Union Pacific Railroad Union -Pacific Company, with the consent and approval of the Secretary of the Inte- Railroad to prorior, are hereby authorized to. locate, construct, and continue their road ceed till met. from Omaha, in Nebraska Territory, westward, according to the best and most practicable route and without reference to the initial point on the one hundredth meridian of west longitude, as now provided by law, in a continuous completed line, until they shall meet and connect with the Central Pacific Railroad Company of California; and the Central Central Pacific Pacific Railroad Company of California, with the consent and approval may continue of the Secretary of the Interior, are hereby authorized to locate, con- their road eaststruct, and continue their road eastward, in a continuous completed wartd with conline, until they shall meet and connect with the Union Pacific Railroad.:s of the Interior, Provided, That each of the above-named companies shall have the right, till met by Union when the nature of the work to be done, by reason of deep cuts and tun- Pacific Railroad nels, shall for the expeditious construction of the Pacific Railroad re- Conmpany.86 Sec - quire it, to work for an extent of not to exceed three hundred miles in section 16, 1864, advance of their continuous completed lines. amended. Approved July 3, 1866. AN ACT to amend the postal laws. X X * * a * SEC. 5. And be itfulrther enacted, That all railroad companies carrying Railroads carthe mails of the United States shall convey without extra charge, by rying mails to any train which they may run over their roads, all such matter as the convey printed Postmaster-General shall, from time to time, direct to be transported matter, &c.,withthereon, with the persons in charge of the mails designated by the Post- out extra charge. Office Department for that purpose. Approved June 12, 1866. a The two companies having agreed in general terms upon the point of junction of the two roads, Congress passed- AN ACT to fix the point of junction of the Union Pacific Railroad Company and the Central Pacific Railroad Company. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the common terminus and point of junction of the Union Pacific Railroad Company and the Central Pacific Railroad Company shall be definitely fixed and established on the line of said road as now located'and constructed, northwest of the station at Ogden, and within the limits of the sections of land hereinafter mentioned, viz: Section thirty-six of township seven, of range two, situate north and west of the principal meridian and base-line in the Territory of Utah, and sections twentyfive, twenty-six, and thirty-five of township seven, of range two, and section six of township six, and sections thirty and thirty-one, 6f township seven, of range one, and sections one and two of township six, of range two, all situate north and west of said principal meridian and base-line; and said companies are her eby authorized to enter upon, use and possess said sections, which are hereby granted to them in equal shares, with the same rights, privileges, and obligations now by law provided with refer*ence to other lands granted to. said railroads: Provided, however, That the Secretary of the Interior shall designate a section of land in said township seven, of range two, belonging to said companies, and reserve the same for the benefit of schools in said Territory, in accordance with the act of February twenty-one, eighteen hundred and sixty-five, establishing the office of surveyor-general of Utah, and to grant land for school and university purposes: Provided also, That said companies shall pay for any additional lands acquired by this act at the rate of two dollars and fifty cents per acre: And provided further, That no rights of private persons shall be affected by this act. Approved May 6, 1870. 164 PACIFIC RAILROADS. June 15, 1866. AN ACT to facilitate commercical, postal, and military communication among the several States.* Preamble. Whereas'the Constitution of the United States confers upon Congress, in express-terms, the power to regulate commerce among the several States, to establish post-roads, and to raise and support armies: ThereforeSteamrailroads Be it enacted by the Senate and House of Representatives of the United may carry over States f erica in Congress assembled, That every railroad company in theirroadpassen-c o. gers and freight the United States, whose road is operated by steam, its successors and from one State to assigns, be, and is hereby, authorized to carry upon and over its road,boats, another and con- bridges, and ferries, all passengers, troops, Government supplies, mails, of other States to freights, and property on their way from any State to another State,and to form continuous receive compensation therefor, and to connect with roads of other States lines. so as to form continuous lines for the transportation of the same to the Existing con- place of destination: ~ Provided, That this act shall not affect any stiputracts and con- lation between the Government'of the United States and any railroad ed.ns company for transportation or fares without compensation, nor impair or change the conditions imhposed by the terms of any act granting lands to any such company to aid in the construction of its road, nor New roads not shall it be construed to authorize any railroad company. to build any'authorized witho u t authority new road or connection with any other road without authority from the trom State. State in which said railroad or connection may be proposed. This act may SEC. 2. And be it further enacted, That Congress may at any time alter, be amended, &c. amends or repeal this act.Approved, June 15, 1866. ACT OF 1866. [14 U. S. STATUTES AT LARGE, PAGE 239-242.] July 25, 1866. CHAP. CCXLII.-An act granting lands to aid in the construction of a railroad and telegraph line from the Central Pacific Railroad, in California, to Portland, in Oregon. The California Be it enacted by the Senate and House of Representatives of the United and Oregon Rail- States of America in Congress assenbled, That the "Califorriia and Oread an Oregony gon Railroad Company," organized under an act of the State of Califorand an Oregon. company may lo- nia to protect certain parties in and to a railroad survey, "to connect cate and con-Portland, in Oregon, with Marysviile, in California," approved April struct a-railroad sixth, eighteen hundred and sixty-three, and such company organized a n d telegraph under the laws of Oregon as the legislature of said State shall hereafPortland, bOreg., ter designate, be, and they are hereby, authorized and empowered. to and the Central lay out, locate, construct, finish, and maintain a railroad and telegraph Pacific Railroad line between the city of Portland, in Oregon, and the Central Pacific What part the Railroad, iCalifornioa, in the manner following, to wit: The said CaliCalifornia a n d fornia and Oregon Railroad Company to construct that part of the said Oregon company railroad and telegraph within the State of California, beginning at some to build. point (to be selected by said company) on the Central Pacific Railroad in the Sacramento Valley, in the State of California, and'running thence northerly, through the Sacramento and Shasta Valleys, to the northern boundary of the State of California'; and the said Oregon company to construct that part of the said railroad and telegraph line within the State of Oregon,beginning at the city of Portland, in Oregon, and' running thence southerly through the Willamette, Umpqua, and Rogue River Valleys to the southern boundary of Oregon, where the same shall connect with the part aforesaid to be made by the first-named company: The company Provided, That the company completing its respective part of the said first completing railroad and telegraph from either of the termini herein named to the its part may continue its road line between California and Oregon before the other company shall' with consent of have likewise arrived at the saome. line, shall have the right, and the State. said company is' hereby authorized to continue in constructing the same beyond the line aforesaid, with the consent of the State in which the unfinished part may lie, upon the -terms mentioned in this act, until the said parts shall meet and connect; and: the whole line of said railroad and telegraph shall be completed. *This act'is inserted because of its application to inter-State commerce, and not on account of any special reference to the Union Pacific Railroad. PACIFIC RAILROADS. 65 SEC. 2. And be it frlther enacted, That there he, and hereby is, granted Grantof public to the said companies, their successors and assigns, for the purpose of lands, not mineraidilg in the construction of said railroad and telegraph-line, and to se- panis to aid in cure the safe and speedy transportation of the mails, troops, munitions the construction of war, and public stores over the line of said railroad, every alternate of road, &c. section of public land, not mineral, designated by odd numbers, to the amount of twenty alternate sections per mile (ten on each side) of said railroad-line; and when any of said alternate sections or parts of see- If any sections tions shall be fiound to have been granted, sold, reserved, occupied by sol or aree occuhomestead-settlers, pre-empted, or otherwise disposed of, other lands, pied, other lands designated as aforesaid, shall be selected by. said companies in lieu there- may be selected of, under the direction of the Secretary of the Interior, in alternate sec- in lieu thereof. tions, designated by odd numbers as aforesaid, nearest to and not more than ten miles beyond the limits of said first-named alternate sections; and as soon as the said companies, or either of them, shall file in the office of the Secretary of the Interior a map of the survey of said rail- When maps of road, or any portion thereof, not less than sixty continuous miles from lands to be witheither terminus, the Secretary of the Interior shall withdraw from sale drawn from sale. pnublic lands herei.n granted on each side of the railroad, so far as located and within the limits before specified. The lands herein granted shall Lands granted be applied to the building of said road within the States, respectively, to be applied to Wvherein they are situated. And the sections and parts of sections of bil'ding road in land which shall remain in the United States within the limits of the the States where aforesaid grant shall not be sold for less than double the minimum price y. of public lands when sold: PIrovided, That bona-fide and actual settlers I (l t e obioldg under the pre-emption laws of the United States may, after due proof for what price. of settlement, improvement, and occupation, as now provided by law, Settlers' under purchase the same at the price fixed for said lands at the date of such pre.-mption laws settlement, improvement, and occupation: And plrovided also, That set- phsll uSe' at tilers under the provisions of the homestead act, who comply with the Under hometerms and requirements of said act, shall be entitled, within the limits of stead act may said grant, to patents for an amount not exceeding eighty acres of the have not over land so reserved 1)y the.United States, anything in this act to the con- eighty acres. trary notwithstanding. S1C. 3. And be it lfr.ther enacted, That the right of way through the Right of way public lands be, and the samne is hereby, granted to said companies for lands granted to the construction of said railroad and telegraph-line; and the right, pow- said companies. er, and authority are hereby given to said companies to take from the Materials for public lanuds adjacent to the line of said road earth, stone, timber, water, ons tfro r t ion and other materials for the construction thereof, Said right of way is lands. granted to said railroad to the extent of one hundred feet in width on Extent of grant each side of said railroad where it may pass over the public lands, in- of right of way. cluding all necessary grounds for stations, buildings, workshops, de- Land for stapots, machine-shops, switches, side-tracks, turn-tables, water-stations,tns, & or any other structures required in the construction and operating of said road. SEC. 4. And be it further enacted, That whenever the said companies, or When and how either of them, shall have twenty or more consecutive miles of any por- patents for these tion of said railroad and telegraph-line ready for the service contem- hantissue toanid plated by this act, the President of the United States shall appoint three companies. commissioners, whose compensation shall be paid by said company, to examine the same, and if it shall appear that twentV consecutive miles of railroad and telegraph shall have been completed and equipped in all respects as required by this act, the said commissioners shall so report un(ler oath to the President of the United States, and thereupon patents shall issue to said companies, or either of them, as the case mnay be, for the lands hereinbefore granted, to the extent of and coterminous with the conmpleted section of said railroad and telegraph-line, as aforesaid; and from time to time, whenever twenty or more consecutive miles of the said road and telegraph shall be completed and equipped as aforesaid, patents shall in like manner issue upon the report of the said comimissioners, and so on until the entire railroad and telegraph authorized by this act shall have been constructed, and the patents of the lands herein granted shall have been issued. SEC. 5. And be it firther enacted, That th'e grants aforesaid are made Conditions of upon the condition that the said company shall keep said railroad and grants. telegraph in repair and use, and shall at all times transport the mails upon said railroad, and transmit dispatches by said telegraph-line, for the Government of the United States, when required so to do by any Department thereof, and that the Government shall at all times have the IH. RIp. 440 —5 66 6PACIFIC RAILROADS. preference in the use of said railroad and telegraph, therefor, at faiir and reasonable rates of compensation, not to exceed the rates paid by priRahlload tool ea vate parties for the same kind of service. And said railroad shall be, public highway, and free to the and remain a public highway, for the use of the Government of the'United States. United States, free of all toll or other charges upon the transportation of the property or troops of the United States; and the same shall be transported over said road at the cost, charge, and expense of the corporations or companies owning or operating the same, when so required lby the Government of the United States. Companies, SEC. 6. And be it further enacted, That the said companies shall file when totile assent their assent to this act in the Department of the Interior within one to this ct. year after the passage hereof, and shall complete the first section of Rate of pro twenty miles of said railroad and telegraph within two years, and, at gress to be made' Gauge. least twrenty miles in each year thereafter; and the whole on or before To be connect- the first day of July, one thousand eight hundred and seventy-five; and ed with Central the said railroad shall be of the same gauge as the "' Central Pacific Pacific Railroad. Railroad" of California, and be connected therewith. CompamnPies to SEC. 7. And be it further enacted, That the said companies named in road as one con- this act are hereby required to operate and use the portions or parts of tinuous line, and said railroad and telegraph mentioned in section one of this act for all to secure to each purposes of transportation, travel, and communication, so far as the Govotler equal ad- ernment and public are concerned, as one connected and continuous line; and in such operation and use to afford and secure to each other equal advantages aind facilities as' to rates, time, and transportation, without any discrimination whatever, on pain of folfeiting the full amount of damages sustained on account of such discrimination, to. be sued for and recovered in any court of the United States, or of any State, of competent jurisdiction. if compaines SlSEcc. 8. And be it further enacted,' That in case the said companies shall with certain conr fail to comply with the terms and conditions required, namely, by not ditious, this act filing their assent thereto as provided in section six of this act, or by not to be void, and comupleting the same as provided in said section, this act shall be null eed torenerto toand void, and all the lands not conveyed by patent to said company or theUnitedStates. companies, as the case may be, at the date of any such failure, shall reIf roadand tele- vert to the United States. And in case the said road and telegraph-line graph-lineare not shall not be kept in repair and fit for use, after the same shall have been rept in repair, completed, Congres s may pass an act to put the same in repair and use, &c.' and may direct the incolme of said railroad and telegraph line to be there thereafter devoted to the United States, to repay all expenditures caused by the default and neglect of said conlpanies, or either of them, as the case may be, or niay fix pecuniary responsibility, not exceeding The ompanies the value of the lands grantecl by this ac, t. to' compai.t o be goveIne C. 9. And be itfrlther enacted, That the said "California and Oregon by the laws of Railroad Company " and the said " Oregon C-otpany" shall be governed their respective by the provisions of the general railroad and telegraph laws of their States. respective States, as to the construction and management of the said railroad and telegraph line hereinbefore authorized, in all matters not Theword "com- provided for in this act. Wherever the word " company " or "' compaparsc" toinalude nies is used in this act, it shall be construed to embrace' the words ~' associates, suc-'cessors, and as- " their associates, successors, anti assigns," the same as if the words had sirgns." been insertedl or thereto annexed. Mineral lands SEC. 10. And be itfurther enacted, That all mineral lands shall be exexcepted fro m cepted from the operation of this act; but where the same shall contain this grant. Tiniberforcon- timber. so mnuch of the timber thereon as shall be required to construct struction. said road over such mineral land is hereby granted to said companies: "Mirderal" not Provided, That the term "mineral lands" shall not include lands concal and iron, tamingin coal and iron. Companies to SEC. 11. And be it further enacted, That'the saidcompanies named in obtain consent of States, wlere this act shall obtain the consent of the legislatures of their respective road and tele- States, and be governed by the statutory regulations thereof in all matgraph-line do not ters pertaining to the right of way, wherever the said road and telepassthron gh ib- graph-line shall not pass over or through the public lands of the United lie lands. States~ Amendetmay be SEC. 12. And be it'further enacted, That Congress may at any time, having due regards for the rghts of said California and Oregon Railroad Com,lpanies, add to,' alter, amend, or repeal this act. Approved July 25, 1866. PACIFIC RAILROADS. 67 RESOLUTION OF 1866. [14 U. S. STATUTES AT LARGE, PAGE 367.] (No. 85).-A resolution granltinu the right of way through military reserves to the July 26, 1866. Union Pacific Railtoad Colmpany and its branches. Resolved by the Senate and House'of Representatives of the Unitedl Rilght of way States of Amnerica in Congress assembled, That, sub1ject to approval by the grainted to t il President, the right of way, one hundred feet in width, is hereby granted Railroad nC o l0 - to the Union Pacific Railroad Company and tha companies constructing pan l, and its branch roads connecting therewith, for the construction and operation branches through of their roads over and upon all military reserves through which the the military re-... set apart to serves. Grant for same may pass; and the President is hereby authorized to set apart to depot and other the Union Pacific Railway Company, eastern division, twenty acres of purposes. the Fort Riley military reservation, fbr depot and otherpurposes, in the Such portions Ibottomn opposite "Riiey City;" also fractional section "one" on the of these reserves botto-s opposite Riley City as are not needed west side of said reservation, near Junction City, for the same purposes;for military purand also to restore, from time to time, to the public domain, any portion poses, to be reof said military reserve over which the Union Pacific Railroad or any stored to putblic of its brauches, may pass, and which shall not, be required for military. Usefulness for purposes: Provided, That the President shall not permit the location of militarypurposes airy such railroad or the diminution of any such reserve in any manner not to be inte'rso as to impair its usefulness for military purposes, so long as it shall be fered with. required therefor. Approved, July 26, 1866. ACT OF 1868. [15 U. S. STATUTES AT LARGE, PAGE 39.] CHAP. XX.-An act restoring lands to market along the line of the Pacific Rail- March 6,1863. road, and( branches. Be it enacted by the Sen,.ate and House of Representatives of the United Lands on line -. o f Pacific RailStates of.Aserica in Congress assentbled, That nothing in the act approved r oa d s a aiiJuly first, eighteen hundred and sixty-two, entitled "An act to aid in branches restored the construction of a railroad and telegraph-line from the Missouri River to market. to the Pacific Ocean, and to secure to the Government the use of the 1t62,ch120, vol. same for postal, military, and other purposes," and the acts amendatory x, p. 4 6vol9. thereof, shall be held to authorize the withdrawal or exclusion from xiii, p. 356. settlement and entry, under the provisions of the pre-emption or home- 1866,ch.156.vol. stead laws, the even-numbered sections along the routes of the sevral xiv, p. 79, vol. xi, roads therein mentioned which have been or may be hereafter located' PP 335, 367. _Provided, That such sections shall be rated at two dollars and fifty cents Price of lands. per acre, and subject only to entry under those laws; and the Secretary of the Interior be, and is hereby, authorized and directed to restore to homestead settlement, pre-emption, or entry, according to existing Homesteadantl laws, all the even-numbered sections of land belongingi to the Govern- Pme- e in p t io n mlent, and now withdrawn fromn market, on both sides of the Pacific g Railroad and branches, wherever said road and branches have been definitely located. Approved, March 6, 1868. ACT OF 1868. [15 IT. S. STATUTES AT LARGE, PAGE 79.j CHAP. LXXVII. —An act relative to filing reports of railroad companies. June 25, 1868. Be it enacted by the Senate and House of Representatives of the United Reports of berStates of America in Congress assembled, That the reports required to be tain railroads to made to the Secretary of the Treasury on or before the first day of July be made on or before October Ist, of each year, by the corporations created by or entitled to subsidies in each year, to unider the provisions of an act entitled "An act to aid in the construec- Secretary of Intion of a railroad and telegraph-line from the Missouri River to the teror. Pacific Ocean, and to secure to the Government the use of the same for 1862, cl.120,vol. postal, military, and other purposes," approved July first, eighteen hun- xii, p. 489. 68. PACIFIC RAILROADS. 1,964,ch.216,vol. dred and sixt,y-two, and the acts supplemental to and amendatory thereof, xld, p. 356. shall hereafter be made to the Secretary of the Interior on or before 1865, ch. 88, vol. xii, p. 504; to con- the first day of October of each year. Said reports shall furnish full tain what. and specific information upon the several points mentioned in the twentieth section of the said act of eighteen hundred and sixty-two, and shall be verified as therein prescribed, and on failure to make the same as herein required, the issue of bonds or patents to the company in default shall be suspended until the requirements of this act shall be comFormer re-plied with by such company. And the reports hitherto made to the ports. Secretary of the Treasury under the said act of July first, eighteen hundred and sixty-two, shall be transferred and delivered by him to the Secretary of the Interior to be filed by him. Reportsof or- SEC. 2. And be itfarlther enacted, That the corporations created by the thern Pacific, At- provisions of the acts of Congress approved July second, eighteen hunlantio & Pacific, dred and sixty-four, and July twenty-seventh, eighteen hundred( and and Southern Pacific, to be miade sixty-six, and known as the Northern Pacific Railroad Company, the lhlen, &c. Atlantic and Pacific Railroad Company, and the Southern Pacific Rail1 864,clh.216,vol. road Company, shall make reports to the Secretary of the Interior on or xiii' p' 3568 before the first of October of each year, as are required to be made by 1866, ch. 278, vol. xiv, p. 292. the Union Pacific Railroad and branches, under the provisions of the first section of this act, and on failure so to do, shall be subject to the like suspension. Rteportsofcom- SEC. 3. And be it further enacted, That the reports required from the missao ertoDpa be commissioners appointed to ekamine and report in relation to the road iient of the In- of any of the corporations whereto reference is made in this act, shall terioi-. be addressed to and filed in the Department of the Interior; and all such reports heretofore made shall be transferred to and filed in said Department of the Interior; and so much of any and all acts as requires any reports fioom such companies, or any officers thereof; to be made to the Secretary of the Treasury, is hereby repealed. RIepealin g SEC. 4. A.nd be it further enacted, That, in addition to the eight subCianports of enjects referred to in section twenty of the act of July, eighteen hundred gineers and other and sixty-two, to be reported upon, there shall also be furnished anofficerswho made nually to the Secretary of the Interior, all reports of engineers, superreports, to be fur- intendents, or other officers who make annual reports to any of said. nished. railroad companies. A-pproved, June 25, 1868. AMENDMENT OF 1868. [15 U. S. STATUTES AT LARGE, PAGE 80.] June 25, 1868. CHIAP. LXXX.-An act to amend an act entitled "An act grantinD lands to aid in 1866, ch. 242, 6, the constructiton of a railroad and telegraph-line from the Central Pacific Railroad, vol. xiv, p. 241. in California, to Portland, in Oregon." Timeofcomple- Be it enacted by the Senate and House of Representatives of the United t.ion of railroad States of America in Congress assembled, That section six of an act entiand telegraph, tied "AD act granting lands to aid in the construction of a railroad and telegraph-line from the Central Pacific Railroad, in California, to Portland, in Oregon," approved July twenty-fifth, eighteen hundred and sixty-six, be so amended as to provide that instead of the times now fixed in said section, the first section of twenty miles of said railroad and telegraph shall be completed within eighteen months from the passage of this act, and at least twenty miles in each two years thereafter, and the whole on or before the first day of July, anno Domini eighteen hundred and eighty. Approved, June 25, 1868. AMENDMENT OF 1869. [16 U. S. STATUTES AT LARGE, PAGE 47.] April 10, 1869. CHAP. XXVII.-An act to amend an act entitled "An act granting lands to aid in the construction of a railroad and telegraph-line from the Central Pacific Railroad, 1866, ch.242, vol. in California, to Portland, in Oregon," approved July twenty-five, eighteen hundred xiv, p. 239. and sixty-six. Assent of rail- Be it enacted by the Senate and House of Representatives of the United road company to States of America in Congress assembled, That section six of an act entiact may be filed tiled "An act granting lands to aid in the construction of a railroad and frowithin one year telegraph-line from the Central Pacific Railroad, in California., to Portland, in Oregon," approved July twenty-five, eighteen hundred and PACIFIC RAILROADS. 69 sixty-six, be, and the same is hereby, amended so as to allow any railroad company heretofore designated by the legislature of the State of Oregon, in accordance with the first'section of said a ct; to file its assent to such act in the Department of the Interior within one year from the date of the passage of this act; and such filing of its assent, if done wit.hin one year from the passage hereof, shall have the same force and effect, to all intents and purposes, as if such assent had been filed within one year after the passage of said act: Provided, That nothing herein Acqiredrights not affected. shall impair any rights heretofore acquired by any railroad company under said act, nor shall said act or this amendment be construed to Not mrre, than entitle more than one company to a grant of land. And provided further, one company entitled to a grant That the lands granted by the acts aforesaid shall be sold to actual set- of land. tiers only, in quantities not greater than one quarter-section to one pur- Lands, how an0(l chaser, and for a price not exceeding two dollars and fifty cents per acre. to wholm to be Approved, April 10, 1869. sold. JOINT RESOLUTION for the protection of the interests of the United States in the April 10, 189. Union Pacitic Railroad Company, the: Central Pacific Railroad Company, and for other purposes.. Be it resolred by the Senate and House of Representatives of the United Stockholdersof States of America'in Congress asse)mlbled, That the stockholders of the Ullion Pacific Union Pacific Railroad Company, at a meeting to be held on the twenty- Railroad C or - second day of April, eighteen hundred and sixty-nine, at the city ofpany to elect a board of direct. Boston, (with power to adjourn from day to day,) shall elect a board of ors; to establish directors for the ensuing year; and said stockholders are hereby author- t h e i r general ized to establish their general oflice at such place in the United States office. as they may select at said meeting: Provided, That the passage of this resolution shall not confer any other right upon said Union Pacific No other right Railroad Company than to hold such election, or be held in any manner con ferre d or to relinquish or waive any rights of the United States to take advan- waived hereby. tage of any act or neglect of said Union Pacific Railroad Company heretofore done or omitted whereby the rights of the General Government Common terhave been or may be prejudiced: And provided, firther., That the corm- luPa-ofi the moon terminus of the Union Pacific and the Central Pacific Railroads Central Pacific shall be at or near Ogden; and the Union Pacific Railroad Company Railroads to blat shall build, and the Central Pacific Railroad Company pay for and own or near Ogden, the railroad front the terminus aforesaid to Promontory Summit, at which &c. point the rails shall meet and connect and form one continuous line. SEc. 2. And be it further resohled, That, to ascertain the condli- The President io appoint a conotion of the UJnion Pacific Railroad and the Central Pacific Rail- mission to exroad, the President of the United States is authorized to appoint aminieanl report a. board of eminent citizens, not exceeding five in number, and upon the roads. who shall not be interested in either road, to examine and report upon the condition of, and what sum or sums, if any, will- be required to coomplete, each of said roads, for the entire length thereof, to the said terminus as a first-class railroad, in compliance with the several acts relating to said roads; and the expense of such b)nard, including an allowance of ExpeInses ansl ten dollars to each for their services for each day employed in such ex- sioners. commamination or report, to be paid equally by said companies. Sa:c. 3. And be it farther resolved, That the President is hereby author- Subsidy - bornds ized and required to withhold from each of said companies an amount to ble withheld sufficient to seof subsidy bonds authorized to be issued by the United States under said core the full coneacts sufficient to secure' the full completion as a first-class road of all pletion, as afirtsections of such road upon which bonds have already been issued, or in class road, of all lieu of such bonds he may receive as such security an equal amount of the sections of such first-mortgage bonds of such company; and if it shall appear to the President that the amount of subsidy-bonds yet to be issued to either If the amou'lt of said companies is insufficient to insure the full completion of such to lie islued is inroad, he may make requisition upon such company for a sufficient amount sufficient, &c. of bonds already issued to said company, or in his discretion of their firs'mortgage bonds, to seCure the full completion of the same. And in default of obtaining such security as [is] in this section provided, the President may authorize and direct the Attorney-General to institute Attorney-G inlesuch suits and proceedings on behalf and in the name of the United necessary suits. States, in any court of the United States having jurisdiction, as shall be necessary or proper to compel the giving of such security, and thereby, or in any manner otherwise, to protect the interests of the United States in said road, and to insure the full completion thereof as a first-class road, as required by law and the statutes in that case made. .70 PACIFIC RAILROADS. Altorney-Gene- SEC. 4. And be"it further resolved, That the Attorney-General of tne ral to investigate United States be' and he is hereby, authorized and directed to investiwhether the char-' ters of the, Union gate whether or not the charter and all the franchises of the Union PaciPacific and Cen- fic Railroad Company and of the Central Pacific Railroad Company have tral Pacific Rail- not, been forfeited, and to institute all necessary and proper legal proroads have not ceedings; also to investigate whether or not said companies have or be en forfeited, I hc. ave not made any illegal dividends upon their stock, and if so to institute the necessary proceedings to have the same re-inbursed; and also To institute to investigate whether any of the directors or any other agents or emc{,iminalproceed- ployds of said companies have or not violated any penal law, and if so ings, if, &c. to institute the proper criminal proceedings against all persons who have violated such laws. Approved, April 10, 1869. ACT OF 1870. [16 U. S. STATUTES AT LARGE, PAGES 121-2.] ZMay 6, 1870. CHAP. XCI V.-An act to fix the point of junction of the Union Pacific Railroad Company and the Central Pacific Railroad Company. Point of june- Be it enacted by the Senate and Houtse of Representatives of the United tion of the Union States of Alnerica in.Congress assembled, That the common terminus and sacific Railroad Company and the point of junction of the Union Pacific Railroad Company and the CenCentral Pacific tral Pacific Railroad Company shall be definitely fixed and established Railroad C o r - on the line of railroad as now located and constructed, northwest of the pany established station at Ogden, and within the limits of the sections of land hereinnorthwest of the sio a station at Ogrden,l after mentioned, viz: section thirty-six of township seven, of range two, &c. " situate north and west of the principal meridian and base line in the Territory of Utah, and sections twenty-five, twenty-six, and thirty-five of township seven, of range two, and section six of township six, and sections thirty and thirty-one of township seven, of range one, and sections one and two of township six, of range two, all situate north and west of said principal meridian and base line; and said companies are Grant of cer- hereby authorized to enter upon, 1use, and possess said sections, which tain sections. are hereby granted to them in equal shares, with the same rights, privileges, and obligations now by law provided with reference to other lands granted to said railroads: Provided, hon-ever, That the' Secretary of the Interior shall designate a section of land in said township seven, R eserve for of range two, belonging to said companies. and reserve the same for the schools. benefit of schools in said Territory, in accorda;nce with the act of February twenty-one, eighteen hundred and fifty-five, establishing the office of surveyor-general of Utah, and to grant land for school and univerPrice of lad. sity purposes: Provided, also, That said companies shall pay for any additional lands acquired by this.act at the rate of two dollars and fifty Private rights. cents'an acre: And procided further, That no rights of private persons shall be affected by this act. Approved, May 6, 1870. AN ACT to repeal Certain sections of acts passed by the territorial legislature of Wyoming.* Sections of cer- Be it enacted by the Senate and Rouse of Representatives of the United States taiml acts of hf of America in, Congress assenbled, That the following sections of acts, passed legislature of Wyoiuing declared by the legislature of the Territory of Wyolning, to wit, the fourth and null. sixth sections of an act entitled "An act providing for the collection of taxes heretofore assessed and levied in this Territory;" also sections forty-nine to fifty-nine, both inclusive, of an act entitled "An act to create and regulate corporations," be, and the same are hereby disapproved, repealed, and declared null and void. Approved, July 1, 1870. * The sections of the laws of Wyoming Territory declared void by this act, though general in their ternis, were so evidently intended to apply to the Union Pacific Railroad Company, that Congress promptly intervened for the protection of said company. PACIFIC RAILROADS. 71 ACT OF 1871. [16 U. S. ST.ITUTES AT LARGE, PAGE 525. ] CrHAP. CXVI. —An act making appropriations for the support of the Army for the March 3, 1871. year ending June thirtieth, eighteen hundred and seventy-two, and for other purposes. SEC. 9. That, in accordance with the fifth section of the act approved Secretary of the July two, eiglhteen hundred and sixty-four, entitled " An act to amend Treasury to pay an act entitled -'An act to. aid in the construction of a railroad and Railroad C o n - telegraph-line from the Missouri River to the Pacific Ocean, and to panies one - half secure to the Government the use of the same for postal, military, and of compensation, other purposes,' approved July first, eighteen hundred and sixty-two." &c. the Secretary of the Treasury is hereby directed to pay over in money 186s, ch.1'0, vol. to the Pacific Railrotad Companies mentioned in said act, and perform- xii, p. 489. ing services for the United States, one-half of the compensation att the iS.4,ch.216,vol. rate provided by law for such services, heretofore or hereafter rendered: xiii p. 356. Provided, That this section shall not be construed to affect the legal Legal rights of rights of the Governnlent or the obligations of the companies, except as pwrties not otherherein specifically provided. Approved, March 3, 1871. ACT OF 1873. [17 U. S. STATUTIES AT LARGE, PAGE 508.] CHAP. CCXXVI.-An act, making appropriations for the legislative, executive, and March 3, 1873. judicial expenses of the Government for the year ending June 30,1874, and for other purposes. SEC. 2. That the Secretary of the Treasury is directed to withhold all Secretary of the, payments to any railroad company and its assigns, on accolnt of freigrhts Treasurly to withhold payments to or transportation, over their respective roads, of any kind, to the amount certain railroad of payments made by the United States for interest upon bonds of the companies fo r United States issued to any such company, and which shall not have been freight, &c. re-imbursed, together with the five per cent. of net earnings due and unapplied as provided by law; and anly such company may.bring suit in the Companies may Court of Claims to recover the price of such freight and transportation; brintg oa 1 i t i n and in such suit the right of such company to recover the samre upon the Court of Claims. law and the facts of the case shall be determined, and also the rights of the United States upon the merits of all the points presented by it in Appeal to Suanswer thereto by them, and either party to such suit may appeal to causes tCo havet; the Supreme Court; and both said courts shall give such cause or causes precedence. precedence of all other business. Approved, March 3, 1873. ACT OF 1874. [18 U. S. STATUTES AT LARGE, PAGES 111, 112.] CIAP. CCCXXXI.-A-u act making additions to the fifteenth section of the act ap- June 20,1874. proved Jul- 2, 1864, entitled "An act to amend an act entitled'An act to aid in 186i4, ch.2t1,vol. the construction of a railroad and telegraph-line from the Missouri River to the xiii, p. 36-2. Pacific Ocean, and to secure to the Government the use of the same for postal, 186-2, ch. 120, vol. military, and other purposes,' approved July 1, 1862." xii, p. 489. Be it enacted by the Senate ard foumcse of Rep~resentatives of the United States A-mendment to of Amer'ica iG Congress assembled, That there shall be, and is hereby, section 15. a c added to the fifteenth section of the act approved July second, eighteen Jut1y 2, 1864, ch. hundred and sixty-four, entitled "An act to amend an act entitled'An 362. act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, rnilitary, and other purposes,' approved July first, eighteen hundred and sixty-two," the following words, namely, "'And any officer or agent of the companies authorized to construct the aforesaid roads, or of any company engaged in operating Refusal to opeeither of said roads,'who shall refuse to operate and use the road or rate and ulse Patelegraph under his control, or which he is engaged in operating, for all cifie Railroads as purposes of communication, travel, and, transportation, so far as. the continuous lines, public and the Government are concerned, as one continuous line, or &c., penalty.' shall refuse, in such operation and use, to afford and secure to each of said roads equal advantages and facilities as to rates, time, or transportation, without any discrimination of any kind in favor of, or adverse to, the road or business of any or either of said companies, shall be deemed guilty of a misdemeanor, and, upon conviction thereof; shall he fined in any sum not exceeding one thousand dollars, and may be impris 72 PACIFIC RAILROADS. In case of a oned not less than six months. In case of failare or refusal of the Union failure, &c., of Pacific Railroad Company, or either of said branches, to comply with Railroad Co m - the requirements of this act and the acts to which this act is amendapany, orbanches, tory, the party injured or the company aggrieved may bring an action to comply,.&c., in the district or circuit court of the United States in the Territory, disparties aggrieved trict, or circuit in which any portion of the road of the defendant may mav bring suit for damages. be situated, for damacges, on account of such failure or refusal; and, upon Treble dam- recovery, the plaintiff shall be entitled tojudgment for treble the amount ages, &c., may be of all excess of freight and fares collected by the defendant, and for treble recovered. the amount of damages sustained by the plaintiff by such failure or refusal; and for each and every violation of or failure to comply with the requirements of this act, a new cause of action shall arise; and in case of suit in any such Territory, district, or circuit, process may be served Service upon any arent of the defendant found in the Territory, district, or circess. cult in which such suit may be brought, and such service shall be by the court held to be good and sufficient; and it is hereby provided that for all the purposes of said act, and of the acts amendatory thereof, the railDenver Pacific way of the Denver Pacific Railway and Telegraph Company shall be Railway to be deemed and taken to be a part and extension of the road of the Kansas deemned extensio Pacifc Railroad, to the polnt of junction thereof with the road of the of]KansasPacifi c, 1869, ch. 127, vol. Union Pacific Railroad Company at Cheyenne, as provided in the act of xv, p. 324..March third, eighteen hundred and sixty-nine. Approved, June 20, 1674. ACT OF 1874. [18 U. S. STATUTES AT LARGE, PAGE 200.] June 22, 1874. C-HAP. CCCCXIV.-An act providing for the collection of moneys due the United States froml the Pacific Ilailroad Companies. Secret a r y of Be it enacted by the Senate and House of Replresentatives of the United States Treasury to re- of America in Con gress assembled, That the Secretary of the Treasury be, quire pacymentm o and hereby is, directed to require payment of the railroad companies, 5 per centum net earningsfrom'Pa- their successors and assigns, or the successors or assigns of any or either cifie Railroad of said companies, of all snrum of moiiey due, or to become due, the Companies. United States for the five per centurn of the net earnings provided for by the act entitled "An act to aid in the construction of a railroad and 1862,ch.l20,vol. telegr'aph line from the Missouri River to the Pacific Ocean, and to Xi, tpp. 4- 48a.ol secure to the Governiment the use of the same for postal, military, and xiii, pp. 356-;365. other purposes," approved July first, eighteen hundred and sixty-two, 1873, ch. 296, ~~ or by any other act or acts in relation to the companies therein namned, 2 4. vol. xvii, pp. or any other such company or companies, and in case either of said rail8-5 to pa09. road companies shall neglect or refuse to pay the same within sixty within sixtydays days after demand therefor made upon the treasurer of such railroad after demand to company, the Secretary of the Treasury shall certify that fact to the lbe certified to Attorney-General, who shall thereupon institute the necessary suits and A torey - Gone- proceedings to collect and otherwise obtain redress in respect of tlte ral. t Attoruey- Gen- same in the proper circuit courts of the United States, and prosecute eral to institute the same, with all convenient dispatch to a fiual deterxinatior. suits a n d pro- Approved, June 22, 1874, ceedintugs. T o prosecute with dispatch. PACIFIC RAILROADS. 73:B _Y-L AW" S. ARTICLE I. ELECTION OF DIRECTORS. SECTION 1. The annual election of directors of the company shall be held on the first Wednesday following the fourth (lay of March in each year, at 10 o'clock a. m., at such place as shall have been previously appointed by the stockholders. The board of directors shall previously appoint three inspectors, who shall be holders of full-paid stock, to preside at such election, and shall close the stock-transfer books for ten days previous to the time appointed for holding the same. SEC. 2. Due notice of the time and place of holding such election shall be published by the president and secreta'ry, for at least thirty days previous, in one or more newspapers published in New York, and such other places as the president or board may direct. The board of directors shall cause to be prepared an alphabetical list of the stockholders, registered as such, at the close of the stock-transfer books, with the number of shares held by each, for the use of the inspectors on the clay of election. SEC. 3. The polls shall be opened by the acting inspectors, at the time and place appointed, and kept open for at least two hours. The inspectors of election shall be judges of the qualifications of voters, and shall proceed to canvass the votes as soon as the polls are closed, and shall sign a certificate of the result of the election, and deliver the same to the secretary, or, in his absence, to some other officer of the company. ARTICLE II. MEETINGS OF THE BOARD. SECTION 1. Stated meetings of the board shall be held quarterly, at such place and hour as shall fromn time to time be agreed upon by the board. Special meetings may be called by the secretary, when ordered by the president, or on the written request of five or more directors. SEC. 2. At the first meeting of the directors after an election, before any business is taken up, the secretary shall read the certificate of election, when the board shall be orglanized by the election of officers. ARTICLE III. OFFICERS AND THEIR DUTIES. SECTION 1. The officers of the company shall consist of a president, vice-president, secretary, and treasurer, as provided for by law, and such other officers as the board may designate. SEc. 2. The president and vice-president shall hold their respective offices during the continuance of the term of the board of directors which elects them. All other officers shall hold their offices during the pleasure of the board of directors. SEc. 3. The president shall preside at all meetings of the board of directors when present; shall have a general care, supervision, and direction of the affairs of the company and employds, under the direction of the board of directors; shall have such other powers and perform such other duties as the board of directors may, from time to time, confer or prescribe. SEc. 4. It shall be the duty of the vice-president, in case of the absence, death, sickness, or other inability of the president, to preside at the meetings of the board, and to exercise the powers and discharge the duties of that office until the president returns to duty. The board may, at their discretion, assign to the vice-president, by resolution, a portixo of txe ov ers axd c& uties of the president. SEc. 5. It shall be the duty of the secretary to notify officees arnd directors of their election; to give timely notice to all the directors of the stated and special meetings of the board; to attend such meetings,'a.d keep accurate mimltes of the same in the book prov frie/ iz-zt irpose,/ [tokaep the minutes of the meetings of the standingl co.m 74 PACIFIC RAILROADS. mittees, when requested; to affix the corporate seal of the company when directed by the board or president, and attest the same; and generally to discharge all the ordinary duties of a secretary, and such as may be required of him by the board. SiEc. 6. The board of directors shall have power to fill any vacancy that may occur by reason of death, resignation, or otherwise, of any director. ARTICLE IV. SECTION 1. The board of directors, at their first meeting after every annual election, shall elect, by ballot, from their own number, a president and vice-president, and nmy also elect a secretary and treasurer, or may continue tie then incumbents in office by resolution. The board of directors shall have the whole charge and management of the property and effects of the company, and they may delegate power to the executive committee to do any and all acts which the board is authorized to do, except such acts as, by law or these by-laws, mrust be done by the board itself. The board shall have power, in the absence of the president and vice-president, to appoint a chairman pro tempore, and, during the prolonged absence of the president, or other officers, to appoint substitutes pro tenmpore. A majority of all the members is necessary to a quorum, but less than a quorum may adjourn from time to time. The board of directors may prescribe the duties and powers of the secretary, trea surer, engineers, and all subordinate officers and agents; fix the salaries of all officers of the company; make all needful rules and regulations, not inconsistent with the charter, for the transfer of the stock of the company, the issuing of certificates of stock, keeping the records and accounts of the company, the management and disposition in particular of the stock, property, estate, and effects of the company, and the construction and operating of the railroad and telegraph of this company. At each annual meeting of the stockholders, the board of directors shall cause to be presented to said meeting a general statement of the affairs of the conmpany. The board of directors shall have power to delegate authority to do and perfornm specific acts, not inconsistent with the charter, to special committees, to be appointed by the board or presiding officer, at the option of the board. ARTICLE V. STANDING COMMITTEES. SECTION 1. The standing committees shall consist of an, executive committee, a finance committee, and a land committee. They shall be appointed by the board, and shall each consist of seven umembers. SEC. 2. The executive committee shall have, and may exercise, by a majority of its members, all the powers and authority which from time to tirn3 mwy be (lelegttedl to said committee by the board of directors. A record of all proceedings shall be kept, in a book provided for that their purpose, by the secretary, and certified. by him, which shall be read at the next ensuing meeting-of the board of directors. The secretary of the company shall call meetings of this committee on the request of any one of its members. SEC. 3. The finance committee and the land committee shall have such powers and perform such duties as the board~ of directors shall prescribe. ARTICLE VI. SPECIAL MEETINGS OF STOCKHOLDERS. SECTION 1. Special meetings of stockholders may be held at any time by order of the board of directors, and shall be, whenever stockholders owning onle-fourth part of the capital stock shall, in writing, make an application therefor to the president, stating the object of such meeting. SEC.'2. Notice of such special meetings shall be published in the same manner as notices for regular meetings, and, in addition, shall state the object of such meetings. SEC. 3. The business of all special meetings shall be confined to the objects stated in such notices. SEC. 4. No stockholder shall be entitled to vote at any election of directors or stockholders' meeting unless the stock owned by hinm shall have been standing in his name upon the books of the company at least ten days prior to such election. ARTICLE VII. AMENDMENTS. SECTION 1. These by-laws may be altered or amended at any imeeting of thle stockholders, provided due notice of such alteration or amendment shall have been given in the pnublished notice of such meeting. PACIFIC RAILROADS. 75 FIRST MORTGAGE. UT. S. This indenture, made this first; day of November, ev1, stamps,1865, between The Union Pacific Railroad Company, i Canceled. J a body-corporate, created by and under an act of the Congress of the United States of America, approved July 1, 1862, entitled "An act to aid in the construction of a Railroad and Telegraph Line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other pur- Edwin D. orposes," party of the first part, and Edwin D. Morgan of the city of gan and Oakes New York, and Oakes Ames of Easton, in the State of Massachusetts, Ames, trustees. parties of the second part. Witnesseth: Whereas the said party of the first part is authorized by the said act Authority to execute mortof Congress incorporating the same, and by the several acts of Congress gage and iia~suo amendatory thereof, namely, the act approved July 2, 1864, being chap- bonds given by ter 216, and the act approved March 3, 1865, being chapter 88, to borrow act of July 2, money for the objects and purposes therein mentioned, and to execute 1864, &c. a mortgage to secure the payment thereof as hereinafter contained, which bonds and mortgage by said acts of Congress are made the first lien, and unto it the lien of the Government bonds is subordinate; and whereas, for such objects and purposes, said party of the first part is desirous of borrowing a sum of money, which shall be equal to the amount per mile of United States bonds, provided by said acts to be issued to said company, for each and every muile of its said railroad completed and to be hereafter conlpleted, and of securing the payment of its corporate bonds to be issued and negotiated therefor, by a mortgage to said parties of the second part, as trustees, as hereinafter provided and set forth. And whereas, under and pursuant to lawful authority, conferred by Certain acts of said several acts of Congress, all of which are hereby declared to be ConfFressrelative to Union Pacific taken as a part of this instrument, the said party of the first part has Railroad m a d o determined to bake, execute, issue, negotiate, and deliver under its cor- part of this inporate seal its corporate bonds, from time to time, and severally payable strunleut.Terls, to bearer, for the sum of $1,000 each, thirty years after the date thereof, deomin a tlioDn, and interest of with semi-annual interest at the rate of 6 per centum per annum from bonds. the date thereof, to an amount equal, and not exceeding per mile, the amount provided to be issued by the Government of the United States, to aid in the construction of said railroad: each of said bonds so to be issued to bear date of the time of its issue, and to be in form and be certified and have coupons annexed as follows: UNITED STATES OF AMERICA. FIRST-MORTGAGE BON'DS. The Union Pacific Railroad Company acknowledges itself indebted Bonds, w h ie to the bearer hereof; in the sum of one thousand dollars, which sum the and where paid. said company promises to pay unto the holder hereof, at its office in the city of New York, thirty years after the date hereof, and also interest thereon, at the rate of 6 per centurn per annum, payable semi-annually from the date hereof, in lawful money of the Unitedl States, until the principal sum be paid, on presentation of the annexed interest-coupons at the office of the company in the city of New York. In testimony whereof, the said company has hereunto caused to be affixed its corporate seal, and these presents to be executed by its presi(lent and treasurer, at the city of New York, this - day of A. D. one thousand eight hundred and. - - -—, President. Tr,.1easurer. We, thle undersigned trustees, do hereby certify, that the above bond Certificate of is issued by virtue of authority granted to the Union Pacific Railroad trustees. Company by the acts of Congress of the`United States, approved July 2, 1864, chap. 216, and MarSh 3, t865, chap. 88, and is of similar tenor, except as to the-date, and of like amount with the other bonds issued and to be issued under the said acts of Congress; that the said company has executed to us a mortgage, dated November 1, 1865, purporting to convey to us the entire railroad and telegraph-line of said company, with its equipment and appurtenances, for the benefit of the holders of said bonds, and to secure the payment thereof; that the said mortgage has been recorded in every county through or in which the said road 76 PACIFIC RAILROADS. has been permanently located, and a certified copy thereof filed in the office of the Secretary of the Interior at Washington, and that the same is a first lien upon the line of the said company's road, and that no more such bonds have been certified by us than are authorized by the said acts of Congress. YTr}tstees. [COUPON.] Coupon. The Union Pacific Railroad Company will pay bearer, at its office in the city of New York, thirty dollars, on the - day of -, being interest due that day on its bond, No. --- -, ~Treasurer. And whereas said party of the first part has further determined, under and pursuant to authority so conferred by acts of Congress as aforesaid, to execute and acknowledge, under its corporate seal, and deliver to said parties hereto of the second part, a mrortgrage conveying, assigning and transferring to them in trust, all the corporate real and personal property, franchises and effects hereinafter specifically described, as seDate of mort- curity for the payment of the said bonds so to be issued, and the interc ate and how est to grow due thereon, and that said mortgage should contain all and singular the covenants and conditions hereinafter set forth, and should bear date the first day of November, 1865: Now, therefore, this indenture witnesseth: That the Union Pacific Railroad Company, party of the first part, under and pursuant to and by virtue of the express authority of said several acts of Congress as aforesaid, and for and in consideration of the premises, and for the purpose and with the intent of better and more effectually securing the payment of said bonds to be issued as aforesaid, with the interest due, and to grow due thereon, and for and in consideration of one dollar lawful money of the IUnited States of America, by the said parties of the second part hereto fully and truly paid to the said party of the first part, the receipt whereof is hereby acknowledged, hath bargained, sold, assigned, transferred and set over, enfeoffed, conveyed and contirmed unto the said Edwin D. Morgan and Oakes Ames, the said parties of the second part, as trustees, and in trust, and to the survivor of them, and to their successor or successors, all and singular the railroad and telegraph of the said party of the first part, heretofore constructed, or hereafter to be,What property, constructed, from a point on the western boundary of the State of Iowa, &c., iscovered by heretofore fixed by the President of the United States, pursuant to the mortgage. terms and provisions of said acts of Congress, to wit: At the city of Omaha, in the Territory of Nebraska; thence as provided in said acts of Congress, through the Territories of the United States to the western boundary of the late Territory of Nevada, together with all its lands, tenements, hereditaments, rights of way and easements, acquired or appropriated or which shall be hereafter acquired or appropriated, for the purpose of a right of way for a single, double, or other track, railroad, and telegraph-line, and for depots, engine-houses, car-houses, station-houses, warehouses, machine-shops, superstructuores, erections, and fixtures, being necessary for the use of said railroad or telegraph; and also all and singular the franchises, now owned, possessed, or acquired, or which shall be hereafter owned, possessed, or acquired by the said party of the first part, for the purpose of building and operating said railroad and telegraph above specified and described; and also all the rails, depots, yards, engine-houses, car-houses, stationhouses, warehouses, machine-shops, workshops, and fixtures of said party of the first part; and also all goods and chattels now owned, or which shall hereafter be owned or acquired by said party of the first part, necessary to said railroad and telegraph-line, or the running and operating the same. To have and to hold all and singular the premises, rights, franchises, lands and property, real and personal, hereinbefore and hereby assigned, mortgaged, pledged and conveyed, or intended to be, and every part and parcel thereof, with all the appurtenances unto the sanme belongProperty, &c., ing, or'in any wise appertaining, unto the said Edwin D. Morgan and covered by mort- nakes Ames, parties of the second part, and their survivor, successor or gage held in trust successors, and his or their assigns, in trust for the person or persons, for bondholders, firm or firms, bodies politic or corporate; who have heretofore, or who tion while no de- shall hereafter at any time become the purcLasers, or holders, or owners fault is made. of any or either of said bonds so to be issued as aforesaid, and subject to PACIFIC RAILROADS. 7 7 the terms, provisions, and conditions in said bonds contained, and subject also to the provisions and conditions of the said acts of Congress, and also subject to the possession and management of said railroad and telegraph-line and property by said party of the first part and its assigns, so long as no default shall be made in the payment of either the interest or principal of the said bonds so to be issued, or any of them, and so long as said party of the first part shall well and truly observe, keep, and perform all anfd singular the covenants, agreements, conditions, and stipulations in this indenture contained and set forth, and which are to be observed, kept, and performed by and on the part of the slid party of the first part. And the said Union Pacific Railroad Company, the party of the first Company covepart, covenants and agrees to and with the said parties of the second nants to pay all part, that it shall and will pay, or cause to be paid, all taxes, charges, tates, charges, rates, levies, and assessmlentss imposed, assessed, or levied, or which may hereafter be imposed, assessed, or levied upon the premises, lands, franchises, and property hereby mortgaged, conveyed, and assigned, or intended so to be; and shall and will, at its own proper cost, charge, and expense, do., or cause to be (lone, all the acts and things necessary or proper to be done or performed, in order to preserve and keep valid and intact the lien or incunmbrance upon all and singular the aforesaid lands and p emises, property and firanchises, hereby created; and further, that thle said party of the first part shall and will not, at any time hereafter, or in any way or manner, interfere or avail itself of any extension laws, appraisement laws, or any other laws of the States or Ter- Company n o ritories through which the said road shall pass, now in force, or hereafter to avail itself of to be enacted anl in force in said States or Territories, which would laws, &. e alter, affect, or impair, or which-are, or which may be designed, intended, or constrned to alter, affect, or change the rights and interests of the said parties of the second part, as herein declared, or which shall in any way impede or obstruct the mode or manner of realizing, perfecting, or enfircingr tho rights and interests of any of the owners or holders of said bonds so to be issued as aforesaid, or which shall affect, change, or alter the time, place, mlode, means, or manner of perfecting, enjoying, or enforcing any of such rights or interests as the same are herein declared; and also that the said party of the first part shall and will, at any time or times hereafter, and from time to time, execute, acknowl- Company to do edge, and deliver, under its corporate seal, to the said parties of the whatever may be second part, and the survivor, successor, or successors thereof, all such necessary a n d other or f~lrther assurances, deeds, mortgages, obligations, transfers, in- proper to effectl ilnrtherdeedsmortgages, oblgatonally secure the dentures, and instrumllents in writing, and shall and will do and per- bonds. form all such other or further acts or things as shall or may be necessary or proper, or as their counsel learned in the law shall deem necessary, proper, or expedient for the better or more effectually securing upon the above mortgaged premises the payment of the-said bonds so to be issued, and the interest due and to grow due thereon in manner -aforesaid, or for carrying into efflct the true intent, design, objects, and purposes of these Iresents, or making, preserving, continuing, and keeping valid and effectual the lien and incumbrance created, or intended to be created, by the execution, delivery, and recording of this indenture, upon the property, real and personal, rolling-stock, equipments, fianchises, and effects hereinbefore particularly described. This indletnreflrther witnesseth, That the said Union Pacific Railroad Company coyCompany, the party of the first part, by these presents further covenants enants. and agrees to and with the said parties of the second part hereto, and the survivor or survivors of them, and their and his snccessor or successors, as trustees, in manner and form following, that is to say: Fiirst. That the said Union Pacific Railroad Company, the party hereto To pay at time of the first part, shall and will well and truly pay the said sums of and in manner money secured in and by said bonds so to be issued as herein provided, specified. together with the semi-annual interest to become due thereon, at the rate of six per ceryqtunl per annum, at the times, in the manner, and at the place specified therein respectively. Second. That'no greater amount of bonds shall be issued or put in That no'bonds circulation under the provisions of this deed than the sum or amnount thary toissue cots of authorized to be issued by the act of Congress aforesaid, nor shall any Congress. such bonds be issued before the same lawfully may be issuable in pursuance of said acts. T/iird. If any default shllall be made in the payment of any of said bonds or coupons at the time and place when the sam-e, shall beconme payable, and such default shall continue for six months thereafter, then 7 8 PACIFIC RAILROADS. That trustees in the said trustees, on the request in writing of holders of a majority of case cf teoaslt, such bonds, then in force and so in default, may and shall forthwith sioloftmo,'tgageed enter into and take possession of'all and singular the saidl mortgaged property, &c., sell property, rights, and franchises, and use, operate, and manage the same the same, and'!' for the benefit, of the holders of all said bonds; and if such default shall ply proceeds in continue for the space of one year fromn the time of the happening of p no. such default, then said trustees, upon the request. in o\riting of the hollders of a majority of all said bonds then outstanding, may and shall offer for sale, and sell, all and singular the said mortgaged property, rights, and franchises, or so much thereof as may be necessary, at public auction, first giving notice of such sale by advertisement in one or more newspapers published inl the city of New York for a period of ninety days, and otherwise proceeding according to the statutes in such case Imade and provided; and as the attorneys of the said party of the first part for that purpose, by these presents duly authorized, constituted, and appointed, may, and shall, make and deliver to the purchaser or purchasers on said sale a good and sufficient deed or deeds of conveyance in the law of the lands and real property so sold in fee-simple, and of all other property, rights, franchises, and privileges so sold by such full, perfe.t, and effectual title and estate as the nature of the things solcl shall admit and alilor; and all proceeds of said mortgaged property, rights, and franchises which shall be realized by the managemient or operation thereof, or the sale thereof, provided f,r in this third clause, after deducting all necessary and proper costs, expenses, charges, and commissions of said sale, and all the other expenses and disbursements of the said trustees in their proceedings, shall be applied by said trustees to the payment of the moneys then owing for principal and interest upon such of said bonds as shall then remain in force, whether due or to become dclue, and without preference, and the surplus, if any, shall be paid by themn to the said party of the first part, its successors, or assigns. And in case of the said trustees entering and taking possession as aforesaid, then at any time afterward, but hefore such sale as aforesaid, en m ou n ts in upon the payment and satisfaction of all sumrs then payable on said Trfustees i. bonds for interest, and all costs, expenses, and charges incurred or aclilnquish prop- cruecl by reasoi of such entry, possession, and use, and the operating erty, &c. and using of the property by the said trustees, they, the said trustees, shall relinquish and restore the premises to the said party of the first part, to be held subject to these presents in like manner as if' such entry had not been ina(le. And whensoever the said trustees shall be in possession by means of any such entry, they shall have.full power to run and operate sai(l railPower of trms- road, and to do and carry on the business of the corporation, party. of tees in posses- the first part, including repairs, for the benefit of the holders of said sion. bonds under the trusts by these presents declared, in such manner as the said trustees shall deem discreet and advisable. Trustees paid, And for all services rendered by the said trustees in performance of h o w a n d b y any duty whatsoever under and by virtue of these presents, they shall who m. be entitled to receive froml the parties of the first part, or from and out of the said property or its proceeds, a fair and proper compensation. THIS INDENTURE FURTHER WITNESSETH: That these presents are upon Mort g a ge t the express condition that upon the payment of all the bonds so issued ceaseon playment and to be issued in full and the interest dclue thereon, then these presents, of all bonds, &c. and the estate hereby granted, shall cease and determine; and the said party of the first part, its successors and assigns, shall thereupon be immediately and fully re-invested with said premises, franchises, and property hereby granted in law and in fact, without any entry or other act whatsoever. Trustees not to It is further agreed, that no one of the said trustees, their survivor or be answeraIlefior successors, shall be answerable for the acts, otmissions or defaults of the h other, & other, nor for anything short of gross negligence or willful default in the discharge of his duties. Trust extends And this indenture further witnesseth, that this trust, and the seonly to bonds cer- curity hereby intended, extends only to such bonds of the party of the titled by trus-first part as. shall be certified by the said trustees, or the survivor of tees. them, and his and their successor or successors, and when all such bonds shall be satisfied and discharged the trusts herein and hereby created shall cease. Vacancies i n. This indenture further witnesseth, and it is hereby expressly agreed, trustees, how to that in. case of the death, resignation, incapacity, or removal of any or be filled. either of the parties of the second part, then it shall and may be lawful, PACIFIC RAILROADS. 79 and the remaining, acting, surviving, or competent trustee, and the party of the first part, are hereby jointly empowered to elect and appoint by an instrument in writing, duly executed hy each of such parties, a competent person to fill the vacancy created in manner aforesaid, and that such person so appointed trustee, on his acceptance of such appointment, shall have and possess, and be vested with the sanme rights and powers as trustee as he would have had and possessed or been vested with, had he been originally made a party of the second part hereto, anid shall: perform thle same duties in all respects; an(l until such appointment shall be so made in manner aforesaid, and notwithstanding any vacancy as aforesaid, said remaining, surviving, acting, or comnpetent trustee shall have full power and authority to execute each and all the trusts hereby created; and his acts in the premises shall be as legal, valid, and effectual in all respects and to all intents and..purposes as if the same had been done and performed by both the prarties hereto of the second part. And if for any reason the said surviving trustee and the party of the On failure to fifll vacancy, first part hereto, should fail to inite in the aplpointment of a trustee, as secretaryof combefore required, within the space of thirty days after such vacancy c- pany to call cu's, then, and in that case, it shall be the duty of thesecretaryof thle co:M- meeting of bondpany to call a meeting of the bondholders, by printed notice published holders. in two of tihe public newspapers of the city of New York, calling such meeting (f the bondholders to be hel~l in said city, not less than thirty days after the first publication of said notice, for the purpose of filling such vacancy. At the time and place specified in such notice the holdei's of said hPower of bondholders of such bonds, at such meeting, shall proceed to elect a suitalle person to act as meeting. such trustee, to fill said vacancy; and a majority in interest of said bondholders so attending said meeting, or legally represented thereat, shall be competent to elect a new trustee, and the person so elected shall immediately on such election, and on his acceptance in writing of such trust, become vested with all the estate, trust, rights, powers, and duties of the trustee in whose place he shall have been elected. And in case said appointment shall be made in manner aforesaid, or Compan y to in case of such election as aforesaid, the said party of the first part execute s u c h hereby covenants to make, execute, and deliver such other or further as to enable trusinstruments, deeds, indentures, or assurances, as may be necessary to tees to act, &c. enable the person or persons so appointed or elected to execute the trusts hereby created and declared, as fully and perfectly in all respects as he or thcy could have executed the sarme if originally made a party or parties ot the second part to this indenture. Notice of the appointment or election of every new trustee shall be Notice to Degiven to the Departmnent of the Interior. parteat of the Interior. It is further agreed that it shall be the duty of the said trustees to Further duties certify as aforesaid, and deliver immediately to the said party of the of trustees. first part, all such bonds as by the said acts of Congress may lawfilly be issued fron1 time to time as the same shall become issuable, to be held or used by the said party of the first part. In witness whereof the said Union Pacific Railroad Company, the party of the first part, has caused these presents to be subscribed by its president and attested by its secretary, and has caused its corporate seal to be hereunto affixed, and the salid parties of the second part, for the purpose of signifying their acceptance of the trusts herein and hereby created, have hereunto subscribed their names and affixed their seals the day and year above written. JOHN A. DJX, [L. s.] President Union P. I'. 1f. Co. Attest: CHS. TUTTLIE, Secretary.U. P. R. RI. Co. Subscribed, sealed, and delivered in the presence ofBy E. D. MorganXWitness: CHAs. TRaCy, JOit: C. AVNPOT. E. D. MORGAN. [L. S.] ~By Oakes Amles- OAKES AMES. [L. 8s.] Witness: CIAS. TVIACY, AMASA CO6n. By J. A.. Dix and C. TuttleWitness: CIHA. TnRACY, CuHiAtLEs NETT'LETON. 80 PACIFIC RAILROADS. DISTRICT O-F COLUMTIBIA, WVashington Coitnty, SS: I, John F. Callan, a commissioner for the Territory of Nebraska, residing in Washington, in the county of Washington, and District of Columbia, do certify that on the 13th day of December, in the year 1865, at Washinlgton, in the District aforesaid, before mle personally appeared Charles Tracy, who, being by me duly sworn, did depose ahd say that he resides in the city of New York, in the State of New York; that he was one of the subscribing witnesses to the execution of the foregoing deed; that he knew Edwin D. Morgan and Oakes Ames, the persons described in and who executed the said deed; that he saw said Morgan and the said Armes sign, seal, and deliver the same; and they acknowledged to him that they executed the same; and that he, the said Charles Tracy, thereupon became the subscribing witness to the execution of the said deed, which is to me satisfactory evidenlce of the due execution of said deed. In witness whereof I have hereunto set my hand and official seal, at Washington, in the county of Washington, in the District of Columrbia, this 13th day of December, in the year 1865. [L. S.] JOHN F. CALLAN, A Commtissioner for Nebraskca. [U. S. revenue-stamps, 5 cents, canceled..] STATE OF NENw YORK, City atnd County of NTew York, ss: Be it remembered, that on this fifteenth day of December, A. D. one thousand eight hundred and sixty-five, before me, Charles Nettleton, a commissioner of the Territory of Nebraska in and for.the State of New York, duly appointed and commissioned by the governor of said Territory,'cduly sworn and dwelling in said city of New York, personally appeared John A. Dix, the president of the Union Pacific Railroad Company, and Charles Tuttle, the secretary of the same company, to me respectively knowln, who, being by me severally duly sworn, did depose and say that he, the said John A. Dix, resided in the city, county, and State of New York, and that he, said Charles Tuttle, resided in Rye, in the county of Westchester, in the State of New York; that he, said John A. Dix, was the president, and he, said Charles Tuttle, was the secretary of said Union Pacific Railroad Company; that they each knew the corporate seal of the said company; that the seal affixed to the foregoing indenture was such corporate seal; that the said corporate seal was so affixed by the order of the board of directors of said company, and with the assent and authority of the stockholders thereof; and that the said John'A. 1)ix, as such president as aforesaid, subscribed the said indenture; and the said Charles Tuttle, as such secretary as aforesaid, attested the saine by subscribing his name thereto, by the like order and authority; and they, the said John A. Dix and Charles Tuttle, acknowledged to me that they executed the same indenture in manner aforesaid, as the act and deed of the said Union Pacific Railroad Company. In witness whereof I have hereunto set my hand and affixed my official seal, the day and year above written. LL. S.] CHARLES NETTLETON, Conmmissione} for the Territory of NTebraska in Newo York. [U. S. revenue-stamp, 5 cents, canceled.] Similar certificates follow for the State of New York and the Territories of Dakota Colorado, Utah, and State of Nevada. LAND-GRANT MORTGAGE. This indenture, made this sixteenth day of April, one thousand eight hunodred and sixty-seven, between the Union Pacific Railroad Company, a body corporate, created by and under an act of Congress of the United States of America, approved July 1, 1862, entitled "An act to aid in the constructiobl of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes," party of the first part, Trustees. and Cyrus H. McCormick, of the city of New York, and John Duff, of the city of Boston, parties of the second part, witnesseth: Purposeof land- Whereas by the said act of Congress, approved July 1, 1862, being grant. chapter 120, and by the act, of Congress amendatory thereof, approved July 2, 1864, being chapter 216, a large number of sections of the public lands of the United States has been granted to the said company for the purpose of aiding in the construction of its railroad and telegraph-line and to secure the safe and speedy transportation of the mails, troops, munitions of war, and public stores thereon; PACIFIC RAILROADS. 81 And whereas the said party of the first part, for the purpose of raising money to aid in the construction of said railroad and telegraph-line, and to secure the safe and speedy transportation of said mails, troops, munitions of war, and public stores; has determined to make and issue, from time to time, under its corporate seal, and secure by mortgage on said lands, the bonds of said company, to an amount not exceeding ten thousand dollars for each mile of said railroad; said bonds to be severally for the sum of one thousand dollars each, and payable to the bearer Amount, an d thereof twenty years after the date thereof, with semi-annual interest at bonds, &c. of the rate of seven per centum per annum, payable on every first day of April and October ensuing the date thereof, until the principal sum shall be paid, according to the tenor thereof; each of said bonds to bear date of the time of its issue and to be certified, and to have coupons for such interest annexed, and to be in form as follows, namely: [BOND.] UNITED STATES OF AMERICA. No. -. $1,000. UNION PACIFIC RAILROAD COMPANY. BOND. Secured by mortgage on lands granted by the United States. The Union Pacific Railroad Company acknowledges itself to owe to bearer one thousand dollars, which sum said company promises to pay to the holder hereof, at its office in the city of New York, twenty years after the date hereof, and also interest thereon at the rate of seven per cent. per annum; semi-annually, on the first day of each April and Octo- Bond. ber ensuing the date hereof, until the said principal sum shall be paid, on the presentation of the annexed interest-coupons at the office of the company, in the city of New York. In' testimony whereof the said company has caused to be affixed hereto its corporate seal, and these presents to be subscribed by its president and treasurer this - day of, one thousand eight hundred and [L. s.] Presidenst. lTreas urer. [ c ERTIFITE. ] The undersigned trustees do hereby certify that the Union Pacific Rail- Certificate of road Company has executed to us a deed of trust, or mortgage, purport- trustees. ing to convey all the right, title, and interest which the said company now has or shall hereafter acquire in and to all public lands of the United States, to said Company granted by an act of Congress approved July 1, 1862, and by the act amendatory thereof approved July 2, 1864, except the lands which are or shall be included in the railroad and telegraphline of said company, or used for the construction or operation thereof, or for the track, yards, depot-grounds, buildings or erections thereof, in trust for the benefit of the holders of its bonds of sinilar tenor with the foregoing, except as to the date, issued and to be issued to an amount not exceeding in all ten thousand dollars per mile of said railroad; with power, in case of a default in paying the interest or principal of said bonds or any of them, to take possession of and to sell the lands so conveyed, and apply the proceeds to the payment of said bonds; and that the foregoing is one of the several bonds described in and secured by said deed, and that we have caused the said deed to be recorded in every county through or in which the said road has been actually constructed, and in which the said lands so far as thereby already acquired are situated, and a certified copy thereof is filed in the Office of the Secretary of the Interior at Washington, and that the same is a first lien upon all the lands so conveyed; and that the whole amount of such bonds certified by us does not exceed ten thousand dollars for each mile of the track of said railroad actually laid. Dated,, 18-. Trustees. H. Rep. 440- 6 82 PACIFIC RAILROADS. [couroN.] $35. Coupon. The Union Pacific Railroad Company will pay the bearer, at its office in the city of New York, on the first day of ~, 18-, thirty-five dollars, being the interest due that day on its land-grant bond No. -. Treasurer. Purpose of Now, therefore, this indenture witnesseth, That the said party of the con~veyance. first part, for securing the payment of the sums of money mentioned in the said bonds, and the interest thereof, and in consideration of the premises, and also for and in consideration of the sum of one dollar to the said party of the first part in hand paid by the parties of the second part, the receipt whereof is hereby acknowledged, has granted, bargained, sold, released, enfeoffed, conveyed, and confirmed, and by these presents does grant, bargain, sell, release, enfeoff, convey, and confirm, unto the said parties of the second part, as trustees, and to their successors and survivor, and their and his heirs and assigns foreverWhat conveyed. All and singular the said several sections of land so as aforesaid granted to said company by said acts of Congress; and also all the estate, right, title, interest, claim, and demand whatsoever, at law or in equity, of, in, or to the same, or any part or parcel thereof, which the said party of the first part now has, holds, owns, or is entitled to, or hereafter may or shall acquire, have, hold, own, or be or become entitled to, by force or virtue of the said acts of Congress; saving, excepting, and reserving all parts and parcels of said lands which are or shall be included in the said railroad and telegraph-line of said company, or use for the construction or operation thereof, or for the track, yards, depotgrounds, buildings, or erections thereof: To have and to hold all and singular the lands hereby granted or intended to be granted, and each and every part and parcel thereof, with the appurtenances thereunto belonging, unto the said parties of the second part, and their successors and survivor, and their and his heirs and assigns forever, as trustees, for the uses and purposes, and upon the trusts, terms, conditions, and agreements in this indenture set forth and declared. Conditions of Provided always, allld Ihese, presents are upO'n the express condition, conveyance. that if the said party of the first part shall well and truly pay, or cause to be paid, to the holders of the said bonds, and every of them, the principal sums of money therein mentioned, according to the tenor thereof, with the interest thereon, at the times and in the imanner hereinbefore provided, according to the true intent and meaning of these presents, then and from thenceforth this indenture and the estate hereby granted shall cease and determine, and all the right, title, and interest in any and all property hereby conveyed to the parties of the second part, not then disposed of under the powers hereby conferred, shall revert to and vest in the said party of the first part. This indenture further witnesseth that these presents and the said bonds are made, executed, and delivered, upon the trusts, terms, conditions, and agreements following, that is to to say: Company t o That all the lands herein above conveyed and mortgaged shall be sell lands an d under the sole and exclusive management and control of the said party proceeds to be paid to trustees. of the first part, who shall have full power and authority to make con- tracts for the sale of the same, at such price, on such credit or terms of payment, and such other conditions as shall be agreed on by the said party of the first part and said trustees, and as shall seem to them best calculated to secure the payment in full of all the bonds issued as hereinbefore provided, until entry or foreclosure by the trustees, as hereinafter provided. But no title to any tract of land, contracted to be sold by the said party of the first part, shall be given until the whole of the purchase-money of said tract shall be paid to said parties of the second part, or their successors or survivor, in cash or in said bonds, or overdue coupons thereof Company and And for this purpose it is agreed that the said party of the first part trustees to deter- and said trustees shall cause all such lands, as they shall from time to mine p r i c e o f time become subject to sale, to be carefully examined and surveyed, and land, &c. shall affix to each tract or parcel such price as in their judgment shall be most judicious, having in view the interests of all parties; and said lands shall be and remain at all times thereafter open for sale to any person who may desire to purchase and pay therefor; the prices being, PACiFIC RAILROADS. 83 nevertheless, at all times subject to revision and alteration by the said parties; and the party of the first part may reserve from sale any lands necessary for depot grounds or other purposes connected with the construction or operation of the said railroad or telegraph. The purchaser of any such land shall be at liberty to pay for the Bonds and consame in the aforesaid bonds or overdue coupons at par; and when any pons to be retract or parcel of said lands shall have been purchased and paid for, ceived in payeither in bonds, coupons, or cash, as hereinbefore provided, the same shall be conveyed by the said party of the first part and said trustees to the purchaser in fee-simple, and shall by such conveyance be absolutely and forever released from any and all lien or incumbrance, for or on account of said bonds, or any other debt or obligation of the said party of the first part. The said trustees shall and will cancel and discharge each and every T r u s t e e s to bond and the coupons thereon, and all overdue coupons, which they cancel bonds, &c. may receive in payment for land, or by purchase, by defacing the seal of the corporation, perforating the signatures of the president and treasurer, and drawing lines across each of the interest-coupons, on receipt thereof; and all bonds and coupons received in payment for lands aforesaid shall, when so canceled, be delivered to the said party of the first part. The said trustees shall apply the proceeds of all sales made by them Trustees to apof lands hereby conveyed, to the sole and exclusive purpose of the pay- ply proceeds ot ment of the bonds provided for in and issued in conformity to the terms sales to payment of this indenture. And for this purpose all such avails shall, from time to time, as the same are realized, be used in the purchase of such bonds in the market, to be canceled, so long as purchases thereof can be made at par, and whenever such bonds cannot be purchased at that rate, said trustees shall advertise for proposals to sell such bonds to them in two newspapers published in the city of New York; and after receiving such proposals they shall have power to purchase such bonds at the lowest terms so offered. The said party of the first part doth hereby covenant and agree to pay 1o the holders of said bonds, respectively, the said principal sums of money therein mentioned and the interest thereof as aforesaid. If any In default of default shall be made- in the payment either of principal or interest on payment,trustees may take possesany of said bonds for six months after demand at the place of payment sio of lands, &csse when the same shall become due, then the said trustees may, on being requested by the holders of at least one hundred thousand dollars of such bonds, enter into and take possession of any of the lands above conveyed, and foreclose this mortgage, and may sell at public auction so much of said lands as may be necessary to discharge all arrears of such interest, and apply the proceeds, after deducting the costs, charges, and expenses of such entry, foreclosure, and sale, to the payment of such arrears of interest. If any such default shall continue for one year from the time of such demand and refusal, the principal sum of all said bonds then outstanding shall'become due and payable, and the said trustees may enter into and take possession of all the lands above by these presents mortgaged or conveyed, foreclose this mortgage, and sell at public auction all said lands, or so much thereof as may be necessary, first giving at least six months' previous notice of the time and place of sale, in at least one newspaper published in the city of New York, and in one published in the city of Omaha; and they shall apply the proceeds thereof, after deducting the costs, charges, and expenses of such lastmentioned entry, foreclosure, and sale, to the payment of all said bonds then outstanding, and the interest accrued thereon, rendering the overplus, if any there shall be, unto the said party of the first part. In case of any sale upon any such forclosure or at any such public auction, the said trustees shall make, execute, and deliver a conveyance of the said lands so sold, which shall convey to, the purchaser all the rights and privileges of the said party of the first part, in and to the property so sold, to the same extent as the same shall have been previously enjoyed and held by the said party of the first part. If after any such entry shall be made or any such foreclosure proceed- Company entiings shall be commenced, for the satisfying of interest only, as above tled to re-possesprovided, and before the lands are sold thereon, the said party of the sion on payment, first part shall pay and discharge such interest and deliver the coupons therefor to the said trustees, and pay all the' costs, charges, and expenses incurred in such entry and foreclosure, and the proceedings thereon, then, and in every such case, the said trustees shall discontinue their proceedings thereon, and restore to the said party of the first part all such lands, ,84 PACIFIC RAILROADS. to be held subject to the above conveyance and mortgage, and subject to all the provisions, terms, and conditions of these presents, in like manner as if such entry had not been made nor such foreclosure proceedings commenced. In case a vacancy shall happen in the number of trustees hereinbefore mentioned as parties of the second part in this indenture, the remaining trustee shall, while said vacancy exists, have all the rights, exercise all the powers, and discharge all the duties devolving on the said trustees Vacancies in by this instrumnent. But as soon as it conveniently may be done, such trustees, h o w vacancy shall be filled by the nomination, by the- remaining trustee, of Tilled, &C. some proper person to fill such vacancy; which nomination shall be submitted to the board of directors of said company, and, if approved by them, the person so nominated and approved immediately shall become a trustee under this instrument. If said nomination is not approved, another person shall be nominated by said remaining trustee, and in like manner submitted for approval, and so on till three nominations shall have been made. But if three successive nominations shall be made, and none of them shall be approved by said board, said vacancy shall be filled by a committee of three persons, selected, one by said remaining trustee, one by said board of directors, and a third by the two thus selected, and the person appointed trustee by a majority of the committee shall be and remain a trustee under this instrument. And the person regularly appointed a trustee to fill a vacancy in either of the forms above specified shall, from and after his said appointment and his acceptance of the appointment, become vested with the same estates, powers rights' and interests, and charged with the same duties and responsibilities as if he had been one of the original trustees, parties of the second part named in and executing this instrument; and the prior remaining trustee may and shall execute such conveyances and instruments as may be proper or necessary to vest the same in such new trustee jointly with him, or to furnish evidence of such vesting. Riight of trLus- If at any time either of the said trustees shall resign his place as trus8ei to resign. tee, by a proper deed or writing to that effect, and such resignation shall be accepted by the said party of the first part, then, and in every sut:h case, the place of such resigning trustee thereupon shall beccme m:nd be vacant. Trustees to re- Whenever all time bonds which shall have been made and issued by the convey on pay- said party of the first part, under and in conformityv to the pioviions of ment of all the this indenture, with the interest thereon, together with all tte e~,penses bonds. incurred by the said trustees in the execution of the trust heren and hereby created, shall have been fully paid, the said trustees shall reconvey to the said party of the first part all and singular the said lands then in the bands of the said trustees, and not before that time sold or disposed of, in the execution of the trust hereby created. Trustees to de- In case the said trustees shall at any time have any trust-moneys on posit money, &c. hand, derived from the sale of the lands hereby conveyed which will not be required to meet any immediate liabilities of the company, to which said moneys are by these presents devoted, the said moneys shall be deposited on interest with some bank or trust company in the city of New York, subject to be drawn by checks.signed by the trustees or,uch one of them as they may designate. Land books to All the books of the said company and of the trustees, relating to the be open to com- M pany and trus- lands hereby conveyed, shall be mutually open to the inspection of said tees. company and said trustees. Trustees to de- It shall be the duty of the said trustees to certify as aforesaid, and deliver bonds. liver to the said party of the first part the said bonds, as the same from time to time shall be demanded, not exceeding ten thousand dollars of such bonds fur each mile of the track of said railroad actually constructed, to be held, issued, or used by the said party of the first part. Trustees n o t And it is hereby mutually agreed, by and between the parties hereto, liable for acts of that the said parties of the second part, and their survivor and succeseach other. sors, and their heirs,, executors, and administrators, shall not be answerable for the acts, omissions, or defaults of each other, nor for anything short of their own gross negligence or willful misfeasance. Acts of Con, It is hereby declared by the parties to this indenture that all the progress made part visions of said acts of Congress, so far as they are applicable, are hereby of indenture, made, and shall be deemed and taken to be, a part of this instrument, and the said provisions in all that concerns the sale and disposal of the said lands hereby conveyed to the parties of the second part, ate to be observed and strictly and faithfully carried out and fulfilled. PACIFIC RAILROADS. 85 And the said party of the first part covenants and agrees to and with the said parties of the second part, that the said party of the first part shall and will, at any and all times hereafter, and from time to time, execute, acknowledge, and deliver, under its corporate seat, to the said parties of the second part, and their survivor or successors, all such Further necesother or further assurances, deeds, mortgages, obligations, transfers, in- sary instruments dentures, and instruments in writing, and shall and will do and per- to beexecuted by form all such other or further acts or things as shall or may be neces- com sary or proper, or as their counsel learned in the law shall deem necessary, proper, or expedient, for the better or more effectually securing upon the above conveyed and mortgaged premises the payment of the said bonds so to be issued, and the interest due, and to grow due thereon in. manner aforesaid, or for carrying. into effect the true intent, design, objects, and purposes of these presents. In witness whereof the said party of the first part has caused these presents to be sealedi with its corporate seal and to be signed b its president pro tern. and treasurer, and the said parties of the second part have set hereto their hands and seals the day and year first above written. U. S. revenue stamps to $ cancele(d. ) Sealed, signed, and delivered in presence ofOLIVER AMES, President pro tern. Union Pacific Railroc.d Conmpany. TBy 0. AMES and J. DUFF. Witness: CHAS. TRACY, CHrARLES NETTLETON. [I~,.~ ~S~~.l~ JOHN J. CISCO. Treasurer Union Pacific Railroad Com pany. Sealed, signed, and delivered in presence ofCYRUS H. McCORMICK. [L. S.] By JOHN J. CISCO And CYRUS H. McCORMICK. JOHN DUFF. [L. s.] Witness: CHARLES NETTLETON, WILLIAM'X. PEARSON; STATE OF NEW YORK, e CITY AND COUNTY OF NEW YORK, s Be it remembered, that on this sixteenth day of April, A. D. 1867, before me, Charles Nettleton, a commissioner of the State of Nebraska, in and for the State of New York, duly appointed and commissioned by the governor of said State, duly sworn and dwelling in said city of New York. personally appeared Oliver Ames, the president pro tent. of the Union Pacific Railroad Company, and John J. Cisco, the treasurer of the same comlpany, to me respectively known, who, being by me severally duly sworn, did depose and say that he, the said Oliver Ames, resided in Easton, in the State of Massachusetts; and that leo, said John J. Cisco, resided in the city, county, and State of New York; that he, said Oliver Ames, was the president pro ternm., and he, said John J. Cisco, was the treasurer of said Union Pacific Railroad Company; that they each knew the corporate seal of said company; that the seal affixed to the foregoing indenture was such corporate seal; that the said corporate seal was so affixed by the order of the board of directors of said company, and with the -assent and authority of the stockholders thereof; anld that the said Oliver Ames, as such president pro tern. as aforesaid, subscribed the said indenture; and the said John J. Cisco, as such treasurer as aforesaid, attested the samue by subscribing his name thereto, by the like order and authority; and they, the said Oliver Ames and John J. Cisco, acknowledged to me that they executed the same indenture in manner aforesaid, as the act and deed of the said Union Pacific Railroad Company. And also, on the same day, personally appeared before me Cyrus H. McCormick a id John Duff, who are personally known to me to be the same and identical persons described in and who executed the foregoing indenture as trustees therein name(l, and they severally acknowledged to me that they executed the same as their free and voluntary act and deed, for the uses and purposes therein mention ed. In witness whereof I have hereunto set my hand and affixed my official seal, the dlay and year above written. [L. r.] CHARLES NETTLETON, CommissionerJbor Nebraska, in _NeTv Yor 7. Similar certificates follow for the State of New York and the Territories of Dakota, Colorado, Utah, and State of Nevada. 86 PACIFIC RAILROADS. Copy of record of proceedings of executive committee authorizing income-bonds to be issued. BOSTON, September 23, 1869. Executive committee met pursuant to adjo urnment. Present-Messrs. John Duff, C. S. Bushnell, W. T. Glidden, and Elisha Atkins. Records of all the meetings from September 8 to September 22, inclusive, were read and approved. On motion of Mr. Glidden it wasResolved, That the president, or vice-president, and treasurer, are hereby authorized to prepare-and issue bonds to the amount of ten million dollars, bearing interest at the rate of ten per cent. per annum, payable at the option of the company in two years from September 1, 1869, or within five years from said date, giving as security the obligation of the company to trustees for the purchasers to appropriate the net income of the company to the payment of interest on these bonds after paying the coupons on first-mortgage and land-grant bonds of the company, and John R. Duff, Benjamin E. Bates, and William T. Glidden are hereby designated as trustees for the purchasers as before named, and all resolutio ns in regard.to income-bonds heretofore passed are hereby rescinded. Yeas-Duff, Bushnell, Glidden, and Atkins. Indenture under Lwhich the income-bonds were issued. Truste5es. This indenture, made and executed at the city of Boston on the first day of September, A. D. 1869, by and between the Union Pacific Railroad Company of the first part, and John R.' Duff, Benjamin E. Bates, and F. Gordon Dex.ter, all of the city of Boston, trustees, as hereinafter set forth, of the second part, witnesseth: Amount a n d That the party of the first part has caused to be made and executed denomination of its bonds of one thousand dollars each, bearing even date herewith, bonds, interest, amounting in the aggregate to ten millions of dollars, payable on the &ec. first day of September, 1871, or on the first days of March or September in either of the years 1872, 1873, 1874, at the election of said company, with interest thereon, at the rate of ten per cent. per annum, payable semi-annually, and proposes to sell said bonds to parties desirous of purchasing the same; and said party of the first part, for the purpose of securing the payment of the interest-warrants attached to said bonds ePortion of net according to the tenor thereof to the parties who may have purchased toaredemptionf ofr hold said bonds, has agreed to devote the net earnings of its said bonds, &c. railroad-after deducting therefrom the payment of interest that shall fall due upon the first mortgage of its road, and also upon the mortgage of its lands, heretofore made aild already issued or to be issued by it —to the payment of the interest-warrants attached to the bonds thus proposed to be sold. Company t o Now, therefore, the said party of the first part, in consideration of the make up semi- premises, does hereby covenant and agree to and with the said parties annual statement of the second part, the survivors and survivor of them, who are hereby of net earnings, declared to be trustees for the several parties who may purchase and hold said bonds, that it will semi-annually, on the first days of the months of January and July of each year, make up and furnish to said trustees a fair and just account of the net earnings of said road, for the six months next preceding, and will deduct therefrom the interest due. and payable from it upon the first mortgage of its road, heretofore issued, and upon its land-mortgage bonds heretofore issued or to be issued, so as to exhibit the true sumn applicable to the payments of the several interest-warrants attached to said bonds, bearing date September 1, 1869.. Company when And further, will, in case they shall fail to pay said interest-warrants in default to pay according to their tenor at the time the same fall due, pay over to said over net income party of the second part the said net income of their road, after the to trustees. deductions aforesaid, or such part thereof as may be necessary to pay said interest-w-arrants, with interest thereon from their maturity, and a reasonable compensation to said party of the second part for the perSame to be ap- formance of their said trust; which sum thus paid, except their complied to payment pensation aforesaid, is to be by said parties of the sec)nud part held of interest, &c., and applied to the payment of said interest-warrants to the holders thereof, with interest. Like provis- And said parties of the first part do further agree to hold said net inions relative to come in trust for the parties of the second part, to be applied to the purrantrity of a.r- posesaforesaid in case of its failure to pay its warrants at maturity. PACIFIC RAILROADS. 87 And said parties of the second part do hereby accept said trust, and Trustees n o t covenant and agree to execute the same; but without any responsibility to be liable for except for their willful negligence or default in the premises, and without responsibility for the acts or omissions of each other. In testimony whereof the said corporation has hereto affixed its seal and caused the same to be signed by its president and treasurer, thereto duly authorized, and the said parties of the second part have hereto interchangeably set their hands and seals the day and year first above written. JOHN R. DUFF. [SEAL.] BENJ. E. BATES. [SEAL.] F. GORDON DEXTER. [SEAL.] (Copy.) UNITED STATES OF AMERICA. No.-. $1,000. UNION PACIFIC RAILROAD COMPANY. [50 c. stamp.] BOND. BOND. [5 c. stamp.] The Union nacific Railroad Company acknowledges itself to owe to bearer one thousand dollars, which sum said company promises to pay the holder hereof at its office in the city of Boston, on the first day of September, A; D. 1871, or on the first days of March or September in either of the years 1872, 1873, or 1874, at the election of said company; and also interest thereon at the rate of ten per cent. per annum semi-annually, on the first day of each March and September ensuing the date hereof, until said principal sum shall be paid, on the presentation of the annexed interest-warrants at the office of the company in the city of Boston. In testimony whereof the company has caused to be affixed hereto its corporate seal, and these presents to be subscribed by its president and treasurer this first dayvof Sep-. tember, A. D. 1869. [SEAL OF CO.] (Signed) OLIVER AMES, President. JOHN M. S. WILLIAMS, Treasuirer. This bond is one of a series of bonds of one thousand dollars each, dated tq September 1st, 1869, amounting in the aggregate to ten millions of dollars, i tj 5 d and payment of the interest-warrants attached thereto is secured by an;CD v indenture of covenant between said corporation and John R. Duff, Ben-'3 o jamin E. Bates, and F. Gordon Dexter, trustees for the holders of said CD bonds, whereby said company agrees to apply the net income of the road,..~ after deducting therefrom the payments of interest that shall fall due upon D W t' the first mnortgage of its said road, and also upon the mortgage-of its lands' - heretofore made, and to the payment of said interest-warrants. C. $.50. $50. Warrant of fifty dollars, half-yearly interest on March 1, September March 1, bond of the Union Pacific Railroad Company No., 1874. 1, 1873. 1873. datedSeptemberl, 1,867,1 f payable September 1, 1874, upon the surrender _1 ~ of this warrant, unless said bond shall have been previously paid. J. M. S. WILLIAMS, Treasurer..September March 1, Payable September 1, 1871, upon March 1, September March1, 1, 1872. 1872. the surrcnder of this warrant. 1871. 1,1870. 1870. 68,3, 48 All 18 88 PACIFIC RAILROADS. BRIDGE MORTGAGE. This indenture, made this -- day of, 1871, by and between the Union Pacific Railroad Company (hereinafter called "the Company") of the one part, and John Edgar Thomson, of Philadelphia, John Pierpont Morgan, of New York, and Elisha Atkins, of Boston, of the other part. Mortgage au- Whereas by an act of Congress of the United States, approved 22d thorized by act February, 1871, the company is authorized to construct a bridge and of February 22, railroad-line across the river Missouri, between Omaha, in the State of Nebraska, and Council Bluffs, in the State of Iowa, and to issue such bonds, not exceeding two millions and a half of dollars, as it might deem needful for that purpose, and to secure the same by mortgage on the bridge and its approaches and'appurtenances; And whereas the company, for the purpose of purchasing and acquiring the lands and materials necessary for the construction of the said bridge and its approaches, and connecting lines, and for constructing the same, has determined to obtain a loan of money by the issue of A m o u n t, de- special bridge-bonds for the total sum of two millions and a half of nomination, and dollars, United States gold coin, or five hundred thousand pounds British bondscharacter of sterling money, in two thousand five hundred bonds, numbered 1 to 2,500, inclusive, for the sum of one thousand dollars United States gold coin, or two hundred pounds British sterling money each, the principal of which is payable on the 1st day of April, 1896, unless sooner redeerned under the sinking-fund clause hereinafter contained, payable, at the option of the holder, at the office of Messrs. Dabney, Morgan & Co, or their satisfactory successors, of New York, or at the London and San Francisco Bank, (limited,) London, with interest in the mean time, from the 1st day of April, 1871, on the said principal sum, at the rate of eight per cent. pler annum, payable by half-yearly installments of forty dollars United States gold coin, or of eight pounds, five shillings, and nine pence, British sterling money, each, on the 1st day of October,. and the 1st day. of April in each year, free of all taxes on said bonds in the United States, the said interest to be payable, at the option of the holder, in United States gold coin, at the office of Messrs. Dabney,. Morgan & Co., or their satisfactory successors, New York, or in British sterling money, at the office of the said London and San Francisco Bank, (limited,) in London, upon presentation of the coupons attached to thebonds, with provisions for the principal of the said bonds becoming due immediately upon default of paying the interest thereon, or upon default in the provision of the fund for payment of interest and sinkiengfund. as hereinafter provided; And whereas it has been agreed, upon the issue of the said bonds,. that the payment of the principal and interest thereof shall be secured in manner hereinafter expressed, and that the covenants and mortgage hereinafter contained should, for that purpose, be made to the said John Trustees named. Edgar Thomson, John Pierpont Morgan, and Elisha Atkins, (hereinafter called "the trustees,") for the benefit of' and in trust for, the various persons who have consented, or shall hereafter consent, to purchase and take the said bonds, and all other the persons who shall, at any time hereafter, be, or become holders of the said bonds; and also, so, far as necessary for the benefit of, and in trust for, any person or corporation who shall become purchasers of the said bridge, under the powers hereinafter contained; And whereas the said bonds are identified as being entitled to the benefit of the security hereby given by a certificate upon each of them, signed by the trustees: Now this indenture witnesseth, that the company doth hereby covenant and agree with and to the trustees in manner following; that is to say: ARTICLE 1. The survivor or survivors of the trustees, or other persons or person who shall, under the powers hereinafter contained, be for t,he time being the trustees or trustee of these presents (all which persons Trustees, in collectively are hereinafter called "the trustees ") for the time being, case of default of if the said company should at any time fail to provide the said trustees right tofi tolls with all the moneys required to meet matured interest, sinking-fund &c. payments, and all other obligations arising under the terms and conditions of this indenture, shall, so long as any of the said bonds shall be cutstandillg or unpaid, have the right to fix the tolls to be levied upolt PACIFIC RAILROADS. 89 all property and passengers to be transported over, or which shall use or have the benefit of the said bridge, or the depots connected therewith at Council Bluffs or Omaha, or the lines of tracks required to connect the said bridge with the railways having their terminus at Omaha and Council Bluffs; and the rates so fixed may be changed from time to time by the trustees for the time being, so as to pro(luce from time to time a sufficient revenue to maintain the said bridge and lines in good order and repair, and to pay the interest on the said bonds, and to provide in each year a sinking-fund, to consist of the fixed sum of forty-two thousand dollars U.nited States gold coin, and of a suni equal to the interest upon all bonds previously purchased or redeemed by the operation of the sinking-fund in previous years; which sinking-fund in each year is to be applied for the purchase or redemption of so many of the said bonds as it will purchase under the provisions hereinafter contained, provided the holders elect to sell the shine. ART. 2! The said tolls shall be levied and collected by the company upon all property and passengers transported over or using the said bridge; depots, or lines, and shall constitute a first transportation lien upon all such property, and shall be first deducted and retained from the Tollsto be a gross sums received from transportation of such property and passen- mortgaged propgers, and shall be especially set apart, and the amount thereof received, ert-y, &c. deducted, and retained in each calendar month; and shall, within fourteen days after the end of each calendar mouth, be paid to the credit of the trustees for the time being, at such bankillg-house at New York as they shall from time to time designate; and said money shall be kept by said trustees at current deposit interest, for the benefit of the company; and out of the mcneys so raised and paid, and the interest that may accrue thereon, the trustees for the tirne being shall in each year deduct and retain such sums as shall be necessary to pay and provide the interest for the current year on the said bonds, and the said further sum of forty-two thousand dollars gold coin, and a sunl equal to the interest Bloney received upon the bonds, previously redeerned or purchased under the provisions f tolls, &c. t hereinafter contained; and the two last-mentioned items shall constitute the said sinking-fund, which is to be applied in each year by annual drawing for the purchase and redemption of the said bonds thus drawn, with a premiuml of ten per cent. thereon, if the holders thereof elect to sell the same in the manner hereinafter provided; and out of the said moneys so received by them, the trustees for the time being shall pay the interest on the unredeermed bonds and the principal and premium of the bonds thus to be redeemed or purchased, if any, and the remainder (if any) of the tolls received by the said trustees in each year shall be repaid by them to the company. ART. 3. The bonds to be redeemed in each year shall be drawn by lot by the trustees for the time being, or some or one of them, or by some Trustees to reperson duly authorized by theni, in the month of November in each year deem bonds by beginning in the month of Novemlber, 1871, at the office of Dabney, Mor- lot, &c. gan & Co., or their satisfactory successors, New York, in the presence of one of the members of that firm and of a notary public, and notice of the numbers so drawn shall be posted by thle trustees for the time being at the offices where coupons are paid in New York and London, and shall be also advertised by them in one or more newspapers in each of the cities of London and New York, on or before the first day of February after the drawing: and on the first day of April following the drawing, the bonds so drawn shall be paid by the trustees for the time being to such of the holders thereof as may have in writing notified the trustees, on. or before that day, of their election to have their said bonds so redeemed or paid, together with a premium of ten per cent. on the nominal value thereof; that is to say, at the rate of two hundred and twenty pounds British sterling money, or one thousand one hundred dollars Payments to bo United States gold coin, for each bond; such payment to be made at the ho whe and option of the holders of the bonds, at she offices of the London and San San Francisco Bank, (limited,) in London, or Messrs. Dabney, Morgan & Co., or their satisfactory successors, of New York, on delivery up of the bond with the unmatured copoens; and in case any of the holders of the bonds thus drawn shall fail to notify the trustees in writing as aforesaid of their election to have their said bonds thus paid and redeemed with the prenrium aforesaid, then and forever thereafter such bonds shall cease to be entitled to be purchased and redeemed by means of said sinking-fund as aforesaid, and said sinking-fund shall be proportionately reduced. In case the tolls paid overby tile company to the trustees for 90 PACIFIC RAILROADS. If tolls not suf- the time being shall not be sufficient to enable the said trustees to make ficient, company the payments which they are hereinbefore authorized to make, the comto make up deficiency. pany will from time to time pay to the trustees for the time being such sums of money as shall be required to make up the deficiency, as and when required to make the payments. All mon e y ART. 4. All moneys to be raised by the issue of the said bonds raised by bonds shall, in the first instance, be received by the trustees, who shall retain trustees pid t in their hands, from time to time, such amount as shall, in their judgment, be sufficient to secure the entire construction and completion of the said bridge, and of the connecting lines and approaches thereof, and the payment and provision of the interest and sinking-fund upon the said bonds during such construction. ART. 5. For the better securing the payment of the principal and interest of the said bonds, and in consideration of the premises and of one dollar lawful money of the United States to the company in hand paid by the trustees, the receipt whereof is hereby acknowledged, the company hath granted, bargained, sold, assigned, transferred, set over, B r i d g e, &c., enfeoffed, conveyed, and confirmed, and by these presents doth grant, conveyed to trus- bargain, sell, assign, transfer, set over, enfeoff, convey, and confirm untees, &C. to the said John Edgar Thomson, John Pierpont Morgan, and Elisha Atkins, trustees as aforesaid, and to their heirs and successors, and the survivors and survivor of them, and the heirs of such survivor, all and singular the said bridge over the river Missouri, between Omaha and Council Bluffs, and the approaches thereof; and the appurtenances belonging thereto, including all parts and portions of the said bridge now constructed or hereafter to be constructed, and the depots at Council Bluffs and Omaha aforesaid, and the lines and tracks required to perfect the said bridge, its approaches and appurtenances, aiid to connect the same with the neighboring lines, including in this conveyance as well the lines and tracks now constructed as those which may hereafter be constructed, and also all estates, terms and rights of way for the said bridge, approaches, and appurtenances, as well now held by the company as to be hereafter acquired by it, and all the rights and privileges of the company of, in, or to the said bridge, approaches, or appurtenlances, or touching, concerning, or appertaining to the maintenance, use,'and occupation thereof. To have and to -hold all the said premises unto the said John Edgar Thomson, John Pierpont Morgan, and Elisha Atkins, as such trustees as aforesaid, and to their heirs and successors, and the survivor and survivors of them, and to the heirs of such survivor, upon trust, to hold the same to and for the uses and purposes, and upon and with the conditions and powers in and by these presents expressed and declared. ART. 6. So long as the security hereby created shall subsist, the company will insure the depots and buildings connected with the said Company t o bridge to the full value thereof, with some insurance office or offices to in sur e depots, be approved by the trustees for the time being, against loss or damage buildings, &c. by fire, and will deposit with such trustees the policies of insurance, and produce to them the receipts for payment of premiums, so soon as they shall become due; in default whereof the trustees for the tinme being mayinsure the said depots and buildings, and the company will forthwith repay them the cost thereof, or the said trustees may retain the same out of any moneys which shall come to their hands by virtue of these presents. On default of ART. 7. If the company shall fail to levy and collect the tolls to be company, t r u s - fixed as aforesaid upon the property and passengers transported over, or tees to receive having the benefit or use of the said bridge, depots, or lines, or to deposit and apply the said tolls in manner hereinbefore provided, or if the tolls collected and paid over by the company shall prove insufficient to meet the payments aforesaid to be mlade thereout by the trustees for the time being, for interest and redemption of the bonds at the time and manner hereinbefore provided, and the company shall fail in due time to pay the deficiency to such trustees, or if the company shall fail to keep any other of its covenants herein contained, then and in such case it shall be lawful for the trustees for the time being, and it is hereby made their duty, to enter into the direct possession and receipt of the said tolls, and for that purpose to appoint suitable agencies for collection of the said tolls independently of the company, and thereout to defray the expenses attending the maintenance, working, and managing of the said bridge and lines; and out of the surplus, so far as it will extend, to pay the interest and provide the sinking-fund ~upon the said bonds, and gener PACIFIC RAILROADS. 91 ally to apply such surplus in the same manner as is hereby provided in the case of tolls having been levied by the company and paid over to the trustees for the time being. ART. 8. If any such default shall be committed by the company, as in Continued dethe preceding article mentioned, the trustees for the time being shall be fault, trustees authorized, and are hereby required, upon the request of the holders of may sell property. one-tenth of such part of the said bonds as shall then be unpaid, with or without entry, as they may deem best, to cause the said bridge and lines, and all other the property, matters, and things hereinbefore expressed, to be conveyed, to be sold by public auction in the city of New York, giving ninety days', notice of the time, place, and terms of sale, once in each week, in one or more papers published in London or New York, and upon such sale to execute to the purchaser or purchasers deeds, releases, transfers, and conveyance of the property, estates, rights, and securities thus sold, and to apply the proceeds of such sale, together with all moneys in their hands which shall be received under or by virtue of these presents, after deducting all expenses incurred in the execution of the trusts or powers hereby created, pro rata in payment of the principal and interest of the said bonds. then unpaid, whether the same shall have become due, or not, anl(l shall pay over the surplus (if any) to the company. ART. 9. NO purchaser on any such sale shall be bound to inquire Purchaser not whether such notices as are mentioned in the preceding article have required to inbeen given, or be affected by any notice that they have not been given, quie as tonotice. but the conveyance of the trustees to the purchaser shall, notwithstanding the want of such notices, be an effectual discharge to the purchaser (who shall not be bound to see to the application of the purchase-moneys) and an effectual conveyance to him. ART. 10. If such sale shall be made as is provided in article 8, the com- In case of sale pany shall thereafter in perpetuity be bound to pass over the said bridoe company bound and lines, and no part thereof over any bridge or ferry across the Mis-to c bridge, &c. souri now or hereafter existing within twenty miles in a straicght line above or below the said bridge hereinbefore mentioned, all the passengers and freight of the company passing across the Missouri, and will pay, as a first transportation lien upon such traffic, such tolls as shall from time to time be lawfully charged by the purchasers of the said bridge and lines in respect of goods and passengers passing over or using the same. ART. 11. Notwithstanding any such sale,.the company shall remanin If proceeds of bound to payv to all the bondholders so much of the principal and inter- sale are noet Sfficient to paay est of their bonds if any, as shall not have been paid out of the proceeds bonds, company of such sale. to pay balance. ART. 12. Upon payment by the company, without any such sale as is Payment by mentioned in article 8, and of the principal and interest of the said company of all bonds at the times and in the nmanner aforesaid, the transfer, convey- bonds, &c., to revest right to ance, and assignment hereby made of the said bridgre, with its appurte- r)i;dge, &c. nauces, and other the premises hereinbefore expressed, to be conveyed, shall be void, and all the estate, right, and property hereby conveyed to the trustees shall revert to and revest in the conmpany, without any acknowledgment of satisfaction, or reconveyance, re-entryT, or any act whatsoever. Acr. 13. If any of the trustees for the time being shall die or resign, V a c a n c y in the vacancy shall he filled by a successor from among tha persons hold- trus'ttos., how to ing bonds of the said issue to an amount not less than five thousand be ti!lh,. dollars, such appointment to be made in writing by the remaining trustee or trustees for the time being and the board of directors of the company; or in case the said board of directors shall fail, after notice in writing from said trustees, to make such joint appointment within three calendar months after the vacancy shall occur, the appointment shall be made by any court of equity having jurisdiction in the premises, and upon any such appointment all necessary conveyances and assurances shall be made to vest in the new trustees, jointly with the rmnaining trustees, the property hereby mortgaged, and all the rights and powers hereby created. ART. 14. Notwithstanding any such vacancy, the remaining trustee or I e m a i n iinl trustees may discharge all the duties and powers hereby given to the trustees to have trustees for the time being as effectually as if the full number of trus- full power, &c. tees had been filled up; and all the covenants herein contained are to be deemed and made with the trustees hereby appointed, or the survivor or survivors of them, and their successors in the said. trust. 92 PACIFIC RAILROAI)S. Trustees n1 o t ART. 15. The said trustees hereby appointed severally accept the said liable for acts of trust, but they are not nor are the trustees for the time being, to be answerable, except for willful default or gross negligence in the execution of the said trust, and neither of the trustees for the time being is to be answerable for the doings and omissions of any other of such trustees, unless consented to by him. o Compensation ART. 16. The company will pay to the trustees for the time being a of trustees. reasonable compensation for the discharge of their duties, and also all or any expenditure or costs incurred therein, or the trustees for the time being may retain the same out of any moneys which shall come to their hands by virtue of these presents. In witness whereof the company bath affixed its common seal to these presents, and caused the same to be signed by its president and secretary, in pursuance of a resolution of its board of directors, and the other parties have hereunto set their hands and seals the day and year first above written. Executed in the presence ofINDEX. Page. Act of July 1, 186'2, original charter of company.-................ 43 Act of July 12, 1862, providing for first meetilng of conmmissioners..... 5:3 Act of March 3, 1863, fixing gauge of road, note to.- -..5-..................... 53 Act of July 2, 1864, amendatory of act of July 1, 1862...53..................... -5:3 Act of March 3, 1865, amendatory of act of July 2, 1864........................' 62 Act of July 3, 1866, amendatory of act of July 2, 18(4........................... 63 Act of July 12, 1866, to amend postal laws.......... 63 Act of June 15, 1866, to facilitate commerce, &c-............... 64 Act of June 25, 1868, relative to filing reports, &ce., note to-..................... 64 Act of July 27, 1868, authorizing removal of suits from State to United States courts, note to...................................................... 59 Act of May 6, 1870, to fix junction, &c., note to-............................... 63 Act of July 1, 1870, repealing certain laws of the Territory of Wyoming.-... 70 Act of July 15, 1870, limiting appropriation, &c., note to...................... 62 Act of February 24, 1871, authorizing bridge-bonds, note to............... 56 Act of March 3, 1871, regulating payment for services rendered Government, note to —. —..-.. —-.-.47 By-laws.- 73 Decisions of Interior Department affecting land-grant, note to.... 50 Eastern terminus, order of President-fixing, note to.. 50 Income bonds, authorization of, by executive committee-. 86 Income bonds, indenture under which issued............... 86 Joint reolution of December 20, 1867, changing titne of holding annual meeting, &c., note to............-.-.-.- 58 Joint resolution of April 10, 1869, providing for special meeting of stockholders, common terminus, commission, &C ---------—. —. 69 Maps, profiles, &c., to be furnished, & ic., iote to.... 55 Mortgages, first 7Mortgages, land-grant..........80 Mortgages, bridge....................... Act of July 25, 1866, granting lands to aid in construction of California and Oregon Railroad.-... 64 Resolution of July 26, 1866, granting right of way through military reserves -. 67 Act of March 6, 1868, restoring lands to market along line of Pacific Railroad.. 67 Act of June 25, 1868, relative to filing reports. -. 67 Act of June 25, 1868, amen.latory of -act of July 25, 1866 68 Act of April 10, 1869, amnendatom:y of act of July'25, 1866-. 68 Act of May 6, 1870, fixing point of junctionl 70 Act of March 3, 1871, directing Secretary of the Treasury to pay one half colmpensation.....,.,,.........._...-71 Act of March 3, 1873, directing Secretary of the Treasury to withhold payments. 71 Act of June 20, 1874, making additions to aEt of July 2, 1864. -71 Act of June 22, 1874, providing for the coilectioiI of moneys due the United( States.2............................ PACIFIC RAILROADS. 9 3 [Senate Ex. Doc. No. 25, Forty-fourth Congress, First Session.] Letter from the Secretary of the Treasury, transmitting, in. answer to a Senate resolution of January 26, 1876, information in relatipn to propositions made by the Pacific Railroad Companies for the creation of a sinking-fuend for the redemption of Government mortgages, the action of the Government thereon, and the reasons therefor.-February 7, 1876. Ordered to lie on the table and be printed. TREASURY DEPARTMENT, February 3, 1876. SIR: In response to the resolution of the Senate of the United States, January 26 1876, requesting the Secretary of the Treasury to submit copies of any propositions made by the Pacific Railroads for the creation of a sinking-fund for the redemption of the Government mortgages, together with a statement of the action of the Government thereon, and of the reasons therefor, I have the honor to inclose herewith a copy of a communication addressed to me on the 9th of February, 1875, by Mr. Sidney Dilion, president of the Union Pacific Railroad Company, containing a proposition for adjustment of the matter of difference between the Government and the company,,together with a copy of another communication from the president of said company, containing modifications of the proposition submitted to me on the 9th. I also inclose a copy of a communication of the 17th February, 1875, from Mr. -C. P. Huntington, vice-president of the Central Pacific Railroad Company, submlitting to me, on behalf of the company, a proposition looking to a settlement of the differences between the Government and the company, together with a copy of a further communication from Mr. Huntington, modifying the proposition submitted in his letter of the 17th. These are the only communications received by me from any of the Pacific Railroad Companies in regard to the matter in question. I also inclose tabular statements showing the amounts earnedlfrom the Government by said companies respectively for the transportation of troops and supplies, and for mail-service; also showing the gross receipts of said companies, together with the amount charged by them to the accounts of operating-expenses. No definite action was taken by me in the matter, partly for the reason that Congress was about to adjourn, and partly on account of the inadequacy of the sums proposed by the companies to be paid and retained in the Treasury as.a sinking-find, in compromise of the claims of. the Government against them. It seemed to me, however, that it was desirable to reach an adjustment whereby the vexatious differences which had long perplexed the Government and largely affected the credit, if not the prosperity, of the companies should be finally composed. In reaching such a result it is obviously for the interest of both, and especially the Government, that an arrangement- should be made by which a fixed annual or semiannual sum should be paid by the companies, so that when the principal of the debt becomes due the Government may hold in its Treasury a large sum applicable to. the extinguishment of. the debt. How and by what means, in what sums, and at what periods, this fund should be obtained and applied, is for Congress to determine;. but it was. and is.my opinion that it would be a wise precaution to place the corporations under a definite and binding obligation, with their consent, to set apart from their semiannual earnings and deliver to the Government a reasonable and fixed sum, so that their managers might const.antly feel the pressure of this duty upon themselves, and not be permitted to treat it as a matter to be looked to in the distant future or by a succeeding board of officers. I aLn, sir, very respectfully, B. H. BRISTOW, Secretary. The. PRESIDENT of the Sen ate. UNION PACIFIC RAILROAD COMPANY, PRESIDENT'S OFFICE, 23 Nassau Street, New York, February 9, 1875. SIR: The existing relations between the Government and the Union Pacific Railroad Company are such as benefit neither party, and tend continually to the injury of both. The Government, in the prosecution of what it deems to be its just rights, has institnted legal proceedings against the company for claims of different origin and widely different character, and those claims are about to undergo or have already undergone judicial determinatiop. Nothing can be more distasteful to this company than to have even the appearance of resisting a just demand of the Government. The directors, speaking for the stockholders, recognize and fully appreciate the great and generous aid extended by the Government to this magnificent enterprise, and it is their wish to do everything in their power to re-imburse to the Government, so far as they can and as speedily as may be, every dollar advanced from the National Treasury. The company 94 PACIFIC RAILROADS. also feel very keenly the disadvantage they incur, both in popular esteem and in pecuniary resources, by being in seeming conflict with their great benefactor, the Government, and it is their most earnest desire to do everything they can to establish such relations of mutual trust and confidence as will best secure the demands of the Government, and, at the same time, promote the prosperity of the company; and by promoting the prosperity of the company, I do not mean simply the enhancement of the value of the property, but such extension of its uses, resources, and facilities, as will most rapidly develop the great national domain, which it traverses for a thousand miles; and I would respectfully call your attention to the important fact that this great domain cannot be developed without increasing in value immensely the Government lands along the line of the toad, and in addition increase the area of taxable property, a matter of vital importance to the whole country. The mortgage held by the Government, in its terms and by judicial decision of the United States circuit court, cannot be enforced until the maturitv of the bonds, which is near the close of the present century. The bonds are accumulating an interest-account, also uncollectible until the princi-' pal is due. Principal and interest, when due, will amount to the very large aggregate of over seventy-seven millions of dollars, though the actual amount advanced by the Government was only $27,236,512. For this very large amount the Government has only a second mortgage, and if it be allowed to accumulate, without any provision being made to meet it, the company will probably be utterly unable to pay it. At the same time, it is equally manifest that the Government will be unable to collect it, except upon the assumption that it will advance the money to discharge prior mortgages, and run the road on Government account —a policy which wise statesmanship could not advise. By standing still, therefore, the company has a load of debt accumulating for which no provision is made, and the Government is drifting farther and farther from the opportunity to secure a just return for its advances. To do nothing is to injure both the Government and the company, perhaps irretrievably to both. In this dilemma, I -venture to make a proposition, which offers, on the part of the company, all it can possibly do, and secures to the Government a substantial return,for its advances. It is as follows: The Union Pacific Railroad Company propose to pay into the Treasury of the United States $500,000 per annum, on each first day of July, beginning with 1875, and to continue this payment for twenty years, and thereafter, on each first day of July, the payment shall be $750,000, and the money so paid in shall be held by the Secretary of the Treasury as a sinking-fund to the credit of the Union Pacific Railroad Company,. specially devoted to the extinction of the Government mortgage, interest thereon to be. reckoned at 6 per cent. per annum, lawful money, payable semi-annually, and the accruing interest each half-year to be carried to the account of the sinking-fund to the credit of the Union Pacific Railroad Company. And this annual payment by the Union Pacific Railroad Company shall be continued without delay or default until the amount to the credit of the company in the hands. of the Secretary of the Treasury shall be equal to the full amount of the Government mortgage, reckoned at simple interest to same date. The Government lien now existing to remain as security for the discharge of this obligation, and to be canceled when the sinking-fund thus created shall equal the mortgage of the Government, reckoned at simple interest, at which time said sinking-fund shall be transferred to and shall rest in the United States, and this payment shall be in full discharge of all obligations due from the company to the Government. Should this suggestion meet with your approval, I would respectfully request, on behalf of the company, that you lay the matter before Congress, with such favorable recommendation as you may deem expedient. The proposition is made with the sincere desire, on the part of the company, to respond most honorably to all obligations, and with the confident hope that the Government will accept it as the very largest annual amount which the company can safely agree to pay. In addition to the substantial, complete, and final re-inmbursement thus proposed by the company, you will permit me to remind you of the vast saving to the National Treasury which has been effected by the construction of the Union Pacific Railroad.. The former cost to the Government for the transportation of troops and of quartermaster, commissary, and ordnance stores, and the carrying of the United States mails and of Indian supplies across those vast plains and over the mountain-ranges was very great, involving an outlay of many millions annually. The same service, at the railroad company's current rate of charges, is now done with a saving to the Treasury, according to the official statements of Executive Departments, of well-nigh $2,000,000 annually, to say nothing of the superior safety, promptitude, celerity, and certainty with which it is accomplished.:Indeed, it is no exaggeration to say that if -the Government should forfeit all it advanced toward the construction of the road, it would still PACIFIC RAILROADS. 95 realize large annual gain from the economy it has been enabled to effect in the different branches of the public service to which I have referred. I adduce these facte, fortified as they are by the report of the Government directors, to show that the Government after it receives a re-imbursement of its direct pecuniary advances,will still have left an enduring source of profit to the Treasury, and consequent relief to the tax-payer, in the very large amount that will be annually saved by the transportation facilities which this great line of railway will always afford. With great respect, your obedient servant, SIDNEY DILLON, Presidenlt Union Pacific -Railroad Conmpany. Hon. B. H. BnrsTOw, Secretary of the Treasury. SIR: The Union Pacific Railroad Company beg leave to submit the following amendments to its proposition of February 9, 1875, viz: First. The sum of about $800,000 now in the United States Treasury, claimed by said company to be due it for transportation and mail-service, together with interest at 6 per cent. per annum, to be computed every six months, on such part of the said sum as' was due on the first (lays of January and July of each year during its accumulation, to constitute a sinking-fond to the credit of the Union Pacific Railroad Company, as is hereinafter more fully set forth. Second. The company to pay into the Treasury of the United States $500,000 per annum, in semi-annual installments of $250,000 each, payable on the first days of January and July of each year for the period of ten years, commencing on the Ist of July, 1875, $750,000 per annum in semi-annual installments of $375,000 each, payable on the 1st of January and July of each year, for the period of ten years, commencing on the 1st of July, 1885, and $1,000,000 per annum, in installments of $500,000 each, payable on the first days of January and July of each year, commencing on the first day of July, 1895. And.the money so paid in, together with the sum now in the Treasury referred to in the first paragraph above, shall be held by the Secretary of the Treasury as a sinking-fund to the credit of the Union Pacific Railroad Company, specially devoted to the extinction of the Government mortgage, and the interest on said money so paid into said sinking-fund shall be reckoned at 6 per cent. per annum, payable semi-annually, and the accruing interest each half-year be carried to the account of the sinking-fund to the credit of said company. -And the annual payment by the Union Pacific Railroad Company shall be continued without delay or default until tlhe amount to the credit of the company in the hands of the Secretary ofthe Treasury,shall be equal to the full amount of the Government mortgage reckoned at simple interest to same date. The payments to be made upon the terms and conditions set forth in said proposition of February 9, 1875. Third. The Government to retain each year, and credit to the company on account of the payments to be made by it as aforesaid, the moneys due the said company for transportation and mail-service to the amount of such payments as above stipulated, any deficiency to be made good by the company. Fourth. The aforesaid payments to be in full settlement of all claims and demands by or on behalf of the Government against said company. Very respectfully, your obedient servant, SIDNEY DILLON, President. The Hon. SECRETARY OF THE TREASURY. OFFICE CENTX'RAL PACIFIC RAILROAD COMPAN;Y, No. 9 NASSAU STREET, New York, 1February 17, 1875. SIR: The directors of the Central Pacific Railroad Company have noticed in the newspaper press that the Union Pacific Railroad Company have made a proposition to the United States Government to pay a certain amount annually to be placed at interest as a sinking-fund, to pay the amount that that company received from the United States Government to aid in building its road under the acts of July 1, 1862, and July 2, 1864. Now, while the managers of the Central Pacific Railroad Company would prefer to pay as required by the acts above named, rather than to advance any considerable amount of money more than is called for by said acts, if they could be allowed to do so without being annoyed by unfriendly legislation, or menaced by threats of such legislation, as has been the case since the completion of the road, still they would rather pay a fixed amount, larger than has been earned and gone to the credit of the company 96 PACIFIC RAILROADS. up to this time, or is likely to in years to come, than to suffer such annoyances as they have heretofore. The Central Pacific Railroad Company will, therefore, for the sake of having all parties satisfied, agree to pay, in lien of payment as now required by the acts of Congress before mentioned, $200,000 on the first day of October, 1875, and on the first days of April and October in each year thereafter, until the amount, compounded each six months, shall liquidate the claim that the United States Government now has against the Central and Western Pacific Railroads, (both roads being now consolidated under the name of the Central Pacific.) The payments, as above mentioned, to be in full satisfaction of all unsettled questions between the United States Government and the Central Pacific Railroad Company. I have the honor to be, very respectfully, your obedient servants C. P. HUNTINGTON, Vice-President. Hon. B. H. BRISTOW, Secretary of the TreasuryA, -c., Washington, D. C. WASHINGTON, D. C., February 22, 1875. Sin: The Central Pacific Railroad Company respectfully submits the following as supplemental to its proposition of the 17th instant relative to a sinking-fund to pay the principal and interest of the bonds issued to aid in building a portion of its roads eunder the acts of Congress of July 1, 1862, and July 2, 1864. First. The sum which shall have accumulat; d in the United States Treasury on the 1st day of April, 1875, earned by the' company on its roads which have been aided by Government bonds, and which is claimed to be due to the said company for Government transportation and mail-service, with interest at 6 per cent. per annum, to be computed every six months on such part of said sums as was due on the 1st day of April and October in each year during its accumulation, to be retained by the Secretary of the Treasury as a commencement of the sinking-fund heretofore proposed to be established. Second. The Government to retain each six months, and credit to the company on account of the semi-annual payments above mentioned, the moneys due the said company fortransportation and mail-service over the roads aided by Government bonds to the amount of each proposed semi-annual payment, any surplus to be paid by the Government, and any deficiency to be made good by the company. Third. The original and this supplemental proposition are submitted as a compromise, and in full satisfaction of all unsettled questions and claims against the company by the Government, and are to be taken together, and are not to be used against the company, unless accepted by the Government, by consent and authority of Congress, by an act acceptable to the company. C. P. HUNTINGTON, Vice-Pr esiden t. Hon. B. H. BRISTOw, Secretary of the Treasury. Statement of the amount of transportation, "troops and supplies," Union Pacific Railroad, since 1867, as shotwn by the Quartermaster-General's annual reports. Fiscal year ending June 30, 1868.-..,....-.-...,.. $962, 285 92 Fiscal year ending June 30, 1669.......- - -.. 478, 534 78 Fiscal year ending June 30,1870...................................... 557, 537 92' Fiscal year ending June 30, 1871.................. 812, 812 55 Fiscal year ending June 30, 1872............................. 399, 193 72 Fiscal year ending June 30, 1873..................... 445, 501 00 Fiscal year ending June 30, *1874..................................... 306, 589 98 Total................................. 3, 962, 455 87 *Estimated, in part. PACIFIC RAILROADS. 97 Mail-transportation account. One-half. Whole. Fiscal year ending June 30(1869.. $123, 799 20 $247,598 40 One-half paid to company; one-half retained and I} 1870. 15539,639 39 3109,29 7 credited on interest-account. 1871 139,639 39 279,278 78 187211 141,927 52 283,855 04 -1873. 106,445 63 212,891 26; All retained to credit interest-account, 1874............................ 379, 843 77 Half-year to January 1, 1875......................................... 162, 571 50 UNION PACIFIC RAILROAD-PELRCENTAGE ACCOUNT. SOLICITOR'S ESTIMATE. Nret earnings as claimed by the Government; difference between gross receipts and orperatingexpenses. November 6, 1869, to January 1, 1870.............. $441, 179 19 at 56/ $22, 058 96 Fiscal year 1870.. 2,947, 86i2 27 at 5/~o 147,393 11 Fiscal year 1871.................... 3, 921, 115 30 at 5Y0 196, 055 77 Fiscal year 1872 -------------- -- --- 4, 092, 032 05 at 5 o' 204,601 6L Fiscal year 1873............5, 291, 242 64 at 56o 264, 562 13 January 1, 1874, to October 31, 1874............... 4, 107, 694 36 at 5Y% 205, 384 71 Total.....-.............................................. 1,040, 056 29 The company claims that this road was not completed until the 1st day of October, 1874, and hence deny all of the above account. The company also claims that they should be permitted, in arriving at net profits, to deduct interest on their first-moltgage, land-grant, and sinking-fund bonds. RECAPITULA TION. Years. QuarMtermas- Mails. Percentage. Total. 1868......$969,285 9 - ---------- --- -- $969, 285 92 1869.. —..-. —-......... —-..- -------------- 478, 534 78 $247, 598 40 $22, 058 95 746, 192 13 1870.......................................... 557, 537 92 310, 3'29 48 147, 393 11 1,015, 260 51 1871.......-...........81.2, 812 55 279, 278 78 196, 055 76 1, 288, 147 29 1872.......................................... 399, 193 72 283, 855 04 204, 601 60 887, 650 36 1873.4................. 445, 501 00 212, 891 26 264, 562.1:3 922, 954 39 1874.................. 306, 589 98 379, 843 77 164, 3;7 77 1 054,38 Half-year................................... - 162,571 50 41,07 94 162,571 50 41, 076 94 1,054,389 76 Total...... 3,969,455 87 -..-...............-..- —..6, 883, 880 36; The above table does not include account for services rendered the Treasury, Navy and Interior Departments, but the amount in each of these Departments is but small Statement of bonds issued in aid of the construction of the Union Pacific Railroad, at simple interest. Total issue thirty-year 6Y% currency-bonds-.......................... $27, 236, 512 00 Interest paid and to be paid by the United States to July 1, 1875.-... 11,884, 304 65 Interest to be paid to July 1, 1899. 39, 220, 097 28 Total........................................... 78, 340,913 93 Statenment of bonds issued in aid of the construction of the Central, Pacific Railroad. Total issue thirty-year 6Y currency-bonds................. 25,885, 120 00 Interest paid and to be paid by the United States to July 1, 1875.-.- - 11, 027,697 67 Interest to be paid to July 1, 1899. 37,274, 572 80 Total.................... 74,187, 390 47 H. Rep. 440 -7 98 PACIFIC RAILROADS. CENTRAL PACIFIC RAILROAD. Calculations to arrive at percentage of net earnings coming to United States in each of four years. 1870. Gross earnings: Coin-$....... t..,..........,..,.., $4,083,132 48 Reduced to currency at 10 per cent............. 408, 313 24 $4,491,445 72 Currency................................................... 3, 355, 837 72 Total................................................. 7,847, 283 44 Operating-expenses: Coin. —.................... $3, 549,032 60 Reduced at 10 per cent. 354, 903 26 Currency. 114, 986 11 4,018,921 97 Currency net earnings.......... -........................ 3, 828, 361 47 Other expenses not stated. Five per cent. to United States. 191, 418 07 1871. Gross earnings: Coin.............................. 4, 991, 529 04 Reduced to currency, at 10 per cent. 499,152 90 - $5,490,681 94 Currency......................................... 3,870,525 42 Total.....-.-..........-...-......-... 9, 361,207 36 Operating-expenses: Coin.. —,. —-..... 3,799, 280 54 Reduced 10 per cent........................... 379, 928 05 Currency expenses.-.-................ 41,522 38 4,220,730 97 Other expenses not stated.......................... Currency net earnings... 5, 140, 477 39 Five per cent. to United States.............................. 257, 023 86 Per company's statement, superintendent's report, 1873-'74. 1872. Gross earnings: Coin............$. $7,400,089 35 Currency....................... 4, 563,551 22 Equal to currency....... $12, 734,729 88 Operating-expenses: Coin-. "...."... 4, 953, 612 42 Currency...................................... 57,666 43 Equal to currency --........................................ 5, 527, 445 25 Net earnings, (over operating expenses,) currency............ 7, 207, 284 63 Other expenses, per profit and loss account: Taxes............-.............-...-...... 239, 972 00 General and miscellaneous-.................... 233,272 17 Legal.............................. 63,676 16 Engineering..........,,,,...................... 25, 900 97 562, 821 30 Net over all.......................................6, 644, 463 33 Five per cent. to United States.............................. 332, 223 16 1873. Gross earnings: Coin.......................................... 7, 643, 469 58 Currency...-..................... 5, 220, 483 40 Equal to currency....... $13, 851, 489 24 PACIFIC RAILROADS. 99 Operating-expenses: Coin. -......................... $4,929,684 09 Currency.39,587 43 Equal to currency$...................... f5, 606, 186 70 Over operating-expenses, currency.. - 8, 245, 302 54 Other expenses, per profit and loss account: Taxes........................................ 315,821 94 MIiscellaneous. -.............. 178, 089 80 Legal.. —-..,.,, —--- --.. 61,327 71 Civil-engineering-..-.................. 20,312 68 Steamers,,35,485 79 Shops-... -----—.. —.. —-.. 58,608 40 669, 646 32 Earnings over all, (currency)...................... 7, 575, 656 22 Five per cent. to United States... 378, 782 81 CENTRAL PACIFIC RAILROAD. Fiscal-year earnings from United States. Current 37ear. Years. Do M~' c June 30, 1870, to June 30, 1871. $33 48t 88 $222, 665 62 $101 26.......... $705 00 $257, 023 86 $519, 977 63 June 30, 1871, to June 30, 1872. 133, 269 82 232, 512 48 83 92..-. 3, 524 00 332, 223 ]6 701, 613 38 June 30, 1872, to June 30, 187:3. 57, 6926 95 174, 384 36 74 88 $585 38 1, 762 00 378, 782 81 813, 216 38 June 30, 1873, to June 30, 1"74. i0, 464 56 288, 041 90........ 806 11 2 36 353, 662 08 642, 977 01 480, 843 21 917, 604 36 260 06 1, 391 49 5, 993 36 1, 321, 691 91 2, 677, 784 39 __ -._ —866-1219th.....93, 951 84 1,901,460...... 86 Four years' average estimated retention and percentage on 866 miles................ 475, 365 21 In the foregoing, "discount on cnrrency receipts " is not taken into account as an expense, as the percentage is calculated on the basis o f currency, although a large proportion of earnings was in coin. Likewise " United States Government transportation disallowed " is not an expense. Statement as to average earnings of the Central Pacific Railroad Company for four (4) years. By Storrs, counsel for company. For the year ending December 31, 1870: Earnings over operating-expenses................................. $3,828,361 47 For the year ending December 31, 1871: Earnings over operating-expenses................................. 5,140,497 39 For the year ending December 31, 1872: Earnings over operating-expenses................$.........7, 207,284 63 Other expenses in coin -......... $562, 821 30 Ten per cent. premium..................... 56, 282 13 619, 103 43 6, 588, 181 20 For the year ending December 31, 1873: Earnings over operating-expenses. —-----................... ——. 8, 245, 302 54 Other expenses in coin;-.............. $669, 646 32 Add 10 per cent. premium.................. 66, 964 63 736, 610 95 7, 508, 691 59 23,065,731 65 -i-ct;-gths, being the proportion of the roads aided by Government bonds.. 16, 386, 313 44 Yearly average for the four years......................... 4, 096, 578 36 100 PACIFIC RAILROADS. Annual interest on bonds secured by mortgages on the 866 miles aided by Government bonds, which should be deducted before the 5 per cent. is calculated: State aid, 7 per cent., $1,500,000; convertible, 7 per cent., $1,483,000: Total, $2,983,000: interest.............................................. $208. 810 Interest on first-mnortgage bonds, 6 per cent. on $27,885,000............... 1, 673, 100 Interest on T of $9,153,000 land-bonds, being about the proportion applicable to the main line-$6,864,750, 6 per cent -........ 411, 885 2,293,795 Add premium on gold, 12 per cent............................... 275, 255 2, 569, 050 The interest on the United States currency bonds, being $1,673,140.80, though not paid at once, is accumnulattng against the company, and must be paid eventually. We should not pay 5 per cent. on any sum which we have paid, or are at any time to play out as expenses or interest on mortgages. The 5 per ient. is not chargeable against the company until the termination of the current fiscal year, at any rate; but the foregoing is given as the yearly average of earnings for four years. The Government commissioners certify that the road should be considered as completed in October, 1874. Statement as to average earnings of Central Pacific Railroad Cormpany for four (4) years. For the year ending December 31, 1870: Earnings over operating-expenses-.-.................-............... $3,828,361 47 For the year ending December 31, 1871: Earnings over operating-expenses.-.. —---.. —-.......................... 5, 140, 497 39 For the year ending December 31, 1872: Earnings over operating-expenses.................-.....-...- $7, 207,284 63 Other expenses in coin —.................. $562,821 30 Ten per cent. premium..................... 56; 282 13 619, 103 43 6,588,181 20 For the year ending December 31, 1873: Earnings over operating-expenses....................... 8, 245, 302 54 Other expenses in coin. -$................. $669, 646 32 Add 10 per cent. premium.................. 66, 964 63 736, 610 95 7,508,691 59 23, 065, 731 65 5- thsa being the proportion of the roads aided by Government bonds.. 16, 3S5, 313 44 Yearly average for the four years. -.............................. 4,096, 578 36 Annual interest on bonds secured by mortgages on the 866 miles aided by Government bands, which should be deducted before the 5 per cent. is calculated: State aid, 7 per cent., $1,500,000; convertible, 7 per cent., $1,483,000: Total, $2,983,000; interest................................................ $208,810 Interest on first-mortgage bonds, 6 per cent. on $27,885,000......... 1,673,100 Interest on i of $9,153,000 land-bonds, being about the proportion applicable to the main line-$6,864,750, 6 per cent........................ 411, 885 2, 293,795 Add premium on gold, 12 per cent......-............................-. 275, 255 2, 569, 050 The interest on the United States currency bonds, being $1,673,140.80, though nct. paid at once, is accumulating against the company, and must be paid eventually. We should not pay 5 per cent. on any sum which we have paid, or are at any time to.pay out, as expenses or interest on mortgages. The 5 per cent. is not chargeable against the company until the termination of the current fiscal year, at any rate; but the foregoing is given as the yearly average of earnings for four years. The Government commissioners certify that the road should be considered as comlpleted in October, 1874. PACIFIC RAILROADS. 101 VWAR )DEPARTMENT, QUARTER MASTER-GENERAL'S OFFICE, Washington, D. C., February 13, 1875. Statement of payments made by the Treasury Department and by disbursing officers of the Quartermaster's Department to the Union Pacific Railroad Company, on account of transportation and telegraphic services for the Quartermaster's Department, United States Army, from its opening to date, embracing the respective fiscal years from July 1, 1866, to June 30, 1874, and part of fiscal year ending June 30, 1875, inclusive, as shown by the records of this Office: Credited un- Withheld unFor the fiscal year ending- Total pay- In cash. der act of der act Mar. ments. mJuly 2,1864. 3, 1873. June 30, 1867................................. $111, 400 80 $55, 700 40 $55, 700 40.............. June 30, 1868....................9............. 9i, 285 92 484, 642 95 484, 642 97.............. June 30, 1869............................ 478, 5:34 78 23:19, 267 38 239, 267 40......... June 30, 1870.................................. 487, 288 16 243, 644 08 24:3, 644 08.............. June 30, 1871...-........................... 701, 246 30 350, 623 17 350, 62:3 13.............. June 30, 1872).-............................ 481, 930 19 240, 965 08 240, 965 11.............. June 30, 1873........ —------—............... 150, 687 79 62, 579 39 62, 579 40 $25, 529 00 June 30, 1874....................... 52, 778 95 27 00 27 00 52, 724 95 June 30, 1875, in part. 2, 005......................................0, 005 72 Total payments..................... 3, 713,158 61 1, 677, 449 45 1, 677, 449 49 358, 259 67 Accounts in Treasury Department........... 580,800 76............................ 580, 800 76 Accounts in Quartermaster-General's Departmlent.................................... 58,292 34.............................. 58, 292 34 Total earnings to date........................ 4, 352, 251 71 1, 677, 449 45 1, 677, 449 45 997, 352 77 Official: M. I. LUDINGTON, Quaartermaster, U. S. A. Statement of the amount of bonds issued to the Pacific Railroad Companies, lwith interest comlputed thereon half yearly at 6 per cent. per annum. The interest in this statement is compounded. Union. Pacific Railroad Comnany: Amount of bonds issued........................... $27, 236,512 00 Interest due at maturity,. September 3, 1897....... 133, 230, 206 60 - $160 466,7 18 60 Central Pacific Railroad Conmpany: Amount of bonds issued...-... 25,885,120 00 Interest due at maturity, November 18, 1897... 126, 619, 733 30 152,504,853 30 Kanlas Pacific Railroad Comn2any: Amoun t of bonds issued.................-......... 6, 303, 000 00 Interest due at maturity, November 17, 1896........ 30,831,774 36 37,134,774 36 Westerrn Pacific Railroad Company: Amount of bonds issued........................... 1, 970, 560 00 Interest due at maturity, September 5, 1898. -.... 9, 639,197 41 - 11,609,757 41 Sioux City and Pacific Railroad Company: Amount of bonds issued 1, 628, 320 00 Interest due at maturity, January 1, 1898... - 7,965,095 16 9, 593,415 16 Centiral Branch U7nion Pacific Railroad Company: Amount of bonds issed........................... 1, 600, 000 00 Interest due at maturity, October 20, 1896.......... 7,826,564 96 9, 426, 564 96 Total principal.............................. 64, 623: 512 00 Total interest................. 316,112, 571 79 Grand total....................... 380,736, 083 79 102 PACIFIC RAILROADS. Uvion Pacific Railroad.-Letter of President Dillon to the chairman of the Committee on the Judiciary of the United States Senate, relative to the differences between the company and the United States. UNION PACIFIC RAILROAD COMPANY, PRESIDENT'S OFFICE, 23 NASSAU STREET, -New York, January 24, 1876. SIR: Various bills have been introduced into the Senate and referred to the Committee on the Judiciary hostile to the rights of this company, and implying a charge of unwillingness on its part to comply with all its obligations to the Government. Allow me, therefore, to call your attention to the fact that all differences between the Government and the company, in respect to the rights and duties of the latter under the contract contained in the acts of 18152 and 1864, under which the Pacific Railroad was built, were, by express provisions of the acts of Congress of March 3, 1873, and of June 22, 1874, referred to the courts of the United States for final decision. Under the act of March 3, 1873, the claim of the company that the interest paid by the United States on the bonds issued by the UJnited States in aid of the construction of the road, and secured by a second-mortgage lieu, is not to be re-imbursed by the company until the maturity of the bonds themselves, except by half the transportation money on Government business, and that the other half of such money is to be paiql to the company in cash as it accrues, has been fully argued and considered before the Court of Claims, and, on appeal, before the Supreme Court of the United States, and the claim of the company fully and finally allowed and affirmed by the judgments of both courts. Under the act of June 22, 1874, the claim of the United States for 5 per cent,. of alleged net earnings of the road, involving various doubtful questions of fact and of law, has been put in suit in the proper United States court; and'it is unnecessary to say that to the final judgment in that suit the company will most willingly conform. In February, 1875, this company submitted to the Secretary of the Treasury propositions for the substitution, in place of the doubtful and fluctuatinog payments derived by withholding transportation moneys and from 5 per cent. of net earnings, the payment by the company of a large definite annual sum, to be carried to the sinking-fund for account of the Government second mortgage, such annual payment to be continued until its full redemption. The principle of these propositions was, as the company understood, cordially approved by the Secretary of the Treasury and the Executive. It was deemed desirable for both parties, and especially for the Government, that fixed and definite annual payments should take the place of uncertain and variable payments; and the propositions only failed of submission to Congress by reason of the lateness of the session and the unwillingness of the Executive to introduce new subjects of legislation, which might render necessary an extra session. The foregoing propositions, it is to be borne in mind, were made by the company at a time when its claim that the interest paid by the Government on its bonds could be reclaimed only at their maturity was disputed and in litigation, and the whole transportation moneys were being retained by the United States; since which time the claim made by the company has been sustained to the fullest extent by the courts of the United States, to which Congress directed its reference. In view'of all these facts, to a full and candid consideration of which the attention of your committee is invited, the company is sensitive to and deprecates any attempt to create an impression in Congress or with the public that it seeks to evade any of its legal obligations under the contracts made with it by the acts of 1862 and 1864. Those obligations, as they may clearly appear, or as they may be finally defined and fixed by the courts, the company will endeavor to faithfully and fully carry out, unless modified or changed by agreement between the parties to the contract and for the mutual ad-' vantage of both, negotiations for which purpose the company is willing to enter into at any time with the proper representatives of the Government. Meantime, it is entirely certain that the United States as as second-mortgae creditor of the company is more than any other person or corporation vitally interested in protecting the company and maintaining its credit and financial standing. Very respectfully, SIDNEY DILLON, President. Hon. GEO. F. EDMUNDS, Chairmavn of the Committee on the Judiciary, United States Senate. PACIFIC RAILROADS. 103 [Senate Mis. Doc. No. 85, Forty-fourth Congress, first session.] Letter from C. P. feuntington, vice-president of the Central Pacific Railroad Company, to Bion. George F. Eclmuinds, United States Senate, in relation to a bill to create a sin7lkinfl-fund foi the liquidcation of the Government bonds advanced to the Central and Western Pacific Railroad Companies.-April 3, 1876. IReferred to the Committee on Railr oads and ordered to beprinted, to accompany bill S. 687. NEW YOInK, Abpril 3, 1876. DiEAR SIR: The relations between the Government and the Pacific Railroad Comnpanies, growing out of the acts of 1862 and 1864, whereby the United States, in a time of wvar, advanced its bonds, in order to insure and hasten the construction of a railroad and telegraph-line between certain points on the Missouri River and the Pacific Ocean, and especially the pecuniary obligations created thereby, have again been pressed upon the attention of Congress and of your committee. The spirit and aim of those acts, it is well known, was to establish, without the direct agency of the nation, railroad communication across the continent, and this object has been attained nder the terms and conditions then made, but years ahead of the allotted time. Commonplace as the achievement may Reem now, at the time of its inception it was deemed a work so novel, so bold and vast, that but few believed inll its success, while there was a general apprehension, both in the public mind and among their representatives, that it might be long delayed or fail altogether. Several safeguards and provisions were incorporated ill the charter in the fear, if not in the expectation, of a failure to complete it, and they now remain there as absolute stunmbling-blocks to the well-mleaning chance-investigator who is unfamiliar with their origin, but which are also seized upon by others and distorted from their primary signification, for no other purpose, apparently, than to harass the companies or to serve personal ends. The indebtedness of the companies and the complicated condition of their accounts with the Treasury is one of these questions, fruitful of contention and profitless discussion. We have understood from thle beginning (and the records of the debates, the obvious reasons in the necessity of the case, as well as the language of the acts, bear us out) that the railroad companies were not called on to repay the interest on these bonds as it fell due to the holders, until the maturity of the bonds themselves, except in way of transportation services, and a portion of the net earnings as provided in the law. It never could have been the intention of Congress that they should be obliged to repay it during the contemplated interval of construction, which, by the way, has not yet expired. This position was sustained by a decision of the Court of Clainis, and has, since the date of my communication to the Secretary of the Treasury on the subject, been affirmed by the Supreme Court of the United States. Notwithstanding this decision, the sums due from the Treasury are, and have long been, withheld from us. In regard to the other form of repayments from the net earnings of the roads, their amount, and the time at which they should commenice, similar suits are now pending in the courts. I may recall to your notice that, prior to the passage of these acts, the Government disbursed fronlm seven millions up as high as eighteen millions per annum, in coin, for inadequate and hazardous transportation of mails, troops, munitions, and supplies, and the losses incidental thereto, over these Territories, and it was naturally supposed that the enlarged services to be rendered by the railroads would amount to far more than the three millions in currency assumed by the nation, as interest, to say nothing of the multiplied safety, efficiency, and power incident to the use of the railroads. Contrasting the cost of waglon-transportation of the one period with that of the railroadcharges of the other, (which are as 20 to 1,) it is apparent that the Government derives a benefit, or, in other words, virtually saves, every year, a sum far exceeding the total interest payments on the Pacific Railroad issues, aside from the immense benefits conferred upon commerce, industry, and the general convenience of locomotion. If the whole of the Government freights were sent by the railroads, and if we had not been compelled to carry the Government employes, ostensibly on public business, without compensation, or if the compensation for mail-service was at " fair and reasonable rates," the same as " paid by private parties for the same kind of service," as wras contemplated by the acts, and not by the arbitrary regulations of the postal laws, the amounts repaid by transportation would be far larger than they are. But because the companies were aided in the beginning by a loan of credit, it has been presumed that therefore they should do a part of the Government business for nothing and another part at reduced rates; and it is proposed to make them pay the indebtedness in advance of the statute requirements besides. This ceaseless or profitless agitation of barren or long-settled issues, is unseemly, wasteful, and places both parties in a false attitude. Neither the companies nor the Government, I am persuaded, seek any undue advan 104 PACIFIC RAILROADS. tage, and ask neither more nor less than justice under the contract and the law. It seems as if some mutual and honorable accommodation of all differences on this subject might be reached, in which the rights and equities of both parties to the contract will be allowed, and their vested rights be respected, and in this way remove them from the choked chaunels of legislation and the courts, so that other and more pressing public affairs may receive the attention of the public servants, and that the energies and means of the railroad companies may be devoted to the perfecting and operating of their roads. As the acts now stand, there is no provision for a gradual liquidation of this indebtedness; but the principal of the bonds. with the bulk of the accumulated interest-estimated at from fifty to seventy millions-will remain to be paid at the maturity of the bonds. I am informed that there is a widespread impression that this sum will never be repaid by the companies in money, and only partly by services; but that the Government will, some twenty-five years hence, be called upon to decide whether it will lose the whole of its advances, or then institute a sinking-fund for their gradual liquidation, or take possession of the road and assume the burden of the first mortgages. There are those, I am told, who regard the enterprise as a national blessing, so great that they think it cheaply acquired at even that sacrifice; while Others look forward to such a contingency with pretended alarm, and are only anxious to have it repaid, regardless of the statutes, the decision of the courts, the prior liens, or the earning-power and intearity of the property. I may say, o'n behalf of the Central Pacific Railroad Company, that we entertain no such view. XWe acknowledge our indebtedness, and, large as the sum may be, hope to be able to repay it in the manner and at the time it becomes due. At the same time, any departure from the law and the contract as it exists can only be made by the consent of both parties thereto. It is desirable that some plan should be devised for the settlement of these outstanding claims and the controversies to which they give rise. This may be done by instit.uting a sinkiug-fiind, either in the hands of the companies or of the Government, which will, by a series of lhalf-yearly contributions and their reinvestment, extinguish the debt, within a reasonable time, without loss to the Government, injury to the preferred creditors, or oppressing the companies. If we should attempt to provide for the whole of this vast sum, which is in the nature of a second mortgage, together with the sinking-fund and interest requirements for the first mortgage, (amounting to as much more,) within the life-time of the bonds, it is obvious that the whole imust be drawn from the revenues of the road and the sales of lands, and consequently from the public who use it. It has thus far been the practice of the conipalny to steadily reduce the cost of carriage as fast as it can be done with safety to our obligations to our creditors and the improvement of the facilities, until we are now furnishing, all things considered, on through traffic the cheapest rail-transportation in the world. This policy we desire to continue, but cannot do, if the cancellation of both these loans is to be concentrated within so short a period. In deference to the views of some members of your body, and in the absence of any rational proposition on behalf of the Government to that end, I submit herewith, in the form of a short bill, a plan for the creation of such a sinking-folnd in the custody of the United States Treasury, which shall commence at once, by the application of the sums due the company and remaining in the Treasury, on the first day of January last estimated at nearly a million dollars, upon which no interest has been allowed, together with a portion of the lands belonging to the company, the value of which is constantly enhancing by the presence of the road, to which there shall be added semi-annual payments in cash, which, with the interest thereon at tile low rate of 6 per cent., will suffice to cancel the Government advances by the time the last bond falls due. The latter suml is based on the best calculations we are enabled to make of the future ability of the company to meet this and their other more imperative engagements, and do no0 injustice to the public on the one hand, nor to the renewal-demands of the road on the other. The operation of the road is, to a certain extent, thus far experimental; each successive season revealing some new feature or locality for which provision must be made by fresh expenditures. If this shall receive the approval of Congress and become a law, it will, I am satisfied, result in refunding to the Government, withiln a reasonable time, every dollar it has advanced, and put an end to the many embarrassing and unseemly controversies thereupon now pending in each of its branches. Very respectfully, yours, C. P. HUNTINGTON, Vice-Jlres ient. Hon. GEO. F. EDMUNDS, United States Senate. PACIFIC RAILROADS. 105 [Senate Ex. Doc. No. 18, Forty-fourth Congress, first session.] Let rjro a the Secretary of the Treasury, communicating, in answer to a Senate resolution of January 20, 1876, a statement of his action under the act of Congress providing for the collection of moneys due the United States from the Pacific Railroad Companies, approved June 22, 1874.-January 26, 1876. Referred to the Committee on the Judiciary and ordered to beprinted. TREASURY DEPAIRTMENT, January 24,1876. SIR: In response to the resolution of the Senate of the United States, January 20, 1876, directing the Secretary of the Treasury to communicate to the Senate what action, if any, has been taken by him under the act of Congress entitled "An act providing or the collection of moneys due the collection ofe United States from the Pacific Railroad Cornanies," approved June 22, 1874, and what is the present condition of the matters erein referred to, I have the honor to say that, in accordance with a provision of said act, a demand was made. by me on the treasrea r of the Union Pacific Railroad Company, November 12, 1874, for $1,040,056.29, the amount claimed to be due for the 5 per centum of the net earnings of said company from November 6, 1869, the date of the rompletion of said railroad, to October 31, 1874; on the treasurer of the Kansas Pacific ailroad Company, November 14, 1874, for $308,830.13, the amount claimed to )be due from November 2, 1869, the date of the completion of said railroad, to October 31, 1874; on the treasurer of the Union Pacific Railroad Company, Central Branch, November 11, 1874, for $47,197.39, the amount claimed to be due from January 20, 1868, the date of e completion of said railroad, to October 31, 1874; on the treasurer of the Sioux City and Pacific Railroad Company, November 12,1874, for $21,104.42, the amount claimed to be due from March 3, 1869, the date of completion of said railroad, to October 31 1874; on the treasurer of the Central Pacific Railroad Company, November 24, 1874, for $836,636.10, the amount claimed to be due from July 16, 1869, the date of the completion of the said railroad, to October 31, 1874. All of said companies having neglected and refused to pay the sums thus demanded of them within sixty days from such demands, on the 15th and 25th days of January, 1875, I certified that fact to the Attorney-General, at the same time transmitting to him a duplicate of the several demands imade by me. My duty under the act in question thereupon ended, the statute requiring the statute requiring the Attorney-General to institute the ncessary suits and proceedings to collect and otherwise obtain redress in respect of the same in the proper circuit courts of the United States, and prosecute the same toa final determination. I inclose acopy of my certificate to the Attorney-General, together with a copy of the demands referred to. From the reports of the United States attorneys of California, Kansas, Minnesota, and. Iowa, rendered to the Solicitor of the Treasury tunder section 773 of the Revised States, it appears that suit was brought against the Central Pacific Railroad Company April 20,1875; against the Kansas Pacific and Central Branch Union Pacific Railroad Companies April 6, 1875; against the Union Pacific Railroad Company March 27, 1875; ad against the Sioux City and Pacific Railroad Company April 9,1875, to recover the amounts due for. the 5 per centum of the net earnings of said railroads. No report of judgment in any one of the ases has been made to the Solicitor. In response to the further direction to the Secretary of the Treasury to communicate to the Senate what steps, if any, have been taken by him under the second section of te act entitled "An act making appropriations for the legislative, executive, and judicia expenses of the Government for the year ending June 30,1874, and for other purposes," approved March 3, 18733and what is the present condition of the matter theatter therein ferred to, I have the honor to state that, on the 27th day of May, 1873, the Secreta,-y the Treasury addressed the following letter to the Third Auditor. of the Treasury, viz "TREASURY DEPARTMENT, "Washington, D. C., May 27, 1873. " SIr: Referring to your letter of the 24th ultimo, asking to be instructed not to settle the accounts of the several Pacific Railroad Companies, I have to state that the terms of the second section of the act of March 3; 1873 (17 Stat., 508,) require that all moneys due those companies for transportation shall be paid to the Secretary of the Treasury. Iave, therefore, to request that the accounts referred to be settled as soon. as practicable, and that the entire amounts now due, and which may hereafter become due, be paid to the Secretary of the Treasury, as assignee, to be placed to their credit on accountof interest due by them to tohe United States in accordance with the requirets of the act. above referred to. "I am, very respectfully, "WM. A. RICHARDSON, "Secretary.:Ton. ALLAN RUTHERFTT 1D, "Third Auditor of the Treasury." 106 PACIFIC RAILROADS. Since that date, all moneys due the several Pacific Railroad Companies for transportation have been paid, ill accordance with said letter, to the Secretary of the Treasury, and placed to their credit on account of interest due by them to the United States. Subsequently the Union Pacific, the Central Pacific, and Kansas Pacific Railroad Companies brought suit in the Court of Claims to recover the amount due them and retained by the direction of the Secretary of the Treasury as aforesaid, one of which, viz, that brought by the Union Pacific Railroad Company, was tried at the December term, 1874, of that court, in which suit the court rendered jidgment for the claimant in the sum of $512,632.50, which judgment was affirmed by the Supreme Court of the United States on appeal at its present term. The other suits are still pending in the Court of Claims. A copy of the judgment obtained by the Union Pacific Railroad Company, certified by the clerk of the Court of Claims, has been duly presented to me, but the judgment has not been paid. I inclose a copy of a paper signed by the plaintiffs in the case of the Union Pacific Railroad Company on file in the Court of Claims, in which it is stipulated that no judgment which may be rendered against the United States shall be collected until after final judgment in the suit brought by the United States against said company under the act of June 22, 1874. I am, sir, very respectfully, B. H. BRISTOWV, -'ecretary. The PRESIDENT OF THE SENATE. To E. H. Rollins, the treasurer of the Union Pacific Railroad Company: The act of Congress approved June 22, 1874, entitled "An act providing for the collection of moneys due the United States from the,Pacific Railroad Companies," directs the Secretary of the Treasury to require payment of the railroad companies, their successors and assigns, or the successors or assigns of any or either of said companies, of all sums of money due or to become due the United States for the 5 per cent. of the net earnings provided for by the act entitled "An act to aid in the construction of a railroad and telegraph line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes," approved July 1, 1862, or by any other act or acts in relation to the companies therein named or any other such company or companies. Said act of June 22, 1874, also provides that in case either of said railroad companies shall neglect or refuse to pay the same within sixty days after demand therefor made upon the treasurer of such railroad company, the Secretary of the Treasury shall certify,hat fact to the Attorney-General. Now, therefore, I, B. H. Bristow, Secretary of the Treasury, in accordance with the provisions of said act of Congress approved June 2-2, 1874, hereby demand of you, E. H. Rollins, the treasurer of the said Union Pacific Railroad Company, payment to the United States, within sixty days after service of this demand upon you, of $1,040,056.29, being the sum due from said Union Pacific Railroad Company to the United States for the 5 per centum of its net earnings from the 6th day of November, 1869, the day of the completion of said Union Pacific Railroad, to the 21st day of October, 1874. If said Union Pacific Railroad Company shall neglect or refuse to pay the United States said sum of $1,040,056.29 within sixty days after service of this demand, I shall certify that fact to the Attorney-General,'in order that the necessary suits and proceedings to collect or otherwise obtain redress in respect of the same may be instituted and prosecuted to a final determination. In witness whereof I have hereto set my hand and the seal of the Treasury Department this 10th day of November, 1874. [SEAL.] B. H. BRISTOW, Secretary of the Treasury. I, Bluford Wilson, do certify that, on the 12th day of November, 1874, I made personal service of a written demand, signed by the Secretary of the Treasury, upon E H. Rollins, esq., treasurer of the Union Pacific Railroad Company, by delivering to him, at his office in Boston, Mass., said demand, of which the within is an exact counterpart. BLUFORD WILSON. NOVEMBER 12, 1874. I acknowledge service of the demand above mentioned. E. H. ROLLINS, Treasurer of the Union, Pacific Railroad Con:panzy. PACIFIC RAILROADS. 107 TREASURY DEPARTMENT, Washington, D. C., January 15, 1875. I, B. H. Bristow, Secretary of the Treasury, do certify that, on the 12th day of November, A. D. 1874, in accordance with the provisions of an act of Congress approved Julte 22, 1874, I ml:de a written demand, herewith inclosed, upon E. H. Rollins, treasurer of the Union Pacific Railroad Company, for the sums of money due from said railroad company to the United States for the five per centurn of its net earnings from the 6th day of November, A. D. 1869, the day of its completion, to the 31st day of October, 1874, amounting to $1,040,056.29. I further certify that said railroad company has neglected and refused to pay the same within sixty days after demand therefor, and still neglects and refuses to pay the same. B. H. BRISTOW, Secretary of the Treasury. To Carlos S. Greeley, the treasurer of the Kansas Pacific Railroad Company: The act of Congress, approved June 22, 1874, entitled "An act providing for the collection of moneys due the United States from the Pacific Railroad Companies," directs the Secretary of the Treasury to require payment of the railroad companies, their successors and assigns, or the successors or assigns of any or either of said companies, of all sums of money due or to become due the United States for the five per centumrn of the net earnings provided for by the act entitled "An act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes," approved July 1, 1862, or by any other act or acts in relation to the companies therein named, or any other such company or companies. Said act of June 22, 1874, also provides that in case either of said railroad co lpanies shall neglect or refuse to pay the same within sixty days after demand therefor made upon the treasurer of such railroad company, the Secretary of the Treasury shall certiftv that fact to the Attorney-General. Now, therefore, I, B. H. Bristow, Secretary of the Treasury, in accordance with the provisions of said act of Congress, approved June 22, 1874, hereby demand of you, Carlos S. Greeley, the treasurer of the said Kansas Pacific Railroad Company, payment to the United States, within sixty days after service of this demand upon you, of $308,832.13, being the sum due from said Kansas Pacific Railroad Company to the United States for the five per centumr of its net earnings from the 2d day of Novembei 1869, the day of the completion of said Kansas Pacific Railroad, to the 31st day o October, 1874. If said Kansas Pacific Railroad Company shall neglect or refuse to pay the United States said sum of $308,830.13 within sixty dlays after service of this demand, I shall certify that fact to the Attorney-General, in order that the necessary suits and proceedings to collect or otherwise obtain redress in respect of the same may be instituted and prosecuted to a final determination. In witness whereof I have hereto set my hand and the seal of the Treasury Department this 10th day of November, 1874. [SEAL] B. H. BRISTO W, Secretary of the Treasury. I, Joseph H. Robinson, do certify that, on the 14th day of November, 1874, I made personal service of a written demand, signed by the Secretary of the Treasury, upon Carlos S. Greeley, esq., treasurer Kansas Pacific Railroad Company, by delivering to him, at his office in Saint Louis, Missouri, said demand, of which the within is an exact counterpart. JOSEPH H. ROBINSON. NOVEMBER 14, 1874. I acknowledge service of the demand above mentioned. Treasurer of the Kansas Pacific Railroad Comnpay. TREASURY DEPARTMENT, rWashington, D. C., January 15, 1875. I, B. H. Bristow, Secretary of the Treasury, do certify that, on the 14th day of November, A. D. 1874, in accordance with the provisions of an act of Congress approved June 22, 1874, I made a written demand, herewith - indorsed, upon Carlos S. Greeley, treasurer of the Kansas Pacific Railroad Company, for the suims of money due from said railroad company to the United States for the five per centum of its net earnings 108 PACIFIC RAILROADS. from the 2d day of November, A. D. 1869, the day of its completion, to the 31st day of October, 1874, amnounting to $308,830.13. I further certify that said railroad company has neglected and refilsed to pay the same within sixty days after demand therefor, and still neglects and refuses to pay the same. B. H. BRISTOW, Secretary of the Tr7easury. TSo E. H. Nichols, the treasurer of the Central Branch Union Pacific Railroad Company: The act of Congress approved June 22, 1874, entitled "An act providing for the collection of money due the United States from the Pacijfic Railroad Companies," directs the Secretary of the Treasury to require payment of the railroad companies, their successors.and assigns, or'the successors or assigns of any or either of said companies, of all sums of money due or to become due the United States for the five per centumr of the net earnings provided for by the act entitled "An act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government.the use of the same for postal, military, and other purposes," approved July 1, 1862, or by any other act or acts in relation to the companies therein named, or any other such company or companies. Said ac tof June 22, 1874, also provides that in case either of said railroad companies shall neglect or refuse to pay the same within sixty days after demand therefor made upon the treasurer of such railroad company, the Secretary of the Treasury shall certify that fact to the Attorney-General. Now, therefore, I, B. H. Bristow, Secretary of the Treasury, in accordance with the provisions of said act of Congress approved June 22, 1874, hereby demand of you, E. H. Nichols, the treasurer of the said Central Branch Union Pacific Railroadl Cornpany, payment, to the United States, w-ithin sixty days after service of this demand upon you, of $47,197.39, being the sum due from said Central Branch Union Pacific Railroad Company to the United States for the five per centurn of its net earnings from the 20th day of January, 1868, the day of the completion of said Central Branch Union Pacific Railroad, to the 31st day of October, 1874. If said Central Branch Union Pacific Railroad Company shall neglect or refuse to pay the United States said sum of $47,197.39 within sixty days after service of this demand, I shall certify that fact to the Attorney-General, in order that the necessary suits and proceedings to collect or otherwise obtain redress in respect of the same may be instituted and prosecuted to a final determination. In witness whereof I hereto set my hand and the seal of the Treasury Department this 10th day of November, 1874. [SEAL.] B. H. BRISTOW, Secretary of the Treasury. I, Blufordl Wilson, do certify that, on the 11th day of November, 1874, I made personal service of a written demand, signed by the Secretary of the Treasury, upon Thomas M. Sother, esq., treasurer of the Central Branch Union Pacific Railroad Company, by delivering to him at his office in New York City said demand, of which the within is an exact counterpart. BLUFORD WILSON. NOVEMBER 11, 1875. I acknowledge service of the demand above mentioned. THOMAS M SOTHEN, Treasurer of the Central Branch Union Pacific Railroad Co2mpany. TREASURY DEPARTMENT, Washington, -D. C., January 15, 1875. I, B. H. Bristow, Secretary of the Treasury, do certify that, on the 11th day of Novemnber, A. D. 1874, in accordance with the provisions of an act of Congress approved June 22, 1874, I made a written demand, herewith inclosed, upon Thomas M. Sother, treasurer of the Central Branch Union Pacific Railroad Company, for the sums of money due from said railroad company to the United States for the five per centum of its net earnings from the 20th day of January, A. D. 1868, the day of its.completion, to the 31st day of October, 1874, amounting to $47,197.39. I further certify that said railroad company has neglected and refused to pay the same within sixty days after demand therefor, and still neglects and refuses to pay the same. B. H. BRISTOW, Secretary of the Treasury. PACIFIC RAILROADS. 109'To John M. Glidden, the treasurer of the Sioux City and Pacific Railroad Company: The act of Congress approved June 22, 1874, entitled "An act providing for the collection of moneys due the United States from the Pacific Railroad Companies," directs the Secretary of the Treasury to require payment of the railroad companies, their successors and assigns, or the successors or assigns of any or either of said companies, of all sums of money due or tobecome due the United States for the five per centum of the net earnings provided for by the act entitled "An act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes," approved July 1, 1862, or by any other act or acts in relation to the companies therein named or any other such companyr or companies. Said act of June 22, 1874, also provides that in case either of said railroad companies shall neglect or refuse to pay the same within sixty days after demand therefor made upon the treasurer of such railroad company, the Secretary of the Treasury shall certify that fact to the Attorney-General. Now, therefore, I, B. H. Bristow, Secretary of the Treasuryf in accordance with the provisions of said act of Congress, approved June 22, 1874; hereby demand of you, Johfi M. Glidden, the treasurer of the said Sioux City and Pacific Railroad Company, payment to tie United States, within sixty days after service of this demand upon you, of $21,104.42, being the sum due fromn said Sioux City and Pacific Railroad Company to the United States for the five per centum of its net earnings from the 3d day of March, 1869, the day of completion of said Sioux City and Pacific Railroad, to the 31st day of October, 1874. If said Sioux City and Pacific Railroad Company shall neglect or refuise to pay the United States said sum of $21,10-1.42 within sixty days after service of this demand, I shall certify that fact to the Attorney-General, in order that the necessary suits and proceedings to collect or othierwise obtain redress in respect of the same may be instituted and prosecuted to a final determination. In witness whereof I have hereto set my hand and the seal of the Treasury Department this 10th day of November, 1874. [SEAL.] "B. H. BRISTOW, Secretary of the Treasury. I, Bluford Wilson, do certify that, on the 12th day of November, 1874, I made personal service of a written demand, signed by the Secretary of the Treasury, upon John M. Glidden, esq., treasurer of the Sioux City and Pacific Railroad Company, by delivering to hin, at his office in Boston, Mass., said demand, of which the within is an exact counterpart. BLUFORD WILSON. NOVEMBER 12, 1874. I acknowledge service of the demand above mentioned. JOHN M. GLIDDEN, Treasurer of the Sioux City and Pacific Railroad Company. TREASURY DEPARTMENT, Washington, D. C., January 15, 1875. I, B. H. Bristow, Secretary of the Treasury, do certify that, on the twelfth day of November, A. D. 1874, in accordance with the provisions of an act of Congress approved June 22,1874, I made a written demand, herewith inclosed, upon John M. Glidden, treasurer of the Sioux City and Pacific Railroad Company, for the sums of money dlue from said railroad company to the United States for the five per centuar of its net earnings, from the 3d day of March, 1869, the day of its completion, to the 31st day of October, 1874, amounting to $21,104.42. I further certify that said railroad company has neglected and refuised to pay the same within sixty days after demand therefor, and still neglects and refuses to pay the samne. B. H. BRISTOW, Secretary of the 1Treasury. To Marhk Hopkins, the treasurer of the Central Pacific Railroad Company: The act of Congress approved June 22, 1874, entitled "An act providing for the collection of moneys due the United States front the Pacific Railroad Companies," directs the Secretary of the Treasury to require payment of the railroad companies, their 8successors and assigns, or the successors or assigns of any or either of said companies, of all sums of money due or to become due the United States for the five per centum of the net earnings provided for by the act entitled "An act to aid in the construction of 110 PACIFIC RAILROADS. a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, or other purposes," approved July 1, 1862, or by any other act or acts in relation to the companies therein named or any other such company or companies. Said act of June 22, 1874, also provides that in case either of said railroad companies shall neglect or refuse to pay the same within sixty days after demand therefor made upon the treasurer of such railroad company, the Secretary of the Treasury shall certify. that fact to the Attorney-General. Now, therefore, I,. B. H. Bristow, Secretary of the Treasury, in accordance with the provisions of said act of Congress, approved June 22, 1874, hereby demand of you, Mark Hopkins, the treasurer of the said Central Pacific Railroad Company, payment to the United. States, within sixty days after service of this demand upon you, of $1,836,635.10, being the sum due from said Central Pacific Railroad Company to the United States for the five per centum of its net earnings, from the 16th day of July. 1869, the day of the completion of said Central Pacific Railroad, to the 31st day of October, 1874. If said Central Pacific Railroad Company shall neglect or refuse to pay the Unitedl States said sum of $1,836.635.10, within sixty days after service of this demand, I shall certify that fact to the Attorney-General, in order that the necessary suits and proceedings to collect or otherwise obtain redress in respect of the same may be instituted and prosecuted to a final determination. In witness whereof I have hereto set my hand and the seal of the Treasury Department this 10th day of November, 1874. [SEAL.] B. H. BRISTOW, Secretary of the Treasury. I, Joseph H. Robinson, do certify that, on the 24th day of November, 1874, I made service of a written demand, signed by the Secretary of the Treasury, upon Mark Hopkins, esq., treasurer of the Central Pacific Railroad Company, by leaving with E. WV. Hopkins, assistant treasurer, at the office of the treasurer of the Central Pacific Railroad Company,. in San Francisco, Cal., said demand, of which the within is an exact counterpart. JOSEPH H. ROBINSON. TREASURY DEPARTMENT, January 25, 1875. I, B. H. Bristow, Secretary of the Treasury, do certify that, on the 24th day of November, A. D. 1874, in accordance with the provisions of an act of Congress approved June 22, 1874, I made a written demand, herewith inclosed, upon Mark Hopkins, treasurer of the Central Pacific Railroad Company, for the sums of money due from said railroad company to the United States for the 5 per centum of its net earnings, from the 16th day of July, A. D. 1869, the day of its completion, to the 31st day of October, 1874, amounting to $1,836,635.10. I further certify that said railroad company has neglected and refused to pay the same within sixty days after demand therefor, and still neglects and refuses to pay the same. CHARLES F. CONANT, A cling Secretary of the Treasury. IN THE COURT OF CLAIMS. THE UNION PACIFIC RAILROAD COMPANY VS. TIlE UNITED STATES. No. 9830. It is hereby stipulated on behalf of the plaintiffs that no juldgmnent agrainst the United States which may be rendered in this cause shall be collected until after final judgment in the suit brought in the circuit court of the United States of the district of Massachusetts, by the United States against the plaintiffs, under direction of the act of Congress of June 22, 1874, to recover sums claimed to be due as the 5 per cent. of the not earnings of the railroad of the plaintiffs; and in a case of a recovery by the United States in this latter suit the judgment may be offset against any judgment feor the plaintiffs in this cause; but nothing herein shall be construed to affect the right of recovery by either party in either of said suits. S. BARTLETT, _For the Union Pacific Railroad Company. JOHN GOFORTH, Assistant Attorney- General. PACIFIC RAILROADS. 111 TREASURY DE PARTMENT, Washington, D. C., January 15, 1875. SIR: The act approved June 22, 1874, "providing for the collection of moneys due the United States from the Pacific Railroad Companies," directs the Secretary of the Treasury to demand of the treasurer of each of said companies all sums due the United States for, the 5 per centumn of the net earnings of said railroad companies, and on neglect or refusal to pay the same, within sixty days thereafter, to certify the fact to the Attorney-General. On the 11th day of November, 1874, I accordingly made demand on the treasurer of the Central Branch Union Pacific Railroad Company; on the 12th day of November, 1874, on the treasurer of the Union Pacific and Sioux City and Pacific Railroad Companies; and on the 14th day of November, 1874, on the treasurer of the Kansas Pacific Railroad Company, for the 5 per centum of the net earnings of each of said railroad companies. These companies have neglected and refused to pay the same within sixty days after demnand therefor made as aforesaid, and still neglect and refuse so to do. In accordance with the requirements of the act referred to, I have the honor to inclose my certificates to that effect, together with a duplicate of the demands, and of the service of the same in each case. On the 24th clay of November, 1874, I made a like demand on the treasurer of the Central Pacific Railroad Company. When the sixty days shall have elapsed, I shall, if this company neglects and refuses to comply therewith, certify that fact to you. In this connection I desire to say that the 20th section of the act of July 1, 1862, required these companies to make certain annual reports to the Secretary of the Treasury. By the Subsequent act of June 28, 1868, these reports were to be made to the Secretary of the Interior. If the requirements of the law in this regard had been complied with, the annual net earnings of these companies would have been shown, and these would have furnished a basis upon which to make a demand for the 5 per centum thereof. The companies did not, however, comply with the requirements of the act, and did not, upon a further demand of the Interior Department, furnish a statement of the net earnings. Resort was, therefore, had by me to such other sources of information as were within reach, namely, to the annual reports of the presidents of said companies to the stockholders, and such further statements relating to the financial affairs of the several companies as have from time to time been given to the public. Upon information derived from these sources, estimates were made approximating as nearly as practicable the net earnings of the respective companies. It is upon the amount of the net earnings thus derived that the demands for the 5 per centumn thereof have been based. I am, sir, very respectfully, B. H. BRISTOW, Secretary of the Treasury. Hon. GEORGE HE. WILLIAMS Attorney-General United States. TREASURY DEPARTMENT, January 25, 1875. SIR: I have the honor to refer to my letter of the 15th instant, inclosing certain certificates made by me under the act of June 22, 1874, and to say that, in accordance with the provisions of said act, on the 24th of November last, I made demand on the treasurer of the Cehtral Pacific Railroad Company for the 5 per centum of its net earnings, and that said company has neglected and refused to pay the same within sixty days after solid demand and still continues so to do. I transmit herewith my certificate to that effect, together with duplicates of said demand, and of the service of the same. I am, sir, very respectfully, CHAS. F. CONANT, Aoting Secretary of the Treasury. Hon. GEORGE H. WILLIAMS, attorney-General United States. 1112 PACIFIC RAILROADS. Senate Ex. Doc. No. 22. - Forty-fourth Congress, first session. Letter fiom the Attorney-General, commu1nicating, in ansiwer to a resolution of the Senate of January 20, 1876, i;nformation in relation to the condition of suits betwseen the United States and the Pacific Railroad Companies, under the second section of the legislative, executive, and judicial act of 1873. —February. 3, 1876. ReferP*d to the Committee on the Judiciary and ordered to be printed. To the Senate of the United States: I would respectfully acknowledge the receipt of the following resolution of the Senate, viz: "Resolved, That the Attorney-General be, and he is hereby, directed to inform the Senate what steps have been taken by any suit, or otherwise, under the second section of the act making appropriations for the legislative, executive, and judicial expenses of the Government for the )year ending June 30, 1874, and for other purposes, approved March 3, 1873, and whether, in any suit -brougiht under said section, the'claimnof the United States for the 5 per cent. of net earnings therein mentioned was brought under adjudication and passed upon, and if not, why not; and that he also communicate the present condition of matters therein referred to "and beg leave to reply in answer thereto, that since March 3, 1873, the date of the ap, proval of the "Act making appropriations for the legislative, executive, and judicial expenses of the Government for the year ending June 30, 1874, and for other purposes, (17 Statutes at Large, page 508,) five suits have been brought by railroads to whomu bonds have been issued by the United States under the second section of said act, in the Court of Claims, against the United States: one by the Union Pacific Railroad Company in July, 1874; two by the Central Pacific Railroad Company on DecIlmber 15, 1873; one by the same railroad on November 23, 1874, and one by the Kansas Pacific Railroad Company on August 12, 187 5. The suits of the Central Pacific Railroad Company have not been brought to trial, although evidence has been filed by the claimant in support of its claim. The Kansas Pacific Railroad Company has taken no action since the filing of the petition. The suit of the Union Pacific Railroad has been adjudicated. To the petition filed in that suit, the'answer and set-off marked A was filed, and the case was heard in the Court of Claims on April 19, 1875. On May 31, 1875, the court gave judgment for the Union Pacific Railroad Company in the srlm of $512,632.50. On July 8, 1875, an appeal was taken to the' Supreme Court. On October 27, 1875, the case was heard, and on November 29, 1875, the Supreme Court rendered a decision affirming the judgment of the Court of Claims. Since the last date there have been no further proceedings in that suit. On April 19, 1875, a stipulation signed by S. Bartlett, for the Union Pacific Railroad Company, was filed in the Union Pacific Railroad Company's suit, a copy of which is annexed, marked B. The claim of the United States for the 5 per cent. of net earnings, mentioned in the act of March 3, 18t73, was not brought under adjudication, nor passed upon, the answer and set-off containing no demand for the same. I am informed that the claim for the 5 per cent. of net earnings was not included in the answer and set-off of the United States in the Union Pacific Railroad Company's suit because of the agreement entered into by Mr. Bartlett on behalf of the Union Pacific Railroad Company, marked B, and because the act approved June 22, 1874, (18 Stat., p. 200,) was regarded as prescribing the manner of bringing suit by the United States for the 5 per cent. of net earnings against the railroad companies.. EDWARDS PIERREPONT, Attorney- Genleral. A. In the Court of Claims of th.b United States.-No. 9830.-Decemtber term, 1874. UNION PACIFIC RAILROAD COMIPANY VS. THE UNITED STATES. Answer and set-off. The Attorney-General, on behalf of the United States, comes and makes answer to the petition filed by the claimant in the above suit, and says, that the Secretary of the Treasury is prohibited by the act of March 3, 1873, firom making payments to the claimants in this suit, on account of freights and transportation over its main road and branches thereof, including the claims in this suit, and therefore the deendlants deny that they are indebted to the said claimant, as set forth in their petition. PACIFIC RAILROADS. 113 And he further says, that the defendants are not indebted to the claimant under the provisions of the act of July 1, 1862, the act of July 12, 1864, or any other act of Congress, or otherwise. And further says, that the claimant is indebted to the defendants in the sum of $12,000,000, in this: That, under the provisions orehe act of July 1, 1862,. and acts amendatory thereof, coupon bonds of the United States, bearing interest at the rate of 6 per cent. per annum, payable semi-annually, were issued to the amount of $100,000,000, by the defendants to the claimant, as a loan or advance for the. purposes mentioned in the said act; and the defendants have paid the annual interest on said bonds to the holders thereof, at the stated semi-annualperiods. And the claimant therefore was and is bound by law, from time to time, as such interest accrued and was due, to re-imburse the defendants for all payments made by them as aforesaid for the interest upon bonds of the United States issued to the claimant according to law, and the defendants aver that the claimant has never re-imbursed to them the payments made by them as aforesaid, or any part thereof, for interest upon bonds of the Uiited States issued to the claimant according to law; and the said claimant in this suit became and is liable to the defendants, from time to time, as such interest accrued and was due, for the payments made by them as aforesaid, for interest upon bonds as aforesaid, to wit, in the sum of $12,000,000. Wherefore the defendants ask judgment against the claimant for the sum of $12,000,000. JOHN GOFORTH, Assistant Attorney- General. B. In the Court of Claims. TIuE UNION PACIFIC RAILROAD COMPANY ) VS. No. 9830. THE UNITED STATES,. It is hereby stipulated on behalf of the plaintiffs that no judgment against the United States, which may be rendered in this cause, shall be collected until after final judgment in the suit brought in the circuit court of the United States of the district of Massachusetts, by the United States against the plaintiffs under direction of the act of Congress of June 22, 1874, to recover sums claimed to be due as the 5 per cent. of the net earnings of the railroad of the plaintiffs; and in case of a recovery by the United States in this latter suit, the judgment may be offset against any. judgment for the plaintiffs in this cause; but nothing herein shall be construed to e[a]ffect the right of recovery by either party in either of said suits. S. BARTLETT, For the Union Pacific Railroad Comgpany. House of Representatives Ex. Doe. No. 24, 41st Congress, 3d session. RAILROAD AND TELEGRAPH FROM THE MISSOURI RIVER TO THE PACIFIC OCEAN. Letter from the Secretary of the Treasury, in answer to a resolution of the House of December 6, 1870, in relation to the construction ofea railroad and telegraph-line from the Missouri River to the Pacific Ocean.-December 21, 1870. Referred to the Committee on Appropriations and ordered to be printed. TREASURY DEPARTMENT, Office of the Secretary, December 19, 1870. SIR: I have the honor to submit a reply to the resolution of the House of Representatives under date of December 6, 1870, in these words: "Resolved, That the Secretary of the Treasury be required to inform this House whether the several railroad companies, or any of them, to whom the bonds of the United States have been issued in aid of the construction of a railroad and telegraphline from the Missouri River to the Pacific Ocean, have made default in the payment of the interest upon the said bonds; and whether such interest or any part thereof has been paid by the United States; what amount, if any, has been so paid, and on account of what companies; and whether any steps have been taken to secure the repayment of such interest to the United States as required by law." The following statement gives the names of the several railroads to which bonds have been issued, the amount issued to each, the interest accrued, the interest paid by the United States, the amount re-imbursed by each company, and the balance due from each company and remaining unpaid on the 1st day of December, 1870: HI. Rep. 440 8 Statement giving the names of the several railroad comnanies to which bonds have been issued.. ciChar Eatern of ision. Cs 0 sue. Character of issue.ig When reeemable or pyable. Interest payable. n and Pke' Bonds, Union Pacific Company...........6 per cent. $..., 236,512 00 Payable 30 years from date.. Jan. 1 and July1.. 680, 912 80 3, 713,371 05 $1, 434, 952 33 2, 278,418 72 Bons, ansas Pacific, late Union Pa......... 6 per cent. 6, 83 2 000 00 Pyable 30 years from date. Jan 1 and July 1.. 15, 575 00 1,212, 993 09 24,823 67 488,169 42 cific, Eastern Division.I Bonds, Sioux City and Pacific -------— 6 per cent 1,628,320 00 Payable 30 years from date.. Jan. 1 and July 1. 40, 708 00 194, 207 89 396 08 193, 811 81 Bonds, Central Pacific. -- ---- -----— 6 per cent 25, 881, 000 00 Payable 30 years from date.. Jan. 1 and July 1.. 647,025 00 3,261,767 84 241, 638 70 3, 020, 129 14 Bonds, Central Branch Union Pacific, 6 per cent. 1, 600, 000 00 Payable 30 years from date. - Jan. 1 and July 1.. 40, 000 00 301, 808 26 7, 401 92 294, 406 34 assignees of Atchison and Pike's Pesak.d Bonds, Western Pacific....... 6 per cent. 1,970,000 00 Payable 30 yearsfromdate- Jan. and July 1.. 49, 250 00 131,197 36 8, 281 25 122, 916 11 Total........64,618,832 00...1,615, 470 80 8, 815, 345 49 2 417 493 95 6, 397, 851 54 ___________ ___ ____ ________ _____ ____ I,, ____~~~~~~~~~~~~~~; H4 0a PACIFIC RAILROADS. 115 On the 13th day of September last, the First Comptroller of the Treasury addressed a letter to each of the railroad companies mentioned, asking for re-imbursements of the interest paid by the United States upon the bonds issued to the company. A copy of the Comptroller's letter, marked A, is herewith inclosed, together with a report made by the Comptroller to the Secretary of the Treasury, marked B, under date of the 1st of October, 1870, inclosing a copy of a communication received from the treasurer of the Union Pacific Railway Company, marked C, and thetreasurer of the Sioux City and Pacific Railroad Company, marked D, the same person being treasurer of both companies. No reply has been received by the Department from either of the other companies. On the 7th day of October I asked the Attorney-General for his opinion upon the question raised by the correspondence between the Comptroller of the Treasury and the treasurer of the two roads mentioned. On the 23d day of November I submitted to the Attorney-General the question whether the Secretary of the Treasury had the right to reserve the entire amount which might at any time be due to said roads for transportation. I herewith transmit a copy of the opinion of the Attorney-General, marked E. The Attorney-General sustains the claim of the Government to be re-imbursed for interest paid on bonds issued in aid of the several roads. He also expresses the opinion that the Secretary of the Treasury may hold the entire proceeds due to said roads for transportation, and apply the same to the payment of interest advanced, and that upon the re-imbursement of the full amount of interest, one-half of the compensation for such service may be retained and applied to the principal of the bonds. The Treasury Department accepts the opinion of the Attorney-General as a correct interpretation of the law of the case. Very respectfully, GEO. S. BOUTWELL, S'ecretary. Hon. JAMES G. BLAINE, Speaker House of Representatives, Washington, D. C. A. TREASURY DEPARTMENT, FIRST COMPTROLLER'S OFFICE, Washington, Se2te1niber 13, 1870. SIR: Inclosed you will find abstracts of the account stated at the Treasury Department showing the amount of bonds issued by the United States to your company, and of the interest accrued thereon to the 1st day of July, 1870, namely: Amount of bonds, 3'27,236,512; amount of interest accrued and due to the United States by ypour company, $2,543,987.81. I have to request that payment be made of this latter sumn by deposit with the assistant treasurer at Boston, or with some other assistant treasurer of the United States, to the credit of the Treasurer. Your early compliance with this is requested. I am, very respectfully, R. W. TAYLER, Compn)troller. JOHN M. S. WILLIAMS, Esq., Treasurer Unio~n Pacific Railroad Conmpany, Boston, Massachusetts. B. TREASURY DEPARTMENT, FIRST COMPTROLLER'S OFFICE, October 1, 1870. SIR: I inclose you a copy of a letter addressed to the treasurer of the Union Pacific Railroad Company, September 13, 1870, requesting payment of the interest accrued on bonds of the United States issued to that company. A similar letter in form has been addressed to the treasurer of each of the other companies named in the schedule hereto annexed. I also inclose a copy of the answer received from the treasurer of the Union Pacific Railroad Company, and of the answer received from the treasurer of the Sioux,City and Pacific Railroad Company. Answers from the other companies have not as yet been received. I am, very respectfully, R. W. TAYLER, Hon. G. S. BOUTWELL, ptyoller. Secretary of the.Ty-easury. 116. - PACIFIC RAILROADS. Railroad companies. Amount of bonds. Interest accrued.'Union Pacific Railroad Company............................ $27, 236, 512 00 $2, 543, 987 81 Central Pacific Railroad Company........................... 25, 881, 000 00 3, 326, 834 45. Western Pacific Railroad Company............................ 1, 970, 000 00 137, 798 97 Sioux Clty and Pacific Railroad Company.-..................... 1, 628, 320 00 203, 470 14 Kansas Pacific Railway Company, (late Union Pacific, Eastern Division).......................:.-.-.......-..... 6, 303, 000 00 569, 261 05 Central Branch, Union Pacific Railroad Company, (late Atchison and Pike's Peak)............................................. 1, 600, 000 00 320, 210 84 C. UNION PACIFIC RAILROAD COMPANY, Boston, September 20, 1870. SIR: I have received your favor of the 13th, embracing statement of the amount of bonds issued by.the United States to this company, and of the interest paid by the Government thereon, and requesting payment by the company of the last-named amount. The act of Congress establishing the company and granting it a subsidy in bonds, does not, as understood:by us, require payment of either principal or interest until therespective maturities of the bonds issued in conformity to it. Any other construction would make the interest paid by the Government payable at once by the company, and the act would have provided either for its direct payment by the company to the holders, or that the company should provide the Government with funds seasonably to meet the interest. That such was not the intent of Congress would seem clearly to result from the consideration that these issues were to be made to the company on the completion and acceptance of each twenty miles of its road. The term fixed for the completion of the road might, by the act,.extend to twelve years. It could hardly have been contemnplated that an incomplete road, without resources from traffiel would, at the expiration of each six months from the first issue of such bonds, and while thus in the process of construction, have the means to pay the interest on those issues. If, then, the act did not contemplate the payment of interest by the company as it fell due, it would be impossible, we think, to find in the act any other provision fixing a time for such payment, except at the maturity of the bonds; and the language of the act and its various provisions seem to us clearly to establish that as the period of payment. Very respectfully, your obedient servant, JOHN M. S. WILLIAMS, Treasurer Un ion Pacific'Railroad Company. R. W. TAYLER, Esq., Comptroller, 4Cc. D. BOSTON, September 28, 1870. DEAR SIR: In reply to yours of the 13th instant, inclosing statement of amount of bonds issued to the Sioux City and Pacific Railroad Company. and interest remaining unpaid thereon, requesting payment of the last-named amount, I beg to say that the act of Congress establishing the company and granting it a subsidy in bonds, does not, as understood by us, require payment of either principal or interest until the respective maturities of the bonds issued in confor.mity to it. Any other construction would make the interest paid by the Government payable at once by the company, and the act would have provided either for its direct payment by the company to the holders, or that the company should provide the Government with funds seasonably to meet the interest. That such was not the intent of Congress would seem clearly to result from the consideration that these issues were to be made to the company on the completion and acceptance of each twenty miles of its road. The term fixed for the completion of the road might, by the act, extend to twelve years. It could hardly have been contemplated that an incomplete road, without resources from traffic, would, at the expiration of each six months from the first issue of such bonds, and while thus in the process of construction, have the means to pay the interest on those issues. If, then, the act did not contemplate the payment of interest by the company as it fell due, it would be impossible, we think, to find in the act.any other provision fixing a time for such payment, except at the maturity of the bonds; and the language of the act and its various provisions seem to us clearly to establish that as the period of payment. Very respectfully, your obedient servant, JOHN M. S. WILLIAMS, Treasurer Sioux City and Pacific Railroad Company. Hon. R. W. TAYLER, Comnptroller, Washington. PACIFIC RAILROADS. 117 E. DEPARTMENT OF JUSTICE, Decemtber 15, 1870o SIR: I have considered the questions presented in your letters of October 7 and November 23 last, in relation to the claim of the United States on the Union Pacific Railroad Company for re-imbursement of interest paid -by the United States on bonds issued as a subsidy to that company. By the act of July 1, 1862, section 5, (12 U. S. Stat., p. 492,) bonds of the United States were to be issued to the company to the amount of $16,000 a mile upon the completion,and equipment of each forty miles of the road, payable in thirty years after date, bearing 6 per cent. per annum interest, (the interest payable semi-annually;) and to secure the repayment to the United States, as hereinafter provided, of the amount of said bonds, " together with all interest thereon which shall have been paid by the United.States, the issue of said bonds and delivery to the company.shall, ipso facto, constitute.a first mortgage on the whole line of the railroad and telegraph," &c. Section 6 provides, " that the grants aforesaid are made upon condition that said company shall pay said bonds at maturity, and shall keep said railroad and telegraph, line' in repair and use, and shall at all times transmit dispatches over said telegraph-line and, transport mails, troops, and munitions of war, supplies and public stores upon said railroad for the Government, whenever required to do so by any department thereof;.and that the Government shall at all times have the preference in the use of the same for all the purposes aforesaid, (at fair and reasonable rates, of compensation, not to exceed the amounts paid by private parties for the same kind of service;).and all compensation for services rendered for the Government shall be applied to the payment of said bonds and interest until the whole amount is fully paid. Said company may also pay the United States, wholly or in part, in the same or other bonds, treasury notes, or other evidences of debt against the United States, to be allowed at par; and after.said road is completed, until said bonds and interest are paid, at least 5 per cent. of the net earnings of said road shall also be annually applied to the payment thereof." This act was amended by the act of July 2, 1864, (13 U. S. Stat., p. 356,) the 5th sec-tion of which provides that only one-half of the compensation for services rendered for the Government by said companies shall be required to be applied to the payment of the bonds issued by the Government in aid of the construction of said roads. Section 10 further provides that the companies participating in the construction of the Pacific.Railroad may " issue their first-mortgage bonds on their respective railroad and telegraph lines to an amount not exceeding the amount of the bonds of the United States,.and of even tenor and date, time of maturity, rate and character of interest, with the bonds authorized to be issued to said railroad companies respectively. And the lien of the United States bonds shall be subordinate to that of the bonds of any or either of,said companies hereby authorized to be issued on their respective roads, property, and equipments, except as to the provisions of the 6th section of the act to which this is an amendment," (the act of 1862 above quoted,) " relating to the transmission of dispatches and the transportation of mails, troops, munitions of war, supplies, and public stores for the Governllrent of the United States." The Government has issued its bonds to the Union Pacific Railroad Company to the,amount of many millions. It has paid the accrund interest on these bonds. Upon an application to the company to re-imburse this interest the company refuses, contending that the Government has no valid claim upon the company for re-imbursements of interest until the principal of the bonds shall be due, except as to one-half of the compen-,sation for services rendered by the company for the Government, and as-to 5 per cent. of the net earnings of the road after its completion. If the company is right, the Government must go. on paying out the interest twice a year, and wait thirty years for its pay, except the probably small amount of one-half the compensation due to the company as a carrier for the Government and 5 per cent;. of the net earnings. The amount which the company will thus owe the Government at the expiration of the thirty years will be nearly treble the principal of the bonds, and moore, if interest on the paid coupons is chargeable against'the company. And'while this heavy debt shall be accumulating against the company, the Government will all the time be paying to the company one-half of the value of the services rendered to it by the company. Without a wonderful increase of value, there is no probability that the road and all the appurtenant property will be worth, at thle end of thirity years, the thus increased debt then due to the Government, after the first-mort-.gage creditors shall have been satisfied. Meanwhile the company may be paying dividends to its stockholders out of earnings which natural justice would apply to the relief of that creditor through whose benefactions the road has been mainly built. A construction which leads to such results ought not to be adopted, unless clearly required iby the language of the law. In considering the subject I have inquired whether a rule of construction favorable -to the Government or a rule favorable to the company should be followed where the 1anguage of the statute' leaves the mind in doubt. Between a grantor for valuable 118 PACIFIC RAILROADS. consideration and the grantee the law adopts a construction favorable to the latter. Where the transaction is an act of bounty, the construction of doubtful language should be in favor of the donor. (9 Opinions of Attorneys-General, pp. 59, 60; Dubuque and Pacific Railroad Company vs. Litchfield, 23 How., p. 88.) I regard the aid to the Union Pacific Railroad Company as substantially an act of bounty on the part of the Government. There is, it is true, something like a valuable consideration in the stipulations for preference to the Government in the business of the road; but when we look at the whole matter and see how much the Government does for the company, and how little the company is required in return to do for the Government, we must conclude that the Government and the company are substantially in the relations of donor and donee. The company admits a liability to repay principal and interest to the Government; the controversy is as to the time when the interest is to be repaid. In the absence of distinct provisions upon the subject, it would seem just that, as soon as the Government pays money for the company, the company should be bound to re-imburse the Government. This principle ofj ustice is the basis of the common-law action for money paid. Is there anything in the aiding acts which makes this principle inoperative here? These acts. aid the company both by bonds and by donations of land. The lands are given absolutely, and the titles, as the conditions are complied with from time to time, issue to the company. It was manifestly the intention of Congress that the Government should lose, and that the company should acquire the lands; but in the case of the bonds, the idea of re-imbursement is a standing attendant upon all the provisions for this form of aid. The 5th section of the act of 1862, in order "to secure the repayment to the United States, as hereinafter provided, of the amount of bonds so issued and delivered to said company, together with all interest thereon which shall have been paid by the United States," makes the issue and delivery of the bonds to constitute a first mortgage on the road and connected property, and then provides that the Secretary of the Treasury may take possession in case of default. This section does not specify the time when the interest shall be repaid. The main stress of the argument for the company depends on the first clause of'the next section-" the grants aforesaid are made upon condition that said company shall pay said bonds at maturity." As construed by the company, this clause should be read: " The said company shall pay said bonds and interest at the maturity of the principal of the bonds." But it is observable that at the first mention of re-imbursement in the 5th section the bonds and interest are severally named. In the language quoted from the beginning of the 6th section, no separate mention is made of interest. If this omission of the mention of interest were designed, the time of repaying interest is not affected by this clause, and is determinable by the- other considerations in the case. If the omission were casual, and the word "bonds," as used in the 6th section, embraces interest as;well as principal, is it an extravagant stretch of the meaning of the word " maturity' to hold that, as to the principal, it signifies the time when the principal falls due, and,. as to the interest, it signifies the times when the interest falls due? Conceding that. this is not the more common meaning of the word maturity, as applied to such bonds, I think that there is enough in the whole character of the statutes now under examination to authorize this interpretation of it, as used here, if the clause refers to interest at all. The interest falls due semi-annually, and, in fact, a separate instrument (a coupon) is issued for each installment of interest. Suppose the not very unusual case of a written obligation to pay money by installments. Speaking of the maturity of that paper, we should mean the several times when the successive installments become due. Each coupon is a separate engagement, and may be sued upon without even producing the bond to which it was originally attached. (Cornmmissioners of Knox County, Indiana, vs. Aspinwall et al., 21 How., p. 539.) * The 5th section provides that, upon the failure of the company to redeem said bonds, or any part of them, when required to.do so by the Secretary of the Treasury in accordance with the provisions of this act, the said road, with all the rights, franchises,, immunities, and appurtenances thereunto belonging, and also all lands granted to the, said company by the United States which, at the time of said default, shall remain in the ownership of the company, may be taken possession of by the Secretary of the Treasury for the use and benefit of the United States. It is not likely that Congress intended to encumber this important provision with anything unimportant or useless. We must suppose that, in authorizing the Secretary,of the Treasury, on the failure to redeem the bonds, or any part of them, to take possession of all lands granted to the said company by the United States which, at the time of said default, should remain in the ownership of the said- company, Congress intended to obtain a substantial and valuable security. The 3d section, which gives to the company five alternate sections of land a mile on each side of the road, provides that all such lands which shall not be sold or disposed of by said company within three years after the entire road shall have been completed PACIFIC RAILROADS 11 shall be subject to settlement and pre-emption like other lands, at a price not exceeding $1.25 per acre, to be paid to said company. The object and certain effect of this provision was to compel the company to sell the granted lands by the end of three years' from the completion of the road. The 17th section forfeits the whole road to the United States if not completed by the 1st day of July, 1876. Thus it appears that Congress expected that granted lands of sufficient value to be an important security for the company's debt would be in the possession of the company at the time when a default might occur. No such lands could be expected to remain in possession of the company after the 1st day of July, 1879. This date is at least thirteen years earlier than the time when the principal of the bonds will fall due. By that date, then, it is not possible that there shall be a default as to the principal of the bonds. The only default which can happen by that time is a default in the payment of interest. Congress, in thus providing for an entry upon the granted lands, provided in effect for an entry for a default which might happen before the 1st of July, 1879; and such default can be in the matter of interest alone. Counsel for the company derive an argument in support of their views from the language of the 5th section of the act of July 2, 1864, amendatory of the act of July 1, 1862, that only one-half of the compensation for services rendered for the Government by said company shall be required to be applied to the payment of the bonds issued by the Government in aid of the construction of said road. (13 U. S. Stat., p. 359.) The language of the 6th section of the act of 1862 on this subject is: "All compensation for' services rendered for the Government shall be applied to the payment of said bonds and interest until the whole amount is fully paid." There is this difference between the original provision and the amendment, that the latter omits the words "and interest." If this omission were intentional, it shows that Congress, in passing the amending act, intended to leave in force all the provisions of the original act in relation to the re-imbursement of interest, and reduced the reservation of compensation one-half, in so far only as that reservation should be applicable to the discharge of the principal of the bonds-an application which could only be required in the event that the interest should be regularly repaid by the company from other sources. If the omission was accidental, and the word " bonds" in -the 5th section of the act of 1864 means the same as the words "bonds and interest " in the 6th section of the act of 1862, then Congress intended to reduce the specific appropriation of the compensation for services rendered for the Government from all to half. An argument is made for the company that this specific appropriation indicates that Congress expected no re-imbursemlent fiom the general resources of the company before the maturity of the principal of the bonds, except the 5 per cent. of the net earnings after the completion of the road, which is to be annually applied to the payment of the bonds and interest. This argument would reach too far. The limitation of it to payments before the maturity of the principal is warranted by nothing in the statutes themselves. Fairly carried out, it would establish that neither the principal of the bonds nor the interest can ever be required from the company by the Government, except out of one-half of the compensation for services rendered to the Government, and out of the reservation of 5 per cent. of the net earnings. If these are the only resources from which the Government can claim payment of principal and interest before the expiration of the thirty years, they are the only resources from which such payment can be claimed after the expiration of the thirty years. It is incredible that Congress intended to assume so large a liability with so small a provision for re-imbursement. The question may be asked why.the reservation of one-half of the compensation for the carrying for the Government and the 5 per cent. upon the net earnings should be made at all, if Congress intended that the Government should be re-imbursed by the company from its general resources, either before or after the expiration of the thirty years. Various answers might be suggested. The act of 1864 was passed in the midst of a formidable war. The intervention of foreign powers was within the range of possibility. An occasion might possibly arise for transportation of troops and munitions of war across the continent to such an extent that the Government would, for the time, absorb the whole service of the road. In such a case it would be exceedingly harsh for the Government to reserve for its own debt the whole compensation for that service, and thus leave the company without current sources for carrying on the road. An argument against the conclusion to which my mind has come has been founded on the language of members of the House of Representatives when the act of 1862 was under consideration. In expounding an act of Congress, the construction placed upon it by individual members of Congress in the debate which took place on its passage cannot be considered. (Eldridge vs. Williams, 3 How., p. 1; 6 Opinions, p. 464; 9 Opinions, p. 57.) I am more impressed by the rejection of an offered amendment to require the payment of the current interest. (Congressional Globe, part 2, 1861-'62, p. 1911.) But this was only in one house of Congress; it was in Committee of the Whole, and after 120 PACIFIC RAILROADS. very brief debate; and the weight which fairly belongs to such a circumstance is insufficient to reverse'the conclusion to which I am brought by the other'considerations in the case. It has been argued on the part of the company that an intention in Congress to'require the immediate repayment of interest would have been distinctly expressed. This argument may be turned the other way with equal force. It may be said that an intention to postpone the relayment.of interest would have been distinctly expressed. The addition of a few plain words would have settled the meaning one way or the other beyond all controversy. And strictly construing the acts, Wherever obscure, against the party most benefited by them,'I find in the omission of such words a strong reason for holding that Congress meant to leave in full force the equities that prescribe the immediate repayment of moneys paid for one's benefit aud at his request. My conclusion, then, is, that the Government may lawfully claim from the company the amount of the interest in question as soon as such interest is paid by the Government. To the particular question in your letter of November 23, I answer that the Governument may retain the entire amount of compensation for services rendered to it by the company, applying the same to the interest paid by the United States, unless such interest shall have been repaid by the company, and in that event one-half of the compensation for such services may be reserved and applied to the principal of the bonds. Very respectfully, your obedient servant, A. T. AKERMAN, Attorney- General. Hon. GEORGE S. BOUTWELL, Secretary of the Treasury. House of Representatives.-Ex. Doe. No. 127. 44th Congress, 1st session. UNION PACIFIC RAILROAD COMPANY. Letter from the Secretary of the Interior, transmitting, in answer to House resolution of the 16th instant, a copy of the report of the Government directors of the Union Pacific Railroad Conmpany for 1875. February 21, 1876.-Referred to the Committee on the Pacific Railroad and ordered to be printed. DEPARTMENT OF THE INTERIOR, WashingtOn, D. C., February 18, 1876. SIR: In compliance with resolution of the House of Representatives of the 16th instant, I have the honor to transmit herewith a copy of the report of the Government directors of the Union Pacific Railroad Company for the year 1875. The report is not dated, but it was filed in'this Department on the 27th of last September. I am, sir, very respectfully, your obedient servant, Z. CHANDLER, Secretary. Hon. S. S. Cox, Speaker of the House of Representatives cpro temlpore. REPORT OF THE GOVERNMENT DIRECTORS OF THE UNION PACIFIC RAILROAD COMPANY FOR THE YEAR 1875. Hon. C. DELANO, Secretary of the Interior: SIR: During the month of August the Government directors of the Union Pacific Railroad made the usual annual inspection of the road. The result was quite satisfactory, as the entire line gave evidence of steady, noticeable, and substantial improvement, fully justifying the commendation bestowed in our report of 1874 upon the general superintendent and his several assistants. In our report for 1874 we remarked that"The protection of the road now against obstruction by snow-has been carried to such degree of perfection that impediments to the operation of the line from that cause will be no greater in the future than may be expected on any of the lines between Chicago and New York. The problem of the practicability of the road for winter operation may be considered as solved." PACIFIC RAILROADS. 121 The experiences of last winter more than maintain this declaltion; for, while the lines between Chicago and New York were frequently and seriously obstructed by,now, the Union Pacific Road was substantially free from such impediment during the en-tire season, notwithstanding the winter was exceedingly severe, and the fall of snow mnusually great. The only serious delay on the road during the year was occasioned by the " wash-,outs " on the two western divisions last spring. All roads are liable to such disasters, fbut on none could they be met more efficiently than they were on this.. It put the,superintendent's department to a severe and unexpected strain, and the promptness end completeness with which it was met shows how thoroughly that department is,organized. The greatest delay to first-class passengers was three days, and the greatest delay to freight was ten days, notwithstanding the vast amount upon the line at.the time. The experiences of the " wash-out " period, short as it was, and the means adopted to prevent a like occurrence, we regard as sufficient to dispel any apprehension for the future, beyond such as apply to all the great lines of the country. The replacement of iron is being carried on with sufficient rapidity to keep the track -in as serviceable and efficient condition as upon most other trunk-lines. The mountain divisions are being suppliedwith steel rail as fast as the.needs of the road require, and it can be obtained. The establishment of a rolling-mill on the line at Laramie was an act of wisdom, and is working a great saving in the cost of rerolling the iron of the road. Hereto-,fore all rerolling was done by mills east of the Mississippi River. The economy of the present system will appear from the following statement. Heretofore eastern mills look the old iron at Council Bluffs at $21 per ton. and returned at that point the same number of tons, at $51. Allowing 50 cents per ton each way over the Missouri River bridge, would make the cost at Omaha $52 per ton. The result from 100 tons of old trail sent to Laramie from Omaha would be as follows: 100 tons old rail, at $21.................. $2, 100 00 Company freight, 573 miles................... 573 00 Allowing 16 per cent. for shrinkage, would give 84 tons, rerolled at $18.50.. 1, 554 00 Company freight on 84 tons, 573 miles.................................... 481 52 Cost of 84 tons........................................................... 4,708 32 Cost per ton at Omaha, $56.05. lJpon the same basis, to renew a ton of rails at North Platte would cost-.If shipped east............. 36 64 If shipped to Laramie.............. 28 87. Cost to renew pier ton at Cheyenne: If shipped east............................................ 41 32 if shipped to Laramie....... 23 74 Cost at Laramie: I-f shipped east.-...................................................-. 42 64 If rolled at mill..-............. -22~ 50 Cost at Ogden: If shipped east................................................. 51 64 if shipped to Laramie...........,. 32 55 This comparative statement shows that a vast aggregate saving will be made by the establishment of the rolling-mill at Laramie, even while it is operated by lease to private parties, as it is now, and this saving would be enhanced should the company,conclude to operate the mill itself, as it'should do. The amount of rail renewed during the year ending June 30, 1875, was 4,640 tons of iron and 1,015 tons of steel. In the matter of ties, a great improvement has been made, as on the western part of the line great quantities of red-pine ties are being used, a wood which holds - a spike. almost equally with oak. On the eastern part of the line oak-ties are now to a great extent being used. These ties are being obtained at a cost of about fifty cents each. The Dale Creek bridge, the largest wooden structure on the line, is to be replaced by one constructed of iron, the contract for it having been let, and it is expected to have it in position before the close of the present year. 122 PACIFIC RAILROADS. There have been,4Pd will be, placed in position during the year, iron bridges, as follows: 2 bridges, each 107 feet long, at a cost of.............................. 9, 514 66 1 bridge, 102 feet long, at a cost of...................................... 4, 083 20 1 bridge, 64 feet long, at a cost of.............................. 4, 736 00 18, 333 86 Masonry for above.....................-......2......... 29, 200 00 Masonry for other bridges.................................. 6, 500 00 Total-...........................-........ 54,033 86 We give here a statement of extraordinary expenditures upon Union Pacific Railroad for year ending June 30, 1875, which have been included in operating-expenses: TENEMENT HOUSES AND HOTELS. Eating-house at Rawlings.-........................ $9, 959 78 Eating-house at Sidney.2.......... 271 30 ---- -- P$10, 231 08 STATION -HOUSES. Depot at Omaha............................................ $73, 108 44 Depot at Cozad................ 965 92 74, 074 36 TANKS AND WATER-WORKS. Tanks, &c., at Omaha.................................... $2,004 94 Tanks, &c., at Dale Creek —-—................. 1, 438 01 3, 542 95 SHOPS AND MACHINERY. Scrap-furnace and hammer, Omaha. $14, 432 94 Rolling-mill at Laramie........-.......-.-.-..........-.... 188, 293 93 - - ------ 202, 726 87 RIGHTS OF WAY AND LAND DAMAGE. Land at Laramie.,.................$............... 8'2, 000 00 G. M. Dodge for right of way at Council Bluffs -..-........... 549 19 Land damage near Ogden. Arbitrated by J. Sharp........... 15,930 89 -, 8530 08 ENGINE-EQUIPRMENT. 7 Taunton locomotives. Freight on same to Omaha and fitting for service.. 83, 088 06 CAR-EQUIPMENT. 1 passenger-car returned by Colorado Central -—.. —.. —--- $3, 600 00 25 Pennsylvania Railroad cars, and freight on same to Omaha. 48, 197 50 10 second-class cars.. 35, 670 00 96 box-cars. 79,200 00 4 fruit-cars...................7, 449 37 20 coal-ears................. -................... 16, 928 05 1 derrick-car................................................ 2, 787 08 193, 832 00 Less exchange of car with Colorado Central................... 1, 000 00 - 192,832 00 Total 585, 025 40'The improvements which we would recommend as next to be effected are the construction of a more substantial, commodious, and convenient passenger-house at Ogden; cutting down Aspen Hill, and, by widening cut, do away with large snow-shed at that point, thus saving largely and constantly in power and expense of protecting the road; take out the shale cut at Green River, and the reduction of the Elk Horn Hill about ten feet at the summit. These improvements, we are assured, are all contemplated by the company; but they should not be long delayed, upon economic grounds if none o ther. PACIFIC RAILROADS. 123 The business of the road for the year has been very satisfactory. It was feared last year that the general depression which had fallen upon the business of the country would seriously and unfavorably affect the earnings of the road for the year upon which we are now reporting. The fears entertained seem now to have been groundless, as will appear from the comparative statement of the earnings and expenses for the years 1874 and 1875: Earnings. Year ending Year ending Increase. June 30, 1874. June 30, 1875. Passengers........................................................................... Cash. —-.... —................ $3, 541,633 57 $4, 149, 648 40 $608, 014 83 Government....................................,.... 208, 364 53 259, 317 75 50, 953 20 Mail........................ 325,143 00 325,114 00 *29 00 Express...................... 336,192 98 435,340 77 67,147 79 Freight.............................................................................................. Cash................................................. 4, 933, 664 61 5, 142, 883 94 209, 219 33 Government -—...............;............. 225, 545 69 297, 179 20 71,633 51 Company.................... 513, 513 71 624, 574 45 111, 060 74 Car-service. -— 8................................. t6, 953 12 5,988 35 12, 941 47 Miscellaneous -.........7 —....-..-..-................ 122, 791 47 260, 459 67 137, 668 20 Kent of buildings.. -............... 16, 863 70 23, 515 01 6, 651 31 Total earnings................................. 10, 246, 760 16 11, 522, 021 54 1; 275, 261 38 EXPENSES DURING SAME TIME. Expenses. Year ending Year ending Increase. June 30, 1874. June 30, 1875. Conducting transportation -..................... $770, 381 07 $875, 237 63 $104, 856 55 Motive-power.-................................ 1, 662, 771 98 1, 721, 763 39 59,171 41 Maintenance of cars.....-... I......... 432, 769 03 563, 416 09 130, 647 06; Maintenance of way.1, 865, 729 98 1, 725, 605 86 *40, 124 12 General expenses...............-.................... 380, 748 19 447, 298 41 66, 550 22 5,112, 400 25 5, 433, 521 37 321, 121 12' Surplus-fuel and material accounts-................. 22, 611 08 59,865 50 37, 254 42 Total expenses....................................... 5, 089, 789 17 5, 373, 655 87 283, 866 70 Less amount expended for depots, shops, equipments, &c., such as were charged to construction befoire October 1, 1874. —.......................... 585, 025 40 585, 025 40. Expenses................-...................5, 089, 789 17 4, 788, 633 47 f301,158 70 Net earnings -................. 5, 156, 970 99 6, 733, 391 07 1, 576, 420 08 * Decrease. i Paid. Expense ratio, 49.67; per cent., 41.56. The transportation of cattle over the road is rapidly increasing, and as illustrative: thereof we give the following statement of stock-shipments from points on the Union Pacific Railroad to Omaha from January 1 to August 31, 1875: S -~~~~~~~~~~~~~~~~~~4 s a. -. ~ "~~~~~~~ - a;:j dj c Ca a P., Ogden-....................................................1....... — -.. —..- - 1 Evanston 2.......-....................... 12................. 12 Laramie...............................................'............. 28 10: Cheyenne2...........- - -3....................... 36 147 185 Pine Bluff...................4....................66 Sidney............................................. 8 2 —-- --- 10 Julesburgh1.49..3..............-.... 13....-... - -...........- 34 49 96 Ogallalla........................................... 15 66 81 North Platte.1.....4 9.......................... I [ [:.......... 40 9 50 Plum Creek -... -- -- -.. —...5................................ 55 Xearney - - - - - - - 24 17 41.,Fraontt..2..............................-...... 3 2 ---- 2 2 9 Valley..1............................................... 2 Elkhorn...................................... 1 3 1 --- -... 1 6 ~Papillion ---—............... 4 2..... 21 6 7 Total.....................16 12 1 11 14 10 270 347 581 '124 PACIFIC RAILROADS. Comparing the. two heaviest months in this table with the corresgonding months of last year, we have the following results: July and August, 1875, total number of cars.-......................... 517 July and August, 1874, total number of cars.................................... 255 Increase for 1875 -6................................................... 262 The herds on the plains of the Platte are constantly increasing, while the aggregate number of cattle is becoming fabulous. The plains west of Kearney Junction will soon become one of the chief sources from which the eastern markets will be supplied with beef-cattle. These plains furnish unsurpassed grazing-range, and the lands belonging to the Government and to the company ought to be placed under some. welldevised system of pasturage, from which profit could be secured to both. We would respectfully call the attention of the Government and the company to this exceedingly important subject, hoping that some system may be devised whereby the growth of cattle may be fostered, and the lands made immediately remunerative. We have expressed our views fully in former reports relative:to the fuel question. We have little to add thereto. We have not changed our views as to the policy which should be adopted by the company in the treatment of this question; if it can rid itself of the mistaken and mischievous contract made between it and the Wyoming Coal and Mining Company. This contract is now in course of judicial determination in the courts, where we must leave it until a conclusion shall have been reached therein. The production of coal at the company's mines during the year was as follows: At Carbon, 78, 534 tons, costing.............................. $2 043 per ton. At Rock Springs, 107,147 tons, costing............................. 1 951 per ton. Total......... 185, 681 tons, costing, average..................... 1 991 per ton. There were mined at Almy 38,898 tons, at $2 per ton, by contract. The foregoing tables of earnings and expenses for the year ending June 30,1875, show net earnings, after paying operatinglexpenses, amountingto. $6, 733, 391 57 Deducting from this the interest on the first-mortgage bonds; with gold at 14 per cent.........1,... -... 862,977 42 VWTe have,................................................. 4,870,414 15 On which, according to the basis we have heretofore reported; the Government is entitled to receive five per cent., making due the Government for the year the sum of $243,520.70. The company deny the correctness of the rule here adopted, and claim that the decision of the Supreme Court oftthe United States in St. John vs. The Erie Railway Comrn pany justifies them in resisting the demand of the Government for the payment of the five per cent. until all obligations of the company shall have been discharged or deducted, and the five per cent. be assessed upon what may be thereafter left, for division to the stockholders as dividends. Of this we will say more hereafter. At the May term, 1875, of the circuit court of the United States for the State of Iowa, it was decided that the eastern terminus of the Union Pacific Railroad is on the Iowa side of the Missouri River, and a decree was entered requiring the company to operate its line as a continuous road from the said terminus. The company appealed the case, and it is now pending in the Supreme Court of the United States. Our views, expressed in former reports, relative to the desirability of a localized management, have undergone no change. Indeed, they have been rather strengthened by the fact that, owing to the personal attention which the present president of the company has given to the road during the tinme he has occupied said office, many -desirable things have been done, and are being done, which, doubtless, would have remained undone for indefinite periods, had it not been for his more than usual attention to, and contact with, the line. The president of the company, in his report to the stockholders at their last annual meeting in March, 1875, made this very significant statement, viz: "An important consideration for the stockholders of this company, and one which.should'not be lost sight of, is, that while most of the great railway enterprises of the countryhave been largely increasing their bonded obligations,this company has steadily pursued a directly opposite policy, having actually reduced its land-grant bonds during the year $678,000, and upward of $2,600,000 since the completion of the road." We see no reason why this reduction of the bonded debt of the company should not be a steadily continuous and increasing operation; for there is one fact peculiar to this company, and-that is, that its road has now a capacity for doing over double its present volume of business without any considerable additional expenditure, or which may not be met by its increasing revenues, and without any increase of its bonded indebtedness. There is not a division on the line which cannot promptly handle more than twice the business now passing over it, without any expenditure for additional PACIFIC RAILROADS. 12!5 tradk, turn-outs, Sidings, &c., so that the traffic of the road may be increased until the earnings thereof shall reach more than $20,000,000 per year, without any-call for expenditures demanding an increase of the bonded debt of the company. There is probably no other trunk-line in the country of which the like can be said. On, the 9th of February last the president of the Union Pacific Railroad Company addressed the following communication to the Secretary of the Treasury, viz: "UNION PACIFIC RAILROAD CO., " ew York, Febr'uary 9, 1875. " SIR: The existing relations between the Government and Union Pacific Railroad Company are such as benefit neither party, and tend continually to the injury of both. "The Government, in prosecution of what it deems to be its just rights, has instituted:legal proceedings against the company for claims of different origin and widelydifferent character, and those claims are about to undergo, or have already undergone, judicial determination. Nothing can be more distasteful to the company than to have. even the appearance of resisting a just demand of the Government. The directors, speaking for the stockholders, recognize and fully appreciate the great and generous aid extended by the Government to this magnificent enterprise, and it is their wish to do everything in their power to re-imburse to the Government, so far as they can, and. as speedily as may be, every dollar advanced from the National Treasury. The company also feel very keenly the disadvantage they incur, both in popular esteem and. pecuniary resources, by being in seeming' conflict with their great benefactor, the Government, and it is their most earnest desire to do everythinig they can to establish such relations of mutual trust and confidence as will best secure the demands of the Government, and at the same time promote the prosperity of the company. And by promoting the prosperity of the company, I do not mean simply the enhancement of the value of the property, but such extension of its uses, resources, and facilities as will' most rapidly develop the great national domain, which it traverses for a thousand miles; and I would respectfully call your attention to the important fact that this. great domain cannot be developed without increasing in value immensely the Government land along the line- of the road, and, in addition, increase the area of taxable property-a matter of vital importance to the whole country. The mortgage held by the Government, in its terms and by judicial decision of the United States circuit court, cannot be enforced until the maturity of the bonds, which is near the close of the present century. The bonds are accumulating an interest-account also uncollectible, until the principal is due. Principal and interest when due will amount to the very large aggregate of over $77,000,000, though the actual amount advanced by the Government was only $27,23'6,512. For this very large amount the Government -has only a second mortgage, and if it be allowed to accumulate without any provision being made to meet it, the'company will probably be utterly unable to pay it. "At the same time it is equally manifest that the Government will be unable to collect it, except upon the assumption that it will advance the money to discharge prior mortgages and run the road on Government account-a policy which wise statesmanship could not advise. By standing still, therefore, the company has a load of debt accumulating for which no provision is made, and the Government is drifting farther and farther from the' opportunity to secure a just return for its advances. To do nothing is to injure both the Government and the company, perhaps irretrievably to both. In this dilemma, I venture to make a proposition, which offers, on the part of the company, all it can possibly do, and' secures to the Government a substantial return for its advances. It is as follows: "The Union Pacific Railroad Company propose to pay into the Treasury of the United States $500,000 per annum on each first day of July, beginning with 1875, and to continue this payment for twenty years; and thereafter, on each first day of July, the payment shall be $750,000; and the money so paid in shall be held by the Secretary of the Treasury as a sinking-fund to the credit of the U. P. R. R. Company, specially devoted to the extinction of the Government mortgage, interest thereon to be reckoned' at six (6) per cent. per annum, lawful money, payable semi-annually, and the accruing interest each" half-year to be carried to the account of the sinking-fund to the credit of the Union Pacific Railroad Company. And this annual payment by the Union Pacific Railroad Company shall be continued without delay or default until the amount to the credit of the company in the hands of the Secretary of the Treasury shall be equal to the full amount of the Government mortgage, reckoned at simple interest to same date. The Government lien now existing to remain as security for the discharge of this obligation, and to be canceled when this sinking-fund, thus created, shall equal the mortgage of the Government, reckoned at simple interest, at which time said sinking-fund shall be transferred to and shall rest in the United States; and this payment shall be in full discharge of all obligations due from the company to the Government. "Should this suggestion meet with your. approval, I would respectfully request, on behalf of the company, that you lay the matter before Congress, with such favorable recommendation as you may deem expedient. 126 PACIFIC RAILROADS. "The proposition is made with the sincere desire on the part of the company to respond most honorably to all obligations, and with the confident hope that the Govern-ment will accept it as the very largest annual amount which the company can safely agree to pay. "In addition to the substantial, complete, and final re-imbursement thus proposed by the company, you will permit me to remind you of the vast saving to the National Treasury which, has been effected by the construction of the Union Pacific Railroad. The former cost to the Government for transportation of troops and of quartermaster's, commissary, and ordnance stores, and the carrying of the United States mails and of Indian supplies across those vast plains and over the mountain-ranges, was very great, involving an outlay of many millions annually. The same service at the railroad company's current rate of charges is now done with a saving to the Treasury, according to the official statements of the Executive Departments, of well-nigh two millions of dollars ($2,000,000) annually, to say nothing of the superior safety, promptitude, -celerity, and certainty with which it is accomplished. Indeed it is no exaggeration to say that if the Government should forfeit all it advanced toward the construction of the road, it would still realize large annual gain from the economy it has been enabled to effect in the different branches of the' public service to which I have referred. " I adduce these facts, fortified as they are by the report of the Government directors, to show that the Government, after it receives a re-imbursement of its direct pecuniary advances, will still have left an enduring source of profit to the Treasury, and consequent relief to the tax-payer, in the very large amount that will be annually.saved by the transportation facilities which this great line of railway will always afford. "With great respect, your obedient servant, "SIDNEY DILLON, "President Union Pacific Railroad Company." "Hon. B. H. BRISTOW, " Secretary of the Treasury." This proposition was subsequently modified by a communication -which reads as follows, viz: a' To the honorable the Secretary of the Treasury: "SiR: The Union Pacific Railroad Company begs leave to submit the following amendments to its proposition of February 9, 1875, viz: "' First. The sum of about eight hundred thousand dollars, ($800,000,). now in the United States Treasury, claimed by said company to be due it.for transportation and mail service, together with interest at six per cent. per annum, to be computed every.,six months on such part of the said sum as was due on the 1st day of January and July of each year, during its accumulatvn, to constitute a sinking-fund to the credit of the Union Pacific Railroad Company, as is hereinafter more fully set forth. " Second. The company to pay into the Treasury of the United States five hundred thousand dollars ($500,000) per annum,in semi-annual installments of two hundred and fifty thousand dollars ($250,000) each, payable on the 1st of January and July of each year, for the period of ten years, commencing on the 1st of July, 1875. Seven huntdred and fifty thousand dollars ($750,000) per annum, in semi-annual installments of three hundred and seventy-five thousand dollars ($375,000) each, payable on the 1st of January and July of each year, for the period of ten years, commencing on the 1st day *of July, 1885, and one million dollars per annum, in installments of five hundred thousand dollars ($500,000) each, payable on the 1st day of January and July of each year, commencing the 1st day of July, 1895. "And the money so paid in, together with the sum now in the Treasury referred to in the first paragraph above, shall be held by the Secretary of the Treasury as a sinkingfund to'the credit of the Union Pacific Railroad Company, specially devoted to the extinction of the Government mortgage, and the interest on said money so paid into said sinking-fund shall be reckoned at six per cent. per annum, payable semi-annually, and the accruing interest each half year to be carried to the account of the sinking-fund to thle credit of said company. And the annual payment by the Union Pacific Railroad Company shall be continued without delay or default until the amount to the credit of the company in the hands of the Secretary of the Treasury shall be equal to the full amount of the Government mortgage reckoned at simple interest to same date, the payments to be made upon the terms and conditions set forth in said proposition of February 9, 1875. "Third. The Government to retain each year, and credit to the company on account of the payments to be made to it as aforesaid, the moneys due the said company for transportation' and mail service to the amount of such payments as above stipulated, any deficiency to be made good by the company. "Fourth. The aforesaid payments to be in full settlement of all claims and demands *by or on behalf of the Government against said company. "I am, very respectfully, your obedient servant, "SIDNEY DILLON, President." PACIFIC RAILROADS. 127 We do not assume that it is the right of the Government directors to volunteer advice to the Government as to what action it should take relative to these propositions. But, as the subject presented by them is of the highest importance as affecting the pecuniary interest which the Government has in the road; and as we have given to it a careful consideration, it may not be deemed presumptuous, and, indeed, may not be regarded as improper, for us to communicate our views touching the same, or even to venture so far as to state opinions relative thereto. It is not our purpose to favor or oppose herein any proposition in detail, but to leave the details of any adjustment of the conflicting views now existing between the Government and the company to such negotiations as may be had between them, the result, whatever it may be, being necessarily left to the approval or disapproval of Congress. It has been our aim to represent, at all meetings of the board of directors of the company, the views, policy, and purpose of the Government relative to its rights to re-imbursements, even though, in some instances, our judgments may not have given entire approval to the particular means adopted for its enforcement. The right of the Government to entire re-imbursement for its advances of bonds in aid of the construction of the road is, in our judgment, perfect. Concerning the enforcement of this right, in manner and time, a wide difference of opinion exists between the Government and the company. Can this difference be reconciled, and harmonious relations established between the two parties in interest, without substantial injury to either? This is a plain, practical, business question, which may not be difficult of solution, if approached and treated as such questions should be. There is nothing suggested by it which should excite either prejudice or alarfi. It invites the same careful consideration and prudent action which successful men give to their private affairs-nothing more, nothing less. To treat the subject intelligently, we must ascertain the positions occupied by the respective parties relative to the obligations created by the legislation under and in pursuance of which the Union Pacific Railroad was constructed. This done, we have at once disclosed the cause and character of the conflict of opinion now existing between the parties, and may then form a judgment, more or less accurate, of the probability of effecting a harmonious adjustment of the same. The Government advanced in bonds to the. Union Pacific Railroad Company, as aid in construction of its road, $27,236.512. These bonds are to run thirty years from date of issue. If no current re-imbursement should be made to the Government by the company, the principal and interest at the maturity of the bonds would amount to about $77,000,000. This would be the amount due from the company to the Government at that time. This the Government asserts and the company admits. There is no disagreement here. The disagreement arises in the mode and time of re-imbursement. In the 6th section of the act of July 1, 1862, it is provided that"After said road is completed, until said bonds and interest are paid, at least five per centum of the net earnings of said road shall also be annually applied to the payment thereof." What are net earnings? In their answers t6 this question the Government and company are widely apart. Representing what we understood to be the Government's construction of the law above quoted, we have claimed that net earnings are such as are left after paying the operating expenses of the road, and deducting from the remnainder the interest on the first-mortgage bonds, the Government having subordinated its lien to that of the holders of the said bonds. The position of the company relative to this question may best be ascertained by the following extract taken from the last report of the president of the company to the stockholders, at their meeting in March last. We quote as follows, viz: " The law having provided that the Government shall be entitled to receive 5 per cent. of the net earnings of the road after its completion, and the Government having, as above stated, determined that the road was completed on the 1st day of October, 1874, the question arises: "What constitutes net earnings? "The Supreme Court of the United States has answered this question. In St. John vs. The Erie Railwa.y Company, that court held that net earnings are such as are left to the stockholders after the payment of all just and lawful charges against the company. It is stated, in the opinion of the court, that the' lexical definition of net is clear of all charges and deductions.' (Webster.) "'That which remains after the deduction of all charges or outlay; as net profits.' (Worcester.) "The popular acceptation of the term is the same. "This reduces the question of net earnings to absolute certainty. Whatever this company has left of its earnings, after payment of all its just and lawful obligations, is net earnings, and of this amount the Government claims that it is entitled to 5 per cent. since the completion of the road, a date fixed as the 1st day of October, 1874 -1.28 PACIFIC RAILROADS. Henee there is no longer any ground of disagreement between the Government acll the company as to what constitutes net earnings, and the date from which the formeris entitled to demand 5 per cent. of the same, if at all. Whether or not the 5 per cent.. liability is now obligatory on the company is not deemed essential to discuss. It isR sufficient to say that eminent counsel are of opinion that this part of the act of 1862: is repealed; and the decision of Jndge Hunt that the legal construction of our chartermust, on doubtful points, be construed in favor of the company, seems to give grea,%t; force to the opinion that no such obligation now exists." The date from which the road is to be treated as completed is, also, a matter of dispute between the Government.and the company, the former claiming that it should date froml the connection of the Union Pacific and Central Pacific tracks in 1869, and the latter that it should date from the 1st day of October, 1874, in pursuance of the following conclusion of the report of a commission appointed by the President of the, United States-to examine and report relative to the completion of the road, viz: "This commission has, therefore, decided that the road was completed, as required by law, by the report of the former commission, and, to comply with the instructions of the Interior Department, October 1, 1874, at. a total cost. of $115,214,587.79, as shown by the books of the company." The position of the company. concerning this conclusion of the said commission is thus stated in the last annual report of the president of the company, viz: ".That report was-approved by the Government, and since such approval, and only since then, has: the road been. deemed and held to be completed. This action of the. *Government was highly important in several respects. It.settled, finally, authorita-. tively, and definitely, the question of the road's completion; it removed the inhibition to the issuance of patents for the lands granted to the company, and they are now being issued as rapidly as required by the company; and it fixed the date from which, the Government is entitled to secure from the company 5 per cent. of its net earnings,. under the sixth.section of the act of July 1, 1862, which provides that'after said road is completed, until said bonds and.interest are paid, at least five per centum, of the net: earnings of said road shall also be annually applied to the payment.thereof."' This entire subject is now in the courts for adjudication, the Government having: commenced an action against.the company for the recovery of the five per centumn alleged to be due under the Government's construction of the act aforesaid. The 6th section:of the act of July 1, 1862, also provided that"All compensation for services rendered for the Government shall be applied to the payment of said bonds and interest, untill the whole amount is fully paid." This was amended by-the act of July 2, 1864, which, in section 5, provides that"Only one-half of the compensation for services rendered for the Government, by said companies, shall be required to be applied to the payment of the bonds issued by' the Government in aid of the construction of said roads." As one of the results of the Credit Mobilier investigation, this provision of the law, was amended, and the Secretary of the Treasury was directed to retain in the Treasury' all earnings on Government account.: The same act authorized the company to com — mence a suit in the Court of Claims to determine the right of the Government under' this act to retain more than one-half of the said earnings, as provided in the law under which the bonds were advanced and the road built. The case of the Union Pacific Railroad vs. The United States was instituted in the Court of Claims for the recovery of one-half claimed to be due to the company on account of Government transportation. The case has been decided in favor of the company, and judgment rendered in its behalf for $512,632.50. From this judgment the Government has appealed to the Supreme Court of the United States, where the case is now pending. We here quote a portion of the opinion of the Court of Claims, for the purpose of showing the position in which this whole question is now placed: f' Moreover, (and this is the chief point in the'case,) the statute makes no distinction between principal and interest, nor indicates in any way that the debt for the one shall mature at a different time than the debt for the other. Furthermore, a previous sec — tion of the statute declares that for' the amount of said bonds,''together with all interest thereon which shall have been paid by the United States,' they shall consti — tute a mortgage upon the road. In the present predicament of the transaction, the' Government is largely in advance for interest; and there at first appears to be no consideration received which should bind it to suffer a serious if not disastrous loss. But if we reverse the condition of affairs, it will be seen that a similar loss would fall upon the company, and a corresponding gain inure to the Government.' That is to say,. if the Government had required a larger amount of transportation, and the net earnings had greatly exceeded the reality, so that the two more than equaled the interest, then the company would be paying off the principal of its ultimate indebtedness to the Government long before the Government would be paying its debts to the bondholders.. And as the company had mortgaged its road' to secure the repayment''of the amount of said bonds,''together with all interest. thereon which shall have been paid by the United States," a corresponding loss of interest upon inter PACIFIC RAILROADS. 129 est would likewise fall upon it. Now, when the statute has provided two sources for the payment, not only of interest, but of a great deal more; that is to say, of a portion of the principal before it comes due, what reason can there be for the judiciary to interpolate, by mere constructions a third sourc'e into the statute? Assuredly none. If the statute had stopped with interest, and had provided that the remainder, if any, of the transportation moneys and five per centum should be paid to the company, there would be good reason for saying that a reciprocal obligation was implied, and, that the company should be held liable to make the interest-account whole. But in the plight which Congress has placed the reciprocal and intermingling rights and interests of the parties, we perceive no reason why the Government should call the varying balance of its advances a liquidated present debt, subject to immediate collection. "But beyond the confines of all disputed construction, there remains one uncontroverted provision in the statute, which seems decisive of the legislative intent. The only party to whom an option was reserved by the act is the Government, and that option is the important right of making the company's services as little or as great as it pleases. If it requires these services, the company cannot withhold them; if it refuses all employment, the company cannot exact it. As the compact originally stood, the Government could keep down this interest without the expenditure of any ready money by simply furnishing to the company this employment, and it might push the,advantage to an unlimited extent, even to carrying the earnings of the road to the liquidation of the debt before it had matured. The subsequent statute which substituted a half for the whole of the earnings did not affect the legal import of the Government's reserved discretion, nor change the legal relations of the parties, nor vary the construction applicable to the original statute. It was an alteration in degree and not in kind, and still left the company in this matter of service entirely subject to the orders of the Government. In contemplation of law, the wrong and injury of which the Government complains are entirely of its own choosing. Courts of law cannot be ifivoked to aid persons where they themselves possess the means of redress. If an ordinary party were to come into another court with such a complaint, he would be told,'Either you have willfully withheld this employment from the other contractor or you have been unable to furnish it to him. If the former supposition is the fact, then the fault is your own, and you cannot ascribe wrong to one whom you confess has always been willing to repay you in the manner which your agreement prescribes; if the latter is the fact, then, because the sources of payment which you provided disappoint you, and because the payment in kind, which you elected to take, gives you more of the transportation service than you really require, you are trying to shift your loss to other shoulders than your own. Your misfortune is really this, that you made an improvident bargain.' " The judgment of the court is, that the claimant recover of the defendants the sum of $512,632.50, and that the counter-claim of the defendant be dismissed." The committee claims that the doctrine of this case evidently is, that there is nothing due to the Government from the company on account of either principal or interest until the maturity of the subsidy-bonds, except one-half of such sum as the Government may create by its demands for transportation, and that, in fact, the only mode of reimbursement now provided by law, either before, at, or after the maturity of the bonds, is this one-half of Government transportation, which is made by the 10th section of the act of July 2,1864, to run so long in the future as there may be anything due to the Government, and even as against parties who may become possessed of the road under and by virtue of a foreclosure of the first mortgage-claiming that any other construction leaves nothing for the amendment relative to compensation for services rendered by the Government, contained in the 5th section of the said act, to operate upon. It is clear from the foregoing that, while the Government and the company agree as to the amount which the former has advanced to the latter, and that it must be paid at some time and in some way, they are so far apart as to time and manner of payment, that nothing short of the judgment of a court of last resort, or a new contract, can bring them together. First, then, as to the judgment of a court of last resort. If that should be with the Government, it still would leave the claim against the company in an unsatisfactory condition. There would still be an annual increase of the company's debt to the Government, and this would go on to the period of the maturity of the bonds, at which time it might exceed $60,000,000. And there would still remain the possible fact that, in order to save its claim, or any part thereof, the Government would be compelled to advance the amount of the first mortgage, a result by no means desirable. On the other hand, if the court should hold with the company, the case would be decidedly worse; as, in that event, the accumulated debt at the maturity of the bonds would probably be not less than $70,000,000, and might reach a much larger sum. Secondly, as to a new contract. If the company is correct in its construction of the present law, then the difference between the amount which it offers to pay under the H. Rep. 440 9 130 PACIFIC RAILROADS. propositions submitted by it, and hereinbefore quoted, and what the Government would receive under said construction, is the difference between simple and compound interest. If the interest which the Government pays on the subsidy-bonds is not a semiannual maturing debt against the company, then such amounts as the company should semi-annually pay in excess of what the Government is entitled under the present law to demand, would be in the nature of a loan to the latter by the former, and would very properly bear interest, and if the interest should not be paid, there is no impropriety in allowing interest thereon. This would reduce the difference to interest, simple and compound, on the amounts which the Government may now rightfully demand of the company. If it were not for this seeming loss arising from the interest-account, no one, doubtless, would hesitate to recommend an acceptance of some such proposition as the company presents. Is there anything in the case to counterbalance this seeming loss In our report for the year 1874, we discussed the incidental advantages derived by the Government from the construction of the Union Pacific Railroad in the matter of transportation. We make the following extract from that report, viz: "Suppose that it [the company] should not in whole, as it has not in part, pay the interest on the Government bonds issued in aid of its construction, nor provide for the payment of said bonds at ~their maturity, what then? What is the worst of the case? Two Departments of the Government have furnished answers to this question. " The Postmaster-General stated, in a communication to the House of Representatives, in answer to a resolution of inquiry adopted by that body, that for mail-service rendered by the Union Pacific Railroad Company for the years 1867 to 1872, inclusive, the Government had paid $1,156,138.73, and that had the road not been constructed it would have paid, for the same service, over the routes merged into this one, for the same time, $1,799,718.28, being a saving, calculated on the basis of pounds transported by stage, of $107,263.25 per annum; but in addition to this direct saving, the Postmaster-General states in said communication that'it should be borne in mind that the mail-service by the railroad-route between the Missouri River and the Pacific coast is incomparably superior to the previous service. Under the contracts which expired in 1868, the schedule-time for a trip from Atchison, Kans., to San Francisco, Cal., was sixteen days for eight months, from April to November, inclusive, and twenty-four and a half days the residue of the year. By the railroad-route the time, the year round, is less than four and a half days. The average amount of matter conveyed in the mails overland before the completion of the railroads was less than a thousand poundsperday, the papermails being mainly forwarded via Panama in consequence of the exaction of prepaid letter-postage rates on such matter conveyed between the western boundary of Kansas and the eastern boundary of California, under the 4th section of the'act of March 25,.1864; now, that section having been repealed from the 30th of September, 1868, by the act of June 25, 1868, the whole letter and paper mails are carried overland, averaging, in March, 1870, on the Union Pacific Railroad 6,376 pounds per day, and on the Central Pacific 5,308 pounds per day. The railroad companies provide, moreover, first-class cars 48 feet in length, with all the necessary fixtures and furniture, in which railway post-office clerks, appointed by. the Department, accompany and distribute the mails, while in transit, in all respects as if in local distributing post-offices, by which means the detention of mails in Such offices is avoided, and the greatest practicable expedition secured.' "On the 3lst day of January, 1873, the Secretary of War communicated to the House of Representatives of the Congress of the United States, in answer to a resolution of that body, a letter of the Quartermaster-General of the Army of the United States, M. C. Meigs, from which it appears that the construction of the Union Pacific Railroad had saved the Government large sums in that department of the public service, making a large average saving on several routes of transportation theretofore used. He states the case thus: "'At this average rate, the estimated cost of transportation of the freight moved by the Union Pacific Railroad, including express charges as shown above, during the time commencing July, 1866, and ending January 28, 1873, would be as follows:'Rate per 100 pounds per 100 miles, railroad-rates..-....... $0 404'Rate per 100 pounds per 100 miles, wagon-rates...................... 1 46' Actual cost of freight at railroad-rates.......................... 1, 896, 589 57'Estimate of cost at wagon-rates............................. 6, 837, 088 32' Showing a total estimated cost for moving the troops and supplies by stage and wagon of................................................9, 850,134 67' Total actual cost by railroad...........................-......... 3, 342, 851 82'Estimated difference............................ 6, 507,282 85'Equivalent to about 66 per cent.' "From these statements it appears that the saving to the Government to June 30 1872, upon the transportation of postal matter alone, by reason of the construction of PACIFIC RAILROADS. 131 the Union Pacific Railroad, amounted to $643,579.55. Upon the same basis, the saving to the Government from this source to September 30,1874, amounted to $1,015,829.900 This statement assumes that the amount or weight carried was only equal to that transported previous to the construction of the road; but, in fact, the amount by rail has been over six times the amount formerly transported by stage, so that the real saving, taking weight alone as the basis of the calculation, has been about $6,094,979.40. " The statement from the War Department above cited shows that the saving upon military transportation to June 30, 1872, was $6,507,282.85, and upon the same basis the saving to August 31,1874, would have been $8,462,107.76. "Thus it appears that during the past two years, or since June 30, 1872, the saving to the Government in the transportation of postal matter, of troops, stores, &c., has been at the rate of $ 1,894.894.40 per annum. "The case comes to this: Allowing that there will be no increase in amounts carried from year to year, the saving during the thirty years (being the term for which the Government bonds were issued in order to secure the construction of the road) would amount to $56,846,832. "The Government has advanced in bonds at 6 per cent..-..$27, 237, 000 "Interest on same for thirty years, at 6 per cent.. -.. 49, 026, 600..... — — ~$76, 263, 600 ~ 56, 846, 832 19, 416, 768" From this statement it appears that the incidental saving to the Government falls short of the entire amount advanced by it to the company, including principal of bonds and interest for the entire period of thirty years, only $19,416,768. As has been said, this calculation is based upon the supposition that there will be no increase of Government transportation over the road. Nor does it include any of those great economic advantages arising from the settlement of the country, and the development of the mining and other resources throughout the vast regions tributary to, and supplied by, the road. Nor does it take into account the great gains arising from speedy military, postal, and commercial communication. In a very imperfect manner does it present to the mind the immense advantage of this great work to the Government and to the people. The following interesting statement of Mr. Van Dervoort, in charge of the mail-service over the line, shows the rapid increase of that service: "SALT LACE, August 7, 1875. "lTo the Goveminent Directors Union Pacific Railway: "GENTLEMEN: In compliance with your request, I take pleasure in submitting to you a brief statement of the service performed by Omaha and Ogden Railway postoffice. It is the longest route in the world over which one set of agents run from initial to terminal points. In amount of mail handled, it ranks with the greatest lines running through the most populous districts in the country. In variety of foreign mail handled it surpasses any route on the globe, every nationality and clime being represented in the mail passing over this line. At last weighing, in the winter-of 1874, the average amount each day for thirty working days was about 10,500 pounds. The estimated amount at the present time is 15,000 pounds daily. We carry all the mail for the Western States and Territories, except Colorado, which is partly handled by Kansas Pacific Railway. Our clerks make up in direct packages for every office in Colorado, Utah, Wyoming, Montana, Idaho, Oregon, and Washington, sending Nevada, part of Arizona, and all of California, to Central Pacific Railway for distribution there. They also make up direct locked pouches for all prominent points in Idaho and Montana. These are sent over the connecting stage-routes, and are not opened until they arrive at destination. We also carry through-registered packages, envelopes, and post-office supplies for all points west, averaging about one hundred and fifty packages west, and about one hundred and sixty east, each day; also registered boxes of gold coin from San Francisco to New York. " Going east we receive all the mail from Pacific slope and all the Territories, from Australia, and all the islands in the Southern Pacific, Japan, and China, which is distributed and forwarded eastward from Omaha. We make up for all principal lines and cities direct and send the mail in through-locked pouches to destination. This grand road is the shortest route from London and Liverpool to Australia, Van Diemen's Land, New Zealand, Japan, Hong-Kong, and always makes quicker time than the routes previously in use. " The British government send the greater portion of their Australian mail this way, amounting to about one hundred and eighty sacks east, and two hundred and fifty west, each month. "We have thirty clerks running on the line-two in each car. It takes six days to make the round trip; they then lay off seven, unless the Department needs their services during the time stated. The mail is increasing very largely, and the time will 132 PACIFIC RAILROADS. soon come when the present force of men and our car-room will not be sufficient for the working of this mail. " The present management of the road aid the Post-Office Department greatly in the dispatch and the management of the service. During the wash-out last spring, mail accumulated all along the line, but, through the energy of Mr. Clark and his subordinates, was all forwarded to destination, reaching there at same time as the passengers that left Omaha on same train. "I have written this hastily. If I had more time I could have furnished a more thorough statement, and one that would have given all of us more satisfaction. Trusting I have shown you that the magnitude of the mail-service is equal to the other branches of business, and hoping that as years go on they will continue increasing, I am, very respectfully, your obedient servant, "PAUL VAN DERVOORT, "Chief Head Clerkc R. M. S., in charge of Omaha and Ogden R.. O." A study of the subject in all of its relations and effects only tends to dwarf the exhibit made in our last report, as quoted above. Whether or not such incidental advantages as we have noticed, vast as they are in immediate saving and profit, should be considered in connection with any negotiations which may be had between the Government and the company, with a view to a definite settlement of existing relations and obligations, we leave to the judgment of those who may act for the Government and to Congress, our sole purpose being to state such facts as occur to us, and such as are calculated to cast light upon the general subject. The establishment of harmonious relations between the Government and the company, and a definite determination of the obligations and rights of each, is an end greatly to be desired. If this can be done without loss to the Government, all will concede the wisdom of doing it. The propositions of the company open the door to negotiations which may lead to this result. And, notwithstanding the scandals of the past, the fact remains that the Union Pacific Railroad is a vast and valuable property, well cared for and well maintained, and capable of returning to the Government the investment which it has made therein. Inharmonious relations injure all parties concerned. If they can be removed without detriment to the public interest, it does seem that a simple, plain, practical business prudence would demand that it be done. To reach so desirable an end is worthy of an earnest practical effort. We would not suggest the weakening of any security which the Government now has for a full return of its advances. Whatever new arrangement, if any, shall be made, the provisions of the present laws should be held in reserve, to come again into active force, in the event of failure on the part of the company to comply strictly with the new contract. In conclusion, we repeat that we do not assume it to be our right to advise the Government as to the course which it should take inll this matter; but, having given the subject our best thought, we can but express the opinion that it is one which ought to receive a calm, practical, thoughtful consideration. No, harm can result, while a great public good may be attained. Respectfully submitted. JAMES F. WILSON, J. H. MILLARD, JOHN C. S. HARRISON, T. B. BREWER, JOHN A. TIBBITS, Governmient Directors of the U. P. B. R. Co. Reports of the commissioners who examined the Central Pacific and Union Pacific Railroads in 1869 and 1874, and letter of Secretary Cox to the Commissioner of the General Land-Office. REPORTS. WASHINGTON, D. C., October 30, 1869. The undersigned, members of a commission for the examination of the Union and Central Pacific Railroads, appointed under a "Joint resolution for the protection of the interests of the United States in the Union Pacific Railroad Company, the Central Pacific Railroad, and for other purposes," approved April 10, 1869, have the honor to submit the following report: Under instructions from the Interior Department, dated August 14, 1869, four members of the commission were in Omaha on August 23, but the instructions of the fifth PACIFIC RAILROADS. 133 commissioner having failed to reach him, he was not present, and it was informally~ decided to proceed to Sacramento. The commission met at Sacramento on September 8, all the members being present; organized by the election of General Hiram Walbridge president, and General C. B. Comstock secretary, and commenced the inspection of the Central Pacific Railroad, usually working from 6.30 a. m. till dark, and occupying from September 8 until September 14 in the inspection of that road. The inspec — tion of the Union Pacific Railroad was begun September 14 and completed September 23, when the commission adjourned to meet at Washington October 13, 1869, but the meeting was subsequently postponed until October 23, when most of the mnaps and information asked for from the two roads had been received. The joint resolution under which the commission was appointed requires it "to examine and report upon the condition of, and what sum or sums,- if any, will be required to complete each of said roads for the entire length thereof to said terminus, as a first-class railroad, in compliance with the several acts relating to said roads." The instructions of the Interior Department require that the "report should be minute and specific upon the several particulars relating to the construction and equipment of each of the roads, which those instructions set forth, and that it should state to what extent, if any, the line of either road deviates from the most central, direct, and practicable route mentioned in said acts of Congress." The instructions add: "You will not, however, be restricted to these instructions, but will, in the spirit of the resolution, include in your report any suggestions or facts, relating to the roads, elicited by your examination, which you shall consider necessary to be submitted to the President of the United States." The first question that comes before the commission is, what is meant by Congress in its various acts relating to the Pacific Railroads by the words "first-class railroad?" Railroads now ranked as first-class in this country were far from being perfect at their opening, and have been brought to their present high standard by large expenditures, which a small traffic in the beginning could never have justified. To require the Pacific Railroads to be brought at first to the standard other roads have reached, after years of heavy and lucrative business, would be a waste of money. It is evident to the commission that this was not what Congress desired or intended in requiring a first-class railroad. If private corporations had built these roads without governmental subsidy, it would undoubtedly have been for their interest to build them at first at the lowest cost consistent with keeping them in operation, and, when built, if a paying business should be developed, to have gradually made the improvements which increasing traffic should render necessary. But Congress had made a large loan and an extensive land-grant, a part of which will be valuable, and in return it required a better road than private interests would have built-a road that should be capable of transporting passengers and freight with rapidity, safety, and certainty; a road as good as the majority of those in the thicklysettled States. In the opinion of the commission, the requirements of the law will be satisfied, and the designs of Congress carried out, if the roads be properly located, with judicious grades; have substantial road-beds of good width; ballasting, which with proper care shall be able to keep the track in good condition throughout the year; permanent structures for crossing streams, good cross-ties, iron and joint fastenings; sufficient sidings, water-tanks, buildings, machinery, and adequate rolling-stock-the more important machine-shops and engine-houses being of masonry; and the commission is glad to be able to say that, in its opinion, while some expenditures still need to be made, these two roads are substantially such roads to-day. The expenditures needed for completion will be given in detail for each road. REPORT ON TI-HE CENTRAL PACIFIC RAILROAD, WITH ESTIMATE OF SUMIS REQUIRED TO COMPLETE I'1. Location.-In the opinion of the commission, the general location is good, although they saw several places where it appeared to them it might be improved in some of its details, perhaps at a somewhat increased expense. But this could only be determined positively by an extended instrumental survey, for which the commission did not have the time at its disposal. While, as was to be expected, the location is open to criticism, there are no errors, the immediate correction of which should be required, by the Government. It is not thought that they exceed reasonable limits, considering the haste with which the latter part of the road was built, nor that either bonds or landgrant should be withheld for the small distance by which they increase the length of the road. The road is capable of doing all its business with safety and rapidity. The road-bed is generally of good width, both in cuts and embankments; a few points were noticed where the embankments were narrow, and an estimate has been made of the cost of widening them. Tinnels.-There are fifteen tunnels on the road, through solid rock and conglomerate 134 PACIFIC RAILROADS.,or soft granite. A part of these are arched with heavy wood-work which will last for many years. Those not through solid rock and not arched have stood without giving trouble for two or three years, and show no signs of failure; we therefore make no estimate for arching any of them. Bridges, trestles, and culverts.-The bridges are usually Howe's truss, of good material -and workmanship. Several of them are, however, lighter, especially, in their suspen-;sion-rods, than is advisable, and in some cases so light that the heaviest load which can be put on them, a train of locomotives coupled together, should not be run over them at high speed. An estimate has been made for strengthening such as are deemed too weak to carry the maximum load with safety. They are the bridges over the North Fork of.the Humboldt, over Donner Creek, and the two long spans of that at the American River. The piers of the American River bridge are of wood. An estimate is made for replacing them with stone. The high trestles west of and in the Serra Nevada are generally of good character. At least two of them should ultimately be filled up or replaced by permanent structures, as also the trestles and temporary water-ways east of the Serra Nevada. An estimate is made for this. The immediate replacement of these trestles, however, should not be required, as they will be safe for four or five years, and in the mean time the necessary experience will be gained as to the position and dimensions of the waterways required. The masonry, especially on the mountain-division, is well constructed and of good material. Snowv-sheds.-At the summit of the Sierra Nevada the snow sometimes falls to the depth of about fifteen feet, making it a problem of great difficulty to secure the running of trains during the winter, but one, it is believed, which has been boldly and successfully met. Through the region of heavy snow-fall, except on some high embankments, the track has been covered by strongly-built sheds, boarded in at the sides, thus thoroughly protecting it from snow. There are in these mountains frequent snow-slides or snow-avalanches, and in many places the road crosses their track. Whenever this occurs in excavation, a heavy roof is built over the road and extended up the side of the mountain, to which its upper edge is fitted, and the whole securely fastened to the rock, its slope being such that the avalarnche will pass readily over it. These roofs, in some cases, extend up the slope of the mountain one to two hundred feet, and are very strongly built, to carry the great weight which may be suddenly thrown upon them. In a distance of forty miles there is an aggregate length of thirty-two miles of snow-sheds and galleries, costing, according to the statements furnished by the company, $1,731,000. Trac. —The iron in the track varies from fifty- six to sixty-six pounds per linear yard; is thoroughly spiked on good-sized cross-ties, numbering from 2,300 to 2,640 per mile; about ore hundred and fifteen miles is laid with chairs, and the remainder with fish-joints. The whole is in good surface and line, and as well adapted to high rates of speed as the average first-class railroads in the United States. Sidings.-The sidings, which are about five per cent. of the length of the road, are ample for the accommodation of its business, and judiciously located. Ballast.-A large portion of the road is well ballasted with good material. In making estimates to supply the deficiencies noted in this respect, regard has been had to the character of the material of which the road-bed is constructed, and the small rainfall east of the Sierra Nevada. Station-houses. —The station-honses west of the Sierra Nevada are not deemed sufficient, and an estimate is made for additional ones. Farther east, while they are but common buildings, they are yet sufficient for the present business of the road. When replaced they should be of a better character. Water-stations.-These are sufficient in number, and located at convenient points excepting in the alkali country, where some are too far apart for economy in operating the road-in one case, thirty-four miles. But it is so obviously for the great advantage of the company to get water at convenient distances, that we do not think it necessary to estimate for the cost of an additional supply. Machine-shops and engine-houses.-The machine-shops are considered sufficient except at the proposed junction of the two roads. There is a sufficient supply of machinery and tools on hand for all the shops except at this junction. East of Rocklin, the enginehouses are of wood, and these should have walls of stone or brick. Some additional ones are needed. Estimates are made for all these items. These wooden engine-houses are first-class buildings of their kind, but they should have been built of brick or stone originally. Equipment.-The company have on the line of their road one hundred and sixty-six locomotive engines; thirteen sleeping-cars; sixty-two first-class and thirty-five secondclass passenger-cars; twenty-three baggage, mail, and express cars; six hundred and forty-eight box, fruit, and stock-cars; twelve hundred andl ninety-three platform-cars; PACIFIC RAILROADS. 135 and in course of construction, according to the statements furnished by the company, eighteen sleeping-cars, thirty-one first-class and twenty-five second-class passengercars, which the commission believe to be considerably in excess of the number required for the present and immediate future business of the road. Telegraph-line.-The telegraph-line is well constructed, and is supplied with a suffi-cient number of stations. Estimnatesfor stpplying deficiencies on the Central Pacific Railroad. * For ballasting track between Sacramento and Alta... —-... —.................... $20, 000 For ballasting track between Verdi and Humboldt......................... 50, 000 For ballasting track between Humboldt and Carlin.....-............. 100, 000 /For ballasting track between Carlin and Promontory....................... 50, 000 For widening embankments between Verdi and Humboldt -................ 5, 000 For widening embankments between Carlin and'roano... 5, 000 For widening embankments between Toano and Promontory................ 3, 000 Addi tional station-houses between Sacramento and Alta.................... 10, 000 Freight and passenger depot at the proposed junction of the two roads...... 10, 000 Engine-house at Truckee, of brick or stone, in addition to amount already expended there................................................ I.......... 20, 000 Substituting Trick walls for frame in engine-house at Wadsworth........... 14, 000:Substituting brick or stone walls for frame in engine-house at Winnemucca.. 11,200 Substituting brick or stone walls for frame in engine-house at Carlhn.-... 11, 200 For brick or stone engine-house at Terrace, in addition to material now there. 20, 000 For brick or stone engine-house at the proposed junction with the Union Pacific................................................................. 40,000 Machine and repair shops at the said junction.-...,.,................. 50, 000 Tools and machinery for shops at said junction........................... 20, 000'Strengthening two long spans of American River bridge -....... 2,000 Putting in stone piers at American River bridge................, — 187.... 1, 750 Strengthening Donner Creek bridge.............................-....... 500 Strengthening bridge over North Fork of Humboldt.... 500 For abutments, straining-beam bridge, and filling at Arcade Creek.......... 1,500'To fill up Auburn trestle and put in arch culvert............................. 15, 000 To fill up trestle at Station No. 450, and put in arch culvert-................ 16,000 Filling trestles and making permanent water-ways at one hundred and seventyfive short openings of trestle-work.-7.......-. 70, 000 Filling trestles and making permanent water-ways at thirteen large openings of trestle-w ork............................................... 13, 000 Total..........-..... 576, 650 Surplus materials.-On examining the lists of surplus rolling-stock, materials, and:supplies submitted by the company, the commission is of opiniou that after making a liberal allowance, this company have more than a million of dollars' worth of such property on hand beyond the immediate future wants of the road. In Appendix A will be found a list of the maps, papers, and statements submitted:by this company. REPORT ON UNION PACIFIC RAILROAD, WITH ESTIMATE OF COST FOR COMPLETION. Location.-The location of the accepted line is highly creditable to the engineers of the company. There are fewer errors than might reasonably have been expected,,considering the length of the road and the difficulties encountered, and none which, in our opinion, the Government should require corrected. There are deviations from this accepted line at Promontory Mountains, and at Uintah, which should, be corrected; and at Omaha the bridge-line should be built to avoid the present heavy grade. The adoption of this line removes the necessity of reducing the grades on the present location, as heretofore required. An estimate of the cost of these changes is made. Road-bed.-The road-bed is, a large part of the way, of proper width, both in cuts -and embankments, though there are some places where greater width is needed on the embankments, for which an estimate is made. Tunnels.- There are four short tunnels-three through solid rock not arched, and one -arched with timbers. The commission have not deemed it necessary to provide for.arching with masonry. Bridges, trestles, and culverts.-Several of the high trestles between Blue Creek Station.and Promontory ought to be filled up at once. They were evidently intended as temporary expedients, to gain time in opening the road. Below Echo two high trestles (on:the nine hundred and seventy-first mile) and the two of same character near Pied 136 PACIFIC RAILROADS. mont (on the nine hundred and thirty-fourth and nine hundred and thirty-sixth miles) should be filled within the coming year. The high trestle at Dale Creek is a, good structure, and no estimate has been made for filling this, it being a first-class work of its kind. The bridges are generally well built and of gnod materials. There are, however, several of one hundred and one hundred and fifty feet span on Bitter Creek, where a, water-way of forty feet would have been ample. The masonry of these is of an inferior character. The company are now engaged in changing the course of the stream so as to render eight or ten of them unnecessary, and will fill the crossings with embankments. An estimate is made for completing those which are to remain. Some of the Howe truss-bridges, like several of those-on the Central Road, are light in their suspension-rods for the maximum load of a train of locomotives. Several should be strengthened, for which estimates are made. In reference to many of the trestles (not heretofore mentioned) and culverts, which we have estimated for replacing, we would remark that practical railroad managers, having a due regard for economy, would not replace them by permanent structures so long as they are safe and reliable, which, in the opinion of the commission, will be four or five years for many of them, at the end of which time experience will point out the position and size of water-ways with much more certainty than can now be determined. Snow:-fences. —Some protection against snow has already been provided, and much more will be necessary. The officers of the road seem to be aware of the importance of these structures, and were engaged in preparing the material for them. It will undoubtedly be expedient to erect snow-sheds at some of the exposed points, but. experience only can locate them properly. The saving in expense of operating and repairs will be so large, that no railroad similarly situated can afford to be without them; we think, therefore, that it will be safe to leave all this part of the work in the hands of the company, to be done as fast as their experience shall point out the right places and the character of the structures to be built. Track.-The track is generally very good, but a few miles were observed where the heavy traffic, near Omaha, had worn the rails considerably. To replace them is a mat — ter of ordinary repairs, and not of construction, this part of the road having been in operation for four years. About four hundred and fifty miles of the track are laid with rails weighing fifty pounds per linear yard, and with wrought-iron chairs; the remainder is of fifty-six pounds, and laid with fish-joints. The cross-ties are generally of pine, of fair size and good quality, excepting those on about four hundred miles immediately west of Omaha, where originally a large portion were of cottonwood. Many of these have been replaced with pine, oak, and cedar, but a large number are still in the track. A part of the cost of replacement belongs to the repairs of the road, but a portion should be borne by the constructionaccount, as the cross-ties were originally inferior. One hundred thousand dollars above the ordinary repairs is estimated for their replacement, the company now having a large number on hand for that purpose. The cross-ties number from twentythree hundred to twenty-six hundred and forty in each mile of track. Si~dings.-The sidings are ample for the business of the road, amounting to fully nine per cent. of its length. Ballast.-A considerable portion of the road is well ballasted with good material;: quite a large amount is, however, still needed, especially between Promontory and Ogden, and in the Platte Valley. For the latter, it can only be obtained by very long hauls; still, we regard it so important as to justify us in estimating the expense of procuring it. Station-houses and water-tankcs.-The station-houses are of good character, properly located, and sufficient in number to accommodate the business of the road. The companuy have also erected, at convenient points on its line, several good hotels and eating — houses for the accommodation of passengers. There are some long intervals between water-tanks, but the commission is satisfied that all that is practicable is being done by the company to obtain an abundant supply of good water. Coal.-The discovery-of good coal in large quantities, easily accessible, at several points on the line of this road, is of great value in reducing the cost of- operating. Machine-shops and engine-houses.-At several places there are permanent machineshops, well constructed and fully supplied with machinery and tools. These are properly located. We have estimated for building 6ne more at the proposed junction of the two roads. The engine-houses are generally of stone or brick, and of sufficient size. There are three points at which others will be required, for which estimates are. made. Equipnment.-There are upon the line of the road one hundred and forty-nine locomotive-engines; twenty-six first-class and fifteen second-class passenger-cars, (besides sleeping-cars in use upon the road, but not owned by the company;) eighteen baggage, mail, and express cars; eighty-eight caboose-cars, which can also be used for emi PACIFIC RAILROADS. 137 grant-cars; nine hundred and fifteen box-cars; eleven hundred and seven platformcars, (besides three hundred leased to and used by other roads.) There are three firstclass passenger and two express and baggage cars in course of construction in the company's shops at Omaha. The freight-cars are considerably in excess of the present and immediate future wants of the road. In view of the very large amount of material the company have on hand at Omaha, and their ample facilities for construction of passenger-cars, we have made no estimate for additions to this class of equipment. Telegraph-lines.-The telegraph line and stations are sufficient for present purposes, though many of the poles are not of the most durable material. Estimates for supplying deficiencies, Union Pacific RIailroad, Promontory to Ogden. Ballasting track-...........e.e......... $46, 000 Widening embankments.- -.................:...................-.... 64, 000 Filling high trestles between one throusand and seventy-sixth and one thousand and eighty-fifth miles, inclusive...-...........:- 38, 000 Abutments and piers at Bear River bridge, in addition to materials on hand and work done....... -.........................5, 000 Abutments, Ogden River bridge, in addition to work done and material on hand....................................................... 4,000 Filling up and making permanent water-ways at forty-four short openin gs 20, 000 Filling up and making permanent water-ways at three larger openings.... 1, 200 Filling, putting in straining-beam bridges and abutments at three large trestles........................-.-.... 5, 400 Correcting construction and reducing grades to conform to accepted location between one thousand and eightieth and one thousand and eighty-fifth miles, inclusive -80...................................... 80, 000 Total...................................................... -206, 000 Estimnate for supplying deficiencies, Uniion Pacific Railroad, Ogden to Omaha. Ballasting track between Ogden and Echo.............................. $5, 000 Ballasting track between Echo and Bryan.............................. 70, 000 Ballasting track between Bryan and Rawlins............................. 90, 000 Ballasting track between Rawlins and Laramie... —................... 85, 000 Ballasting track between Laramie and Ogallalla........................ 70, 000 Ballastinog track between Ogallalla and Omaha........................... 116, 500 Widening embankments between Ogden and Echo........................ 3, 600 Widening embankments between Echo and Bryan......................... 31, 500 Widening embankments between Bryan and Rawlins.-..,... 12, 500 Widening embankments between Rawlins and Laramie.............. 6, 000 Widening embankments between Laramie and Ogallalla.................. 7,000 Widening embankments between Ogallalla and Columbus................. 18, 000 Widening embankments between Columbus and Omaha- -................ 9,000 For freight and passenger depot at the proposed junction with Central Pacific Railroad.-1....................................................... 10, 000 For engine-house of brick or stone at said junction....................... - 40, 000 For machine-shops at said junction.................................. 50, 000 For engine-house at Green River, of brick or stone, in addition to materials already on hand. -—.....................-.......-.... 20, 000 For engine-house of brick or stone in the vicinityof Wahsatch or Evanston. 20, 000 For replacing cottonwood ties in addition to repair-account...-...... 100, 000 Strengthening Papilion bridge................................. 500 Widening pier and changing bridge at Crow Creek........................ 1, 000 Rebuilding piers and abutments at Laramie............................... 6, 000 For masonry and erecting bridge at the Little Laramie-..-. 3, 000 For improving abutments at Rock Creek................................. 1,000 For repairing masonry at Medicine Bow bridge..........................., 500 Rebuilding and repairing masonry of Bitter Creek bridges................. 21, 000 For abutments and piers at Green River.................................. 15, 000 For widening pier at last crossing Black's Fork........................... 1, 000 Piers and abutments at Black's Fork, eight hundred and seventy-third mile. 3, 500 Piers and abutments at Black's Fork, eight hundred and eightieth mile --- 12, 000 Masonry at crossing Big Muddy, eight hundred and ninetieth mile......... 7, 500 Masonry at crossing the Big Muddy, eight hundred and ninety-first mile.... 5, 500 Masonry for four straining-beam bridges.between nine hundred and fortysixth and nine hundred and forty-ninth miles, including filling trestles-.. 15, 000 For abutments for six 40-foot straining-beam bridges on nine hundred and eighty-fifth to nine hundred and eighty-eighth miles, inclusive.......... 2, 400 Arch culvert......................................................... 500 Filling trestle at Weber River bridge...............................-.. 3,000 138 PACIFIC RAILROADS. Filling and replacing with permanent water-ways thirty-five small openings of trestle-work between Ogden and Yellow Creek........................ 14, 000 Filling and replacing, with permanent water-ways ten larger openings between Ogden and Yellow Creek. —--.................................. ---------- 11,000 Filling two high trestles on nine hundred and seventy-third mile. —------- 12, 000 Filling two high trestles on nine hundred and seventy-first mile. -......... 32, 500 Filling trestle on nine hundred and seventieth mile....................... 2, 000 Filling two trestles on Yellow Creek.. 2, 200 For abutments, filling, and putting in straining-beam bridges at nine hundred and sixtieth and nine hundred and seventy-sixth miles............. 2, 500 For filling and'replacing with permanent water-ways ten small openings of trestle-work between Yellow Creek and Piedmont 2, 000 Filling trestle at nine hundred and sixty-eighth mile..................... 500 For abutments, straining-beam bridge, and filling at nine hundred and fiftysixth mile...-........ 1, 500 For filling four large trestles between nine hundred and forty-fifth and nine hundred and thirty-fourth miles, inclusive.- - - - -......33, 500 For filling and replacing with permanent water-ways seventeen small openings between Piedmont and Bryan -----— 7.........- --—.-.. —-. — 7, 000 Abutments at crossing Big Muddy, nine hundred and twenty-seventh mile.. 9, 000: Abutments at crossing Big Muddy, nine hundred and twenty-third mile..-. 3, 000 For abutments, bridging, and filling eighteen trestles between Piedmont and Bryan, chiefly over the Muddy.-................................... 32, 600 For filling and putting in three culverts between Piedmont and Bryan.... 3, 700 For filling and replacing with permanent water-ways forty small openings of trestle-work between Bryan and Rawlins............................. 16, 000 Filling and replacing with permanent water-ways twenty larger openings between Bryan and Rawlins........................................... 20, 000 Filling and replacing with permanent water-ways sixty small openings of trestle-work between Rawlins and Laramie..24, 000 Filling and replacing with permanent water-ways seventeen larger openings of trestle-work between Rawlins and Laramie.......... 17, 000 Filling three other large trestles and putting in culverts between Rawlins and Laramie.......................................................... 25, 000 Filling and replacing with permanent water-ways one hundred and twentyfive small openings of trestle-work between Laramie and Ogallalla. —-. 50, 000 Filling and replacing with permanent water-ways thirty-seven larger openings of trestle-work between Laramie and Ogallalla...................... 29, 600 Filling eighteen other large trestles between Laramie and Ogallalla.... 50, 000 For filling and replacing with permanent water-ways one hundred and fifty small openings between Ogallalla and Omaha.. 30, 000 For filling and replacing with permanent water-ways twenty-five larger openings of trestle-work between Ogallalla and Omaha.. - 20, 000 To change line to original location at Uintah............................. 5, 000 To reduce grade or change line near Omaha.... 60, 000 Total, Promontory to Omaha.................................... 1, 586, 100 Surplus material and supplies.-After examining the lists of rolling-stock, material, and supplies on bland, submitted by the company, and making a liberal allowance for the immediate future wants of the road, we find they have a surplus amounting to about $1,800,000 in value. In appendix B will be found a list of the maps, papers, and statements submitted by this company, In concluding this report, the commission desire to state that both the companies are doing a large amount of work on their respective roads, and are day by day bringing them nearer to the standard required by law. This great line, the value of which to the country is inestimable, and in which every citizen should feel a pride, has been built in about half the time allowed by Congress, and is now a good and reliable means of communication between Omaha and Sacramei:to, well equipped, and fully prepared to carry passengers and freight with safety and dispatch, comparing in this respect favorably with a majority of the firstclass roadsin the United States. Respectfully submitted. HIRAM WALBRIDGE S. M. FENTON, C. B. COMSTOCK, E. F. WINSLOW, J. F. BOYD, Commissioners. Hon. J. D. Cox, Secretary of the Interior. PACIFIC RAILROADS. 139 DEPARTMENT OF THE INTERIOR, Washington, D. C., November 3, 1869. SIR: The commission to examine the Union Pacific and Central Pacific Railroads having reported, and its report being accepted and made the basis of an adjustment of the accounts between the United States and said railroad companies, you are hereby authorized to commence the patenting of lands to such companies, under grants made by Congress, as follows: In addition to the bonds retained by the United States as security for the completion of said roads in the matters reported deficient or not up to standard by said commission, one-half of the lands ready for patenting to the Union Pacific Company will have patents suspended until further directions from this Department. The other half may be patented to said company as fast as surveys and other preliminaries are completed-that is to say, beginning at Omaha and working westward, the odd-numbered sections, 1, 5, 9, &c., will be-patented first to the company, (there being no valid adverse claim found,) and sections 3, 7, &c., withheld until further directions, as above stated. Patents to the Central Pacific may in like manner issue, beginning at Sacramento and working eastward. It is my desire that the work be so systematized that it may be pushed forward as rapidly as possible. Very respectfully, your obedient servant, J. D. COX, Secretary. Hon. Jos. S. WILSON, Cdmmissioner General Land-Office. SALT LAKE CITY, UTAH, October 7, 1874. To the AHon. the Secretary of the Interior, Washington, D. C.: The undersigned, commissioners to examine and report whether the deficiencies in the construction of the Union Pacific Railroad, as reported by the commission appointed under act of Congress approved April 10, 1869, have been supplied and the road completed, as required by said report, submit the following: The examination was commenced on the 25th September, and completed October 5, and has been made thoroughly and in detail. We find that the report of the commission of eminent citizens was made soon after the.joining of the rails at Promontory, and before they or the company had the experience required to determine what Mnaterial in the peculiar climate of this country was actually necessary to bring the road up to the standard required by law. This embarrassmer.t was felt by that commission, and is referred to in their report. In most cases the expenditures of the company in the items reported by the former comnmissioners have far exceeded their estimate. The present commission has found it at this late day impossible to ascertain'whether or not the exact amounts advised by the commission of eminent citizens have in all cases been expended in the precise localities indicated, particularly as regards the improving of water-ways. Many of these have been changed in size and location; others have been entirely filled up. They have, therefore, been compelled to take the expenditures somewhat in bulk, and find the comparison as follows: 140 PACIFIC RAILROADS. Comgparative statement of estimates for supplying deficiency in construction-account and actual expenditure from October 1, 1869, to September 1, 1874. 5"iR u, R R. Ca a ROAD AND TRACK. Ballasting and widening road-bed........................$529,100 $531, 661 00 $2, 561 00 Reducing grades at Omaha.......................... 60, 000 88, 397 57... 28, 397 57 Shops and fixtures....................................... 130, 000 268, 485 41 138, 485 41 Station-buildings.......................... 10, 000 55-2, 260 90 542, 260 90 Tenement-buildings...................................... 38, 965 45...... 38, 965 45 BRIDGING. Filling trestles, replacing bridges with masonry, &c..... 551, 000 553, 000 00. 2, 000 00 Snow-sheds and fencing.............. ——.. ——..................... 393, 978 14 393, 978 14 Fencing, ordinary..................-....... — ---- -—........ 75, 779 23 75, 779 23 Ties....-100, 000 1, 013, 646 93. 913, 646 93 Telegraph................. -......................... 79, 901 16 79, 901 16 Total.. 380-10...................... 3,596, 075 79..... 2125, 975 79 Deduct deficiency estimated by commissioners..................... 1, 380,100 00 Excess of actual expenditures over estimate.-.......- -...........-... 2, 215, 975 79 WVhen amounts and 1-ocation have been designated, the company have faithfully complied with the recommendation of the former commission, in almost all cases expending larger sums than advised by said commission, the only exception worthy of note being the machine-shops recommended at the junction, which have been built at Evanston, in Wyoming Territory, because of the failure of the two companies to obtain property at the junction until a very recent date. Experience has demonstrated the Evanston location to be much more desirable, it being on the top of the maximum grade, and at the coal-mines of the company. These shops are built at a cost of more than three times the estimate for the junction. Besides the expenditures shown in this statement, the company have paid out large sums in new constructions, maintenance of way, and in additional facilities for accommodating and handling economically the traffic of the road, showing not only that they have acted in good faith in supplying the deficiencies reported by the former commission, but their determination is to make and maintain it in all respects a firstclass road. In accordance with your instructions "to give full and exact information as to the present condition of the road," we submit the following detailed statement: Location.-The location of the road shows a thorough knowledge of the features of the country; its directness, its greater percentage of tangent over curved line, (length of tangents being 887.45 miles, and of curved lines 148.54 miles,) its light grade and curvature, (the maximum grade being 90 feet per mile, and its sharpest curve six degrees,) make it an excellent road to operate and maintain with a minimum expense. The deviation of the road from the accepted line at Uintah has been corrected. The 66-foot grade at Omaha has been reduced -to a 30-foot grade, and the material taken out and used in the approaches to the bridge over the Missouri River. llisssouri River bridge.-A Post's patent truss-bridge resting on iron tubular columns, sunk in the sand from 50 to 80 feet, has been built across the Missouri River at Omaha. The lower chord of truss is 50 feet above high water and 70 feet above low water. The bridge proper is 2,750 feet in length, and the approaches about three miles in length. The structure has been erected at a cost of $2,500,000. By it the Union Pacific Railroad Company can make its connection with the roads coming from the east, north, nd south. Boad-bed.-The road-bed in bank is 14 to 16 feet in width. Large expenditures have been made in widening banks, taking out cuts, and in raising some two hundred miles of track from two to five feet, by which the company is relieved of a large expense in sustaining snow-sheds and fences. The company is using three steam-shovels on the work, and in three years expect to avoid the use of snow-sheds and retain only a very limited amount of snow-fences. PACIFIC RAILROADS. 141 In the opinion of this commission, this action of the company will successfully relieve them from snow-blockades and the large expenditure attending that embarrassment. Tunnels.-There are four short tunnels, one of which is arched, and all are in good condition. Bridges, trestles, and culverts.-All the trestles in the road have been filled, in accordance with the recommendation of the former commission, the last having been completed in September, 1874. Stone piers and abutments have been substituted for the piles and trestle-piers. Several of the bridges on Bitter Creek have been dispensed with by changing the channel of that stream. All the truss-bridges appear to be sound, strong, and capable of sustaining any traffic over them, additional rods having been inserted to comply with the recommendation of the former commission. The wooden truss-bridges are renewed by combination of wood and iron, and many of the smaller trestles and culverts have been replaced, when the water-way allowed, by stone culverts, and by piles, bridges, and trestles on pile-foundations, and, in the opinion of the commission, the very material improvement upon the bridles, the filling of trestles and replacing piers with masonry, make these structures substantial and permanent. Snow-fences.-Since 1869 two hundred and sixty-nine miles of snow-fences and six milesaof snow-sheds have been constructed, so that for two years no delay on account of snow has occurred. During the last two years the company has abandoned a large amount of snowfences by raising tracks and widening outcuts, as heretofore stated, and are proceeding during the spring, summer, and fall months, when earth can be economically moved, to release these structures. They evidently see that a permanent relief in this way, though costing more than the fencing and sheds, is true economy in the end. Track.-The track throughout is in excellent condition. Taking into consideration the material, we doubt if there is a road of this length in the country that can excel it. The iron is in good repair. The chain-joints are being rapidly replaced by fish-plates. About seventy miles of new rails are laid annually. At Laramie, near the center of the road, the company is erecting extensive rolling-mills, to re-roll their own rails, which will no doubt inaugurate an extensive iron business throughout the entire coal and iron districts. Cross-ties are pine and oak.-Since 1869 2,000,000 new ties have been placed on the track. There are now on hand ready for use 400,000 more. All cottonwood ties have been replaced by pine and oak, and the condition of the track also shows that the road is well and fully tied, averaging fully 3,000 ties to the mile. On this item the company has expended since 1869, as we are informed by the auditor, $1,013,646.93. Sidings. —The sidings on the road are ample, far exceeding the demand of the present business. They occur on an average every six miles, and since 1869 the capacity of the road in this particular has been doubled. Ballast.-The road has been ballasted throughout with sand, gravel, or rock, and at many points ballast has been hauled long distances. Often the soil of the country throughout which the road runs has been found from experience to make excellent ballast, and in such cases has been used freely. Station-houses.-The station and freight houses are of good quality and ample in size, properly located, and sufficient in number and capacity to accommodate the natural and probable increase of business of the road for many years. At Fremont, Grand Island, North Platte, Sidney, Cheyenne, Laramie, Rawlins, Green River, Evanston, and Ogden the company has erected or caused to be built large and commodious hotels and eating-houses, giving ample accommodations to the traveling public. Tanks and water-s2upply.-The water-tanks average twelve miles apart, and are generally of 60,000 gallons capacity, supplied in all cases by overhead flow and pumps worked by steam-power or windmills. The additions made since 1869 make the supply ample. Through the dry country, from Rawlins to Green River, seven artesian wells, averaging 700 to 1,400 feet deep, have been sunk, giving a good supply of water, and, in two cases, flowing wells. Coal.-Coal exists along the line of the road from Laramie to Echo, the veins varying from 3 to 30 feet in thickness. Within the past year the company have taken charge of their coal-mines, and, by delivering coal in large quantities, propose to make the cost to consumers much less than it has been heretofore. The Central Pacific Railroad is also obtaining coal from mines along this line. Machine-shops are ample, their capacity being more than double the present requirements of the company. The company estimates that the shops are sufficient to maintain double the amount of rolling-stock now in use. These shops are generally built of brick and stone, and are located at Omaha, North Platte, Cheyenne, Laramie, Rawlins, Green River, and 142 PACIFIC RAILROADS. Evanston. At the latter place the shops built were intended for the junction of the two roads, but the company preferred to make a short division that could be double and have the shops near their coal. At the points named it was supposed ample reservations, were made in the right of way for the accommodation of the shops, and, generally, 1,000 feet was reserved for the shops, out-buildings, and tracks. This commission is satisfied, from a personal examination of the ground, that this is no more than sufficient, and, at some points, are in doubt as to its being sufficient for the growing business of the road. These reservations, we are informed, were made at all points except Omaha, before the Government surveys were made, and since the completing of these surveys additional reservations have been made when the shops have been found to be located on the land of the company. This commission desires to call the attention of the Department to the fact that when any portion of the reservation has fallen upon the even-numbered Government sections, parties have attempted to pre-empt the ground upon which the shops stand. The attention of the commissioners was called to this fact at Cheyenne, at Laramie, and at Evanston; and they consider it would be a great detriment to the company and the Government to have their reservations curtailed, as they are not more than sufficient for the accommodation of the present and future business of the road. If the charter of the company gives them authority to make their reservation for right of way, shops, &c., this commission is of opinion that a prompt decision in these cases will avoid complications and relieve the company of a great source of annoyance. Round-houses are more than sufficient to house the machinery of the road not in use. They are all well built, of brick and stone, and are located at Omaha, Grand Island, North Platte, Sidney, Cheyenne, Sherman, Laramie, Medicine Bow, Bitter Creek, Green River, and Evanston. At two of these points they are not needed and not nsed, Rolling-stock. There are now on the road152 locomotives. 3 wrecking-cars and cabooses. 25 first-class coaches. 4 outfit-cars. 31 second-class coaches. 325 hand-cars. 1 director's car. 75 rubble-cars. 1 officer's car. 47 dump-cars. 1 paymaster's car. 1, 230 box-cars. 8 emigrant-cars. 949 flat cars. 9 mail-cars. 550 coal-cars. 9 extra cars. 2 iron cars. 12 baggage-cars, large. 12 fruit-cars. 6 baggage-cars, small. 114 stock-cars. 78 way-cars. At the car-shops they have ample facilities to manufacture cars of all kinds as fast as required, and have on hand a good supply of proper material for the purpose. There are also eight locomotives under contract at the Taunton works, Massachusetts, to be delivered before the spring of 1875. The equipment is first-class, and fully up to the present requirement of the road. In compliance with the following paragraph of your instructions, " If the road is completed as required by law and departmental instructions, you will ascertain as near as practicable and report the date of such completion," this commission has endeavored to ascertain as accurately as possible the time at which the deficiencies reported by'the former commission were supplied. From personal examination and from the data furnished by the company we find that the expenditures required by the former commission in finishing bridges, in replacing the high trestles by filling with earth, &c., were finally completed in the month of September, 1874. This commission has, therefore, decided that the road was completed as required by law, by the report of the former commission, and to comply with the instructions of the Interior Department, October 1, 1874, at a total cost of $115,214,587.79, as shown by the books of the company. Conclusion. —We consider the road, as built, a first-class railroad, fully complying with its charter and with-the requirements of the law and in accordance with the instructions of the Department furnished to us. The shops and round-houses are of brick and stone; its machinery all of the latest and most approved patterns; its locomotives and rolling-stock ample and in excellent condition. Its passenger-trains are well-appointed and first-class, giving ample accommodation to the travel. PACIFIC RAILROADS 143 Its structures are fast becoming permanent, iron being substituted for wood and stone, and, if the present policy of the road is continued, it will be but a short time before the maintenance of road-bed will be reduced to a minimum. Its cheap fuel, and the effort being made by the company to develop the resources of the country through which it runs, will develop the local travel and traffic, and add largely to its tonnage and earnings. The condition of the road, its order, discipline, and the evident close attention to the details, not only show ability on the part of the general officers, but reflect great credit upon its local management, its superintendent, and assistants. Every facility for carrying out our instructions were furnished by the company. We have found no necessity for making Use of the supplemental instructions of September 10, as in all cases where the use of brick or stone has been desirable, that material has been used. Respectfully submitted. JAMES MOORE, IRA L. MERRIAM, J. S. DELANO, Commissioners. OGDEN, UTTAn, NTovember 2, 1874. SIR: The undersigned, constituting a commission for the examination of the Central Pacific Railroad, and appointed under your instructions therefor of the 21st September, ultimo, have the honor to state that they have completed the said examination, and herewith submit the following report: The commissioners met at San Francisco on the 29th of October, and together proceeded to the examination of the road, first going over that portion thereof called the Western Division of the Central Pacific Railroad, extending from San Francisco to Sacramento, and including what is termed the San Jos6 branch, which extends to the city of that name. Arriving at Sacramento in the evening of that same day, they remained at that city, visiting the company's hospital for their sick and wounded employ6s, and also fully examining the shops, engine and car houses, and other establishments connected with the road. These examinations occupied about half the following day, when the inspection of the line was resumed, proceeding toward its terminus at this point. The progress made over the western and mountain divisions of the road was necessarily slow. Care was taken to examine every important structure along the track and at the stations. All the trestle-work and all the bridges were scrutinized as to their soundness, both in construction and materials, particular borings being made into all wooden portions. The roadway was observed as to its condition of solidity, ballasting, width, soundness of ties, &c. The track was noticed in respect to its alignment and the improvements now being made by the substitution of steel for iron rails. After passing these heavier divisions of the road, the commissioners entered on the Nevada and Utah divisions, characterized by different features of topography and climate, and which permitted a more rapid inspection, although the same attention was given to the various structures along the line. The whole time occupied in the examination was five days, the commissioners being engaged throughout all daylight that afforded opportunities for observation. Your letter of instructions, which referred to the report of the eminent citizens appointed under a joint resolution of Congress for the protection of the interests of the United States in the Union Pacific Railroad Company, the Central Pacific Railroad, and for other purposes, approved April 10, 1869, a copy of which accompanied the same, requires this commission to determine whether the said Central Pacific Railroad has been completed as required by law and the report of the said eminent citizens. The report here referred to specifies what were considered certain deficiencies in the construction of the road. The present commissioners were directed " to examine said road with special reference to the deficiencies referred to, and to report whether they have been substantially supplied." This duty of the commissioners, as it appears to them, will be most properly complied with by taking up the several details of the report of the eminent citizens in the order therein presented, and showing to what extent their suggestions and criticisms have been practically observed by the company. Location. —No especial points of imperfect location were named in the report to which the present commissioners are referred. It states that'" the general location is good," and simply adds an expression of belief that " in several places it might be improved," though without recommending that it should be changed, or estimating, as in case of other deficiencies, any sum for its performance. This present commission examined five places where improved locations have been made, some of them of considerable length, and all of them of necessity at great cost, as they were made in a 144 PACIFIC RAILROADS. rough and difficult country involving deep rock-cutting and in two places change of bed of Humboldt River, and in another a tunnel 700 feet long through rock. These improved locations, in addition to the advantage of straightening the line of road, have also removed a long extent of trestle-work considered objectionable by the report of the former commissioners, and which they recommended to be filled up. In respect to the detail of location here considered, the commissioners are of the opinion that the company has manifested a disposition not to limit the improvement of the road to the mere letter of the recommendation of the eminent citizens, but, with a commendable policy and liberality, has shown a desire to render the work what it ought to be. The road-bed.-Under this head we find that all the points of Inadequate widths, and especially those named in the report of the eminent citizens, have been sufficiently widened. Tunnels.-The tunnels appear to be in good condition; neither in case of masonry, nor wood-arching, nor lining, is any unsoundness apparent. As above stated, a new and additional tunnel of 700 feet in length, with its two entrances for a considerable distance lined with masonry, was finished with its rock-cutting approaches during the present season. Bridges, trestles, and culverts.-The report of the eminent citizens specifies some deficiencies pertaining to the strength of a few of the bridges, naming those over the American River, over Donner Creek, and over the North Fork of the Humboldt. In respect to that over the American River the destruction by fire of the one seen by the former commission has necessitated the building of another, and on an improved scale of strength. That over Donner Creek now has the same proportional strength in its varying spans, and in its present condition and constant use demonstrates its capacity and safety. The bridge at the North Fork of the Humboldt being strengthened in the same manner as the last-mentioned, is deemed abundantly strong for its purposes. Whenever stone suitable for the masonry of the bridges could without extraordinary expense be obtained, it was used, and in other cases the most durable woods of the country were substituted, there being no ice or drift-wood in the streams crossed by the road that proper wooden structures would not successfully resist. The former commission seems to have recognized the condition of the matter, and without being urgent in their recommendation as to any particular case where stone should be used, have simply submitted an estimate for the piers of the American River bridge to be thus constructed. WVe find that this implied recommendation has not been carried out. When the former bridge was burned there was of course a necessity for the immediate erection of another, and accordingly the former system of wooden piers, being more speedily supplied than stone, was renewed. These wooden piers are of strong construction, and being so new and of the most durable wood of the coast, are in a perfectly sound condition, and will last many years beyond the life of the superstructure. There seem no especial reasons for requiring at this time or in this place stone, while in similar circumstances at other places wood is considered unobjectionable. At Bear River bridge the piers are finished similar to those of the American River; while at Ogden River, and owing to the deferred settlement between this company and the Union Pacific Company as to point of junction, nothing has yet been done. All the deck-bridges east of Colfax have been covered by galvanized iron. Trestles.-The good character of these structures has been recognized in the report of the'former commissioners. They, however, reccommend that-" two of them should alternately be filled up or replaced by permanent structures; also the trestles and temporary water-ways east of the Sierra Nevada." They further say: "The immediate replacement of these trestles, however, should not be required, as they will be safe for four or five years." The present commission, fully appreciating the importance of having structures of this character of a perfectly trustworthy condition, and with an earnest desire to satisfy themselves as to their exact state, occupied a sufficient time with each of them to determine it, accordingly, the separate portions of the structures, when examined with reference to their alignment and fastenings, for the ascertaining whether wear and the influence of passing trains had in any measure disturbed the original position of the various portions of the work. This scrutiny not only demonstrated the resistance of the structures to these elements, but showed that no unsoundness or rottenness of materials had entered into the works, for with the existence of such decay they must have settled out of line. As a further test, of the soundness of the materials, the foundation-timbers, those most liable to decay, were bored with an auger. No symptoms of decay were found, and there appeared no reason for suspecting the integrity of these trestles for several years to come, or for exacting their removal until their full economical value had been realized. However, several of the large trestles have been filled up, and one of the longest and highest has been dispensed with by the construction of the tunnel above referred to. Of the smaller, trestles, about sixty have been filled and the drainage provided for by stone culverts or cement drains. A large number of smaller trestles, which it was the intention of the company to fill, have been replaced with similar structures PACIFIC RAILROADS. 145 of redwood, being located whlere stone could not be economically obtained; these structures being found to be necessary on account of inore water-way being required than was originally anticipated. For this last-named reason many of the original water-ways have bleen enlarged, and in a few instances it has been found necessary to substitute trestles in place of the stone culverts at first. constructed. From the observations we have made we have no doubt that, in the endeavor to carry out thle snggestions of the fornmer commission in regard to filling the trestles, the company has very largely exceeded the stum estimated in that report, and in the amount of such work actually accomplished has carried out the spirit of their recomnmendation. It is proper here to add, tliat we find at station 450, mentioned by thle eminent citizens, that no trestle exists, nor was one ever built there, and, therefore, conclude that the number mentioned must have been a typographical error, and that the trestle intended to be designated was the first structure of the kind above Clipper Gap, which has been filled and the water-way provided for by a stone culvert. The Auburn trestle, mentioned by the former commission, remains in a perfectly sound condition. Snowv-sheds. —These structures, so iniportant to the economy, comfort of traveling, and even its safety, are simply noticed by the former commission, ancd without recommendation or suggestion of improvement. Exrerience has demon-trated the necessity of such protection in a clinate like that of the Sierra Nevada where these sheds exist, and since the report of the former commission the company has extended them about three miles. Tr'cclk.-The track, as it existed at the time of the inspection of the former commission, met its approval without qualification or suggestion of improvement; the rails were then of iron. We find the entire route in excellent condition both as to surface and alignment. We are informed by the engineer of the company, that 4,000 tons of steel rail, -weighing sixty pounds per yard, have been received and laid on the main track on the heavv mountuain-grades, and 1,000 tons additional are now arriving and will be laid during the present month. This quantity will give over 53) miles of steel track on the mountain-division. All the perimanent tracks on the main line will hereafter be of steel, and laid as rapidly as the present iron track requires renewal. Sidings. —No recommendations as to the sidings appear in the report of the former commission. They report them at "about 5 per cent. of the lelngth of the road." The company's engineer reports now their increase to 12 per cent. of the length of the road, or one hundred and six miles total, exclusive of those pertainingr to the depot in San Francisco. Ballasf.-The entire ballasting recommended to be done, and estimated for, in the report of the former commissionm, has been completed. Station-houses.-Additional station-houses have beenl built between Sacramento and Alta, and along the line wherever necessary. The expenditures for station-buildings "at the proposed junction of the roads" as expressed in the former commissioners' report, we believe must already have considerably exceeded their estimate therefor, though permanent buildiogs have not yet been erected, for the reason that, until the 7th October, ultimo, no title to the land necessary for depot purposes could be obtained. We understand that the natter of title is now arranged, and that it is proposed at once to construct permanent buildings. Water-stations. —No deficiency of these appears along the line except at one point where the operation of boring for water is now going on; the present depth reached being 1.:300 feet. At many of the stations the water is brourght by means of iron pipes through distances varying froum three to nine miles, and necessarily at much cost.. Machine-shops and engine-houses. —The report of the eminent citizens specifies in some detail, and with estinlates, their views and recommendations as to the then existing deficiencies, under this head. In regard to machine-shops they considered them " sufficient, except at the proposed junction of the two roads," where they recommended the erection of one. This has not been done, owing to the unsettled state of the land-title as above mentioned under the head of " station-houses," which has prompted the company to extend its shops at Terrace, where they have provided all necessary tools and machines for the repairs of the eastern division of the road. A small repairshop has, however, been erected at Ogden, and machinery intended for it, to a much -greater value than the estimates of the former commissioners, has been procured. The present commission fully agrees with the report of the eminent citizens in respect to the character of somte of the engine-houses, which are therein termed " firstclass buildinigs of their kind," alt,hough of wood. They recommend, however, the substitution of stone or brick walls for the wooden ones. The large establishments of the company at Sacramento are of brick walls, and its engine-house at Rocklin is of stone. The roofs of. all these buildings are covered with iron. The recommendation to alter tile wooden engine-houses was undoubtedly prompted by the psupposed greater security of stone and brick buildings from fire, and the then existing fact that no adequate H. Rep. 440- 10 146 PACIFIC RAILROADS. means for the extinguishrent of fires were provided to the buildings then erected. Although the recommendation of the former cormmrission has not yet been carried out, we, find that the conmpany has responded to the supposed motive of it, and at a very considerable expense has provided most efficient means to secure their buildings froni fires. They have ccinmnenced and carried to a great extent a systemr of iron-covered roofis, it, having been found in the silJgle case of fire which has occurred, viz, thet conflagration of the stone engine-house at Rocklin, that the fire originated in that part of the, building. In addition to this precaution, an!d at nluch expense, they have established in all these buildings a very complete arrangement of pipes, carbolized hose, and steam-pnumps, and boilers-in w!ich steam is kept at all times available. The fire-departiiient is completely organized and efficient, as the commissioners had opportunity of seeing at some of the largest machine-shops, when, at an alarm purposely given, several streams of water were disch'arged with great power in the space of two minutes. The system of pipes can be mradcl to flood any portion of those siniple buildings in a short tinme, and it seems fair to suppose that the system employed promnises as great an imromunity from fire damage- as constructions of brick and stone would be without it. When the time for reconstruction happens, either from fire, decay, inadequacy of space, or convunience, we should then consider it proper for the reconimendation of the commission to be carried into effect. The buildings in use are found to be entirely sufficient, and from the great expense that would attend their alter.ation to stone and brick, material unobtaiuable except by long transportation, we are of opinion that the non-coimpliatllce of the company in this respect with the letter of the printed circular of instructions ought to be considered as abundantly justified, especially as they have done the best that circumstances per-mitted to secure the results obviously aimed at by the public authoirities. Eqidpmnent.-In addition to the rolling-stock enumerated in the report of the formner commission, we observe, by statements made by the company and examination of its accoun Is, that, since the time of said report, there has been an addition to the sanme for the main line at the cost of $1,354,375.40 in gold coin. This additional stock shows not only a largeincrease of the business of the road, but also the liberal spirit in which its demands have been met. lMiscellavneows imnp-rovenlents: —Under this heading we desire to state what has been done by the company since the report of the former commission, and not recommended tlherein. Amlong these we have noted as the most important, the wharves, yard, and fieight buildings in San Francisco, grading and wharves in Mission Bay, designed for permanent depot-grounds, Oakland wharf, over two miles in length, with ferry-slips, and other slips to accommodate the largest shipping that enters the harbor, enabling fromr eight to ten ships to simultaneously load or discharge. Addition to shops in Sacramento, consisting of iron and brass foundery, 52 by 120 feet; copper and tinl shop, 52 by 70 feet; addition to blacksmrith-shop, 90 by 104 feet; extension of L of car-shop, 90 by 264 feet; extension of ruachine-shop, 100 by 198 feiet; -boiler-shop, 60 by 172 feet; extension of boiler-hotise, 34 by 51 feet; paint-shop, 228 by 70 feet, with five wings, four of which are 23 by 70 feet,.and one 22 by 44 feet; addition to boiler-shop, (0. by 60 feet; transfer-table, running whole length of wing of car-shop, 300 feet. All the (]above are built of brick. A large anmount of grading for shops and yard at Sacramento has also been done, some 20 acres having been filled to an average depth of 15 feet. For the better protection of the snow-shelds a fire-alarm telegraph, extending from Blue Cation to Truckee, has been erected the present season, with twenty-eight alarmboxes anid four alarm-gongs, located respectively at Blue Cailon, Emigrant Gap, Summit, and Truckee, at which places the fire-trains are stationed. In closing our enumeration of the above imlprovemlents we cannot forbear an expression of profound approval of the establishment of the comlpany's hospital for the sick and wounded disabled in its service. This institution is located in Sacramlento, and is a large and conmmodious edlifice, of good architectural proportions and finish, being of four stories, including the basement, and containing accommo(lations for eighty-fbur beds, or that number of patients at once. All the required appliances of a hospiral, with able medical and surgical attendants, are to be found here, the whole being under'the supervision of a skilltull superintendlent. The expense of maintenance is cheerfully borne by all the employ6s of the conmpany, including its officers, the contributions being only 50 cents each per month. All the patieuts who are injured while on duty in the actual servi(e of 1he company are allowed half wages until they are able to resume service. By the 11( sital-records it appears that a total of 7,255 cases have been treated since its first establishmennt, with only'97 imnstances of.death. A brief mention of such a noble institution maintained by a railroad corporation seems to the conlmmissioners to be required from them as illustrating the humanel spirit by which the cornpany has been guided, and which, they think, should in all similar cases be adopted. In lurther elucidation of the improvements of this company, we subjoin to. this rep)ort a statement showing the details and cost thereof, anmounting to $5,121,037.23, bince the date of the report of the former commission of October 30, 186'9, and up to PACIFIC RAILROADS. 147 October 1, 1874, further showing that the completion of their work under the requirements of the law poperly dates at the last-mentiolied( time, viz, October 1, 1874, and that they have expendle(l on these improvements $4,33d,387.23 more than the amount estimrate(l as necessary by the former commission. In conclusion of our report we exoress our unanimous conviction that the Central Pacific Railroad Company has fully carried out the requirements and intention of the law in all essential particulars, including stationary structures and rolling-stock, alnd in lan(l accommodation, and that the road is first class, and has cost olp to the date of completion, as shown by the company's accounts, $140,895,887.30. Respectfully submitted. EUGENE L. SULLIVAN; C ALVIN BROWN, JOE. W. DWYER, Commissioners. Hon. COLUMBTUS DELANO, Secretary of the Interior, Washington, D. C. Statement showing cost of work done on construction of main line of Central Pacific Railroad between October 30, 1869, and October 1, 1874. Ballasting and widening embankments.... 308, 000 00 Buildings, and coal-platforms, not including Sacramento shops......... 60, 256 69 Bridges, and lining tunnel 10.-......................-................ 141, 725 22 Masonry in culverts and retaining-walls..-........................... 30, 214 40 Wharves and buildings, Oakland and San Francisco...... 1,014 681 34 Snow-sheds and sow-fences.........292, 434 47 Corrugated-iron roofing for snow —sheds.-. —....-....... 134, 2d4 33 Extension of shops and grading, Sacramento..... 439, 174 87 Shop-tools and machinery — 222, 570 12 New rolling-stock, main line.-. —- -- —.......-... —. 1,354,375 40 Water-supply...................... — 60, 167 68 Changing line on Promontory, four miles.-............ 114, 360 45 Sidings on main line........................ —-.. —- 391, 784 b3 Filling trestles and correction of line at Deep Gulch.................. 187, 625 21 Additions to telegraph-line on mountains...............................11,716 75 Fire-alarm and telegraph line through snow'sheds.................... 10, 268 00 Inlprovenlents of (lepot-groun ds in Mission Bay.......... 241,490 87 Steamer Thoroughfare, (for car-ferry)............ 105, 906 60 5, 121,037 23 [IHouse Report No. 78, Forty-second Congress, third session.] AFFAIRS OF THE UINION PACIFIC RAILROAD COMPANY. FEEBRUARY 20, 1873.-Ordered to be printed and recommitted. Mr. JEREMIAH -M. WILSON, from the Select Committee (No. 2) on the Credit Mobilier, &c., made the following report, to accompany bill H. R. 4031: The select committee appointed under the resoluetion of the House of Januarg 6, 1873, to make inquiry in relation to the cffairs of the Union Paccific Railroad Company, the Credit Mobilier of A merica, and other matters specified in said resolution and in other resolutions referred to said committee now submit to the House thefollo-wing report as to a portion of the matters therein: By the statutes of July 1, 1862, and July 2, 1864, which, for the most of the purposes of this discussion, may be treated as a single act, Congress created a corporation to be known as the Union Pacific Railroad Company, with authority to construct and maintain a railroad and telegraph from a point on the one hundredth meridian of longitude west from Greenwich to the western boundary of Nevada Territory, upon a route and on the terms specified, there to connect with another road largely endowed by the Government, so as to form a continuous line of railroad from the Missouri River to the navigable waters of the Sacramento River in California, and thereby to unite the railroad s: stern of the Eastern States with that of California, strengthen the bonds df 1 48 PACIFIC RAILROADS. union between the Atlantic and Pacific coasts, develop the immense resources of the great central portion of the North American coontinent, and create a new route for conimerce from the Atlantic and Europe to the Pacific arid Asia. By an act passed July 3, 1866, the company was authorized to locate and construct its road fromn Omaha, in Nebraskla, without reference to the original initial-point, at the one hundredth mleridian. To aid in accomplishing these vast results, the corporation was clothed by the Governmeat with a proportionally vast endowment. The right of way through the public land, the Goveinment undertakinlg to remove all lndian titles for a space of two hundred feet in width on each side of its entire route; the right of eminent domain to appropri.ate necessary private land-,-pace for depots, turnouts, &c.; public lands to the amount of ten alternate sections per mile within the limits of twenty miles on each side of said road, were given to this corporation. It was further provided that upon the certificate of three commissioners, appointed by the President, of the completion and equipment of every section of twenty consecutive miles of said railroad and telegraph in accordance with the provisions of the act, the Secretary of the Treasury should issue to the corporation bonds of the United States of $1,000 each, payable in thirty years after date, with interest at the rate of 6 per cent. per annum, payable semi-annlually, to the amount of $16,000 per mile for a portion thereof, and $;B2,OO0 per mile for a portion, and $48,000 per mile for a portion. These bonds were to lbe a loan to the corporation. To secure their repayment, the act of 1862 provides that their issue shall, ipso facto, constitute a first mortgage on the whole property of the company. This lien was, by the act of 1864, subordinlated to a mortgage executed by the corporation to secure its own bonds for an amount equal to the amnount issued by the Governmient, as aforesaid. Pursuant to these provisions, the company has received from the Government bonds to the amount of $;7,236,51'2, and has issued its own bonds to the arnount of $27,213,000. The corporation has also received, by patents issued, 654,419 acres of the public lands, leaving about 11,345,580 acres, not yet patented, einmbraced in the grant. It has issued bonds, called land-grant' bonds, to the anmonnt of $10,400,000. These land-grant bonds are secured by a deed of trust executed to John Duff and Cyrus McCormick, covering all the lands embraced in the grant. It has also issued what are called income-bonds to the amount of $9,355,000. These -lol;ds ai e se(ulrd lby a p( dge of the inc( me of the road to thi ee trustees, Benjaniin E. Bates, John R. Duff, and P. Gordon Dexter. It has also issued stock to the armount of $36,762,300. It has also taken possession of and. is enjoying the land needed for its way, turnouts, stations, &c. It will thus be seen that all that the Government stipulated to do in aid of this enterprise has been done. The aid thus afforded by the Government was accompanied with precise directions as to the proceedings of those to whom it was intrusted. and Congress endeavored.to provide sufficient safeguards to secure the ftithful performance of their trust. It was provided that the capital stock should be paid in in money. In relation to this the act is emphatic and unmistakable. There were to be ten directors, each of whom nmust be the bona-fide owner of five shares of the capital stock. The act of 1862 provided that the shares should be of the par value of $1,000 each, of which not more than two hundreld should be owned by any one person. This was changed by the act of 1864, so that the shares might be held in small quantities, atid the par value was fixed at one hundred instead of one thousand dollars. Both acts provided that the stock should be actually paid in full in money, in assessments of not less than 5 per cent., at such intervals, not to exceed six mnonths, as should be determined by the directors. The interests of the Government were to be especially protected by five Government director s, appointed by the President, one of whom should be a member of every standing and special committee. Ainnual reports were required to be made to the Secretary of the Treasury, setting forth the nanles and residence of the stockholders and officers, the amount of stock subscribed, the amount of stock paid in, the indebtedness of the road, and its receipts. The claim of the Government t- a re-imbursement for the loan of its bondswas secured by a second mnortgage or lien up )n the road; by the obligation to apply at least 5 per cent. of the net earnings after the road is finished thereto; and whenever the net earnings of the road amount to ten per cent. of the cost, Congress reserved the riglt to legislate for the reduction of the fares, and, if unreasoiiable in arnount,, to fix anld establish the salie by law, and further reserved the power, having due regard to the rights of the corporation, to add to, alter, amend. or' repeal 1 h, act. The purpose of tile whole act was expressly declared to be' to promote the public interest atrld welfare by the construction of said railroad aind telegraph-line, and keeping the same in workilg-order, and to secure to the Government at all liules, but particularly in tinie of war, the use and benefit of the same for postal, military, and other purpo.s)ves." Your commnittee Ce111not doubt that it was the purpose of Congress in all this to pro-.vide fuor something more than a mere gift of so much land and a loan of so manuy bour!l PACIFIC RAILROADS. 149 on the one side, and the construction and equipment of so many miles of railroad and telegral)h on the other. Tlie United St,ates was not a mere creditor, loaning a sum of money upon mortgace. The railroad corporation.was not a mere contractor, bound to furnish a specified structure and nothing more. The law created a body politic and corporate, bourd, as a trustee, so to manage this great public franchise and endowment lhat not o ily the security for the great debt due the United States should not be impaire(l, but so that there should be ample resources to perform its great public duties in time of conmmercial disaster and in time of war. This act was not passed to further the personlal interests of the corporators, nor for the advancement of commlercial interests, norfor the convenience of the general pul)lic alone; but, in addition to these, the interests, present and future, of the Governllent, as such, were to be subserved. A great highway was to be created, the use of which for postal, military, and other purposes was to be secured to the Government " at all times," but particularly in tiume of war. Your committee deem. it important to call esipecial attention to, this declared object of this act, to accomplish which object the mumrficent grant of lands and lb)an of the Government credit was made. To make such a highway, and to have it ready at "all times," and" i articularly in time of war," to nmeet the demrands that, miight be made upon it; to be alde to withstand the loss of business and other casualties incident to war and still to perform for the Government such reasonable service as might under such circumstances be demanded, required a strong, solvent corporation, and when Congress expressed the object and granted the corporate powers to carry that object, into execution, and aided the enterprise with subsidies of lands anid b)onds, the corporators in whom these powers were vested and under whose control these subsidies were placed, were, in the opinion of your committee, under the highest moral, to say nothing of legal or equitable obligations, to use the utimost degree of good faith toward the Government in the exercise of the powers and disposition of the subsidies. Congress relied for the performance of these great trusts by the corporators upon their sense of public duty; upon the fact that they were to deal with and protect a large capital of their own, which they were to pay in in money; uplon the presence of five (lirectors appointed by the President especially to represenit the public interests, who were to own no stock; one of whom should be a member of every coWtiittee, stantding or special; upon commissioners to be appointed by thie Preside nt, wlio should examine and report upon the work as it progressed; in certain cases upon the certificate of the chief ellgiueer, to be made upon his professional honor; and, lastly, upon the reserved power to add to, alter, aumend, or repeal the act. Your coimmittee find themselves constrainedl to report that the moneys borrowed by the corporation, under a power given them, only to meet the necessities of the construction and endowment of the'oad, have been distributed in dividends amnong the corporators; that, the stock was issued, not to men who paid fo)r it at- par in mo,ney, but; who l)aid for it at not more than 30 cents on the (ollaLr in road-mlaking; that of the Government directors, some of themn have neglected their duties and others have been interested in the transactions by which the provisions of the organic law have been evaded; that at least one of the commissioners appointed by the Presi(lent has been directly bribed to betray his trust by the gift of $25,000; that the c iief engineer of the road was largely interested in the contracts for its coLnstruction; antl that there has been' an attemnpt to prevent the exercise of the reserved power in Congress by inducing influential memblhers of Congress to become interested in the profits ot the transactinq. So that of the safeguards above enumReratedl, none seenl to be left but the sense of public duty of the corporators. Your comrmittee, therefore, proceed to report the facts as they have been able to gather them from the evidence, relative to the manner in which the parties ill whoum these trusts were reposed have discharged them, and the consequences which have followned. By reference to the first section of the act of 1862, it will be seen that a subscription of $2,000,000, two thousand shares of $1,( 00 each, and the payment of tenl.per cent. thereon, was a condition-precedent to organization. The sumn of about $2,180,000 was' subscribed, and ten per cent. (about $218,000) paid in, and thereupon, in October, 1863, the company was organized by the election of a board of directors, &c. The first contract for the construct/ion of the road was made with one H. M. Hoxie, who seems to have been a person of little pecuniary responsibility. His proposal to build and equip one.hundred miles of the railroad and telegraph is dated New York, August 8, 1864, signed H. M. Hoxie, by H. C. Crane, attorney. It was accepted by the co(mpany September 23, 1864. On the 30th of September, 1664, Hoxie agreed to assign this contract to Thomas C. Durant, who was then vice-president and director of the Unrion Pacific Railroad Company, or such parties as he might designate. Onu the 4th of October, 1864, this contract was extended to the one hundredth meridian, an additional one hundred and forty-sixs and forty-five hundredths miles, the agreemehit fior 150 PACIFIC RAILROADS. extension being signed by Crane as attorney of Hoxie. Hoxie was an employd of the coamrplany at the time, and Mr. Crane, who signed as Hoxie's attorney, was Duranft's " comltidlential man,",as Durant himrself expresses it. By this contract and its extension, Hoxie agree(d to build two hundred and forty-six and forty-five hlllnidredths miles of road, to furnish money on the securities of the compally, to subscribe $1,000,000 to the capital stock, and he was to receive $50,000 per mile for the work. On the 11lth day of October,.1864, an agreement was entered into by Dnurant, Bushnell, Lambar(t, McComb, all directors of the JUnion Pacific Railroad Company, and G.ray, a stockholder, to take frolm Ioxie the assigtlmeolnt of his contr.ct, (which assiaignmentt he had previously bound himself to make to such pers mnq as Durant should desilrgnate,) and to contibunte $1,600,000 for the purpose of carrying the contract out. T; is Hoxie contract and its assignment were a device by, which the persons who were the active mhanagers and controllers of the Union Pacific Railroad Company caused said corporation to make a contract with themselves for the construction of a portion of its road, by which also they got po-session of all the resources which it would be entitled to by the completion of said portion, and by which they evaded, or sought to evade, the requirement that the capital stock should be fully paid in in money, by substituting for such payment a' fictitious or nominal pay.mrent in road buildingi and equipment, each share being treated as being worth much less than its par value. That this was the substance of the transaction, will niore'fully appear when we come to speak of a subsequent arrangement of the same na,ttre, but on a larger scale. Tlhat in makinig;this contract the interests if the Union Pacific Railroad Company were utterly dlisregarded, your commnittee do not dlonbt. That it was deliberately done we do not hesitate to believe. That itelief is founded upon the following summary of the evidence, in addition to the facts heretofore stated: Peter A. Dey, esq., then the engineer-in-chief, testifies that before this contract was mad(e lie had surveyed and estimated the.one hundred miles embraced in it, and that lupon the full estimate he ne ade the cost not to exceed $30,000 per mile; that after this Mr. Reed, an agent and director of the conmpany, caime theie and directed him to make a larger estimate, putting heavy eninlankmients where none were required, whihll he did, making an estiniate of about $50,000 per mile. When the Hoxie contract was submlittel to himojhe objected to it, and when he found that it was to be executed and the work done under it, lie resigned his position as chief enigineer, as appears from the 111owing written resignation and private letter addressed to the president of the company: "ENGINEER'S OTFICE, UNION PACIFIC RAILROAD, "'Omaha, December 7, 1864. " DEAR Sin: I hereby tender you my resignation as chief engineer of the Unioc Pacific Railroad, to take effect December 30, 1864, one year from the date of lily a)pp)intment. I am induced to delay until that tiiiie that I might combine the results oif surveys of the present year and present them to the company and to myself in a sat sfactory manner. My reasons for this step are simply that I do not approve of the contract miade with Mr. Hoxie for building the first hundred miles from Omaha west, and I do not care to have my name so connected with the railroad that I shall. appear to indorse this contract. " Wishinig for the road success beyond the expectation of its members, I am, respectfully, yours, "PETER A. DEY. " Hon JohIN A. Dix." Mr. Dey further testified as follows: "Question. Did you send the letter of which this is a copy to General Dix?-Answu er~ I did. " Q. Was your resignation accepted?-A. Not that, I know of. "Q. Did you. write any other letter to General Dix?-A. On the same day that I wrote the letter I have just read to you, I wrote and inclosed in the same envelope the followimig: "OMAIIA, December 7, 1864. "DEAR SRl:'With this I send you rmy resignation as chief engineer of the Ilnion Pacific Railroad Coinpany. My reasons I have given. I received the contract nearly'a mouth ago. When I first reaid it, I felt that it was made against my known views, and I could not be held in any measure responsible for it, but it has since been a con*stantly-recurring subject of thought to me, and I am not now satisfied that I shall be able to acquit myself of all blamiie if I blecomie an instrument of its execution. Yon'know, the history of the M. and M. road, a road that to-day could be running to this.point if its stock and bonds only represented the amount of cash that actually wen t into it. MS views of the Pacific Railroad are perhaps peculiar. I look upon its mainagers as trustees of the bounty of Congress. I cannot willingly see themr repeat the PACIFIC RAILROADS. 151 history of the M. and M. by taking a step in the incipiency of the project that will, I believe, if followed out, swell the cost of construction so munch that. by the time the work reaches the mountains the representative capital will be accumulated so muIch that at the very tilne when the company. will have need for all its resources, as well of capital as of credit, its securities will not be negotiable in the market. From my boyhood I have associated Mr. Cisco and yourself with Mr. Bronson and Mr. Flagg, men whose integrity, purity, and singleness of purpose have made theIn marked len in the generation in wlii(ch they lived. Of course, my opinlioI remaillns ntchanged. You are doubtless uninformed how disproportionate the amount to be, paid is to the. work contracted for. I need not expatiate Iupoil the silcerity of my course when you reflect upon the tac;(t that, I have resigned the best position in my profession this coantry has ever offered to any man.." With respect, "' PETER A. DEY." Thle parties above named having procured the assignment to themselves of this contract, were liable individually as plartners for all (lbts incurred inl the joint undertakil)g. They therefore took step)s to procure corporate powers as a shield against such risk, and secured for that, purpose the colltrol of a corporation afteorward kllown as the Credit Mobilier of America,. The followin(g is a. brief history of the corporation: On1 the Ist d(ay of November, 1859, the State of Pennsylvania granted a charter for the incorporationl of the Pennsylvania Fiscal A(rency. That charter gave po.wers of so extraordinary a character that your committee deenl it important to insert it here in full. It is as follows: "An act to incorporate the Pennsylvania Fiscal Agency. " SEcroN 1E Be it enacted by the senate acnd house of representatives of the commonwealth of Pennsylvtanlia in qeneral aesmbllq met, ad,, it is herebqI enacted by/ the aclthority of the sanme, Th[at SaLnmel J. Reeves, Ellis Lewis, Garrick Maldlorv, Daff Green, David R. Porter, Jacob Zieglar, Charles M. Hatll, Horn R. Kneass, Robert J. Ross, William T. Dougherty, Isaac Hurus, C. M. Reed, Willialm Wolrkmla, Asa Packer, Jesse Lazear, C. S. Kaufflman, C. L. Ward, and Henry M. Fnller be, and theys are hereby, appointed comrnissioners to receive subscriptions and to organize a company, by the narme and style of the Pennsylvania Fiscal Agenucy;' and the owners of the shares herein authorized to be issue(l, when the conmp)ny is org(aized, shall, under the name and style afor.esaid, have perpetual succession; and may purchase, hold, and acquire, by any lawrful means, estate, real andl personal, and the same mrlly use, sell, lease, let, muortgage, transfer, and convewy, anld otherwise dispose of; and may sue and.be sued, plead and I)e impleaded, contract and be contracted with, and have and use a common seal, and the same may change at pleasure; and may make by-laws and regulations for the government of tlheir affairs, anl1 may have autil use all tile rigrhts, powers, and, privileges which are or may be necessary for theam to have as a company incorporated for the purposes herein sta tedl: Provided, That the said comlpany shall not at any time hold in this State miore land than may be requisite for the convenient transaction of their business. "SPEc. it. Tlhat the puirpose of this act is to organize an incorporated company, and to authorize them, as such, to become an tgency for the purchalse and sale of railroad: bonds and other securities, and to make advances of money and of credit to railroad and other iniprovement conmpauies, aicl to aid in like mnnrner contractors anl mranufacturers, and to authorize, thenm as a company to make all requisite contracts, arnd especially to receive and hold, on deposit and in trust, estate, real and personal, includ(ing the notes, b)o}nds, obligations, and accounts of States, and of individuals, and of companies, and of corp, rations, and the same to purchase, colleet, adjust, and settle. and also to sell a:nd dispose thereof in any market in the United States, or elsewhere, without proceeei: ig in law or in equity, and for such price and on such terins as may be agreed on btetween them and the parties contracting with. thenm, and also to indoirse and guarantee the payment of the bonds and the performance of the obligations of individuals, of corporations, and of comhpanies. " Svc. 3. That the capital stoek of said company shall consist of fifty thousand shares of $100 each; and the commi-sionets aforesaid, or a majority of them, may, in person or by proxy, open books of subscription at such times and places as they deem expedient,, and when five thousand shares shall have been subscribed, and five per cent. thereoni shall have beei paid ini, the shareholders may elect five or more directors; anti the dlirertors of the said company, when. it shall have been organized, may, anid they are hereby authorized and omnprowerel to have and to exercise, in the namne and in behalf of the company, all the rights, powers, and privileges which are intended to be he-rmi ilivenI: ~ 1,,l nIa;y, fromn title to time, increase their resources by borrowing money on a ple(lde of their property, or without su ch pledlgr, or by new subscriptions, not excceding fifty thousand shares; and any citizen or subject, company or corporation, of 152 PACI:FIC RAILROADS. any State or connty,'may subscribe for, purchase, and hold shares of the said company, witIh all the rights and subject only to such liabilities as other shareholders are subject to; which liabilities are no mIore than for the payment to the company of the sums due or to become due on the shares held by them; andl wlen new subscriptions are made, the shares may be issued at par or sold for the benefit of the holders of the,shares heretofore issued. "SEC. 4. That the hy-lawvs shall prescribe the manner in which the officers and agents of the company shall be chosen, and designate their ponwe s and duties, and their terms of service and comnpensation; and the principal office of the company shall be in Philadcelldlia, but the directors, under such rules and regulations as they nay prescribe, mayv establish branches and agencies in Europe and elsewhere, and ma'y deal in exchange, foreign and domestic; ut, the said company shall not exercise tire privilege Uf banhkilg, nor1 issue their own notes or bills to Ibe used as baiilk-notes or as currency. 9' Sp:c. 5. That three-tifths of the directors of the said comlpany shall be citizens of the United States, and the majority of the whole shall reside in tills State. " SEc. 6. That the said company'shall pay to the S ate treasurer, for the use of the State, a bonlus of one-half of one per cent. on the sumr requisite to be paid in previous to the organization, payable in four equal annrual installlments, the first payment to be 3made in one year after the payment on the capital stock shall be male, anl also a like bonuis on all subsequent paynments on account of the capital stock,:f the salid company,, or any increase thereof, payable in like rmanuner; all(d, in addition to such bonius, shall pay such tax upon dividends exceeding six per cent. per annum as is or may be imposed by law.:' ". C. A. LAWRENCE. "Speakcer of lhe House of Representatives. JNO. CRESWELL, Jit., "Speaker of the Senate. "Approved the first day of November, anno Domini one thousand eight hundred and fifty-nl ine.'"WM. F. PACKER." On the 3d day of March, 1864, Thomas C. Duraunt, vice-president of the Union Pacific Railroad Coi-lpany; purchased this charter for the purpose of using the corporation for the construction of the Uni,) Pacific Ralilhroad. 011 the 26th day of March, 1864, by an act of the legislature of the State of Pennsylvania, the namue was changed to " The Credit Mobilier of America.." By the terms of purchase of the charter, an agency vas to be established in the city of New York, and( when the subscription was nade it was upon the cotnditiou that the full povers of the board of directors should be delegated to the New York agency, and that a railway'bureau should be established at said agency, of five managers, three to be (lirectors of the company, (afterward changed to seven rmanagers,)who sh(ould have the management of railway contracts, subject to the approval of the presildenlt. By these mneans this Pennsylvania corporation, so far as thel management of its affairs was cancerned, substantially exl)atriated itself, and, clothed with the extraordinary power s acquiredl fromn the State of Pennsylvania, it proceeded to take upon itself the control of the Union Pacific Railroad Comnpany ill the nmanner follo A ing: It purcllased the outstanding stock of that corporation, amounting to about $2,180,000, on which about $21,000 liad been paid to the railroad comrpany, the Credit, Mobilier payingo for this stock the amount already paid. At the tirlre of this purchasie the shares q~ Union Pacific stock were $1,000 each. After the act of 1864 was passed these shares were canceled, and a re-issrue was made in shares of $t00 each. The re-issle. was nmade to the stockholders of the Credit Mobilier, and by this process the stockholders of the two corporationrs were made identical. By this Irearis the persons wh ) under the guise of a corporation that was to lake the contract to build the road held comuplete control of the corporation for which the road was to be hrilt. Threse things accomplished, they took charge of constrrction under the Hoxie contract, and the portion of the road lying between Owmaha and the one hundFedth moridian was constructed under it. This contract cost the Union Pacific Railroad Company. —...... $12, 974, 416 24 It cost the Credit Mobilier..... 7,806, 183 33 Profit.....-... --.... —--—................. 5, 168,2:3:3 91 This profit is a profit in stock and bonds estimnated at par. Their actual value will appear hereafter. TlIe next event in this history is as follows, and it is stated here to show the animus of those who were managing this great trust: The Hoxie contract had been completed, fitnishing the road to the one hundredth meridian, a distance of two hundmred and forty-six and forty-five hurrndredths umiles. An agreement was then made, (November 10, 18i6,) by Thomras C. Durmant, vice-president of the Union Pacific Railroad Comnpany, with a Mr. Boorner, for the construction of PACIFIC RAILROADS. 53 one hundred and fifty-three and thirty-five hundreodths miles w:)st from th11 one hundredth lmeridian. By the terms of this agreement Bomer was to be paid $19.500 per mlile fior that portion between the one hundredth meridian and the east bank of the North Platte, and for that portion lying west of the North Platte within the limits of the agreement $20,000 per mile; the bridge over the North Platte, and station-buildings, equipment., &c., to be an alditional char(e. This contract was never ratified by the company, bnt under it the work progressed, and fifty-eig'ht miles of road had been completed and accepted by the Goverlnentt. The books of the company fail to sh,)w wh it this fifty-eirht miles hadl cost the coinpany; iut from the best evidlence thalt could b:, procarerl, your committee believe that the cost had not beten to exceed 8$7,500 p -r mile for construloion andl equiprmeit, the excess over the contraect price beilgr f,)r stationl-houses, eqluipment, &e. Inasrnchl as the charter required that the stationl-houses, eqllipment, &c., shoull be butilt alad furnished before acceptance by the Government, and inaslmuchl as the records of the Department-show that the fifty-eight miles had been accepted, your committee feel warranted in finding that this had beeni done, and teat the cost of the whole wavs not to exceed $27,500 per mile. But notwithstanding this, on the 5th day of January, 1857, the board of directors by a resolution extended the H )xie contract over this fifty-eight miles of then completed road, thereby proposing to pay'to the Credit Mo)bhilier the sum of $22,500 per mile for this fifty-eigh;t miles, amounting to the surn of $1,315,000, without any consi(teration whatever. The following( is the resolution of date January 5, 1867: "Resolred, That the Union Pacitic Railroad Company will, and do hereby, consider the'Hoxie contract extended to the point already completed, namely, three hundred and five miles west from Omaha, and that the officers of this comlpany are hlereby authorized to settle with the Credit Mobilier at $50,000 per muile for the additional fiftyeiaht m1iles." That it was. proposed to give the Credit Mobilier this profit, if that is the propher word t~o be used in such a connection, is verified by the fact that subsequently the suml of $1,104,000 was paid to the Credit Mobilier on account of this fifty-eight miiles, for the construction of which it never had even the semblance of a contract. Of-this $L,104,000 further mention will be made hereafter. Against this proposition Dr. Durant filed the following protest: " To the board of directors of the Un'ion Pacific Railroad Company: "GENTLErIEEN: I protest axgainst the passage of the resolution appearing on your minutes as passed January 5, 1s67, )purporting to treat andl consi(ler the Hoxie contract as extended to the point already completed, namely, three hundred and five miles west of Omaha, and authorizing the officers of the company to settle with the Credit Mobilier at $50,000 per mile for the additional fifty-eiglrt miles. Said resolution was moved and adopted while I'was absent froml the imeeting of the board on necessary business of the company. I make this protest on the ground that said fifty-eight miles has been constructed at much less cost, than $50,000 per mile, and has been accepted by the United States Government as complete, and that it was not constructed under the Hoxie contract, and that a cons.iderable portion of the cost thereof had been paid by the company before the adoption of said resolution, and that said resolution does not provide any compensation or advantage to the company by requiring stock subscriptions, or stipulations for the construction of additional portions of the company's railroa(l, or by any other means or stipulations whatsoever, but leaves the company to sustain a very great and unrecuited loss. " Respectfully, yours, "THOMAS C. DURANT." Dnrant afterward procured an injunction against this extension of the Hoxie contract over this fifty-eight miles. The next step was on the 24th dc,.y of June, 1867. At this date there had been completed and accepted by the Government ninety-eight amid a quarter miles of road west of the one hundredth meridian, at a cost to the railroad company of about $27,500 per mile. Mr. J. M. S. Williams thenl proposed to build and equip two hundred and sixtyseven and fifty-two hundredths miles wvest fronm the one hundredth meridian at $50,000 per mile, amnd his offer was accepted. At the same time he proposed to the railroad bureau of the Credit Mobilier to assign that contract, if accepted, to that corporation. Here was another attempt to give the Credit Mobilier a profit of about $22,500 per mile on constructed and accepted road, this time on ninety-eight and a quarter imiles. Mr. Williams was asked this qulestion with reference to this proposed contract: " Q. Then what purpose had you to propose to build a road that had already.been built by the company at a cost to them of less than the amount mentioned in your proposit.ion — A. We were identical in interest. The Credit Mobilier and the Union Pacific Railroad Company were the samne identical parties. We were buildingr it for ourselves, by ourselves, and among ourselves. There wxas not $20,000 outside interest in it. 154 PACIFIC RAILROADS. " Q. Was this understood at the time?-A. Yes, sir. It was understood that we were dealing with ourselkes to get the colltrol in the righllt hanlds." The consummation of this project was defeated by legal proceedings instituted by D)urant. Construction was continued. Darant hal declared that the Credit Mobilier should never have another contract. Then a new device was resorted to, which will be explained in what follows. On the 16i h of Aunnst, 1867, the " Oakes Ames contract" was entered illto. At, this time one hundred and fhirty-eight miles of road had been completed and acceptedl west, of the one hunldredth meridian, at a cost of ahout,$27,000 per mile. The portion of' the road embraced in this coutract began at the one hundredth meridian, and extended westwardly six hundred and sixty-seven miles, and, by the ternms of the contract the railroad company was to pay as follows: For first 100 miles, $42,000 per mile.$................................... $4, 200, 000 For llext 167 miles, 45,000 per mile..................................... 7,515, 000:For next 100 miles 96,000 per mile 9, 600, 000 For next 100 miles, 80,000 per mile............................ 8, 000, 000 For next 100 imiles, 90,000 per mile 9, 00(), 000 For next 100 imiles, 96,000 per mile.-..................... 9, 60t0, 000 667 - 47,925, 000 At the time this contract was made there was an understanding that it was for the benefit of the shareholders of the Credit Mobilier. Mr. Amles was only the medium throughl whom these shareholders should receive the benefits accruing from it. By this.ontract Armes was to be pmaid nomninally in cash, blt the actual character of the transaction is disclosed by thle following clause inl the agreement, ntamely: "Eleventh. Panyments hereon shall be made to the party of the second part, hisheirs, executors, administrators, or assigns, in cash; but if the Government bonds received.by the company cannot be converted into inoney at their par value net, and thle firstmortgage bonds of the company at ninety' cents on th'e dollar net, then the said party of the second part, his heirs, executors, administrators, and assigns, shall be charged hereon the difference between the amount realized and, the above-named rates; provided the first-nortgage bonds are not sold for less than eighlty cents on the dollar; and if there shall not be realized from the sale of such bonds an amount sufficient to pay the party of the second part, his heirs, executors,,administrators, or assigns, for work as stipulated in this contract, and according to the terms thereof, then such deficiency shall from time to time be subscribed by said party of the secondl part, his heirs, executors, ad(ministrators, or assigns, to the capital stock of said company, and proceeds of such subscriptions shall be paidcto said party of the second part, his heirs, executors, administrators, or assigns, on this contract." This contract was signed on behalf of the railroad company by Oliver Amnes, as president pro tenmlore, who was the brother and business partner of Oakes Amles; it was'approved by Oliver Ames, C. S. Bushnell, Springer Harbaugh, and Thomas C. Durant, as executive committee of the railroad company, all of whom, exceptbig 1Harbaugh, were interested in the Credit Mobilier. Pursuant to the previous understanding, that this contract was to be for the benefit of all the shareholders of the Credit Mobilier, on the 15th day of October, 1867, it was assigned by a tripartite agreement to seven trustees, naurlely, Thomas C. Durant, Oliver Ames, John B. Alley, Sidney Dillon, Cornelius S. Biishnell, Henry S. McComb, and Benjamin E. Bates, ll stockholders in the Union Pactfic R;alroad Company and in the Credit Mobilier, Oliver Ates occupying the anomalous position of president of the railroad company making the contract, and one of the parties to whom. it was assigned, and all of them were directors of the railroad company. The beneficiaries of the contract under this assignment are shown by the following extract, namely: "Fourthly. To hold all the rest and residue of the said proceeds and avails for the use and benefit of such of the several persons holding and owningr shares in the capital stock of the said Credit Mobilier of Amnerica on the day of the date hereof, in proportion to the number of shares which said stockholders now severally hold and own, and for the use and benefit of such of the several assignrees and holders of such shares of stock at the times herein set forth, for the distribution of said residue and remainder of said avails and proceeds, who shall comply with the provisions, conditions, andt limitations herein contained, which are on their part to be coemplied with. -" Fifthly. To pay over, on or before the first Wednesday of June and December in each year, or within thirty days thereafter, his jiust share and proportion of the residue and remainder of the said proceeds and avails as shall be jiustly estimlated by the said trustees to have been made and earned as net profit on saidl contract dluring the preceding six months, to each shareholder only in said Credit Mobilier of America who, being a stockholder in the Union Pacific Railroad, shall have made and executed his power of attorney or proxy, irrevocable, to said several parties of the secoind part, their PACIFIC'RAILROADS. 1,55 silrvivors and successors, empowering them, the said parties of the second part, to vote Upon at least six-tenths of all the shares of stock owned by said shareholders of the Credit Mobilier of America in the capital stock of the Union Pacific Railroa:d Company on the day of the datehllereof, and'six-tenths of any stock in said Union Pacific Railroadl Company he may have received as dividend, or otherwise, because or by virtue of having been a stockholder in said Credit Mobilier of America, or which may appertain to any shares in said Union Pacific Railroad Company which had been so assigned to him at the time or timnes of the distribution of the said profits as herein pirovi(l.d; and this trust is made and declared upon the express condition and limitation that it shall not iniure in any manner or degree to the use or benefit of any stockholder of the Credit Mobilier of America who shall neglect or refuse to execute and deliver unto the said parties of the second part his proxy or power of attorney, in the manner and for the purpose hereinbefore provided, or who shall in any way, or by any proceeding, knowingly hinder, delay, or interfere with the execution or perforniauce of the trust and conditions herein declared and set forth. It will be seen by this that, in order to secure any of the proceeds of this contract, the stockholders of the Credit Mobilier who owned stock in the Union Pacific Railroadi Company were comnpelled to give an irrevocable proxy to these seven trustees to vote in all cases six-tenths of their railroad stock. The stockholders in the two corporations were substantially identical. These proxies were executed and delivered to these.trustees; they represented a majority of the stock, and by this means the entire control of the railroad company passed (nut of the blands of the stockholders of the latter company and was reposed in these seven trustees, and for two years they exercised the power thus acquired. The lanaagernent of the affairs of the railroad company nluring the execution of the work under this contract (and the Davis contract hereafter to be treated of) was under the control of the bleneficiaries thereof. These trustees, having acquired this power by njeans of these proxies, were manifestly not especially looking after, or proposing in the future to very carefully guard the interests of the Union Pacific Railroad' Colmpany. If any one doubts that this railroad company's interests were to be disregarded and the interests of the contractors vigilantly cared far, tliat doubt must be speedily dispelled by reading the foliowing agreement entered into by these trustees the next day after the Oakes Ames contract was assigned to them. It was as follows:'Meamorandumn of agreeament made this 16th day of October, 186(7, between Thonlas C. Durant, Oliv2er Ames, Johe, B. Alley, Sidniey Dillon, Corneliles S. Bushnell, Henery S. McConlb, and Berjaeian E. Bates, witness8th as follows: " The undersigned, being the owners of shares and holders of certain proxies of the shareholders of the Unio!n Pacific Railroad Company, anti expecting hereafter to hold other shares and proxies for other shares therein, fir the protection of our Imlttal interests and the interests of our constituents, do hereby mutnally agree, each with the other, at any and every election of directors of the Union Pacific Railroad Company, to vote upon the shares of stock then standing, in oir own namles respectively, and upon such shares as we hold or mllay hereafter hold proxies therefor, for such persons as directors of the said Union Pacific Railroad Cormpany as may ble nominated at or before each annual stockholders' meeting of said company, by a majorityof the then existing board of directors. not appointed by the Presidlent of the United States, and no others. And on failure of such nomination for any reason by the said existing board of the Union Pacific Railroad Company, we then agree to vote fr the re-election of the elected members of the then existing board. It, is further agreed that, in case any one or more of the parties hereto fails or neglects to perform and stand to any of the a(greelnents and covenants herein contained, that he shall not be entitled to or claim any benefit or right under or by virtue of any of the trusts or agreemenllts contained inl a certain nlenlorand(lun of agreement heretofore rmade and concluded by and between Oakes Amles, of North Easton, Massachusetts, party of the first part, the parties hereto parties of the second part, and the Credit Mobilier of America, a party of the third part, but the said shares arid proportion of the said party so in default, shall become the property of and be divided among the said several remaining parties, for whose benefit said trusts in said agreement are declared. "In witness whereof the said parties have hereunto subscribed their names, this day and year first above written. "OLIVER AMES. "JOHN B. ALLEY. " CORNELIUS S. BUSHNELL. "SIDNEY D)ILLON. " H. S. McCOMB. " THOMAS C. DURANT. "B13. E. BATES. "Signed, sealed, and executed in presence of — "CHARLES BELL." 156 PACIFIC RAILROADS. Comment upon this is unnecessary. It is plain that the men who made this contract on the part of the Union Pacific Railroad Company, thronu(h Oakes Ames with thenmselves, were determined to hold the control of the railroad company until their purposes were accomplished. In addition to all this, your committee find that the wife of the engineer-in-chief, General Granville M. Dodge, who was appointed to succeed Mr. Dey, whose letter of resignation has been given, was the owner of one hundred shares of stock in the Credit Mobilier, which was issued in her name when the capital stock of that corporation was increasedl fromn $2,500,000 to $3,750,000. This stock was paid for originally by John Duff, and General Dodge, was written to by Mr. Ham, secretary of the Credit, Mobilier, to foriward $10,000 to re-imburse Duff. Whlether Dodge paid. for this stock with money of his own, or whether it was paid for with nioneys of his wife, is of little consequence. Whether it was the one way or the other, it placed him in a position where his pecuniary interests were adverse to the interests of the railroad company he was representing in this most vital capacity. In making this contract, the stock of the Union Pacific Railroad Company to be subscribed for bly the contractors, in pursuance of the eleventh section, above quoted, was deemed worth not more than thirty cents to the dollar, and the price of the work was increased accordingly. If it had been treated as worth par in cash, the price of the work would have been lower by the amount of at least 70 per cent. on the par value of so mulch of the stock as was to be subscribed for. The subscription was never paid in in money, but checks were taken for.a.mounts due on construction, and these checks were passeld back by the contractors to the railroad company in payment for stock. The effect of this is stated by Mr. Oliver Ames in his testimony, as follows: "By Mr. HOAR: "Q. When these subscriptions were made by the Credit Mobilier trustees to the capital stock of the Union Pacific R Ailroad Comp;any, what was the process? What happened at the time of the payment? Was there any absolute payment in cash on these subscriptions, or was it a mere payment in road-making?-A. It was a payment in road-laking. We paid cash for building the road, and then we took stock from the companly in payment of the expenditures. " Q. But you would not have considered that stock as equivalent to so much cash in payment for your expenditures?-A. No, sir; we would not.' Q. Therefore you did not consider the amount of expenditure in road-building which you plai(l in for the'stock as equivalent for so much cash, did you? —A. No, sir; I would' have been loth to have taken it. "Q. Then, so far as the subscriptions of the Credit Mobilier were concerned, there was Iio cash. payment for subscriptions except so far as this might be considered eqnivalent? —A. We actually paid cash. The Union Pacific Railroad Company agreed to pay to contractors so lmuch moioey; when the contractors came to us with their bills, we, the Union Pacific Railroad Company, if we had not bontls to pay them, paid the balance in stock; we sold our bonds and paid in cash as far as it would go, or we paid them in bonds, lwhich, by the conltract, they were obliged to take; and the balalce due on the contract we were obliged to pay in stock. "Q. My question is whether $100 ill stock, so subscribed for and so paid, was deemed by either party to the transaction as equivalent to $100 in cash.-A. By the Union Pacific Railroad Company of course it was equivalent to $100, but the man who took it would have been very glad to sell it for thirty or forty dollars. Q. As contractors you got cash, bonds of the company, and Government bonds for buildingc the road?-A. Yes. "Q. You did not regard that, in paying you for building the road, $100 in stock was worth its face to you?-A. No, sir. "Q. You expected to get something else besides that $100 in stock as your $100 worth on your contract?-A. Yes. The stock was really not worth to the contractor who took it at' par by any means, because it could be always bought in the market as low generally as from thirty to forty dollars. " Q. Then, if t~he $100 in stock was only worth about thirty or forty dollars to the contractor to whom it was paid, in proportioning what he rendered to the company between what was given as an equivalent for its stock and what was given as an equivalent, for its Government bonds, and what was given as an equivalent for its own firstmortgage blonds, he did not render to the company $100 in va,lue for every $100 in stock, did he?-A. No, sir. "Q. Was there any actual going through the ceremonial of paying in cash on those subscriptions to the treasurer of the Union Pacific Railroad Company?-A. Yes, there was always a check given. "Q. But the money never got into the treasury of the Union Pacific Railroad Company, I suppose?-A. The Union Pacific Railroad Company gave the trustees a check fior the amount fldue, and the trustees turned over that check in payment to the Union Pacific Railroad Company for stock. PACIFIC RAILROADS. 157 "Q. There never was any interval between the payment of this check for stock and handing of it over again in payment of the contract? —A. Probably not. "Q. When you made, in behalf of the Union Pacific Railroad Company, the contract with Mr. Oakes Ames as contrator, you expected that the transaction which you have now described would be the substance of the transaction that would take place, did you not?-A. Substantially." This contract extended over one hundred and thirty-eight miles of road completed and accepted. No work was done under it until after its assignment. That portion already completed had cost not to exceed $27,500 per mile, and by embracing this one hundred and thirty-eight miles in it, these trustees derived a "' profit," if such a term is admissible in such a connection, which enabled them to make a dividend amlong the stockholders in less than sixty days after the assignment, namely, on the Pith of December, 18.67, as follows: Sixty per cent. in first-mortgage bonds of the Union Pacific Railroad Company, $2,244,000'; sixty per cent. in stock'of the Union Pacific Railroad Comnpany, $2,244,000. This was mainly, if not entirely, derived from the excess of the contract-price over what the one hundred and thirty-eight miles had cost. The trustees proceeded to construct the road under this contract, and from a balancesheet taken from the books it appears that the cost to the Railroad company was.$5.............. $57, 140, 102 74 And the cost to the contractors was. —..-..- ----.. ——. —- ---- 27, 285, 141 99 Profit......29, 854, 141 99 The nature of this profit, as in case of that on the Hoxie contract, will appear hereafter. The next step in construction was under what is known as the DAVIS CONTRACT. This was a contract made with J. W. Davis, a man of but little, if any, pecuniary ability, (and not expected to pertborm the contract,) for the construction of that part of the road beginning at the western terminus of the "Ames contract," andl extending to the western terminus of the road, a distance of one hundred and twenty-five andtwenty-three hundredths miles. It was upon the same terns as the-Ames contract, and was assigned to the same board of trustees. Under it the residue of the road was constructed, and, from a balance-sheet taken from the books of the railroad conmpany, it appears that it Cost the railroad company. —... $2......... 23, 431, 768 10 And from a balance-sheet taken from the books of the trustees, that it cost the contractors ----—. —.....................-..-......... —. 15, 6'29,633 62 Profit........................................... 7, 802, 084 48 Your committee present the following summary of cost of this road to the railroad company and to the contractors, as appears by the books: Cost to railroad company. Hoxie contract...........-...... $12, 974, 416 24 Ames contract.....-..-............. —. 57, 140,102 94 Davis cointract..:.... -..-.3............. 23,431,768 10 Total....................................................... 93, 546, 286 7 28 Cost to contractors. Hoxie contract. —... ----—..... —...-. $7, 806, 183 33 Ames contract....................................... 27,285, 141 99 Davis contract.- -.... -----------—. —----—. —-... 15, 629,633 623 - 50, 720,958 94 42, 825,328 34 To this should be added-amount paid Credit Mobilier on account of fifty-eight miles........................... 1,104, 000 00 Total profit on construction................................... 43, 925, 328 34 The balance-shel-ets, from which ht e foregoing results have been obtained, were made out by Mr. Crane and Mr. Ham, accountants familiar with the books and with most of 158 PACIFIC RAILROADS. the transactions. Your comnmittee have earnestly endeavored to get the exact cost of the ioad to the conmpany and to the contractors; and if they have failed, it is becaatse those who should know, and have had the opportunity to inforin the commnittee, hve failed o10 give the information. The books have beetl kepl in such a way, and the transactions have been of such a cliaracter, as that their true nature has been very much disguised. It is a matter of no little importance to know what the cash profits of this construction have been, and in this connection the following summary is presented on that sulbject. The attention of Mr. Hamn was called to tl!e fact that the balance-sheets above allunded to showed an aggregate profit on the Amles and Davis contracts of $37,657,0935.43, and he was askted the question how much of it was money, how much bonds, and how much stock. His answer gave the following exhibit: $3,777,000 first-mortgage bonds, at 90................................... $3, 399, 300 $4,400,000 certificates for first-mortgagte bonds, afterward converted into incoime-bionds, at.................................................... 4, 425, 000 $5,841,000 incoime-bonds, at 60 -.3............................, 486, 600 $24,000,000, stock Union Pacific Railroad Company...................24, 000, 000 $2,346,195 cash................................ 2, 346, 195 Tutal........................................................... 37,657,095 From this it will appear that in making up this profit all the securities are estimated at their cash value, except the stock, which is estimated at par. This shows that the profits on these two contracts areBonds, (cash valne)................ $11,310,900 00 wetyour million stock, at 30................................... 7, 200, 000 00 Cash..........-... —--- -—...........-.... - 2,346,000 00 20, 856, 900.00 The profits on the Hoxie contract, as before stated, were $6,272,232.71. Treating all of this as stock, except $1,125,000 of first-mortgage bonds, divided as hereinafter stated, the profits, cash values on this, would be as follows: $1,12,,000 first-mortgrage bonds, at 85...3...................... 965, 250 00 $5,147,'232.71 stock, at 30.-................................ —- -- --- - 1,544, 169 81 Total cash profit................................'23,366, 319 81 In making this calculation the stock is placed at thirty cents, because that is the value the parties have placed on it. If all the profits made have been divided, the dividend account should correspond with the amount of profit above stated. Bat it does not correspond,. and whether the failure to correspond is attributable to inaccuracy as to the amount of profits or to disguises in making divisions, the House can j udge in some degree from the facts hereinafter set fort,h. The fi;llo.min(g are the dividends as appears in the evidence. First, by Credit Mobilier results of Hoxie contract: Thle Credit Moblier on the day of January, 1867, increasel its capital stock from $2,500,000 to $3,750,000, and for each $1,000 of additional stock taken, there was distribnted to the subscriber a first-mortgage bond of the Union Pacific Railroad Company of $1,000. In this way there was divided $L,125,000 in first-mtortgagre bonds. Then, on the day of --—, 1867, there was a dividend made of 12 per cent. (6 per ceilt. for each of the years 1866 and 1867) in stock of the Union Pacific Railroad Company, at 30 per cent. of its par value This would amount to $1,500,000 stock par val ue. These two amounts aggregate $2,750,000. But the balance-sheet shows a profit to the Credit MobilierOn the 1loxie contract of............................. $5, 168, 232 91.Add amount received on fifty-eight, niles........ 1,104,000 00 Total................................. 6, 272, 2:32 91 This shows a discrepancy of $3,522,232.91. But that the above dividends are delusive, and are not all t]hat was divided, is disclosed by the testimotiy of Mr. Htam, pages 277-38:3, to which attention ig esp-ecially called. Mr. 1-lHan was asked what amount of profit wLas made by the Credit Mobilier on the Hoxie contract, and what they had. received on the fifty-eight miles west of the one hundredth mIueridian. "A. The amount of profitthey have received ia $6,272,232.91." PACIFIC RAILROADS. 159 Afreo stat;incg that of this amonnt $1,125,000 was divided in first-mortagre bond&, as a tbove, ili his further examination as to thie (disposition of this prolit, (se8e paes 377-;36.S,) it.,ppears that the who e of the profit above stated was divided. So, it is apparent that, Inlch imore has beun distributed on account of this HFoxie contractf lmonor these-stockholders than what the dividend statements wonlld ind(licate. 2. Tile following are the dividends, as appears from the books, that were made out of the proceeds of the Anies contract: First dividend December 12, 1867, of sixty per cent., in first-m.ortgage bonds $2, 244, 000 Sixty per cent. in stock Ulion Pacific Railroad Coinlpany -... —-... ——. 2, 244, 000 Second dividend January 3, 1858, of twenty per cent., in first-mortgage Ibo nds. 7,., 48,000 Third dividend June 17, 1858, of forty per cent. stock Uniion Pacific R ilroad 1, 500, 000 Sixty p r cent. cash............... 2, 250, 000 Fonrth dividend July 3, 1858, first-mortgage bonds....... 2, 791, 500 Fifth dividend July 8, 1868, iii cash.................................... 1, 095, 168 Sixth dividend December 29, 1868, in stock.7, 599, 000 Total........... 20, 471,668 Here, it will be observed, is another large discrepancy between the (lividend account and the amount of profit mLade, as shown above. Whether this difference has escaped unider the cover of some fog into the, pockets of these nmanagers, as was obviously the case under the Hoxie contract, or whether the books show too large a profit, your coInmittee uwill leave the House to judge. Tle Ames and Davis contracts having been essentially the same, the accounts were so kept that it was difficult to separate thein and know exactly the profit on eitherthis is the testimony of Mr. Ham and Mr. Crane-and a part of the profit charged to this Anmes contract niay have been divided under the Davis contract, as it will hereafter be seen that under that contract a division was made of largely mlore than the profit par value of the stock divided. NEXT, TIHE DIVISIONS UNDER THE DAVIS CONTRACT. The mode of making divisions under this contract was this: On the - day of —, 1869, the trustees sold to the stockholders of the Union Pacific Railroad Company2.750 first-mortgage bonds for -.$27......... 9275, 000 2,750 land-grant bonds for.................................... 275,000 Total.........550, 000 They distributed to the persons to whom these bonds were sold in stock two atnd one-half times the amount of bonds purchased, namely, stock Union Pacific Railroad Company.......$1, 375, 000 00 2. The trustees sold stockholders 3,901 income-bonds, at 80 cents to the dollar, aumounting to $-, and divided stock Union Pacific Railroad Company.. -. -. 7, 802, 000 00 3. The trustees sold stockholders 1,909 income-bonds, at 80 cents to the dollar, and divided stock Union Pacific Railroad Company....... 3, 818, 000 00 Total stock............................. 12, 995,000 00 This is a division largely in excess of the profit on this Davis contract in stock, par value, as shown above; but, as before indicated, this excess lmay have been carried from the Arnes into the Davis contract. This excess of profit over the dividends appearing on the books, in all probability was disposed of in some such way as was used in the disposition of the Hoxie profits. Mr. Ham having. given the amount of bonds, stock, and money enmlbrced in this $37,657,095.43 profit on these two contracts from the books, is very stron-g if not conelusive evidence that the statenlent of profit is correct, and consequently that the. books do not show all that was divided, or that there is yet in the hanns of the trustees undividted profits. In this connection the conimittee calls attention to the following facts: First-mlortgage bonds issued....... $27,213, 000 00 Sold at a discount of...3,494, 991 23 Net proceeds................... 23, 718, 008 77 160 PACIFIC RAILROADS. Government bonds issued.............................-....-...- --- $27, 236, 512 00 Sold at discount of..............-9................. 91, 318 72 27,145, 163 38 Aggregate net proceeds of both classes................... $50, 86:3, 172 05 Cost of whole road to the contractors.............................. 50,720,958 94 142,213 11 And attention is also called to the time of the receipt of Government bonds, as shown by schedule thereof set forth in the evidence. It appears, then, speaking in round numbers, that the cost of thie road was $50,000,000, which cost was wholly re-inllmrsed from the proceeds of the Government bonds and first-mortgage bonds; and that from the stok, the income bonds, and land-grant bonds, the builders received in cash-value at least $23,000,000 as profit, being a percent:age of about forty-eight per cent. on the entire cost. The commnittee ha-ve examined, as will be seen from the evidence, the parties who have been participating in these transactions as to the amount of profits. Their testimony on the subject has been widelyi variant. The commiittee deem it proper here to direct attention specifically and separately to the following transactions in disbursement of p)OIrtions of the assets of this road, which seem to the connmmittee to have been wrongful, and to demand the immediate and grave consideration of the present directors of the Unlion Pacific Railroad Company and of whatever authority may be charged with the duty of securing the recovery of the property of the company from those who are responsible for or the recipients of these illegal disbursements: 1. One hundred and twenty-six thousand dollars were paid to C. S. Bushnell on the 9th day of March, 1871, and denrominated' special legal expenses," which was disposed of as follows: First. To G. M. Dodge for services in procuring the passage of the act of March 3, 1871, in relation to transportation by said company for the Gove rnent......-.............................- $24, 500 Second. Amount paid by C. S. Buslinell to Thomas A. Scott on private accounf,.t-.,-...... 19;,000 Third. Amount retained by C. S. Bushnell on his own account.... 82, 500 126, 000 2. Fifty thousand dollars were paid to Governor John A. Dix as a purchase by the railroad company of its own stock. 3. Twenty-five thousand dollars were paid to a Government commissioner to secure the acceptance of a portion of the road as completed. 4. Four hundred and thirty-five thousand seven hundred and fifty-four dollars and twenty-one cents, designated as " suspense account," were allowed to T. C. Durant, vicepresident of the company, which appear from the evidence to have been disbursed in connection with the passage of the amendatory act of July, 1864, of the particulars of which disbursement the committee have been unable to obtain satisfactory account. For disbursement of such money, so far as ascertainel, the committee refer to the evidence herewith reported, as they do also as to the disposition of the other moneys above named. Justice to the parties interested requires that the grounds on which they rely for their defense or extenuation should be understood by Congress and the country in their full force. The contractors, or soime of them, justify these transactions on the fbllo-wing grounds: 1. That nearly every railroad which has been built in the United States for the past twenty years, although its charter may have required the payment of its capital in cash, has ill fact been constructed under an arrangement by which the capital stock.was in large part paid in road-building. 2. That it would have been impossible to build the road under the acts of Congress, if the condition requiring the capital to be paid in money had been strictly enforced, 3. That the act required the books to be kept open for subscriptions until the comnpletion. of the road, or until one hundred millions of capital stock were subscribed. If at any tinme before the completion of the road the stock was in actual value above par, it would be in the power of any person by subscribing alld' paying for new stock at par to avail himself of the value which the stock had derived wholly at the risk alnd throughl the labors of former subscribers, and that this provision rendered a compli anlce Hwith the act imipossible. PACIFIC RAILROADS. 161 4. That all the stockholders of the railroad company consenting and being parties, these transactions, tlhough in form a contract, were in substance a dividend, which they had a perfect right to make, and with which no outside party can justly find fault. 5. That the railroad company acquired by the transaction something more than the mere construction of a road for cash; that the arrangement called, into their service the vast personal credit of Oakes Ames and others, without which it could never have been built, and which could not have been called into the service of the road at less expense. 6. That if the road had been built by contractors in the ordinary way, either under one contractor or cut up into numerous subdivisions, then a profit of 16 to 20 per cent. would not have been unreasona le or improper, and that no more profit has in fact been made here. 7. That the managers of the road believed they were complying with the requirements of the law in substance. 8. That they were advised by eminent counsel that they were so complying. 9. That the country has in fact received not only the vast public benefits resulting from the early completion of'the road, but the pecuniary saving to the United States in postal and military transportation and the maintenance of troops is so great that they are entitled to gratitude and not censure for having departed from the letter of the law, which rendered the construction of the road impossible. 10. That it may be partly true that the capital stock ought not to'be divided, and that the bounty of the Government or the moneys borrowed ought to have been kept in the Treasury; but that if they had dealt with a stranger, they could have got no better terms than they in fact got for building the road. And if they added to the credit of the road their own personal credit, it was not unreasonable that they should nmake a dividend of so much as they would have to pay to a stranger as profit. These arguments the committee have carefully weighed. Some of them are not without force. We will consider them in their order. It is perhaps true that the clause in railroad charters requiring payment of the capital in rnoney, has been of late years constantly disregarded or evaded. But these conditions are commonly inserted in charters granted by State authority as a protection to the public against the contracting of debts by organizations without either corporate funds or the power to pledge the personal liability of their members. The fund, as is said by Judge Story, is a substitute for personal responsibility. Where the purpose of the charter-narrely, the construction of the railroad-has been accomplished, and the road acquired by the company by exchanging its stock for construction, and no person is misled, the public benefited by the enterprise has been disposed to deal leniently with the violation of law. But in this case the Government gave to this corporation its franchise, its right of way, including substantially its entire road-bed, a vast area of public domain, its credit to the amount of over twenty-seven million dollars, and enabled it to obtain a like amount by mortgaging the property the Government gave it. The Government never coI1sented to trust its property to nmen who had not put their own money into the enterprise, It never consented to take security for its re-imbursement at the end of thirty years, solely on the property it had advanced. It never eypected to rely for the performance of these great public duties upon a company whose debts equaled its whole property. The law-umaking power, if its mandates are to be obeyed or respected hereafter, cannot accept as an excuse for disobedience to its express directions, by the corporation it has created, that the members of that corporation have decided that those dlirections were unreasonable and unnecessary. Iin this case the provision of the charter requiring the stock to be paid for in money has been grossly violated; because, as is apparent, nearly the whole of the stock that has been issued represents no value to the railroad company; or, to state it differently, was issued without any consideration whatsoever. 2 and 3. If it was impossible to build the road according to the act of Congress, they.had no right to build it. They could easily have represented their difficulty to Con-gress, which has dealt generously with them from the beginning. 4. It may be that all the existing stockholders shared these profits, so that what was in form a contract was in substance. a dividend. But nothing is better settled than that a railroad corporation has no right, either as against creditors or a minority of its stockholders, to distribute any part of its capital as dividends, and that a court of equity will interfere'to prevent it. There can be still less justification for using the proceeds of moneys borrowed either of the Government or on the first mortgage for the purpose of a dividend. 5. The claim that these gentlemen had aided the enterprise with their own personal credit at first seemed a forcible one, but it disappears when carefully examined. Let us see exactly what risk was assumed at the beginning of the execution of the Oakes Ames contract. If the contract on the whole appeared at any time during the progress of the work likely to be unprofitable, the clause giving the trustees an irPeH. Rep. 440-11 162 PACIFIC RAILROADS. vocable proxy to vote on six-tenths of every man's stock enabled them to obtain the consent of both the nominal parties to its abandonment. They were to have their bonds of both classes for each twenty miles when that twenty miles was completed, and, on the certificate of the chief engineer and commissioners, a proportionate share for uncompleted work. They were entitled by their contract to about $3,000,000 profits on the portion of the road which had been completed under a previous contract, but was included at a higher price in theirs. All they put at risk, therefore, was what they had to advance to build each twenty miles of the road, and this risk only lasted until that sum was re-imbursed on the completion of such section of twenty miles. This, at the rate fixed for the first hundred milesunder the Oakes Ames contract, would amount to $840,000 fortwenty nmiles, supposing there were no profits, and at the rate for the last hundred miles, to $1,920,000. But they divided among themselves on the 12th of December, 1867, less than two months after they got the contract, as before shown, a large amount in first-mortgage. bonds and a like amount in stock par value, and from time to time made the other dividends hereinbefore set forth. Thus it appears that they divided, l)ecember 12, 1867, among themselves as profits at that date, a larger sum than theyever put at risk in the whole transaction. 6. This claim that no unreasonable profit has been made is not supported by the testimony. The risk, as has been shown, was wholly that of the Goverunment. 7 and 8. The gentlemen making these excuses, though invited, have failed to furnish the committee with any evidence that such a legal opinion was given them. 9. It is true that the construction of the Pa.cific Railroad has saved large expenditure, both in postal and military transportation and the maintenance of troops, and has been of great public advantage. But it has been built chiefly with the resources of the Government. 10. The answer to this is to be found in figures disclosed in this report. It is also said that it is unjust to look at this question in the light of the present; that we should go back to the condition of things before the road was built, when the whole scheme seemed, to the prudent capitalists of the country, visionary and perilous. This is true; and if these gentlemen assumed great risks from which others shrank, and thereby great benefits inured to the public, they should have all" due credit. But we think they differed from other capitalists, not in taking a risk, butiin having discovered that the road could be built at vast profit without risk, the resources furnished by the Governmant being more than ample for the purpose. The committee do not conceive it to be their duty to express or to form an opinion as to the degree of moral blame that attaches to the persons engaged in these transactions, except so far as that may rightfully affect the exercise of the discretion,of Congress in dealing with their frapchises, Congress cannot accept the general intentiols of persons combined as an excuse for a deliberate violation of its laws, if it expects them to be obeyed or respected hereafter. But we do not like to close our narrative of this case, and pronounce judgment upon these illegal transactions, without observing that there are many persons connected with the Credit Mobilier who held their stock openly and without concealment from the beginning, and who seemn to have hail no share in its management, and no knowledge of the wrongful use of its stock or of the funds of the railroad. Some of these persons are persons of eminent character, holding high public positions. It is difficult to believe that they had any consciousness that they were doing wrong, or saw the whole proceeding in the light in which the committee now state it. Mr. J. M. S. Williams's statement probably correctly represents the exact feeling of this class of persons: "They thought they were only dealing with their own property; they di(l not think they had anything to do with the Government." The result of these proceedings was this: 1. Whlile the charter of the Credit Mobilier required its affairs to be managed by a board of directors and its principal business office to be in Philadelphia, the actual conduct of its affairs was wholly by the men acting as a board of trustees and in the city of New York, so that this unlawful arrangement attempted to disguise, and did in effect disguise, these persons by means of a fictitious and pretended and not a real use of the corporate powers of the Credit Mobilier. 2. While the charter of the Union Pacific Railroad Company required its corporate powers to be wielded by a board of fifteen directors, ten of whom should be bona-fide holders of stock and should be elected by stockholders representing capital which had been actually paid in full and in money, this contrivance virtually placed all the power and control of said railroad corporation, its property and franchises, in the hands of the same persons; and beyond the management provided by law, thereby disguising and intending to disguise an unlawful seizure of the powers of the company, an unlawful use of its name in the issue of stock, bonds, and scrip, and an unlawful distribution of its property among the parties.'3. While the United States subordinated its own lien to secure re-imbursement of the loan of its bonds to a mortgage to secure the bonds of the company for a like amount PACIFIC RAILROADS. 163 for the purpose of constructing the road, moneys have been in fact borrowed under the privilege so conferred and distributed as dividends. 4. The statute requiring the capital stock to be paid for in money at par, it has ill fact been paid at not exceeding thirty cents on the dollar in road-building, excepting, perhaps, the sum of about $400,000. 5. Instead of securing a solvent, powerful, well-endowed company, able to performi its important public functions without interruption in times of commercial disaster and in times of war, and able to maintain its impartiality and neutrality in dealing with all connecting lines, it is now weak and poor, kept from bankruptcy only by the voluntary aid of a few capitalists who are interested to maintain it, and liable to fall into the control of shrewd and adroit managers, and to become an appendage to some on.e of the railroad lines of the East. In 1871 it fell under the control of the active managing men of the Pennsylvania Central Railroad Company; and its present control and the manner in which it was procured are sufficiently shown by the following testimnony of Hon. Horace F. Clark, the present president. After stating that he had purchased twenty-five or thirty thousand shares of the stock, and with some friends forty thousand shares in all. (which he purchased at thirty cents,) and had made a call or contract for twenty-four or twenty-five thousand additional shares, his testimony proceeds as follows: " Q. What object did, you have in view in making this purchase of stock and in becoming president of the Union Pacific Railroad Company?-A. I am connected with:a line of railroad leading from the Missouri River, through Chicago, Cleveland, and Butfalo, to Albany and Boston. I was president of the Lake Shore and Michigan Southern Railway Company, which fills up the gap from Chicago to Buffalo. I was a direr - tor in the New York Central and Hpdson River Railroad Company, which fills up the gap between Buffalo and New York. Mr. Scott had previously been the president of the Union Pacific Railroad Company. He represented the Pennsylvania Railroad, which is an opposition line to the lines with which I am connected. From Chicago they reach the sea-coast by Philadelphia, by the Fort Wayne road. My object in interesting myself in the Union Pacific Railroad Company was to share in the traffic arrangements. We might get none of the traffic of the Union Pacific Railroad Company by the way of our lines if the control of that road was in the hands of a competing line. That was the inducement. My inducement to make the call was that (never taking any compensation in the way of salary) I wanted the advantage which would result from a participation in the traffic of this railroad. Boston is reached by rail through our lines; it is not reached by continuous rail through any other lines. It seemed to me as if tea and silks, and various articles of merchandise, could be carried to Boston, which is a great point of consumption, and a great point of export by rail, if the railline to the seaboard was open. My object in making the call was that I might share in the prosperity of the road, which would result from the opening of this rail-line; and I made the call. Whether the parties who sold me the call had the stock or not, was a point which I did not inquire about. They were responsible parties, and if they did not have the stock they were bound to buy it in the market. My object in having anything to do with the line was in connection with railroad traffic. I knew nothing about the Credit Mobilier. I had heard that there had been a construction ring in that road, but what had been the effect of it I did not know. My object in taking the call was to get the advantage, which some thought might result from the increase in the value of the stock, from the change of administration. " Q. Was it your purpose in making that purchase of stock, or was there an arrangement when the stock was purchased, that you should become president of that road?A. There was. "Q. By whom was that arrangement made?-A. I think the negotiations for that arrangement were made between Mr. Morton and Mr. Banker. " Q. Who were the parties behind them?-A. I do not know them all. I think that among these parties were some of the Boston parties. Mr. Morton only became responsible under the call to a limited amount. The Messrs. Ames joined in the call, but ill what sums I do not remember. The total amount was twenty-four or twenty-five thousand shares, at 30. "Q. The arrangement which was made for that purchase of stock resulted in your coming into the presidency of the road?-A. Yes; because then I said to the stockholders that I would take their proxies, and the stockholders sent their proxies to ine. I had not, with my friends, stock enough myself to control the election, or anything like it. "Q. Do you know whether, the year preceding, Mr. Scott became president of the road under a similar arrangement? —A. I know nothing about it. I have heard statements about it, but I have no knowledge on the subject." The division of the substance of the corporation has so weakened it as to make its control by capitalists and powerful railroad corporations in the manner above described, easy. It is now helpless and dependent. 6. The right of the Government to regulate fares when the road pays 10 per cent. on 164 PACIFIC RAILROADS. its cost is rendered nugatory or difficult of exercise by recording a fictitious and not an actual statement of the cost of the road. Before proceeding to discuss the question of remedy, your committee take occasion to say that, in making this investigation, they have labored, under great disadvantages. The books containing the records of these transactions are voluninous and comnplicated. The estimates of engineers made before the letting of the various contracts cannot be found. The presence, as at witness, of General Granville M. Dodge, the chief engineer, under whose supervision the principal part of the work was done, could not be procured, although diligent efforts were made to that elnd. Telegrains were sent to him, inviting his attendance as a witness, and a deputy sergeant-at-arms was sent for him, who has diligently sought him for weeks, but has been unable to find him. Your committee have information from which they feel warranted in stating that they believe that he has been purposely avoiding tlle service of the summons. Mr. John J. Cisco, who was treasurer of the Union Pacific Railroad Company, was unable to attend by reason of illness. Governor John A. Dix, who was president, could not be present by reason of his executive duties as governor of the State of' New York. Having had these difficulties to encounter, your committee do not present the fore. going figures in relation to the money value of profits and in relation to dividends as being exact. Many of the incidents to these transactions have not been investigated as thoroughly as was desired, for want of time. This report does not embrace all the matters committed to the committee, and the report is only in part. The present report is made because of the desire of the committee to submit it to the consideration of the House without that delay which would be unavoidable if the report should be attempted to be made complete before any part of the matters submitted to the committee is presented to the House. It is the purpose of the committee to proceed at once to consider and report upon the residue of the matters referred. The committee have given much consideration to the question of remedy. To discuss it fully would extend this report, already too long, to an undue length. We will briefly state our conclusions. It is proper further to state that nothing has been disclosed in the evidence indicating any misappropriations of the moneys of the company by the present management. We think the facts we have stated would fuirnish ground for judgment of forfeiture of all the franchises of the corporation, including the principal franchise, to be a corI)oration, on proper process. According to the American decisions, judgment of forfeiture on quo'warranto is not'followed by an absolute forfeiture to the Government of all the property of a corporation, as was the earlier English practice; but a court of equity in such case has jurisdicticn to divide the assets among the creditors or stockholders. We have no doubt also of the right of Congress to repeal the charter, which is expressly reserved in the act of 1862, and that on such repeal equity would distribute the assets in like manner. But the objection to either proceeding is twofold: first, it would be harsh and unjust to forfeit the rights of the present stockholders, a large majority of wbhom have bought their stock in good faith in the market, for the wrong-doing of their predecessors; second, in either case above supposed, equity could only distribute the assets as in case of bankruptcy or death; neither court nor Congress could compel the present owners to embark their property in continuing the exercise of the same franchise under a new organization. The railroad must then stop or be operated by the Government, or be sold at a forced sale in the market. To either of these proceedings there are grave public objections. The committee have then sought for a remedy which would compel the recovery of the property of the road from those persons- who have received.it wrongf'ully, and its application in future to the purposes of the road and the payment of its debts, including that due the United States. The question of the right to such recovery is of course purely judicial. We cannot by act of Congress impose upon any man a legal or equitable obligation to pay money into the treasury of the company. But we have the right to inake provision for as simple, speedy, and ample a remedy as possible. Can this remedy be by suit, in the name of the United States? The United States sustains several relations to this corporation. First, it is the sovereign which created *the corporation. It, may proceed by quo warranto at common law for forfeiture of the fianchise. The objections to this proceeding have been stated. The sovereign in England has a visitorial power over certain public corporations, which is exercised through the chancellor. But it has been held that this is a power which the chancdellor exercises as the king's servant or representative, and is not a part of the powers of a court of equity as such, and does not reside in the national courts of the United States. It -is doubtfll whether the equity power to regulate charities, though it has been extended over certain trusts created for the public interests which are not included within the popular, and perhaps not within the technical, definition of a charity, would extend over a corporation which, though created for a public purpose, conducts its business PACIFIC RAILROADS. 165'for private gain. The United States also sustains the relation to this corporation of creditor. But as an ordinary creditor it cannot go into equity for relief against the equitable assets of its debtor until it has first obtained judgment at common law. Whether any present debt exists, due and payable to the United States from this corporation, is a matter of grave debate, which is already before another committee of this House. But we think the corporation and the United States sustain the relation of trustee and cestui qee trust. The United States have placed in the hands of the corporation large properties to be managed for a public purpose, for which management the corporators are to be compensated by the gains lawfully made in the employment. After the completion of the road, 5 per cent. of the net earnings of the business are to be applied to the payment of the debt of the United States. Bonds of the United States, payable in thirty years from their date, are issued to the company, and on the refosal or failure of the company to redeem said bonds, or any part of them, when required so to do by the Secretary of the Treasury, in accordance with the provisions of this act, the said road, with all the rights, functions, immunities, and appurtenances thereto belonging, and also all lands granted to the said company by the United States which at the time of said default shall remain in the ownership of the said company, may be taken possession of by the Secretary of the Treasury for the use and benefit of the United States. (Statute 1862, section 5.) The statute of 1864, section 10,' subordinates the lien of the United States to that of the bonds of the companies authorized by that act to be issued." This is not a mere mortgage or lien on existing and ascertained property. It is a right to have a fund in rusted to the corporation for mranagement applied at a future day to the benefit of the United States, and to have in the mean time a share of the profits of such mranagement also so applied. A trust is an obligation on the part of the legal owner of property to manage and apply it for the benefit of another; If the United States had reserved, as it lawfully might, the right to 5 per c;ent. of the net earnings and to enter upon the whole property at the end of thirty years for its own absolute benefit, it would have presented a state of facts which would serve for a clear and simple illustration of a trust. It can be no less a trust that the benefit the United States are to receive is limited to the payment of a debt. Its security for the payment of the debt is the equit;able property reserved to it by the act which creates the corporation, endows it, and defines the terms on which the endowment shall be held. Both the grant of the land and the issue of bonds to this company were made for the purpose and on the trust expressly declared in the grant in these words, " for tilhe purpose of aiding in the construction of said railroad and telegraph-mine, and to secure the safe and speedy transportation of the m-ails, troops, munitions of war, and public stores thereon," and "to promote the public interest and welfare by the construction of said railroad and telegraph-line and keeping the same in ivorking order, and to secure to the Government at all times (but particularly in time of war) the use and benefits of the same for postal, military, and other purposes." The committee do not doubt that the proceeds of these lands and bonds, as well as of the first-mortgage bonds which the Government has provided to secure by a:lieu prior to its own, are held as an express trust by this company, and applicable alone to said declared purposes of the acts. Any distribution of the proceeds of eitlier of these funds as profits or dividends to stockholders is illegal, as violative of the declared purposes of the trust. We have, then, the case of a corporation which is a trustee, in the management of persons who have divided the trust funds among themselves, who have proumised to pay for its capital stock in cash, which promises they have not kept, and on which they are still liable, and which the corporation neglects to enforce, and who have made contracts with themselves in reference to the trust fund, the profits on which contracts they ought in equity, to account for to the trust fund upon the most simple prinlciples of equity. A suit can be maintained by any cestui que trust to compel the collection of these.assets, and that the trustee shall hold them hereafter as part of the trust property. It will be no answer to this statement to say that the ultimate security of the United States has not been impaired. This is far from being true in fact. If it were true, the United States have a right to have the security-which they stipulated for, even if it be more than is necessary. If we are wrong in this opinion, there is no remedy except by resorting to the extreme power of repealing the act. Those questions are judicial questions, as we have said. We propose a simple method of raising and determining them in one suit, and of securing so far as we can the administration of the fund according to law in the future. The cor-mmittee, then, find. that there are persons connected with the Credit Mobilier holding such bonds as are contemplated by the order of the House. They are not holders of the same in good faith and for value, but did procure the same illegally. 166 6PACIFIC RAILROADS. We (lo not recommend that the United States refise to pay these bonds or their interest without a judicial ascertainment of the facts. We think that so many persons hold the first-mortgage bonds of the Union Pacific Railroad in good faith and for value that the said mortgage ought not to /be set aside. We report the facts as to the character of the organization known as the Credit Mobilier. We refer for facts as to the members of Congress and officers of the Government connected therewith to the evidence taken before the committee of which Mr. Poland, of Vermont, is chairman, and to that herewith submitted; and We respectfully report the accompanying bill, and recommend its passage. J. M. WILSON. SAML. SHELLABARGER. GEO. F. HOAR. H. W. SLOCUM. AN. ACT to amend an act entitled " An act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes," and to secure the interests of the United States and of the people in the ULion Pacific Railroad. Be it enacted by the Senate and House of Representatives of the United States of Amverica in Congress assembled, That the Attorney-General shall cause a suit in equity to be instituted in the name of the United-States against the Union Pacific Railroad Company, and against all persons who may in their own names or through any agents have subscribed for or received capital stock in said road, which stock has not been paid for in full in money, or who may have received as dividends or otherwise portions of the capital stock of said road or the proceeds or avails thereof, or other property of said road, unlawfully and contrary to equity, or who may have received as profits or proceeds of contracts for construction or equipment of said road or other contracts therewith, moneys or other property which ought in equity to belong to said railroad corporation, or who Amay, under pretense of having complied with the acts to which this is an addition, have wrongfully and unlawfully received from the United States bonds, moneys, or lands which ought in equity to be accounted for and paid to said railroad company or to the United States, and to compel payment for said stock, and the collection and payment of such moneys and the restoration of such property or its value either to said railroad corporation or to the United States, whichever shall in equity be held entitled thereto. SEC. 2. That said suit may be brought in the circuit court in any circuit, and all said parties may be made defendants in one suit. Decrees may be entered and enforced against any one or more parties defendant without awaiting the final determination of the cause against other, parties. The court where said cause is pending may make such orders and decrees and issue such process as it shall deem necessary to bring in new parties or the representatives of parties deceased, or to carry into effect the purposes of this act. On filing the bill, writs of capias and attachment may be issued by said court against any parties defendant, which writs shall run into any district, and shall be served as other like process by the marshal of such district, on which property, real and personal, may be attached to abide the event of the suit as like property may by law be attached on writs issuing from the circuit court in such district. SEC. 3. That the books, records, correspondence, and all other documents of the Union Pacific Railroad Company, shall at all times be open to inspection by the Secretary of the Treasury, or such persons as he may delegate for that purpose. SEC. 4. That the laws of the United States providing for proceedings in bankruptcy shall not be held to apply to said corporation. SEc. 5. That no dividend shall hereafter be made by said company but from the actual net earnings thereof, and no new stock shall be issued, or mortgages or pledges.lade on the property or future earnings of the company without leave of Congress, except for the purpose of funding and securing debts now existing, or the renewals thereof. SEC. 6. That no director or officer of said road shall hereafter be interested, directly or indirectly, in any contract therewith, except for his lawful compensation as such officer. SEC. 7. That any director or officer who shall pay or declare, or aid in paying or declaring, any dividend, or creating any mortgage or pledge prohibited by this act, or who shall offend against the provisions of the sixth section thereof, shall be punished by imprisonment not exceeding two years, and by fine not exceeding $5,000. PACIFIC RAILROADS. 167 MINORITY REPORT. I concur in the facts and figures presented in this report, so far as the same could be ascertained through the testimony of those who have been connected with the Union Pacific and Credit Mobilier Companies, and the legal remedies recommended by the committee; but I object to the adoption of the report as incomplete, under the resolution referred to this committee January 6, 1873, until some recommendation is embodied in the same in reference to certain members of Congress who have had transactions with Hon. Oakes Ames, as will be found detailed in the report of Hon. Luke P. Poland, as chairman, &c., believing that the same should be promptly considered and disposed of without further loss of time. THOS. SWANN. CREDIT MOBILIER SUITS OF THE UNITED STATES. In the circuit court of the United States for the district of Connecticut. THE UNITED STATES, BY GEORGE HENRY WIL- liams, their Attorney-General, VS. THE UNION PACIFIC RAILROAD COMPANY, Henry Ingalls, Joseph Richardson, and others. Demurrer to the complaint, on the ground that the complainant alleges no cause of action against the defendants, and on the ground of multifariousness. The demurrer was brought to a hearing at a circuit court held at the city of Hartford, on the 20th day of September, 1873. Present: Ward Hunt, associate justice of the Supreme Court, and Nathaniel Shipman, district judge for the district of Connecticut. B. R. Curtis, Sidney Bartlett, Wmin. M. Evarts, for the demurrer. The AttorneyGeneral, Aaron F. Perry, Thomas A. Jenckes, J. Hubley Ashton, for the plaintiff. HUNT, Justice.-The action was commenced during the summer of 1873, by process issuing from the district of Connecticut, and served upon defendants in other districts, who were not residents of Connecticut, nor found therein to be served with process. The Union Pacific Company and twenty-four other defendants now demur to the bill of complaint filed by the complainant. The alleged grounds of demurrer are: 1st. That the complainant, by its bill, has not made a case which entitles it to any discovery or relief, in a court of equity, from or against the defendants; 2d. That the bill is multifarious. The proceedings taken by the complainant are based upon the act of Congress of March, 1873. To understand them, or to appreciate the argument on the demurrer, it is indispensable that this act should be carefully considered. It is a portion of the act making appropriations for the expenses of the Government'for the year 1874, and for other purposes, and is in the words following: "SECTION 4. That the Attorney-General shall cause a suit in equity to be instituted in' the name of the United States against the Union Pacific Railroad Company, and against all persons who may, in their own names or through any agents, have subscribed for or received capital stock in said road, which stock has not been paid for in full in money, or who may have received, as dividends or otherwise, portions of the capital stock of said road, or the proceeds or avails thereof, or other property of said road, unlawfully and contrary to equity, or who may have received as profits or proceeds of contracts for construction or equipment of said road, or other contracts therewith, moneys or other property which ought, in equity, to belong to said railroad corporation, or who may, under pretense of having complied with the acts to which this is an addition, have wrongfully and unlawfully received from the United States bonds, moneys, or lands which ought, in equity, to be accounted for and paid to said railroad company or to the United States, and to compel payment for said stock, and the collection and payment of such moneys, and the restoration of such property or its value, either to said railroad corporation or to the United States, whichever shall in equity be held entitled'thereto. Said suit may-be brought in the circuit court in any circuit, and all said parties may be made defendants in one suit. Decrees may be entered and enforced against any one or more parties defendant without awaiting the final determination of the cause against other parties. The court where said cause is pending may make such orders and decrees and issue such process as it shall deem necessary to bring in new parties or the representatives of parties deceased, or to carry into effect the purposes of this act. On filing the bill, writs of subp(ena may be issued by said court against any parties defendant, which writ shall run into any district, and 168 PACIFIC RAILROADS. shall be served, as other like process, by the marshal of such district. The books. records, correspondence, and all other documents of the Union Pacific Railroad Company shall at all times be open to inspection by the Secretary of the Treasury, or such persons as he may delegate for that purpose. The laws of the United States providing for proceedings in bankruptcy shall not be held to apply to said corporation. No dividend shall hereafter be lmade by said company but from the actual net earnings thereof; and no new stock shall be issued or mortgages or pledges made on the property or future earnings of the company without leave of Congress, except for the purpose of funding and securing debt now existing, or the renewals thereof. No director or officer of said road shall hereafter be interested, directly or indirectly, in any contract therewith except for his lawful compensation as such officer. Any director or officer who shall pay or declare, or aid in paying or declaring, any dividend, or creating any mortgage or pledge prohibited by this act, shall be punished by imprisonmdnt not exceeding two years, and by fine not exceeding five thousand dollars. The proper circuit court of the United States shall have jurisdiction to hear and determine all cases of mandamus to compel said Union Pacific Railroad Company to operate its road as required by law.' Approved March 3, 1873." This act prescribes different rules for the conduct of this suit from those by which ordinary suits are governed. Omlitting the questions upon the act which give rise to the demurrer, and which may hIe considered as of the merits of the case, I notice the following, as some of these differences: 1. The "said suit may be brought in the circuit court in any circuit, and all said parties may be made defendants in one suit." An objection that would ordinarily exist for a misjoinder of parties is cured by this provision. The objection of misjoinder of causes of action is cured by the same provision. The authority to bring a suit and to mnlplead various defendants necessarily includes the right of stating the cause of action as it may exist against each of such defendants. 2. " Decrees may be entered and enforced against any one or more parties-defendant without awaiting the final determination of the cause against other parties." By the ordinary rules of chancery practice, a cause cannot be brought to a final hearing until it is ready for a hearing as to all the defendants; a final decree cannot be made against one defendant, leaving the interest of other defendants undetermined. Ordinarily, there is to be but on6 final decree, and in that decree all the rights and interests of all the parties, however complex or varied, are to be settled. The law we are considering prescribes a different rule, and in effect authorizes a severance of the one suit commenced. into one hundred and seventv different suits, in which decrees may be entered as the court shall hold to be just, independent of the result as to any other defendant. Congress intended that the suits should be against many persons, that it should include causes of action not connected with each other, or which might be hostile to each other, against persons not charged in relation to the same transactions, and which could not, under the ordinary rules of law, be united in the same suit. 3. The most striking departure from the ordinary rules for the conduct of a suit is found in the following provision: "On filing the bill, writs of s.bpoena may be isbned by said court against any parties-defendant, which writ shall run into any district, and shall be served, as other like process, by the marshal of such district." By the judiciary act of 1789, the territory of the United States is divided into judicial districts, for which district courts are appointed; and circuit courts are organized, each circuit extending over one or more of said districts. By section 11 of that act it, is enacted that"The circuit courts shall have original cognizance concurrent with the courts of the several States of all suits of a civil nature at comnlon law or in equity, where the matter in dispute exceeds, exclusive of costs, the sum or value of five hundred dollars, and the United States are plaintiffs or petitioners, or an alien is a party, or the suit is between the citizen of a State where the suit is brought and a citizen 6f another State.' i But no person shall be arrested in one district for trial in another in any civil action before a circuit or district court. And no civil Suit shall be brought before either of said courts against an inhabitant of the United States by any original process in any other district than that whereof he is an inhabitant, or in which he shall be found at the time of serving the writ." —(1 U. S. Stat., 78, 79.) The present suit was commenced and is pending in the circuit court for the district of Connecticut. By force of the statute of 1873, the writs for the commencement of PACIFIC RAILROADS. 169 the suit have been issued into ten different States. These writs have been served in those States upon persons not inhabitants of the district of Connecticut, in which district the suit was commenced, nor found within that district at the time of serving the writ. I do not pause here to consider the effect of this provision as a question of jurisdiction. The defendants insist that it is unconstitutional and void, as in violation of that article of the Constitution of the United States which provides that no person shall be deprived of life, liberty, or property without due process of law, and they move to dismiss the bill on that ground. This motion will be the subject of consideration on another occasion. The provision is here important, as showing the difference in the conduct and management of this suit from that obtaining ordinarily in the circuit courts of the United States. For the present purpose its validity is assumed. 4. The process is authorized to be served upon representatives of parties deceased, and it is not required that they shall be residents of.the district of Connecticut, or that their testators should have been such residents. As a general rule, the power and authority of executors, both for the purpose of suing.or being sued, is restricted to the State or district in which their letters are granted. The power of the executor to bring a suit is derived from his letters testamentary alone. Thus an executor appointed by the courts of Connecticut, under authority of the statutes of that State, cannot bring a suit in that character in the State of New York. His authority will not be recognized in the latter State, but he must be re-appointed under its authority before he can maintain an action. The principle is the same as to actions against executors and administrators. They must be called upon to respond within the local jurisdiction by which they are appointed. Their liability, as well as their authority, is thus locally limited. They are entitled to the benefits and protection of the laws which such local jurisdictions give them.-(Kerr vs. Moon, 9 Wheat., 565; Armstrong vs. Lear, 12 Wheat., 169; Vaughn vs. Northup, 15 Peters, 5.) This principle is overruled in the statute we are considering. As in the case of a former variation from the established rules of law, I assume for the present the validity of this provision, and refer to it here as one of the several differences to be found between the condition of the present action and that of an ordinary suit in the courts of the United States. II. The powers and authorities by this act given to the Attorney-General for the conduct of this suit, which have been pointed out, are, in their nature, exceptional and limited. They are not given to the Attorney-General in all cases, but only in the case of the Union Pacific Company, and to redress the alleged wrongs specified'in the act of 1873. It is quite safe to say that it is not within the general powers of the Attorney-General to institute a suit in which he would be relieved from an objection of the misjoinder of the parties-the misjoinder of causes of action, in which he could obtain final decrees against various defendants fronm time to time, and as often as he might be prepared for that purpose, and in which he could causi to be executed writs to bring in defendants residing in remote districts, and who were not found in the district where the suit was commenced. Generally he may bring and mainthin suits sulbject to the ordinary rules of law. In the present instance he insists truly that the act of 1873 confers extraordinary powers upon him. The act is his charter. Whatever is authorized by it (on the assumption made) he may here do. Beyond it he cannot go. It thus becomes necessary to ascertain for what alleged wrongs, or for what causes of action, the Attorney-General was directed by the act of 1873 to commence a suit. If the~allegations of his complaint are within the authority of that act, and if such allegations afford a good cause of action, his suit is maintainable; otherwise it is not.!II. For what causes of action, and against whom, was the Attorney-General thus directed to institute proceedings? The act of 1873 directed a suit in equity to be instituted in the name of the United States1st. Against the Union Pacific Railroad Company, and all persons who may in their own names, or through any agents, have subscribed for or received capital stock in said road, which stock has not been paid for in full in money. 2d. Against persons. who may have received as dividends, or otherwise, portions of. the capital stock of said road, or the proceeds or avails thereof, or other property of said road unlawfully and contrary to equity. 3d. Against persons who may have received as profits or proceeds of contracts for construction or equipment of said road, or other contracts therewith, moneys or other property which ought, in equity, to belong to said corporation. 170 PACIFIC RAILROADS. 4th. Against persons who have wrongfully and unlawfully received from the United States bonds, moneys, or lands which ought, in equity, to be accounted for and paid to said railroad company or to the United States. For these several causes of action, and for these only, the Attorney-General is authorized in this suit. " To compel payment for said stock, and the collection and payment of such moneys, and the restoration of such property, or its value, either to said railroad corporation or to the United States, whichever shall be, in equity, entitled thereto." If either the railroad corporation or the United States is equitably entitled to such moneys, it is declared that recovery therefor. may be had in this suit. The recovery of money or property, and not the regulation and management of the road, or the disposition of its estate now or hereafter, is the object and purpose of the action. For the purpose of enforcing these four specified causes of action, and for no other purpose, is the Attorney-General invested with the unusual. powers'conferred by the act of 1873. IV. The United States is the plaintiff in this suit, and the question arises, is there a right of action in the United States for the causes thus specified, or can a right to recover for such cause of action be given to the United States by an act of Congress? Congress may well authorize its Attorney-General to institute suits to recover damages due to the United States, to redress wrongs which are legally wrongs to the United States, but its action can scarcely create such damages, or cause acts to be wrongs to the United States which are, in their nature, wrongs to another. The United States cannot convert to itself the property of another by its own declaration or its own authority; nor can it maintain an action in its own name against A to recover a debt which he may owe to B. Moneys recovered by the United States in such an action, like its other funds, will go into its general treasury, and form a part of its resources, to be disposed of according to law. So, if any individual has committed a breach of trust, or been guilty of fraud in discharging his duties as an agent of the Union Pacific Railroad Company, the cause of action to-redress such wrong and to recover damages therefor, and the damages themselves, when recovered, belong to the corporation. The suit for such redress must be in the name of the corporation as plaintiff. As a general rule, and under ordinary circumstances, no other party can be such plaintiff, and an authority by Congress to the Attorney-General to commence such action in the name of the United States is valueless. Congress cannot thus appropriate to itself what belongs to another. To give effect to such an act would be to deprive one of his property without- due process of law. I do not doubt the power of Congress over the remedy to redress alleged injuries; in other words, its power to regulate the conduct of suits, or to prescribe the form of actions; but it cannot, under the form of regulating the remedy, impair contracts or dispose of rights of property. It cannot itself adj udge that moneys are due to the United States, and by such judgment give authority for their collection. This principle applies to all the causes of action specified in the act of 1873, except to a portion of the fourth. Thus, if any person has subscribed for capital stock, or rceived capital stock or shares in the Union Pacific Railroad Company which have not been paid for, the action to recover the money payable by the terms of the subscription must be in the name of,the corporation. The contract was made with the corporation, as an existing person; the money, if due at all, is, in terms, payable to the corporation as such. In law it must be recovered by the corporation, to be applied by it to the legal necessities of the railroad company. In substance and in form the money must go through and to the corporation, and no creditor, legal or equitable, can maintain an action for its recovery. In certain cases, if the corporation refuses to do its duty, such action may be maintained by the shareholders of the corporation, the corporation being made a party defendant. There may also be a case in which a judgment-creditor can maintain an action against his judgment-debtor and his creditor, to collect his debt after his legal remedies are exhausted. Such was the case of Curran vs. Arkansas, 15 How. R., 304. That, however, is not the present case. The debt of the United States has not yet matured. Its bonds, issued to the railroad company, have not become payable, and their payment, when they mature, is secured by a specific lieu upon the road and its franchises. It is not a case for a creditor's bill. Whether the interest paid by the United States upon its bonds is a presently payable claim against the company is a question which has not been argued here, and which I do not decide. The doctrines I have laid down are'sustained by numerous authority, of which I cite the following: Robinson vs. Smith, 3 Paige Rep., 222; The Attorneys-General vs. Utica Insurance Company, 2 John, Ch. R., 371; Carlisle vs. Southeastern Railway Company, 1 MeN. & G., 689; Attorney-General vs. Great Northern Railway Company, 1 Dr. & Sm., 154. (See the cases cited in Heath vs. Erie Railway Company, 1 Blatchford, 394, Ch., &c.) In Robinson vs. Smith the rule is laid down by Chancellor Walworth in these words: "Generally, where there has been a waste or misapplication of the corporate funds PACIFIC RAILROADS. 171 by the officers or agents of the company, a suit to compel them to account for such waste or misapplication should be in the name of the corporation. But as this court never permits a wrong to go unredressed merely for the sake of form, if it appeared that the directors of the corporation refuised to prosecute, by collusion with those who had made themselves answerable by their negligence or fraud, or if the corporation was still under the control of those who must be made the defendants in the suits, the stockholders, who are the real parties in interest, would be permitted to file a bill in their own names, making the corporation a party defendant. And if the stockholders were so numerous as to render it impossible or very inconvenient to bring them all before the court, part might file a bill in behalf of themselves and all others standing in the samle situation." It is held in two of these cases, that if an incorporated company acts illegally in such manner as to endanger the public interest, it may be restrained from such action on a bill filed by the Attorney-General. In many of the cases quoted in these authorities this position is doubted. But I find no case justifying an action in the name of the sovereign to recover money or property belonging to a corporation, illegally received -y another, although obtained from the corporation by fraud or conspiracy. The power is confined to enjoining the commission of acts endangering the public interests, and does not extend to the recovery of money or property which belongs to the corporation. A suit for such recovery can only be maintained by the corporation, or, in certain exceptional cases, by one or more of its shareholders. The cases of the contract with the Wyoming Coal and Mining Company and the others set forth in the bill, come within the principles laid down in the cases cited. It is alleged that the Wyoming contract was made to give an unfair and unreasonable profit to the contractors, to give them a monopoly of the supply of coal for fifteen years, and that the contract was a fraudulent means of obtaining for the parties interested the advantages of the coal-trade for the benefit of the individuals named, and against the interest of the railroad corporation. Again, it is alleged of the Pullman Palace-Car Company, that an agreement has been made, by which it obtains from the railroad company privileges and advantages which it is not for the interest of that company to give, and that the managers and stockholders of the railroad company fraudulently obtain for themselves profits which in equity belongs to the railroad company. A similar statement is made in regard to the Omaha Bridge Transfer Company. Again, it is alleged that the cost of the railroad was less than one-half the sum represented by the stock and other outstanding liabilities of the company; and that much of the stock and bonds of the company had been issued, not in the interest of the company, but by the managers, unlawfully to enrich themselves, and that high interest and commissions are habitually paid to the managers. The Hoxie contract is of the same general character, and is connected with the following transaction: It is alleged that the Credit Mobilier of America was an incorporation organized under the laws of Pennsylvania, withpow er, a nong other things, to contract for building railroads; that the defendants named, in pursuance of a design to control the Union Pacific Road for their private benefit and not for the purposes declared in the act of Congress, obtained the control of the Credit Mobilier; that the intention of the defendants named was to substitute the Credit Mobilier as a contractor in the place of those who had undertaken to perform the Hoxie contract. The means of accomplishing their purpose are set forth in detail, and it is alleged that large amounts of money, dividends, certificates of shares, mortgage-bonds, land-grants, and income-bonds, were issued to and received by the defendants named on pretence of payment for building the road and telegraph-line; and that the transaction was a fraudulent device of such defendants to put money in their own pockets. The allegations of the bill represent the transactions respecting the Oakes Ames contract, and the Davis contract, to have been of a like design, and perfected in a like manner. It is alleged that the accounts respecting these pretended contracts yet remain unsettled, and that large balances are claimed against the railroad company. It is alleged that the stock and bonds issued under this contract should, in equityv be returned to the company for cancellation, or the amount thereof paid to the company in cash. In respect to Cornelius Bushnell, it is alleged that the managers permitted him to dispose of a large number of its bonds and of other property for which he has not accounted and for which it refuses to compel him to account, and that the corporation sold to him certain other bonds at prices below their real value, and that he obtained a large sum of money as compensation for pretended services. All these transactions are alleged to be unlawful and illegal, and it is charged that Bushnell, Scott, Carnigie, and Morgan, who confederated with him, are liable to the company for the amount thereof, with interest thereon. This is the substance of the bill on this branch of the case. Upon the principles and authorities already expressed, the right of recovery for wrongs of this character is in 172 PACIFIC RAILROADS. the railroad corporation. Large amounts of moneyare involved which belong to the corporation, and not to the United States; neither the damnages nor the right of act ion belong to the United States. It is true in law, as alleged inthe bill, that Bushnell, Scott, Carnigie, and Morgan are "liable to the company for the amount" claimed. The United States possesses no power to sue for and recover this debt due to the Union Pacific corporation, and can give none to its Attorney-General. These principles are quite consistent with the power of the United States to institute a suit to procure an adjudication that the charter of the corporation be declared forfeited, and that a receiver of its assets be appointed. The corporation coming into existence by virtue of a statute of the United States, it is quite likely that the Federal courts have jurisdiction to adjudge such forfeiture upon the proper allegations and proofs. In that event, a receiver would be appointed representing the interest of all parties, who would administer upon the assets according to law. This rernedy, however, the United States have not thought fit to pursue. They do not ask to have the corporation dissolved. They are content that it should continue in existence. They must recognize its rights as so continuing, and cannut ask that its affairs be a-lministered as if it were dead.-(People vs. Turnpike Co., 23 Wend., 193; Thompson vs. People, 23 Wend., 537; Ches. & O. Canal Co. vs. B. & 0. R. Co., 4 Gill & Johns., 1.)'So I doubt not, that for the purpose of fixing the rates of fare upon the road according to the power reserved in section 18, Congress may direct an examination into the cost of building and running the road; and in an action with appropriate allegations, may cite the corp6ratiou to a discovery upon that subject, and for that purpose. Such, however9 is not the theory of the present complaint. V. So it is quite probable that a bill can be filed for the purpose of securing the application of the 5 per cent. of net earnings in paymnent of the interest or principal of bonds issued, as provided in section 6. ~A discovery may be sought, and the suit may be retained to afford relief. But it is sufficient to say that such is not the intent of the present bill; that there are no adequate prayers for such an account, and that the allegations are not framed with reference to a bill to compel the company to pay the annual fund. The point applies to the company only. These objections apply also to a supposed right of action to protect the mortgage security of the United States. 1. It is not a cause of action against the remaining demurrants. 2. There is no allegation that the security of the road and the ties is now imperiled. They are just as valuable, whether laid by fraud and extravagance, as if honestly and prudently laid. 3. It is said that some years hence new rails and ties will be needed, and that if future fraud and misconduct occurs the security will be imperiled. This is not a present evil. None of the causes of action are fairly within the scope of the present suit. VI. But let us look at the question of a trust to be enforced, upon the supposition that the act of 1873 was intended to authorize such trust to be set up in the present suit. The claim of the plaintiffs, upon this branch of the case, is contained in the forty-second paragraph of the complaint, and is as follows: "Forty-second. —The grants to said Union Pacific Railroad Company in said acts of Congress approved July 1, 1862, and July 2, 1864, of the right of way through the public lands for the construction of said railroad and telegraph-line, and the right, power, and anthority to take from the public lands adjacent to the line of said road, earth, stone, timber, and other materials for the construction thereof, including with said right of way to the extent of 200 feet on each sid'e of said railroad where it may pass over the public lands, the right to take all necessary grounds for stations, buildings, workshops, and depots, machine-shops, switches, side-tracks, and water-stations, and of every alternate section of public land designated by odd numbers to the amount of ten alternate sections per mile on each side of said railroad, on the line thereof, and within the limits of twenty miles oil each side of said. road, and of the bonds of the United States and the proceeds thereof, issued to the said company, as well as of the other corporate property, rights, privileges, and franchises bestowed upon said Union Pacific Railroad Company by said acts of Congress, were grants in:aid of a public work of the United States, and for a public use, and having been accepted by said corporation, the subject of each of such grants is held in trust by said corporation to be applied to such public use, and according to the intention of such grants, and to be accounted for in such application; and the United States are entitled to have the trust so declared and carried into execution; and to have said property so applied and accounted for; and to have the misapplication of the samle restrained by the injunction of this court; and the property or proceeds thereof so misapplied, restored to said corporation as such trustee, or to the United States." PACIFIC RAILROADS. 173 Not only the lands granted and the bonds issued by Congress to this road are here asserted to be subjects of a trust which the United States are en titled to have executed, but the moneys received upon subscription to its stock made by individuals, and from all other sources, all its corporate property in short, and its corporate rights, privileges, and franchises. In the sense that all men are bound to deal honestly and act justly in the discharge of their duties, and that whoever receives benefits or advantages from the public, which are expected or intended to produce an advantage to some portion of the people of the country, assumes a trust to affect that advantage, the plaintiff's claim -is true. It is not, however, accurate, in a legal sense, to say of a bank incorporated for banking purposes, or of an insurance company, or of any similar institution, that it is a trustee of the Government to efifect the desired result, or that its property is impressed with a trust for that purpose which may be enforced in the courts. Such incorporation is chartered for private benefit as well as for public advantage, and is legally bound to administer its affairs for the public advantage only to the extent that it does not violate the provisions of its charter or the law of the land. With this limitation such corporations are authorized to manage their own affairs for their own benefit, and such is the understanding of the Government which grants a charter, and-of the individuals who accept it. If, in this respect, a corporation should fail in its duty, the remedy is not by an attempt to enforce its supposed duties to the public as a trust, but to punish its illegal acts by a forfeitureof its charter. The plaintiff's counsel based their argument of a trust upon the title of the act of July 1, 1862, viz: "An act to aid in the construction of a railroad and telegraph-line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes." No trust is declared in this title, or in the sections of the act in which this aid is extended. In section 3 it is enacted, " That there be hereby granted to the said company, for the purpose of aiding in the construction of said railroad and telegraph-line, and to secure the safe and speedy transportation of the nails, troops, munitions of war, and public stores thereon," every alternate section of land, &c. In section 5 it is enacted, " That for the purpose herein mentioned, the Secretary of the Treasury shall, upon the certificates specified, issue to said company bonds of the United States, and the issue of said bonds, and delivery to the company shall, ipso facto, constitute a first mortgage on the whole line of the railroad and telegraph; and upon,tilure to redeem the said bonds, the road and all its rights, functions, limmunities, and appurtenances, * * and all granted lands which may remain unsold, may be taken possession of for the use and benefit of the United States: Prorided, That this section shall not apply to that part of any road now constructed." Not only is no trust expressed, but the idea thereof is excluded by taking a mortgage upon the road, the telegraph, its property, franchises, and all its granted lands reimaining unsold. The Government does not rely upon the security of an uncertain and undefined trust, but takes an express mortgage, where it intends to secure to itself the performance of conditions by the company. T.he sixth section enacts, "That the grants aforesaid are made upon the condition that the said company shall pay said bonds at maturity, shall keep said railroad and telegraph-lines in repair and use, and shall at all times transmit dispatches and transport mails, troops, nlunitions of wvar, &c., over said railroad." A condition-precedent is that which is requisite in order that something else should take effect, and without the existence of' which that something else does not and cannot exist. Now, that these grants were made absolutely, that is, without condition-precedent, is evident from the undisputed fact that the legal title to the lands vested at once in the corporation, and the same are now held by the'grantees of the corporation without interference from the Government or claim of title on its part. The same is true of thle bonds issued by the Government.-(Stanley v8. Colt, 5 Wallace, 142, Curtis arguendo, and cases cited.) The condition referred to can only be a condition-subsequelt, which Congress may enforce or omlit at its pleasure, and which does not affect the title to the property, or the existence'and powers of the corporation until it is enforced. Its enforcement would not be as of a trust, but to declare a forfeiture of the charter and to assume possession of the lands. And again, in section 17, Congress specifies the mode in which it intends to secure the completion and keeping in repair of the road and telegraph. If the corporation fails to complete the road and telegraph within a reasonable time, or permits the same to remain out of repair, Congress may pass an act to insure its speedy completion or repair, and may confiscate its subsequent income to repay the expenditures caused by its delay or neglect. The next section provides that, to enable it to accomplish the same purposes, Congress may alter, amend, or repeal the act. These affirmative guards and securities furnish strong evidence that Congress did not intend: to rely upon a condition or an implied trust to secure its rights. Whatever trust, guarantee, or protection it desired was 174 PACIFIC RAILROADS. reserved in express terms. Implications are thereby excluded.-(Leggett vs. Dubois. 5 Paige R., 114; Anstice vs. Brown, 6 ib., 448.) The expressions, which it is claimed established a trust, were used that the act might show on its face that the bounty of Congress was bestowed for a constitutional purpose. It is apparent to the most superficial reader of the statutes that the great object of Congress was to bestow advantages, and from time to time to increase gratuities, to a Corporation which should undertake the completion of a railroad to the Pacific. Conditions, restraints, or trust were but little thought of. Thus, by the act of 1862, Q 3, there were granted to the Union Pacific Company five alternate sections par mile on each side of said- railroad, and within the limits of ten miles on each side thereof; equaling 6,400 acres per mile. In 1864, by an act of Congress, this land-grant was doubled in amount, and the enormous gift of 12,800 acres per mile was made to the road. And again, by its charter of 1862, the Government undertook to issue its own bonds to the corporation, payable in thirty years, with interest, to the extent of $16,000 per anile, whenever forty miles of said road should be completed, which bonds were declared to be a first mortgage upon the road and its property. By the act of 1864 it was provided, first, that the corporation might issue its own bonds to the extent thus specified, and that the lien of the United States bonds should be subordinate to that of the company's bonds; and, secondly, that the corporate bonds might be issued as provided whenever and as often as twenty miles of road should be completed, instead of forty, as first required. By section 11 of the first act it was enacted that in certain localities the subsidy bonds of the Government thus to be issued should be $32,000 per mile, and in still other localities that they should be $48,000 per mile. By the original act fifteen per ceuturn of the bonds to be delivered upon the completion of the sections of the roads between certain points, and twenty-five per centum between certain other points, were required to be reserved until the whole of the road should be completed, and, if there was a failure to complete, should be forfeited to the United States. By the act of 1864 this reservation was abolished and the whole amlount was authorized to be delivered to the corporation. The United States have granted lands in many instances to corporations. The 14th volume of the Sta:tutes at Large will be found to contain five such cases. (Pages 210, 236, 289, 292, 239.) These same general terms, with reference to the purpose of the grants and the use to be made of the road by the Government, are contained in many of these acts. In 1850 Congress granted land in aid of the construction of a railroad from Chicago to Mobile, in which it was enacted that "the railroad shall be and remain a public highway, for the use of the Government of the United States, free from toll or other charge upon the transportation of any property or troops of the United States," and that "i' the United States mail shall at all times be transported on the said railroad under the direction of the Post-Office Department, at such price as the Congress may by law direct." (9 Stat. at Large, 467.) Nine similar cases in which such language is used are found?n the two following volumes: 10 Stat., 9, 34, 156, 302; 11 ib., 9, 15, 16. 18, 19, 20, 22, 30. I cannot think that the Government intended to reserve to itself a visitorial power over these corporations, the right to examine into their affairs, and, when not satisfactorily administered, to summon them before the courts for their regulation, or that it has done so. This railroad company is not a charitable corporation, nor were the grants for a charitable use. The grants of land and the issuing of bonds are to be considered as gifts, gratuities, voluntary contributions to aid in the construction of works which it is supposed would develop the resources of the country, advance its civilization and improvement, and upon which the mails and munitions of war could be transported. When given and acceptedl'the power of the donor is at an end, and the absolute ownership is in the corporations. The position of the Government is that of a donor and not that of -a creditor or a cestui que trust, except where such position is directly specified. Voluntary conveyance creates no presumption of a trust. (1 Hill on Trustees, 170, 171; 4th Am. ed.) The rights of the Government are those which are expressly reserved, and do not arise from an implied trust. No authority is cited to sustain the argument that such gifts or gratuities to a business corporation are in the nature of a trust, and I have found none. The disposition of the law is against implied or constructive trusts. In Cook vs. Fountain, (3 Swanston, 585,) the law is thus laid down by Lord Nottingham: "There is one good, general, and infallible rule that goes to both these kinds of trusts. It is such a general rule as never deceives, a general rule to which there is no exception, and it is this: The law never implies, the court never presumes, a trust but in case of absolule necessity. The reason of this rule is sacred, for if the court of chancery do once take the liberty to construe a trust by implication of law, or to presume a trust unnecessarily, a way is opened to the Lord Chancellor to construe or presume any man in England out of his estate, and so at last every case in coutt will become causa pro amico." (See, also, Sturges vs. Knight, 31 Vt., 1.) The cases in which trusts by implication have been enforced are usually those in favor of third parties, the presumed objects of the donor's bounty, and not in favor of' PACIFIC RAILROADS. 175 the donor himself. The presumption is much slighter in the latter case than in the former. The complaint charges a series of fraudulent acts on the palrt of the directors and managers of the corporation, enormous in extent and gross in character. I should have preferred to have found a mode of redressing these wrongs in the present suit, rather than to have reached the conclusion that this complaint and this plaintiff cannot now and here obtain it. Thus it is said in the thirty-fifth paragraph that the defendants, conspirators, andimanagers of the Union Pacific Railroad Company, caused large amounts of money belonging to the corporation to be expended for unlawful purposes upon objects not within the scope of the corporate powers of the company, to aid in procuring legislation from Congress for their benefit, and in improperly influencing public officers in the discharge of their duties, and in litigation to which said corporation was not a party, or in which it had no interest, and for the private interests of the defendants hereillbefore named. Other offenses equally or more heinous are specified, which must meet, the condemnation of every honest man. I am of the opinion, however, that their redress must be sought through the corporation, unless they refuse to bring suit, in which case the action must be by a shareholder of the corporation. The suggestions already made embrace all the causes of action provided for in the act of 1873, except the last, viz, the action against persons who have wrongfully and unlawfully received from the United States bonds, moneys, or lands which ought to be accounted for and paid to the United States. Where property has been wrongfully received from the United States, which ought to be accounted for and paid to them, a cause of action exists in its favor for the recovery of such property. The allegations of the complaint, however, and the conceded facts, do not cover this cause of action. The complaint contains no allegation that any person wrongfully holding them has received such bonds or moneys or property from the United-States. In every instance referred to in the complaint the property is stated to have been delivered by the United States to the corporation, and not to "the persons" against whom the action is authorized. The cause of action is not set up in the complaint, and needs no further consideration. Judgment must be ordered for the defendants upon the demurrer. INTEREST CASE. UNITED STATES COURT OF CLAIMS. TIlE UNION PACIFIC RAILROAD VS. THE UNITED STATES. FINDINGS OF FACT, I. The claimant, between the 1st day of January, 1873, and the lst day of March, 1874, both inclusive, at the request of the defendants, rendered to them certain valuable services in the transportation of their mails over the Union Pacific Railroad, the same being transported at fair and reasonable rates of compensation, not exceeding the amounts paid by private parties for the same kind of service as provided by the act of 1st July, 1862, (12. Stat, L., p. 489,) amounting to.$385,784.75. The claimant's accounts therefor have been stated to, and duly allowed by, the proper accountiig-officers of the Treasury. After the rendition of these services the claimant consented and offered to the defendants' officers that one-half of its above earnings, to wit, $192,892.37, be withheld from it and applied to and on account of certain payments for interest made by the defendants upon the bonds described in the second finding, and the claimant demanded payment of the remaining moiety of $192,892.37. But the defendants' officers paid to the claimant only $7,815.98, and refused to pay the balance of this moiety, to wit, $185,076.39, which still remains unpaid. The claimant also, between the 1st day of February. 1871, and the 2 th clay of Febrlary, 1874, at the request of the defendants, rendered to them certain other valuable services in the transportation of military and Indian supplies upon said Union Pacific Railroad. The fair and reasonable value of the services thus rendered amounts in the aggregate to the sum. or $655,112.22, and the claimant's accounts therefor have also( been stated, audited, and allowed by the'proper officers of the Treasury. But the defendants have not paid the same nor any part thereof. The claimant has consented that one-half part of its above earnings, to wit, $327,556.11, be withheld from it and applied upon the account of the payment for interest before referred to, and has delmanded payment of the remaining moiety of $327,556.11; but the defendants' officers have refused to pay such moiety, which still remains wholly unpaid. 176 PACIFIC RAILROADS. II. The defendants, at the request of the claimant, and for its use and benefit, at various times since the 1st day-of January, 1866, have issued and delivered to it the bonds of the United States authorized by the act of July 1, 1862, (12 Stat. L., p. 489,) which bonds are not coupon-bonds, but are what is known as registered bonds, being in form and substance like the bond hereto annexed and forming part of these findings. All of such bonds were sold and disposed of by the claimant, and are held by third parties. Between the 1st day of July, 1866, and the first day of January, 1871, both inclusive, the defendants have paid the interest accruing from time to time upon such bonds, to the parties holding the same, to the amount of $.4,530,466.41. Up to the 1st day of February, 1871, the defendants' officers withheld from the claimiant the one-half part of all moneys due to it. the claimant, for the transportation of mails and military supplies over the Union Pacific Railroad, and applied the moneys so withheld upon the account of interest paid by the defendants upon these bonds. The officers of the Government also paid the remaining moiety of such transportation accounts to the claimant. The claimant has not otherwise refunded the $4,530,466.41, interest before mentioned, and a balance remains unrefunded after the credit of the one-half part of such transportation accounts. Between the 1st day of July, 1871, and the 1st day of July, 1874, both inclusive, the defendants also paid to the third parties, for and on account of such interest on the bonds aforesaid, the further sum of $5,718,667.52. The claimant has not paid or discharged such advances for interests, but has tendered to the defendants the one-half part of its accounts for transportation, as set forth in the first finding of fact, and the one-half part of any other transportation accounts which it may have for other services rendered to the defendants. But the defendants by their proper officers have refused to receive such one-half part of sluch accounts in part payment of such interests, and, on the contrary, have insisted and claimed the right to retain the whole amount of such transportation accounts, and apply it upon the advances made in-payment of the interest accruing upon such bonds. And upon the foregoinlg findings of fact the Court of Claims decides, as its CONCLUSIONS OF LAW, that the claimant should recover the one-half part of its transportation accounts against the defendants, and that the counter claim of the defendants should be dismissed. NOTT, J., delivered the opinion of the court: This case comes before the court in two distinct forms: First, in that of an action brought by the Unionl Pacific Railroad Company to recover one-half of certain freightearnings withheld from it by the Government. Second, in that of a cross-action brought by the United States to recover back the interest which they have paid to third per-: sons upon their bonds heretofore loaned to the company to aid it in the construction of its road. The company admits that the Government has the right, to withhold onehalf of such moneys as the road may earn by the transportation of mails and military and other supplies; the United States insist that they may withhold all of these earnings and apply them in payment of their advances already made, or maintain their action for the interest on the instant that it is paid to the holders of the bonds. The statutory history of the case, briefly stated, is this: The act of 1X862 provided that the United States should loan to the company Government bonds, upon condition that the Government have the right to withhold all of the moneys that might become due to the company for the transportation of mails and military and other supplies, and apply the amounts thus withheld to the principal and interest of the debt. The act of 1864 substituted a half for the whole, and assured to the company the right of present payment to the extent of one-half of its earnings. The act of 1871 " directed' the Secretary of the Treasury to pay this half as provided by the act of 1864, he having then recently withheld the whole. The act of 1873 "directed " the Secretary to withhold "all payments" "to the amount of payments made by the United States for interest." and provided for testing judicially the right of the companye1 "to recover the sanme," and the right of the United States to recover back its advances. It is to be noted at the'threshold of the case that these two rights, if they exist, are distinct alld independent. The company may have a valid cause of action against the Government, and the Government may have a valid caluse of action against the company, and the validity of either will not necessarily impair the validity of the other. When both of these rights can be asserted in the same suit by action and cross-action, the greater will practically swallow up the less, but will not in a legal sense defeat it. The court in such a case simply credits to each party what he is entitled to recover, and renders judgment in favor of one for the balance. So far as the company's side of the case is concerned, it is manifest that its right of action must be maintained. For a valuable service rendered a present debt accrues, unllss the parties have expressly provided that payment shall be deferred or appropri PACIFIC RAILROADS. 177 at-ed to a, particular purpose. In this case that purpose was declared by the act of 1'464, which authorized the withholding of half, but assured the payment of the renainder. Under that act and prior to any subsequent legislation, the whole of the railway was constructed by the one party and all of the bonds were issued by the other. Therefbre that stA'tute, in every legal and moral sense, measures the rigohl;s and the liabilities of the parties. The real and important question in the case is, whether the United States can maidntain their action to recover back the interest which they have advanced; and its importance is magnified (as was suggested by the learned Assistant Attorney-General) by the possibility of this resulting consequence, that if they cannot maintain this action now, they mayn 3ot be able hereafter to charge interest upon their ad valuces. in approaching the decision of the case, the court has considered, but cannot adopt, the proposition maintained by the learnled counsel of the claimant, that the payments mrade for several years by Secretary MeCulloch constituted a contemporary construetion of a contract by the parties, such as courts`are ordinarily bound to adopt. The Secretary was not the contracting agent of the Goveri.ment, but simply its administrative officer for carrying out the provisions of the law. Moreover, there was no express contract in these transactions to be the subject of contemporary construction. A statute may contain the elements of a compact by pledging the public faith; but it is nevertheless to be construed according to the rules and statutes and not according to the rules for contracts..In cases of contracts it is the purpose of courts to ascertain and give effect to the real intent of the parties. Ordinarily this is to be deduced from the words of the instrrument; but where the parties, at the time of performing, by their mnltual acts give their own meaning to their own words, courts adopt it as the true meaning, however illogical or foolish it might otherwise be (leemed. The mutual understanding and agreement of the two opposite mlinds is Vhe one thing to be found, and when it is ascertained the work of interpretation is ended. In cases resting upon statutes there is no mutuality of agreement to be sought out. All of the terms of the complpct are dictated and accepted by one side, and the only intent.which judicial construdtion can make certain is the intent of the legislative power. Neither do we think the court preclu(led froml going to the nmerits of the case by the doctrines of estoppel invoked by the sanme learned counsel. It was urged wit.h great earnestness that the Government is now estopped from setting up a doubtfull coilstruction, becatuse, by its forlmer policy of paying, it mlisled the company into subjecting itself" to ten forJ!eital res, carrying its enltire rights and property." But the Government is not now assartilig-a forfeiture. A equitable estoppel only precliudes a party fromn asserting that which in good conscience lie ought not to assert. If this money bet owing to the Government, good conscience does not require it to refrain friom collecting the debt,, for enforcing collection of a debt due works no legal wro,g to the debtor. When the Government, attelnpts to enforce these ten forfeitures the doctrine of estoppel nmay be applicable. To apply that doctrine to a suit for the collection of the dlel)t without asserting forfeiture would be carrying the doctrine beyond its well-settled and rational bounds. Neither do we attach to the act of 1871 the conclusiveness attributed to it by the claimant's' counsel As before shown, the company had a (lemand against the GovernInent for services rendered, and the Governinent had a diemand against the company for nioney advanced to its use. It was perfectly consistent with the reservation of its rights for the Government to pay its debts to the company without compelling the company to pay its debts to the Governmilent. In 1871, a Secretary of the Treasury asserted this right of set-off; which, up to that tinie, had lain dormant, anid refused to pay the debt of the Government to the company. By the act of 1871, Congress interposed and directed the Secretary in effect not to.assert this right of set-off; but. to go on paying the debts of the Government as before. By the act of 1873, Congress interrupted the policy of allowing the comtnpany a credit for the advance, and " directed " the Secretary to assert for the Government the right of set-off, or, in other words, to inrsist to that extent upon the payment of the company's debts to the United States. If these advances for interest becamre debts of the company, due and payable as fast as they were mruade, the Government light rightfully and legally do one of two things: ei ther it might treat them as fres~h loans alnd charge interest upon them from the mroment they were made, or it might insist upon their immediate payment, in whole or in part. The act of 1871 authorized the credit; the act of 1873 insist,ed on the payment. Tue one did not extend to any cause of action belonging to the Government, the other did not infringe any right vested in the company; both left the original compact entirely untouched as it stood declared by the statutes of 1862 and 1864. We come ilow to the final question in the case. The acts of 1,862 and 1864 declared and still define the bargain, whatever it may be. The learned assistant attorney-general has insisted that those acts, in legtal contemplation, are nothing more than a charter of, and grant to, the com pa.,y, and that the consideration moving to the United States is in legal effect nothiung more than the consideration of public benefit which is theoretically received for every statute creatH. Rep. 440- 12 178 PACIFIC RAILROADS. ing a body-corporate. It is well known to every one that when these statutes were passed the United States were threatened with ilismemberment, and that thoughtful persons apprehended with concern the possibilities of the territory of the republic falling into three parts, and of the portion west of the Rocky Mountains, separated by deserts and cut off by natural barriers, fornTiing an independent sovereignty. It is also equally well known that constanutly-recurring Indian hostilities upon the plains rendered sonme,means of speedy transit indispensable. Finally, it is equally beyonld dispute that the Governmeit was possessed of quantities of unsalable lands which it desired to bring within the reach of purchasers. Considerations, therefore, political and financial, of no common magnitude, must be. operated upoh the legislative mind as inducemlients for all the lranchises and grants which those statutes created and conferred. Nevertheless, the magnitude of the consideration does not change the character of the legislation, nor vary the rule of construction by which the hights of the (grantee must bel measured. The judiciary can never weigh the advantages that a particular grant secured to the Government, nor say in one case, "here the consideration was so great that the statute should be deemned a contract and construed liberally;" and iu another, " here the consideration was so small that no reciprocal advantages accrued to the Governmnnt, and the statute mnust be deemed a grant and construed strictly against tile grantee." But these acts of 1862 and 1864 contain something more than provisions to create a corporation and confer upon it franchises and grants. T.he statutes really embody both a charter and a compact. As to those provisions which create the corporation, which limit its rights and franchises, which prescribe its obligations to the public and confer grants anud benefits upon it, the statutes are nothingl more than a charter; but as to those provisions which bind the Government to do something, which cast distinct obligations upon it, which carry it into the region of mercantile transactions and make it take a financial part, in the enterprise, the statutes belong to that class of legislationl which is to be so construed as to carry out the liberal and just intent of the legislature. The rights and duties of the company as a body-corporate are not involved in this suit; the things which the Government agreed to do or not to do form the only subject for judicial determination. When the project of enmbarking the, United States in this enterprise, by loaning Government bonds to the Pacific railways, was sanctioned, three contilgencies must have been contemplated, by Congress: 1. That the earninos of the company in the Way of Government transportation would be substantially equal to the interest on the bonds, a contingency most unlikely, although t,he Government could regulate the qunantity of freight which it would send over the road; 2. That the earn,ings of the company would -be materially greater than the interest, a continge.ncy that would remove all (nlestion of present indebtedness, and tend to reduce the principal of the d(ebt long betore the bonds would mlature;3. That the earnings and five per centuni would be materially less than the interest, a contingency that has actually happened. The amount which the Government was to loan to the company was known with tolerable certainty, and the earnings of the company could be found with soine approximrnation to truth by ascertaining the quantity of freight which the Government wolld be likely to send over the road and the rates which would probably be charged. It was within the power of Congress to have provided that each party should pay its debts to the other as they accrued, and it was also within its power to make some other and more complicated arrangement by which each to some extent should share in the risks of the enterprise and participate to some extent in its success. The simplest form of transaction would htve been that the one party should pay the freight-bills whenever they were presente(]d, and that the other should refund the interest so soon as it was advanced. Was that the substance of the obligation which Congress assumed toward and exacted of this company? The act of 1862 fixed the time when the principal of the debt should become due by sal.ying the "company shallpay said bonds at mnaturity." With regard to the interest the act is not equally explicit, but, so far as its express provisions go, it provides this mode of payment: "' ll compensation for services rendered for the Government shall be applied to the payment of said bonds and interest until the whole amount is fully paid," "and after said road is cornpleted, un til said bonds and interest are paid, at least five per centunt of the net earnings of said road shall also be annually applied to the payment thereof." Anrid this is all which the act provides. First, services rendered to the Government; second, a portion of the net earnings of the company. It is a fmundamental principle of law that when one man pays money to the use of another a present debt immediately ensues. But it is doubtful whether this can be interpolated into a statute, and it is not applicable when there is an express agreemernt which prescribes a different tinme or a specific mode of payment. These provisions of this statute are not followed by a declaration saying, in effect, that if a balance of interest remains after the application of these sources of payment such balance of interest shall become immediately due and payable; on the contrary, th e time and mode PACIFIC RAILROADS. 179 of payment, so far as they are expressly designated by the statute, are satisfied by the application of the moneys derived from those two sources. The assistant attorney-reneral has argued that these were not intended to be the exclusive sources whence the repayment of interest on the bontls might be drawn; but that they were " inserted to create a sinkinkg-fendifor the ultimate payment of the bonds," i nasmuch as lands were to be sold by the company " on which the Government originally held a mortgage." If the amount derived from those two sources, it was said, should exceed the interest on the bonds, the Government would put aside the remainder as a fund for the final extinction of the debt, and would allow interest to the company upon it. However judicious and just such a course might have been, there are two reasons why the court cannot give such a construction to the statute. In the first place, it does not provide for a sinking-fund, (which is an artificial means for paying a debt, unknown to the law, and necessarily the creation of express agreement or express enactment,) nor does it authorize the allowance of interest on any such fund, nor couple these two sources of revenue with any object, save that of being "applied to the pa ymenet of such Worlds and interest." In the second place, though lainds were to be sold upon which the Government held a mortgage, still the avails were to go into the road upon which the mnortgage rested. The form of the security changed, but the mortgage followed the proceeds; the security was transmuted, but not relinqubished, and the change foro unsalable lands to a completed railway, in the contemplation of Congress, might have increased its value. Moreover, (and this is the chief point in the case,) the statute makes no distinction b tween principal and interest, nor indicates in any way that the debt for the one shall mature at a different time than the debt for the other. Furthermore, a previous sectionI of the statute declares that for " the amount of said bonds," " together with all interest thereon which shall have been paid by the United States," they shall constitute a mortgage 1upon the road. In the present predicament of the transaction, the Governmentt is largely in advance for interest; and there at first appears to be no consideration received which should hbind it to suffer a serious, if not disastrous, loss. But if we reverse the condition of affairs, it will be seen that a similar loss would fall upon * the company, and a corresponding gain inure to the Government. That is to say, if the Government had required a larger amount of transportation, and the net earnings had greatly exceeded the rea lity, so that the two more than equaled the interest, then tile company would be paying off the principal of its ultimate indebtedness to the Government long before the Government would be paying its debts to the bondholders. And as the company had mortgaged its road " to secure the repayment" "of the amount of said bonds,"'" together with all interest thereon zi;hich shall have been paid by the United States," a corresponding loss of interest upon interest would likewise fall upon it. Now, Mwhei the statute has providted two sources for the payment, not only of interest, but of a great deal more, that is to say, of a portion of the principal before it becomes due, what reason can there be for the judiciary to interpolate, by ihere construction, a third source into the statute? Assuredly hone. If the statute had stopped with interest, and had provided that the remainder, if any, of the transportation nioneys and five per centum should be paid to the compally, there would be good reasons for saying that a reciprocal obligation was implied, and that the company should be held liable to make the interest account whole. But, in the plight which Congress has placed the reciprocal and intermingling rights and interests of the parties, we perceive no reason why the Government should call the varying balance of its advances a liquidated present debt, subject to immediate collection. But beyond the confines of all disputed construction, there remains one nncontroverted provision in the statute which seems decisive of the legislative intent. The.only party to whom an option was reserved by the act is the Government, and that option is. the important right of making the company's services as little or as great as it pleases. If it requires these services, the company cannot withhold them; if it refuses all employment, the company cannot exact it. As the co01mpact originally stood, the Government could keep down this interest without the expenditure of any ready money, by simply furnishing to the company this employment, and it might push the advantage to an unlimited extent, even to carrying the earnings of the road to the liquidation of the debt before it had matured. The subsequent st'atute which snbstitu: ed a half for the whole of the earnings did not affect the legal import of the Government's reserved discretion, nor change the legal relations of the parties, nor vary the construction applicable to the original statute. It was an alteration in degree and not in kind, and still left the company in this matter of service entirely subject to the orders of the Government. In contemplation of law, the wrong and injury of which the Government complains are entirely of its own choosing. Courts of law cannot be invoked to aid persons where they themselves possess the means of redress, If an ordinary party were to come into another court with such a complaint, he would be told, "Eitheryon have willfillly witbhheld this employment from the other contractor eor you have been unable to filrnisl it to him. If the former supposition. is the fact, then the fault is your own, and you cannot ascribe wrong to one whom you confess has 180 PACIFIC RAILROADS. always been willing to repay you in the manner which your agreement prescribes; if the latter is the ficet, then, because the sources of payment which you provided disappoint you, and because the payment in kind which you elected to take gives you more of the transportation service than you really require, you are trying to shift your ]oss to other shoulders than your own. Your misfortune is really this, that you made an improvident bargain." The judgment of the court is that the claimant recover of the defendants the sum of $512,632.50, and that the counter-claim of the defendants be dismissed. INTEREST CASE. Supreme Court of the United States.-No. 571.-October term, 1875. THE UNITED STATES, APPELLANT, rvS. Appeal from the Court of Claims. TIlnE UNION PACIFIC RAILROAD COMPANY. Mr. Justice DAVIS delivered the opinion of the court. The Union Pacific Railroad Company, conceding the right of the Government to retain one-half of the compensation due it for the transportation of mails, military and Indian supplies, and apply the same to re-imburse the Government for interest paid by it, on i)onds issued to the corporation to aid in the construction of its railroad and telegraph lines, seeks to establish by this suit its right to the other moiety. The United States, on the other hand, having paid interest on these bonds in excess of the sunms credited to the company for services rendered by it, insists upon' its right to withhold payment altogether. One of the grounds on which this right of retention is sought to be maintained is by reason of the general right of set-off. It is true this right, as a general proposition, exists in the Government, and is commonly exercised by it when settling with those having claims against it. But, manifestly, the rules applicable to ordina3ry claimants for services rendered the United States do not apply to this controversy. The bonds in question were issued by the United States in pursuance of a scheme to aid in the construction of a great national highway; in themselves they do not import any obligation on the part of the corporation to pay, and whether, when the United Stat[es have paid interest on them, an obligation arises on the part of the corporation to refund it, depends wholly on the conditions on which the bonds were delivered to the corporation and received by it. These conditions are embodied in the legislation of Congress on the subject; and, if on a fair interpretation of this legislation, the corporation is found to' be now a debtor to the United States, the deduction for interest paid on the bonds can be lawfully made., But if the converse of this proposition is ascertained to be true, the Government cannot rightfully withhold from the corporation one-half of its earnings. In construing an act of Congress, we are not at liberty to recur to the views of individual members in debate, nor to consider the motives which influenced, them to vote for or against its passage. The act itself speaks the will of Congress, and this is to be ascertained from the language used. But courts may, with propriety, in construing a statute, recur to the history of the times when it was passed, and this is frequently necessary in order to ascertain the reason as well as the meaning of particular provisions in it.-(Aldridge vs. Williams, 3 Howard, p. 24;. Preston vs. Browder, 1 Wheaton, 120.) Many of the provisions in the original act of 1862 are-outside of the usual course of legislative action concerning grants to railroads, and cannot be properly constrned without reference to the circumstances which surrounded Congress when the act was passed. The war of the rebellion was in progress, and the country had become alarmed for the safety of the Pacific States, owing to complications with England. In case these conmplications resulted in an open rupture, the loss of our Pacific possessions was feared, but even if this fear were groundless, it was quite apparent that we were unable to furnish that degree of protection to the people occupying them which every Government owes its citizens. It is true the threatened danger was happily averted, but wisdom pointed out the necessity of making suitable provision for the future. This could be done in no better way than by the construction of a railroad across.the continent. Such a road would bind together the widely-separated parts of our common country, and furnish a cheap and expeditious mode for the transportation of troops and supplies. And if it did nothing more than afford the required protection to the Pacific States, it was felt that the Government, in the execution of a plain duty, could not justly withhold the aid necessary to build it. And so strong and pervading was this opinion that it is by no means certain the people would not have sanctioned the action of Congress, if it had departed from the traditional policy of the country regard PACIFIC RAILROADS. 181 ing works of internal improvements, and charged the Government itself with the direct execution of the enterprise. This enterprise was viewed as a national undertaking for national purposes, and the public mind was directed to the end to be accomplished rather than the particnlar Imeans emnployed for tilhe purpose. Although this road was a military necessity, there were otlier reasons active at the time in producing an opinion for its completionl besides. tile protection of an exposed frontier. There was a vast unpeopled territory lying between the Missouri and Sacramenti) Rivers which was practically worthless without the facilities afforded by a railroad for the transportation of person and property. With its constrnction the agrictiltural and mineral resources of this territory could be developed; settlements rmiade where settlements were possible, and thereby the wealth and the power of the United States essentially increased. And there u as also the pressing want, in times of peace even, of an improved and cheaper method for the transportation of the mails and supplies for the Army and the Indians. It was in the presence of these facts that Congress undertook to deal with the subject of this railroad. The difficulties in the way of building it were great, and by many intelligent persons considered insurlnounDtale.. Although a free people, when resolved upon a course of action, can accomlplish great results, the schemle for building a railroad 2,000 miles in length, over deserts, across mountains, and through a country inhabited by Indians jealous of intrusion upon their rights, was universally esteemred at the tille to be a bold and hazardous undertaking. It; is nothing to the purpose that the difficulties in the way of the undertakingf, after trial, in a great measure disalppeared, and that the road was constructed at less cost of time and money than was considered possible. No argument can be drawn from the wisdom that comes after the fact. Congress acted with reference to a state of things supposed to exist, at the time, a ld no aid can be derived in the interpretation of'its legislation, from the consideration that the theory on which it proceeded turned out not to be correct. The project of building the road was not conceived for private ends, and the prevalent opiniion was that it could not be worked out by private capital alone. It was a national work, originating in national necessities, and requiring national assistance. The policy of the country, to say nothing of the supposed want of power, stood in the way of the United States taking the work into its own hanids. Even if this were not so, reasons of econo1my suggested that it were better to enilist private caphial and individual enterprise in the pro{ject. This Congress unidertook to do, and the inducemneuts held out were such as it was believed would procure the requisite capital aind enterprise. But the purpose in presenting these inducements was to promote the colnstruiction and operation of a work deemed essential to the security of great public interests. It is true the scheme conteniplated profit to individuals, for without reasonable expectation of this capital could not bp obtained, nor the requisite skill anid enterprise, but this consideration does not in itself change the relation of, the parties to this suit,. This might have been so if the Government had incorporated a company to advanlce private interests, a-nd agreed to aid it on account of supposed incidental advautages vwhich would accrue to the public fromrlthe completion of the enterprise. But the Government proceeded on a wholly different theory. It promloted the enterprise to advance its own interests, and1( enldeavored to enlist private capital and individual enterprise as a meanis to an enud-the securing a road which could be used for governnmental purposes. Whatever obligations, therefore, rest on the company incorporated to accomrplish this purpose, must dlepend on the true meaning of the enactment itself, viewed in the light of coutempo)raleous history. It has been observed by this court that the title of an act, especially in congressional legislation, furnishes little aid in the construction of it, because the body of the act, in so many cases, has no reference to the matter specified in the title. (Hadden rs. The Collector, 5 Wallace, page 110.) This is true, andl we' lhave no-disposition to depart from this rule, but the title, even, of the original act of 18Sd2, incorporaLting( the defendant, (12 Stats., p. 489,) seems to have been the subject of special consideration by Congress, for it truly (iscloses' the general purpose Congress had in view in passing it. It is "An act to aid in the construction of a railroadl froin the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes." That there should, however, be no doubt of the national character of the work which Congress proposed to aid, the body of the act contains these words: "And the better to accomplish the object of this act, namriely, to pronmote the public interest and welfare by the construction of said railroad and telegraph lines, and keeping the same in working order, and to secure to the Government at all times (but particularly ill time of war) the use and benefits of the same for postal, nilitary, and other purposes, Congress may at any time, having due regard for the rights of said companies ianamed therein, add to, alter, amend, or repeal this act." (See 18th section of charter, 12 Statutes at Large, p. 497.) 182 PACIFIC RAILROADS. Indeed, the whole act contains unmistakable evidence that if Congress was put to the necessity of accomplishing a great public enterprise through the instrumentality of private corporations, it took care that there should be no misunderstanding about thoe objects to be accomplished or the motives which influenced its course of action. If it had been equally explicit in the provision regarding the bonds to be issued in aid of the road, there would have been no occasion for this suit. But even in this particular, looking to the motives which led to the act, and the objects intended to be effected by it,, we do not think there is any serious difficulty to get at the true meaning of Congress. The act itself was an experiment and nmust be considered in the nature of a proposal to enterprising men to engage in the work, for there was no certainty that capital, with the untried obstacles in the way, could be enlisted. If enlisted at all, it could only he on conditions which would insure, in case of success, remuneration proportionate to the risk incurred.'The proffered aid was in lands and interest-bearing bonds of the United States. There is no c.atroversy about the terms on which the lands were granted, and the only point with which we have to deal relates to the nature and extent of the obligation imposed by Congress on the company to pay these bonds. It is not doubted that the Governmnent was to be re-imbursed both principal and interest, but the precise question. for decision is whether the company was required to pay the interest before the maturity of the principal. The solution of this question depends upon the meaning of the fifth and sixth sections of the original act of 1862. and the fifth section of the amendatory act of 1864. (12 Statutes at Large, 492; 13 Statutes at Large, 359.) The fifth section of the original act contains the undertaking of the Government, and the sixth defines the obligation of the company. By the fifth it is provided that, on the completion of the road in sections of forty miles, there shall be issued and delivered to the company a certain number of interest-bearing bonds of the United States, payable thirty years after date, with interest payable semi-annually. And " to secure the repayment to the United States, as'hereinafter provided,' of the amount of said bonds, together with all interest thereon which shall have been.paid by the United States," it was further provided that the issue and delivery of the bonds sh'ould constitute a first mortgage on the property of the company, with a right reserved to the Government to declare a forfeiture and take possession of the road and telegraph-line in case "of the refusal or failure of the comlpany to redeem said hbonds or an.y part of thern when requested to do so by the Secretary of the Treasury, in accordance with the provisions of the act." The manifest purpose of this section is to take a lien on the property of the corporation for the ultimate redemption of the bonds, principal and interest; but the manner of redemption and time of it are left for further provision. That the Government was expected in the first instance to pay the interest is clear enough, for the mortgage was taken to secure the repayment of the bonds, " together with all interest thereon which shall have been paid by the United States." This phrase implies a prior payment by the United States, whatever may be the duty of the corporation in regard to re-imbursement, as subsequently defined. Beside this, when repayment is spoken of, it is nnderstood that. something has been advanced which is to be paid back. Apart from this, had it been the intention that the corporation itself should pay the interest, as it fell dle, phraseology appropriate to such a purpose would have been used. But when and how the re-irnlb]seMnent was to be made was declared to be "as hereinafter provided," that is, in conformity with the terms prescribed in another portion of the act. And that this is so is evident enouoh from the latter part of the section, which directs the Secretary of the Treasury to enforce the fiorfeiture and take possession of the rc(ad on failure of the corporation to redeem said bonds or any part (f then), (referring to the different periods of their issue,) according to the plan of redenmption thus provided, or, in other words, " in accordance with the provisions of this act." The obligations imposed on the corporation, or assumed by them, in relation to the repayment of the bonds, are set.forth entire in the next or sixth section, which, on account of its importance, is set forth at length. " Sulc. 6. And be it further enacted, That the grants aforesaid are made upon condition that said comlpany shall pay said bonds at maturity, and shall keep said railroad and telegraiph line in repair and use, and shall at all times tfansmit dispatches over said telegraphline and transport mails, troops, and munitions of war, supplies, and public stores upon said railroad for the Government, whenever required to do so by any Department thereof; and that the Government shall at all times have the preference in the use of the same for all the plurposes aforesaid, (at fair nand reasonable rates of compensation, not to exceed the anmounts paid by private parties for tile same kind of service,) and all conrpelsatliovs fr services renderedfor the Goverunment shall be applied to the payment of said bonds and interest, until the whole amount is fully paid. Said company may also pay the United States, wholly or in part, in the sanme or other bonds, treasury-notes, or other evidences of debt against the United States, to be allowed at par, and after said vroad is completed, until said1 bonds and interest are paid, at least five per centuln of the net earnings of said road shall also be annually applied to the payment thereof." PACIFIC RAILROADS. 183 Leaving out of consideration the parts of this section not pertinent to the present inquiry, there are three things, and three only, which the corporation is required to do concerning the bonds in controversy: first, to pay said bonds at maturity; second, to allow the Government to retain the compensation due the corporation for services rendered, a.nd apply the same to the payment of the bonds and interest, unt.il the lwhole amount is fully paid; third, to pay over to t;he Governmuent, after the road sliall have been fully completed, five per cent. of the net earnings of the road, to be appropriated to the payment of the bonds and interest. If we take the language used, in its natural and obvious sense, there can be no difficulty in arriving at the meaning of the condition " to pay said( bonds at maturity," which was imposed upon this corporation. As comnimonly understood, the word "' maturity," in its application to bonds and other similar instruments, refers to the time fixed for their payment, which is the te.rination of the period they have to run. The bonds in question were bonds of the United States promising to pay to the holder of them one thousand dollars thirty years after date. and the interest every six months. This obligation the Government was required to perform, and as the bonds were issued and delivered to the corporation to be sold -for the purpose of raising nioney to construct its road, it is insisted that Congress must have meant to impose a corresponding obligation on the corporation. In support of this construction it is sought to give to the word " maturity " a double signification, applying it to each payment of interest as it falls due as well as to the principal. But this is extending the operation of words by a forced construction beyond their natural and ordinary meaning, which is contrary to all legal rules. Courts cannot supply omissions in. legislation, nor afford relief because they are supposed to exist. "We are bound," said Justice Buller, in an early case in the King's Bench, " to take the act of Parliament as they have mnade it; a cases omlissus can in 1o case be supplied by a court of law, for that, would 1)e to make laws; nor can 1 conceive that it is our province to consider whether such a law that has been passed be tyrannical or not." (Jones vs. Simart, 1 Term Reports, 44-52.) Lord Chief Baron Eyre, in the case of Gibson vs. Minet, (I H. BI., 569-614,) said: " I venture to lay it down as a general rule respecting tlhe iinterpretation of deeds, thlat all latitude of construction must subrmit to this restrictionl, lamely, that the words maay bear the sense which by construction is put upon them. If we step beyond this line we no longer construe mien's deeds, but make deeds for thein." This rule is as applicable to the language of a statute as to the language of a deed. The words " to pay said bonds at maturity" do not bear the sense which is sought to be attributed to thenm. They imply, obviously, an obligation to pay both principal and interest when the time fixed for the payment of the prinlcil)al has passed; but they do not imply an obligation to pay the interest as it accrues and the principal when due. It is one thinig to be required to pay principal and interest when the bonds have reached maturity, and a wholly different thing to be required to pay the interest every six months and the principal at the bud of thirty years. The obligations are so different that they cannot both grow out of the direct words employed, and it is necessary to superadd other words in order to extend the condition so as to include the paymenlt of semi-annual interest as it falls due. Neither on principle nor authority is suchl a plain departure from the express letter of the statute warranted. And especially is this so when the conistruction leads to so great an extension of a condition to defteat a grant. The failure to perform the condition is cause of forfeiture. If the natural meaning of the wordts be adopted as the true mleaning, there can be no forfeiture ifntil the bonids themselves have matured. On the contrary, if the construction contended for be allowed, the graunts tiade to the corporation are subject to forfeiture on each occasion that six months' interest falls due and is not met. It would require a pretty large inference to draw from the language used authority to enlarge, in a particular so essential, the ternms of a condition assumedlt by the corporation when it assented to the act. Besides thils, wtern Congress imposed this condition it well knew that the undertaking ot the Goveo-nment bound it to pay to the hollr of any bond into est every six mnonths, and the principal-at t he time the bond mlatured. With this kLowledge. dealing as it did with the relations the company were to bear to the Governmleilt on the receipt of these bonds, had it inten(led to exact of th.- company the payment of interest before the mraturity of the bonds, it would have declared its purpose in language about which there could be no misutlnderstanding. Bat, if the wordls " to pay said bonds at maturity" do not give notice that this exaction was intended, neither do the other provisioins of the sixth section. They created no obligation to keep down the interest, nor were they so intended. The proposition to retain the amount duie the company for services rTelmdered, and apply it toward the genmeral indebtedness of the company to the Government, o.Innot be construed into a requirementou that the conlpany shall pay the interest fromt timie to time and the principal when (lue. It was in the discretion of Congress to mtake this requirement, and then, as collateral to it, provide a special fund or fulmds out of which the principal obligation cotcld be dischlargred. This Congress did not 184 PACIFIC RAILROADS. choose to do, but rested satisfied with the entire property of the company as security for the ultimate payment of the principal and interest of the bonds delivered to it, and, in the mnean time, with special provisions looking to the re-imbursenient of the Government for interest paid by it, and the application of the surplus, if any remained, to discharge the principal. The company, for obvious reasons, might be very willing to accept the bonds of the Government on these terms, and very unwilling to conic under an absolute promise to pay the current interest as it accrued. If it were in a. condition, either during the progress of the work, or on its completion, to earn auiything, there was no hardship in the proposed application of the compensation diue it, but it can be readily seel, if the company were required to raise money every six months to pay interest, when all its available means were necessary to the prosecution of the work, the burden nlilght, be very heavy. Congress did not see fit to impose this burden, and place the company in a position to risk the forfeiture of all its grants, in case of failure to provide the means to pay current interest. Besides, it is fair to infer that Congress supposed that the services to be red(lered by the road to the Goverlinment would equal the interest to be paid; and that this was not an unreasonable expectation, tlhe published statistics of the vast, cost of transpi,rtiig military and naval stores and the mails to the Pacific coast. by the ancient meth(,ds, abundantly show. The views presented regarding the provision that the Government shall retain the compensa.tion for services rendered by the compaly, either before or after the roa(l is completed, ale equally applicable to the provision that, after the road is conlpleted, 5 per cent. (if the net earnings of the road shall be annually appliedcl to the paynmenrt of bonds and ilterest. It is not perceived how, on any prinrciple of construction, an obligattion of the corporation to pay the interest on the bonds every six months after they shall have beenl:issued can be pre(ticated on t;he terms of this provision any more than on the terms of the other. Both are reserved fu nds out of which the Government was to be re-iibursed in the first instance the interest it had paid, leaving the surplus, if any, to be alipplied to the paymnent of the principal of the bonds. In addition to all that has been said, there is enough in the scheme of the act; and in the purposes contemimplated by it, to show that Congress Iiever intenlded to impose onl the corporation the obligation to pay current interest. The act was passed in the mlidst of waxl, as has beeni stated, when the imeans fior nationa.l defense were deenle(l inadequate to the wants of the country, and the public mind was alive to the necessity of uniting by iron bands the destiny of t,.e Pacific States with those of the Atlantic. Confessedly the undertaking was outside of the ability of private capital to accomplish, and only by the helping hand of Congress could the problem, difficult of solution uiider the miost favorable circunmstanlces, be worked out. Local business, as a source of profit, could not lbe expected while the road: was in course of construction, on accouint of the character of the country it traversed; and whether, when coirnpleted, as an investment, it would prove valuable, was a question for time to determine. But vast as the work was, limited as were the private resources to build it, the growing wants of the counltry, as well as the existing and future military necessities of the Government, demanded that it be completed. Under the stiumuliis of these considerations Cores'tess acted. It did not act, for the benefit of private persons, nor in their interest, but for an oblject deellled essential to the security of the country, as well as to the prosperity of the country. Coinpelled, as it m as, to incorporate a private company to accomplish its object, it proffered the terms on which it would lend its aidl, which, if deemed too liberal nlow, were then considered, with the lights before it, not more thani sufficient to engage the attention of enterprising men, who, if not themselves capitalists, were in the position to command the use of capital. These terms looked to ultinuate security, rrLher than immediate re-imbursenlent; and for the obvious reason that the corporation would requtire all its available mleans in. constructioun; and to exact from it, while the work was in progress, the obligation to keep down the interest on the boimds of the United States, would tend to cripple the enterprise at a time when the piimary object with Congress was to advanlce it. There could, however, be no reasonable objection to the application "of all conmpensations for services rendered for the Governmllent" from the outset, and " 5 per cent. of the net earnings after the comnpletion o f the road" to the payment of the bonds and interest, and thqse exactions were accordingly mliade. Of' necessity there were risks to b)e takenl in aiding with money or bonds an enlterprise unparalleled in the history of any free people, which, if completed at all, would require, as was supposed, twelve.years in which to do it.. But. these risks Were commonl to both parties, and Congress was obliged to assume its share and advance the bonds or abandon the enterprise, for obvionusly the grant of lauds, however vahlable after the road was built, could not be available as a resource with which to build it. If the road were a success, in addition to the benefit it would be to the United' Statesi the corporation would be in a situation to repay advances for interest, and pay the principal when due. If, on th1 c )ntrary, the investrenti proved to be a failure, subjecting the private persons who embarked their capital in it to a total loss, thllere PACIFIC RAILROADS. 185 was left for the Government the entire property of the corporation, of which immediate p:ssession could be taken on a declaration of forfeiture. In view of the circumstances under whicli the act of 1d62 was passed, and the purposes to be accomplished by it, appearing as they do in the title as well as the body of the act, and constituting as they do the public history of this legislation, this brief summnlary presents, as we think, fairly its scopet and effect, which are inconsistent with the psition asserted by the appellant. Notwithstanding the favorable terms proposed by Congress, the road langnished, and the efftect of this was the atneudatory act of 1864. By this the grant of lands was doubled; a second, in lien of a first,, mortygage accepted by the Government; and a provision inserted that "only one-half of the compensation for services rendered for the. Government by said comIpanies (meaningc this and the auxiliary companies incorporatedl at the same time) shall be required to be applied to the payment of the bonds issued by the Government in aid of the coDstructiOU of said road." This amendmend t was, without doubt, intended merely to modify the provision in the original act so as to allow the Governmeint to retain only one-half of the compensation fo) services re ndered, instea., of all. Althoughlthe requirement in this provision is that the compensation shall be applied "to the payment of the bonds," and in the former "to pay the bonds and interest," yet it cannot be ~supposed Congress intended to relinquish the right secure(l in the former act to make the application in the first place to the interest and then to the principal. The purpose of Congress culd have been nothing more than to surrender on behalf of the Governlment the right to retain the whole of the companies' earnings and to accept in lieu of' them the right to retain the half, leaving unaffected by this change any right touching this subject secured in the former act. The change was a very material one, and intended, doubtless, as a substantial favor to the companies, but on the principle contended for it would prove, instead of this, to be of no value. Of what possible adlvantage could it be to these companies to receive payment for one-half their earnings, if they were snlbject to a suit to recover it back as soon as it was paid? And this is the effect of the provision on the theory that the companies are debtors to the'Governmeqt on every semi-annual payment of interest. They could not, in the nature of things, have accepted the stipulation with an unlderstanding that any such effect would be given it. If the Government consents to the diminution of its security, so that only half of the prices due for services are to be applied to the payment of the interest or principal, what is to become of the other half"? Surely there is no implication that the Governllent shall retain it; and, if not, who is to gcet it? Manifestly the companies who have earned the money. It is very clear that the Congress of 1864 did not suppose, in making this concession, that it would be barren of results, but as the rights of the parties have been settled by the construction given to the original provision on this subject, it is unnecessary to pursue the subject further. The practice of the Government for a series of years was in conformity with the views we have taken of the effect of the charter, until the Secretary of the Treasury arrested the payment of the money earned by the companies for services rendered the Government, and directed that it be withheld. This action of the Secretary brought the subject to the attention of Congress, and the act of March 3, 1d71, (16 Stats. at Large, p. 525, section 9,) was passed, directing that one-half of the money due the Pacific Railroad Companies for services rendered, either "heretofore or hereafter," be paid thein, leaving open the question of ultimate right for legal decision. After this, another act was passed on this subject, by virtue of which this suit was instituted by the appellee in the Court of Claims, (act of March 3, 1873, section 2, 17 Statutes at La;rge, p. 508.) It is contended tliat the purpose of this act is to repeal that portion of the charter of the Union Pacific Company contaianing the provision we have discussed. But, manifestly, the purpose was very different. It is true, the act directs the Secretary of the Treasury to withold all payments to the Pacific Companies. on account of freights and transportation, but, at the same time, it authorizes any company thus affected to bring suit in the Court of Claims for "such freight and transportation," antd in suchi suit, "the rigoht of such company to recover the same upon the law and the facts shall be determined, and also the rights of the United States upon the merits of all points presented by it in answer thereto by them." This ineans nothing more nor less than the remission to the judicial tribunals of the country of the questiou whether this coaopao;y, and other.s siunilariy situated, hcad the right to recover from the Government one-half of of what it earned by transportation, waich question was to be determined upon its merits. The merits of such a question are determined when the effect of the charter is determined. It is hardly necessary to say that it would have been idle to authorize a suit to be brought if it Vere the intention to. repea the provision on which the suit could alone be predicated. We cannot go into an argument on the consequences which follow oar decision. Consequences are not an ele.neat to be considered in the deter.inaitioa of the question 186 PACIFIC RAILROADS. whether an act of incorporation is less beneficial to the Government than it supposed. And, whether an act of Congress be mnore or less politic and wise, it is not our province to determine. When we have declared the meaning of it, if there be power to pass it, our duty in connection with it is ended. The judgment of the Court of Claiims is affirmed. UNION PACIFIC RAILROAD COMPANY;.. October term, 1873. PENISTON. Mr. Justice STRONG delivered the judgment of the' court, (concurred in by Justices CLIFFORD, MILLER, and DAVIS.) That the taxing power of a State is one of its attributes of sovereignty; that it exists independently of the Constitution of the United States, and underived from that instrument; and that it may be exercised to an. unlimited extent upon all property, trades, business, and avocations existing or carried on within the territorial b,undaries of the State except so far as it has been surrendered to the Federal Government, either expressly or by necessary implication, are propositions that have often been asserted by this court. And in thus acknowledging the extent of the power to tax belonging to the States, we have declared that it is indispensable to their continued existence. No one ever doubted that before the adoption of the Constitution of the United States each of the States possessed unlimited power to tax, either directly or indirectly, 11ll persons and property within their jurisdiction, alike by taxes on polls or duties on internal production, manufacture, or use, except so far as such taxation was inconsistent with certain treaties which had been made. And the Constitution contains no express restriction of this power other than a prohibition to lay any duty of tonnage, or any impost, or duty on imports or exports, except what may be absolutely necessary for executing the State's inspection laws. As was said in Lane County vs. Oregon:* "In respect to property, business, and persons within their respective limits, the power of taxation of the States remained, and remnains entire, notwithstandinlg the Constitution. It is, indeed, a concurrent power, (concurrent with that, of the General Government,) and in the case of a tax upon the same subject by both governments, the claimn of the United States, as the supreme authority, must be preferred; but with this qualification it is absolute. The extent to which it shall be exercised, the subjects upon which it shall be exercised, and the mnode in which it shall be exercised, are all equally within the discretion of the legislature to which the States commit the exercise of the power. That discretion is restrained only by the will of the people expressed in the State constitutions, or through elections, and by the condition that it mnst not be so used as to burden or embarrass the operations of the National Government. "There is nothing in the Constitution which contemplates or authorizes any direct abridgment of this power by national legislation. To the extent just inadicated it is as comnplete in the States as the like power within the limits of the Constitution is complete in Congress.1" Such. are the opinions we have expressed heretofore, and we adhere to them now. There are, we admit, certain subjects of taxation which are withdrawan from the power of the States, not by any direct or express provision of the Federal Constitution, but what may be regarded as its necessary implications. They grow oit ot our complex system of Government, and( out of the fact that the authority of the National Governmenit is legitimately exercised within the States. While it is true that Government cannot exercise its power of taxation so as to destroy the State governments, or ernbarrass their lawful action, it is equally true that the States may not levy taxes the direct effect of which shall be to hinder the exercise of any powers which belong to the N-tional Government. The Constitution contemplates that none of those powers may be restrained by State legislation. But it is often a difficult question whether a tax imposed by a State does, in fact, invade the domain of the General Government, or interfere with its operations to such an extent or in such a manner as to render it unwarranted. It cannot be that a State tax which remotely affects the efficient exercise of a Federal power is for that reason alone inhibited by the Constitution. To hold that would be to deny to the States all power to tax persons or property. Every tax levied by a State withdraws from the reach of Federal taxation a portion of the property from which it is taken, and to that extent diminishes the subject upon which Federal taxes niay be laid. The States are, and they must ever be, co-existent with the National Government. Neither may destroy the other. Hence, the Federal Constitution must receive a practical construction. Its limitations and its implied prohibitions must not be extended so far as to destroy the necessary powers of the States, or prevent their efficient exercise. *7 Wallace, 77. PACIFIC RAILROADS. 18 7 These observations are directly applicable to the case before us. It is insisted on behalf of the plaintiffs that the tax of which they complain has been laid upon an agent of the General Government constituted and organized as an instrumnent to carry into effect the plowers vested in that Government by the Constitution, andclit is claimed that such an agency is not subject to State taxation. That the Union Pacific Railroad Company was created to subserve, in part at least, the lawful pnurposes of the National oovernment; that it, was authorized to construct and maintain a railroad and telegraph line along the prescribed route, and that grants. were niade to it, and privileges conferred upon it, upon cendition that it should at all times transmit dispatches over its telegraph-line, and transport mails, troops, and muniticdns of war, supplies, and public stores, upon the railroad for the Government, whenever required to do so by any department thereof, and that the Government should at all times have the preference in the use of the same for all the purposes aforesaid, must be conceded. Such are the plain provisions of its charter. So it was provided that in the case of the refusal or failure of the conmpany to redeem the bonds advanced to it by the Government, or any part of them, when lawfully required by the Secretary of the Treasury, the road, with all the rights, functions, immllunities, and appurtenances thereunto belonging, and also all lands granted to the cornpany'by the United States which at the time of the default should remain in the ownership of the company, might be taken possession of by the Secretary of the Treasury for the use and benefit of the United States. The charter also contains other provisions looking to a supervision and control of the road and telegraph-line, with the avowed purpose of securing to the Government the use and benefit thereof for postal and military purposes. It is unnecessary to mention these in detail. They all look to a purpose of Congress to secure a.n agency coripetent and under obligation to perform certain offices for the General Government. Notwithstanding this, the railroad alnd the telegraph line are neither in whole nor in part the property of the Government. The ownership is in the complainants, a private corporation, though existing' for the performuance of public duties. The Government owns none of its stock, and though it may appoint two of the directors, the right thus to appoint is plainly reserved for the sole purpose of enabling the enforcement of the engagements which tLe company assuimed, the engagements to which we have already alluded. Admitting then, fully, as we do, that the company is an agent of the General Government, designed to be employed, and actually employed, in the legitimate service of the Governleut, both military and postal, does it necessarily follow that its property is exempt from State taxation? In Thompson v. The Unioa Pacific Railway Company,* after much consideration, we held that the property of that company was not exempt from State taxation, though their railroad was part of a system of roads constructed under the direction and anthority of the United States, and largely for the uses and purposes of the General Government. The company, in that case, were agents of the Governnment, precisely as these claimants are to the sane'extent, and for the same purposes. Congress had mna(le the same grants to them, and attached to the grants the same conditions. They, too, had received from Congress grants of land, and of bonds, and of a right of way for the purpose of aiding iLn the construction of their railroad and telegraph line, but witlh the condition that they should keep their railroad and telegraph line in repair and use, and should at all times transmlit dispatches over-their telegraph-line, and transport mails, troops, and munitions of war, supplies, and public stores, upon their railroad for the Government, whenever required to do so by any department thereof, and that the Government should at all times have the preference in the use thereof for the purposes aforesaid. There is no difference which can be pointed out between the nature, extent, or purposes of their agency and those of the corporation complainants in the present case. Yet, as we have said, a State tax upon the property of the company, its road-bed, rolling-stock, and personalty in general, was ruled by this court not to be in conflict with the Federal Constitution. It may, therefore, be considered as settled that no constitutional implications prohibit a State tax upon the property of an agent of the Governmant merely because it is the property of such an agent. A contrary doctrine 7would greatly embarrass the States in the collection of their necessary revenue without any corresponding advantage to the United States. A very large proportion of the property within the States is employed in execution of the powers of the Government. It belongs to governmental agents, alnd it is n]ot only used but it is necessary for their agencies. Unlited States mails, trools, arid munitions of war are carried upon almost every railroad. Telegraph-lines are emmployed in the national service. So are steamboats, horses, stage-coaches, foiunderies, shipyards, and multitudes of manufacturing establishments. They are the property of natural persons, or of corporations, who are instruments or agents of the General Government, and they are the hands by which the olbjects of the Government are attainod. Were they exempt from liability to contribute to the revenue of the States it is man*9 Wallace, 579. 188 PACIFIC RAILROADS.. ifest the State governments would be paralyzed. While it; is of the utmost importance that all the powers vested by the Constitution of the United States in the General Governmellnt should be preserved ill fill efficiency, and while recent events have called for the niost unemlbarrassed exer'cise of many of those powers, it has never been decided that State taxa;tion of sutch property is impliedly prohibited. It is, however, insisted that the case of Thonmpsoni v. The Union Pacific Railroad Com_pany differs from the case we have now in hand in the fact that it was incorporated by the territorial legislature of the State of Kansas, while these complainants were incorporated lhy Congress. We do not perceive that this presents any reason for the application of a rule different from that which was applied in the former case. It is true that in the opinion delivered by the Chief Justice, reference was made to the fact that the defendants were a State corporation, and an argument was attempted to be drawn from this to distinguish the case from MeCCtlloch v. The State of Maryland.* But when the question is, as in the present case, whether the taxation of property is taxation of n means, instruments, or agencies by which the United States carries out its powers, it is impossible to see how it can be pertinent to inquire whence the property originated, or from whom its present owners obtained it. The United States have no more ownership of the road authorized by Congress than they had in the road authorized ly Kansas. If the taxation of either is unlawful. it is because the States cannot obstruct the exercise of national powers. As was said in Weston v. Charl eston,t they cannot, by taxation or otherwise" Retard, impede, burden, or in manner control the operation of the constitutional laws enacted by Congress to carry into execution the powers vested in the General Govxern ment." The implied inhibition, if any exists, is against such obstruction, and that must be the same whether the corporation whose property is taxed was created by Congtress or by a State legislature. Nothing', we think, in the past decisions of this court is inconsistent wi'th the opinions we now hold. McCu.lloch v. Thle State of MIaryland, and others v. Bank of the Ueitecl States,+ are mach relied upon by the appellants, but an examination of what was decided in those cases will reveal that they are in full harmony with the doctrine that. the property of an agent of the General Government may be subjected to taxation. In the former of those cases the tax held unconstitutional was laid upon the notes of the bank. The institution was prohibited froum issuing notes at all except upon' stamped paper furnished by the State, and to be paid for on delivery, the stamtp upon each note being proportioned to its denomination. The tax, therefore. was not upon any property of the bank, but upon one of its operations, in fact, upon its right to exist as created. It was a direct impediment in the way of a governmental operation pertormed through the bank as an agent. It was a very different thing, both in its nature and effect, froml a tax on- the property of the bank. No wond(er, then, that it was held illegal. But even in that, case the court carefully limited the effect of't,he decision.,It does not extend, said the Chief-Justice, to a tax paid by thereal property of the bank in common with the other real property in the State, nor to a tax imposed on ihe interest which the citizens of Maryland may hold in the institution; in cormmon with the other property of the samine description throughout;the State.' But this is a tax on the operations of the bank, and is, consequently, a tax on the operations of an instrument eimployed by the Government of the Union to carry its powers into execution. Such a t[ax must be unconstitutioual. Here is a clear distinction made between a tax upon the property of a Government agsent and a tax upon the operations of the agent acting for the GovernLment..In Ohborn v. The Bank, the tax held unconstitutiounal was a tax upon the existence of the bank —upon its right to transact business within the State of Ohio. It was, as it was intended to be, a direct imnped(iment in the way of those acts which Congress, for national purposes, had authorized the bauk to perform. For this reason the power of the State to direct it was denied, but at the samle time it was declared by the court that the local property of the bank might be taxed, and, as ilt MeCuilloch v. Maryland, a differenlce was pointed out bet\vween a tax upon its property and one upon its action. In noticing an alleged resemblance between the bank and a Governnilent contractor, Chief-Justice Marshall said: "Can a contractor for suppilying a,nilitary post with provisions be restrained from making purchases within a State, or from transporting to the place at which the troops were stationed? Or- could he be fined or taxed for doing so? We have not heard these questionls answeredl in the affirmative. It is true the property of the contractor may be taxed, and so may the local property of the batik. - ut we do not admit that the act of purchasing, or of conveying the articles purchased, can be under State control." This distinction, so clearly drawn in the earlier decisions, between a tax on the property of a Governmmmeint agent and a tax upon the action. of such agent, or upon his right to be, has ever since been recognized. All State taxation which does not impair the agent's efficiency in the discharge of his duties to the Government has been sus*4 Wheaton, 316. t'2 Peters, 467., 9 Wheaton, 738. PACIFIC RAILROADS. 189 tained when challenged, and a tax upon his property generally has not been regarded as beyond the power of a State to impose. In Natiovnal Bank v. The Commoiwealth of Keltucky,* when the right to tax national banks was under consideration, it was asserted by us that the doctrine cannot be maintained that banks, or other corporations or instrumentalities of the Government, are to be wholly withdrawn from the operation of State legislation. Yet it was concedled that the agencies of the Federal Governmlent are nncontrollable by State legislation, so far as it miay interfere with or. imnpair their efficiency in performing the functions by which they are designed to serve that Governmen t. It is, therefore, Inanifest that exemption of Federal algencies from State taxation is dependent,, not upon the nature of the agents, or upon the mode of their constitution, or up)n the fact thatthey are agents, but, upon the, effect of the tax; that is, upon the question whether the tax does in truth deprive thenm of power to serve the Government as they were intended to serve it, or does hinder the efficient exercise of their power. A tax upon their property has no such necessary effect. It leaves themn free to discharge the duties they have undertaken to perfornm. A tax upon their operations is a direct obstruction to the exercise of Federal powers. In this case the tax. is laid upon the property of the railroad company precisely as was the tax complained of in Thompsonl v. Union Pacific. It is not imposed upon the franchises or the right of the company to exist and perform the ftlnctions for which it was brought into being. Nor is it laid upon any act which the company has been authorized to do. It is not the transmission of dispatches, nor the transportation of United States mails, or troops, or niunitions of war thlat is taxed, but it is (exclusively the real and personal property of the agent, taxed in commnon with all other property in the State of a similar character. It is impossible to maintain that this is an interference with the exercise of any power belonging to the General Government; and if it is not, it is prohibited by no constitutional implicatiol. It remains only to notice one other position taken by the complainants. It is that if the act of the State under which the tax was laid be constitutional in its application to their property within Lincoln County, the property outside of Lincoln County is not lawfally taxable by the authorities of that county under the laws of the State. To this we are unable to give our assent. By.the statutes of Nebraska the unorganized territory west of Lincoln County, and the unorganized county of Cheyenne, are attached to the county of Li ncoln for judicial and revetnu e purposes. The authorities of that county, therefore, were the proper authorities to levy the tax upon the property thus placed under their charge for revenue purposes. The decree of the circuit court is affirmed. Mr. Justice Swayne, concurring in the judgment: I concur in the affirnance of the judgment in this case. I see no reason to doubt that it wa, the intention of Congress not to give the exemption claimed. The exercise of the power may be waived. But I hold that the road is a national instrumentality of such a, character' that Congress may. interpose and protect it from State taxation \whenever that body shall deem it proper tQ do so. For some of the leading authorities in support of the principle involve(l in this view of the subject, I refer to the Chicago and INorthwestern Railway v. lr'iller,t decided by this court a short timhe ago. Decree affirmed. Mr. Justice Bradley, with whom concurred Mr. Justice Field, dissenting: One of the errors assigned to the decree of the court below is, that the State of Nebraska has no power to subject to taxation for State purposes the road-bed, rollingstock, and other property necessary for the use and operation of the complainant's road; and whether the State has such power is the controlling question in this cause. In my judgment, no such power exists, and my opinion is based iupon the principles established in the cases of McCulloch v. Mlarylantd;t and Osborn v.' The Unrited States Bank.L Those principles, as snmaied up by Chief-Justice Marshall himself, in the later case of TWeston v. The City of Cliarleston, I were as follows: 1.' That all subjects to which the sovereign power of a State extends, are objects of taxation; but those over which it does not extend are, upon the soundest principles, exempt from taxation." 2. "rThat the sovereignty of a State extends to everything which exists by its own authority, or is introduced by its permission; but not to those means which are employed by Congress to carry into execution powers conferred on that body by the people of the United States." 3. "That the attempt to use the power of taxation on the means employed by the Government of the Union in pursuarice of the Constitution, is itself an abuse, because it is the usurpation of a power which the people of a single State cannot give." * 9 Wallace, 353. t 17 Wallace, 560. + 4 Wharton, 316. ~ 9 Id., 738. 11 2 Peters, 466. 190 PACIFIC RAILROADS. 4. "That the States have no power, by taxation or otherwise, to retard, impede, burden, or in any mlanner control the operation of the constitutional laws enacted by Congress to carry into execution the powers vested inl the General Government." If we needed an example to show that the application of these principles extends to such a case as the preselt, we could not frame one more to the purpose than that, of the United States Bank, in respect to which they were announced in the cases reforred to. The parallel between it and the Union Pacific Railroad is striking, and, for the pnrpoes of the question, complete. In the case of the bank a corporation was created, with fullhbankiug powers. The capital stock was mostly subscribed by individuals, the Government reserving an interest of seven millions out of thirty-five. Its affairs were managed by twenty-five directors, of whom five were appointed by the President of the United States, by and with the advice and consent of the Senate. The ipowers of the directors were defined and restricted by the charter. The Secretary of the Treasury was authorized, from time to time, to call upon the bank for a, statement of its affairs. For the privileges and benefits conferred, the bank was required to p)ay to the United States a bonns of $1,500,00(. The books of the bank were to be alwa 7ys open to the inspection of a committee of either house of Congress, appointed for that purpose. Penalties and forfeitures were imposed for the breach of certain limitations and directions; and, finally, the bills and notes of the bank were to be receivable in payrment of public dues; the public moneys were to be deposited in the bank and its branches, unless the Secretary of the Treasury should otherwise order; and, on his requisition, the bank was to give the necessary facilities for transferring the public funds from. place to place within the United States, and for distributing the saile in payment of t;he public creditors, without charging commissions or exchange.+: Here, then, was a corporation, constitted mainly of private individuals, created by Congress, estat)lished by its aid, regulated by its laws, amenable to its committees, and to the executive department, and subservient to the uses and purposes of the Govern.ment. in ex, c:lting and carrying out a particular part of its constitutional fune ions. Now, in all of these respects, except the single one of ownership of a portion of its capital stock, tte Union Pacific Railroad presents a parallel case. The corporation is the creature of Congress; it receives large aid from the General Government, both in donations and loans; the President appoints two of its directors; and all the operations of the company in laying, constructing, anid workilng its railroad aind telegraph lines, as well as its rates of toll, are sulbject to regulations imposed by its charter, and to such further regulations as' Congress may hereafter make. On failure to comply with the terms and conditions of the charter, or to keep the road in repair and use, Congress mnay assume the control and management thereof, and devote the income to the use of the United States. Adnual reports are to be, matle to the Secretary of the Treasury. The loan of the United States to the company, amrounting to maly mnillions, is a lien, on all the property, aund, on failure to redeem ir, the Secretary of the Treasury is authorized to take possession of the road, with all its rights, tunetlions, immunities, and appurtenances, for the use acd benefit of the United States; and, finally, all the grants made to the comlpany are declared to be upon the condlition that, besides paying thle Government bonds advanCed, the company shall keep the railro}ad and telegraph-lines in repair and use, and shall, at all times, transmit dispatches anid transport mails, trotps, and muniitiois of war, supplies, and public stores for the Goverrnment, whenever required to do so by any Department thereof; and that the Goverunlent shall have the preference at rates not to exceed those charged to private parties, and payable by being applied to the payment of the bonds aforesaid; and, in addition to all this control of Congress, and the obligations and liabilities of the company, Congress reserves the right to add to, alter, amend, or repeal the charter. In these provisions we see the same close connection between the Government and the corporation, the same control reserved by the former, the same or an equal interest in the scheme, and a like creation of means for carrying into execution the powers conferred upon Congress. In the one case, the object was to facilitate the financial transactions of the Government, and the bank was used as a means to that end; in the other, the object is to establish a national post-road for the imails, and a telegraph-line for the transmission of intelligence, and to facilitate Government transportation of every kind between the East and the' West, as well as to promote and regulate the commerce between those sections; and the railroad company is used as a means to these ends. It seems to me that unless we are prepared to overrule the decisions referred to, we must apply the same law to this case which was applied to the United States Bank. I trust we are not prepared to overrule those decisiuns. While no one disputes the general power of taxation in the States, which is so elaboratiely set forth in the opinion of the majority, it must be conceded that there are limnits to that power. The States cannot tax the powers, the operations, or the property of the United States, nor the means wilch it employs to carry its powers into execution. The Governlment of the United k 3 Stat,. at Large, 266. PACIFIC RAILROADS. 191 States, within the scope of its powers, is supreme, and cannot be interfered with or impeded in their exercise. The case differs toto coelo from that wherein the Government enters into a contract with an individual or corporation to perform services necessary for carrying on the functions of government, as for carrying the mails, or troops, or supplies, or for building ships or works for Government use. In those cases the Government has no fuirther concern with the contractor than in his contract and its execution. It has no concern with his property or his faculties independent of that. HIow much he may be taxed by, or what duties he may be obligedl to perform toward, his State is of no consequence to the Government, so long as his contract and its execution are not interfered with. In that case the contract is the means employed for carrying into execution the powers of the Government, and the contract alone, and not the contractor, is exempt from taxation or other interference by the State government. But where the General Government creates a corporation as a means of carrying out a national object, that corporation and its powers, property, and faculties, employed in accomplishing the service, are the instrumentalities by which the Government effects its objehts. Hence, the corporation is not taxable by State authority. And it matters not that private individuals are interested for their private gain in the stock of the.corporation. Such individual interest may be taxable by itself, but the corporation and its property and operations cannot be, without interfering with the agencies used by the Government for the accomplishment of its objects. This distinction between private corporations performing services for the Government, and public corporations created by the Government for the purpose of carrying on its operations, and the consequences resulting therefrom, are forcibly drawn by Chief-Justice Marshall in Osborn vs. The United States Bank. He says: " he foundation of the argument in favor of the right to tax the bank is laid in the supposed character of that institution. The argument supposes the corporation to have been originated for the management of an individual concern,eto be founded upon contract between individuals, having private trade and private profit for its great end and principal object. If these premises were true, the conclusion drawn from tLenm would be inevitable. This mere private corporation, engaged in its own business, with its own views, would qertainly be subject to the taxinAg power of the State, as any individual would be; aid the casual circumstance of its being employed by the Government in the transaction of its fiscal affairs would no more exempt its private business from the operation of that power than it would exempt the private business of any individual employed in the same manner. But the premises are not true. The bank is not considered as a private corporation, whose principal object is individual trade and individual profit, but as a public corporation, created for public and national purposes. That the mere business of banking is, in its own nature, a private business, and may be carried on by individuals or conmpanies, having no political connection with the Government, is admitted; but the bank is not such an individual or colmpany. It was not created for its own sake or for private purposes. It has never been supposed that Congress should create such a corporation. The whole opinion of the court in McCulloch vs. Maryland is founded on and sustained by the idea that the bank is an instrument which is necessary and proper for carrying into effect the powers vested in the Government of the United States. It is not an instrument wlhich the Government found ready-made, and has supposed to be adapted to its purposes, but one which was created in the form in which it now appears for national purposes only. It is, undoubtedly, capable of transacting private as well as.public business. While it is the great instrument by which the fiscal operations of the Govern'ment are effected, it is also trading with individuals for its own advantage. The appellants endeavor to distinguish between this trade and its agency for the public, between its banking operations and those qualities which it possesses in common with every corporation, such as individuality, immortality, &c." The suggestion of Chief Justice Marshall in the above quotation, that Congress cannot create any corporations except for public and national purposes, is worthy of particular notice. The inference is obvious, that any corporation rightfully created by Congress, being necessarily public and national in its object, is beyond the reach of State taxation. That suggestion, it is true, was made in reference to a corporation established for business purposes within the States of the Union. And in such a case it is evident that the proposition must be true, namely, that Congress cannot create a corporation except for a public and national purpose. But in a Territory of the United States Congress is supreme, and is the fountain of local as well as public and national law. It usually exercises its municipal powers over such Territories by the agency of territorial governments. But it is not obliged to do this. It might exercise them directly, for the greater power includes the less. As the source ot municipal legislation in the Territory of Nebraska, therefore, Congress undoubtedly could have established local and private 192 PA(CIFIC RAILROADS. corporations for manufacturing, mining, financial, and other business purposes, the same as it has been accustomed to do in reference to the District of Columbia prior to the recent establishment of a legislature therein; Now, any such private and local corporations created by Congress in a Territory would cease to be United St'ates corporations when such Territory became a State. They would then become subject to State control by reason of not possessing a national character. A quo warranto from the State courts could be issued for the repeal of their charters in case-of forfeiture ftor misfeasance or non-feasauce. The ad mission of a Territory as a State woauld be a virtual assignment by Congress of all control over such instituntions to the State as the proper successor in the municipal sovereignty. But this would not be the case with regard to corporations of a public and national character, such as Congress could have'created if the Territory had been a Sr-ate at the time. They will remain United States corporations, subject to congressional and not to State control. The Union Pacific Railroad was authorized to be constructed entirely in Territories then belonging to the Urnited States. But the work was public and national in its character, and the corporation was a public and national corporation, as much so as would be a company created by Congress to construct a railroad from New Orleans to New York, through the old or long-admlitted St;ates. The circumstaloccs, therefore, that the road was originally authorized in the ITnited States territory, does not detract from the importance of Chief-Justice Marshall's suggestion in its bearing upon the case in hand. The very fact that the charter of the company can stalnd at all as a congressional instead of a State charter, which has not been seriously questioned, is proof of its national character; for without such national character it would cease to be subject to national control. That Congress has the power, under the Federal Constitution, to create and establish such a corporation for such purposes of a national character, was derlonstrated by the unanswerable argumeneut' of Mr. Hamilton on the creation of the first nation;l bank, and was set at rest by the equally unlanswerable argument of Chief-Justice Marshall in the case of lcCulloch vs. Maryland. "Although among the enumerated powers of Government," says the Chief-Justice,* " we do not find the word' bank' or' incorporation,' we fiund the g(reat powers to levy and collect taxes, to borrow money, to regulate commerce, to declare and. Condlluct war, and to raise and support arniies and navies. Tle sword and the purse, all tlle external relations, and no inconsiderable portion of the industry of the nation, are intrusted to its government. It can never be pretended that these vast powers' draw after them others of inferior importance, merely because they are inferior. Such an idea can never be advanced. But it may, with great reason, be con'tended that a Government intrustedl with such ample powers, on the due execution of which the happiness and prosperity of the 1nation so vitally depends, must also be intrusted with atnple means for their execution. The power being given, it is the interest of the nation to facilitate its execution... Throughout this vast republic, from the Saint Croix to the Gulf of Mexico, from the Atlantic to the Pacific, revenue is to be collected and expended, armies are to be marched and supported. The exigencies of the nation may require that the treasure raised in the north' shouldl be transferred to the south, that raised in the east conveyed to the west, or that this order shouhllbe reversed. Is that construction of the Constitution to be preferred which would. render these operations'difficult, hazardous, and expensive? "The government which has' the right to do an act, and has imposed on it the duty of performinlg that act, must, according to the dictates of reason, be allowed to select the means; and those who contend that it m;ay not select any appropriate mreans, that one particular mode of effecting the object is excepted, take upon themnselves the means of establishing that exception.... The power of creating a corporation, though appertainiig to sovereignty, is not, like the power of mrakilg war, or levying taxes, or of regulating commerce, a great substantive and independent power, which cannot be implied as incidental to other powers, or used as a means of executing them, It is never the end for which other powers are exercised, but a means by which other objects are accomplished. No contributions are inmade to charity for the sake of an incorporation, but a corporation is created to administer the charity; no seminary of learning is instituteed in order to be incorporated, but the corporate character is conferred to subserve the purposes of'education. "No city was ever built with the sole object of being incorporated as affording the best means of beinig well governed. The power of creating a corporation is never used for its own sake, but tfor the purpose of effecting something else. No sufficient reason is, therefore, perceived why it may not pass as incidental to those powers which are-expressly given, if it be a direct muode of executing thenm." Now, I think it cannot be doubted at the present day, whatever may have been contended in formner times, that the creation of national roads and other means of coni*4 Wheaton, 407. PACIFIC RAILROADS. 193 munication between the States, is within the power of Congress in carrying out the powers of regulating conmmerce between the' States, establishing post-offices and postroads, and in providing for the national defense and for military operations in time of war. And no one will contend.that, if the creation of a corporation is a suitable agency and means of carrying on the financial operations of the Government, the cre ation of a corporation is equally apposite as an agency and means of carrying out the objects above mentioned. This has been so forcibly stated by one of the justices of this court, in the case of the Clinton Bridge, decided'in the eighth circuits in October, 1867,'f that I shall not further enlarge upon the point. The Union Pacific Railroad Company, therefore, being a United States corporation created for national objects and purposes, and deriving its existence, its powers, its duties, its liabilities from the United States alone; being responsible to the United States, now as formerly, for a whole congeries of duties and observances; being subjected to the forfeiture of its corporate franchises, powers, and property to the United States, and not to any individual State; being charged with important duties connected with the very functions of the Government; every consideration adduced in the cases of McCulloch 2s. Maryland and Osborn vs. The Bank would seem to require that it should be'exempt not only from State taxation, but from State control and interference, except so far as relates to the preservation of the -peace and the performance of its obligations and contracts. In reference to these and tothe ordinary police regulations imposed for sanitary purposes and the preservation of good order, of course it is amenable to State and local laws. As an instrument of national commerce, as well as Government operations, it has been regulated by Congress. Can it be further regulated by State legislation'? Can the State alter its route, its gauge, its connections, its fares, its franchises, or any part of its charter? Can the State step in between it and the superior power or sovereignty to which it is responsible I Such a hypothesis, it seems to me, is inadmissible and repugnant to the necessary relations arising and existing in the case. Such a hypothesis would greatly derogate from and render almost useless and ineffective that hitherto unexecuted power of Congress to regulate commerce by land among the several States. If it be declared in advance that no agency of such commerce which Congress may hereafter establish, can be freed from local impositions, taxation, and tolls, the hopes of future free and unrestricted intercourse between all parts of this great country will be greatly discouraged and repressed. These considerations show how totally different this case is from that cf Thompson vs. The Kansas Pacific Raidroad Company. That was a State corporation, deriving its origin from State laws and subject to State regulation and responsibilities. It would be subversive of all our ideas of the necessary independence of the National and State governments, acting in their respective spheres, for the General Government to take the management, control, and regulation of State corporations out of the hands of the State to which they owe their existence, without its consent, or to attempt to exonerate them from the performance of any duties or the payment of any taxes or contributions to which their position, as creatures of State legislation, renders them liable. But, it may be asked, if the States cannot tax a United States corporation, created for public and national purposes, on what principle can the General Government tax local corporations created by the State governments for local and State purposes? If the States cannot tax a national bank, how can the United States tax a State bank? The answer is very manifest, and is stated by Chief Justice Marshall in McCulloch va. Maryland: t " The Government of the Union, though limited in its powers, is supreme within its sphere of action. This would seem to result necessarily from its nature. It is the Government of all; its powers are delegated by all; it represents all and acts for all. Though any one Sta-te may be willing to control its operations, no State is willing to allow others to control them." Again: "It has also been insisted that, as the power of' taxation in the General and State governments is acknowledged to be concurrent, every argument which would sustain the right of the General Government to tax banks chartered by the States will equally sustain the right of the States to tax banks chartered by the General Governmlent. But the two cases are not on the same reason. The people of all the States have created the General Government, and have conferred upon it the general power of taxation. The people of all the States, and the States themselves, are represented in Congress, and, by their representatives, exercise this power. When they tax the chartered institutions of the States they tax their constituents, and these taxes must be uniform. But when a State taxes theoperations of the Government'of the United States, it acts upon institutions created not by their own constituents, but by the people over whom they claim no control. It acts upon the measures of a government created by others as well as themselves, for the benefit of others in common with themselves. The difference is that which always -exists and always'must exist between the action of the whole on a part and the action of a pa'rt I Woolworth, 150. t 4 Wheaton,:405. H. Rep. 44 —— 13 194 PACIFIC RAILROADS. on the whole; between the laws of a government declared to be supreme and those of a government which, when in opposition to those laws, is not suprenle." But it is contended that the laying of a tax on the road-bed of the company is nothing more than laying a tax on ordinary real estate, which was conceded might be done in the case of the United States Bank, in reference to its banking-house or other lands taken for claims dclue in the course of its business. This is a plausible suggestion, but, in my apprehension, not a sound one. In ascertaining what is essential in every case respect must always be had to the subject matter. The State of Maryland undertook to tax tie circulation of the United States Branch Bank established in that State, by requiring stamps to be affixed thereto; the State of Ohio imposed a general tax of $50,000 on the branch established therein. These taxes were declared unconstitutional and void. They impeded the operations of the bank as a financial agent. Real estate was not a necessary appurtenant to the exercise of the functions of the bank. It might hire rooms for its office or it, might purchase or erect a building. But the primary- object of a railroad company is commerce and transportation. In its case a railroad track is just as essential to its operations as the use of a currency, or the issue or purchase of bills of exchange is to the operations of a bank. To tax the road is to tax the very instrumentality which Congress desired to establish, and to operate which it created the corporation. Besides, all that a railroad company possesses in reference to its road-bed is the right of way, and the right to use the land for the purpose of way. This is a franchise conferred by the Government, and inseparably connected with the other franchises which enable it to perform the duties for the performance of which it was created. Any estate in the land-the soil, the underlying earth beyond this-belongs to the original proprietor, and that proprietor, in the present case, is the Government itself. So that, look at it in what way we will, there is no room for the taxing power of the State. The estate in the soil cannot be taxed, for that remains in the United States; the franchise of right of way and material of tracks cannot be taxed, because they are essentially connected with and form a part of the powers, faculties, and capital by which the national purposes of the organization are accomplished. If the road-bed may be taxed, it may be seized and sold for non-payment of taxesseized and sold in parts and parcels, separated by county and State lines-and thus the whole purpose of Congress in creating the corporation and establishing the line may be subverted and destroyed. In my judgment, the tax laid in this case was an unconstitutional interference with the instrumentalities created by the National Government in carrying out the objects and powers conferred upon it by the Constitution. Mr. Justice HUNT. I dissent from the opinion of the court. NEBRASKA TAX CASE. SUPREME COURT OF THE UNITED STATES. NOS. 491 AND 492.-OCTOBER TERM, 1874. THE UNION PACIFIC RAILROAD CO., APPELLANT, A 491. V. I EDWARD C(J. MCSHANE, TREASURER, ETC., ET AL. Appeals from the circuit court of the United EDWARD C. MCSHANE, TREASURER, ETC., ET ALT. CROSS! States for the district APPEAL. of Nebraska. 492. Vs. THE UNION PACIFIC RAILROAD CO. J. —The Railway Company vs. Prescott, 16 Wall., 603, modified and overruled so far as it asserts the contingent right of pre-emption in lands granted to the Pacific Railroad Company to constitute an exemption of those lands from State taxation. 2.-But affirmed so far as it holds that lands on which the costs of survey have not been paid, and for which the United States have not issued a patent:to the company, are exempt from State taxation. 3.-But where the Government has issued the patents the lands are taxable, whether payment of those costs has been made to the United States or not. Mr. Justice Miller delivered the opinion of the court.' These are cross-appeals from a decree of the circuit court for the district of Nebraska in a suit in equity brought by the railroad company to enjoin the defendants, who were treasurers of counties in the State of Nebraska, from the collection of taxes assessed on the lands of:the company. PACIFIC RAILROADS. 1 95 EThe bill alleges that in the year 1872 the assessors of the several counties where the lands are situated, which lands are described in lists filed as exhibits with the bill, assessed said lands, and the boards of commissioners of said counties levied taxes for State, school, and local municipal purposes upon them, and that the treasurers, who are made defendants, were about to proceed to the collection of those taxes by seizing and selling the locomotives, cars, and rolling-stock generallyT of the company, with,other personal property. They say *that the lands were not liable to any State taxation at the tithe of the assessment or levy, and they pray that these treasurers, who are made defendants, may be enjoined from filrther proceedings for their collection. The grounds on which, this exemption is claimed may be divided into three distinct propositions, some of which are applicable to all the lands, and others to only part of them. 1. That by the 3d section of the act of 1862, under which the company was organized, and by which the lands within the ten-mile limit were granted in aid of the construction of the road, it was provided that all such lands as should not be sold within three years after the entire road shall have been completed, shall be subject to settlement and pre-emption like other lands, at a price not to exceed one dollar and twentyfive cents per acre, to be paid to the company. And it is alleged that these lands are liable to this pre-emption, which would be defeated by a sale of them for the taxes. 2. That by the amendatory act of 1864, which extends the grant to twenty miles on each side of the road, it is provided that; before any of the land granted shall be conveyed to the compan y, there shall first be paid into the Treasury of the IUnited States the cost of surveying, selecting, and conveying the same, )by the said company, and that these costs not having been paid, a sale for taxes would defeat the right of the United States to enfbrce this claim and recover their expenses out of the lands. 3. That under the joint resolution of April 10, 1869, authorizing the President to appoint a commission to inquire into the manner in which the road had been constructed, and, if the report was unfavorable, take steps to secure its proper construction, the Secretary had refused to issue patents for these lands, withholding the title as security for the performance of what was required in that respect. Without referring to the answer at present, we will take up these several points, and in examining their legal bearing on the case will, at the same time, where it is neces-,sary, inquire how far they are supported by the facts of the case, and will then look into the other matters set up by way of defense. The first and second of the propositions above stated are supposed to find sufficient support in the case of Railway Company vs. Prescott, 16 Wall., 603. That was a suit by the Kansas Branch of the Union Pacific Railroad Company to have declared void a sale of some of its lands for taxes, made under State authority, and this court granted the relief on the ground that the land was not liable to taxation at the time it was assessed for the taxes -under which it had been sold. No patent had been issued to the company when the taxes were assessed, and the cost of surveying the land had not been paid to the Government by any one. This court re-affirmed the doctrine that lands which had constituted a part of the public domain might be taxed by the States before the Government had parted with the legal title by issuing a patent, but that this could only be done when the right to the patent was complete, and the equitable title fully vested in the party, without anything more to be paid, or any act to be done going to the foundation of his right. And it said that in that case the United States had a right to retain the patent until the costs of surveying the land had been paid, which had not been done, and that the right of pre-emption in lands unsold by the company within three years after completion of the road, would be defeated if a sale for State taxes could be made which would be valid. This latter ground was not necessary to the judgment of the court, as it rested as well on the failure to pay the costs of surveying the land. And we are now of the opinion, on a fuller argument and more mature consideration, that the proposition is not tenable. The road was completed and accepted by the President in May, 1869, and these lands have been subject to such pre-emption since three years from that date, if this right can be exercised by the settler without further legislation by Congress, or action by the Interior Department. We do not now propose to decide whether any such legislation or other action is necessary, or whether any one, having the proper qualification, has the right to settle on these lands and tendering to the company the dollar and a quarter per acre enforce his demand for a title. It is not known that any such attempt has been made, or ever will be, or that Congress or the Department has taken, or intends to take. any steps to invite or aid the exercise of this right. It would seem that if it exists, it would not be defeated by the issue of the patent to the company, and it may, therefore, remain the'undefined and uncertain right, vested in no particular person or persons, which it now is, for an indefinite period of time. The company, meantime,.obtains the title, sells the lands when a good offer is made, and exercises all the other acts of full ownership over them, without the liability to pay taxes. We are of the opinion, therefore, that this right confers no exemption from taxation, 196 PACIFIC RAILROADS. whether the land be patented or not; and so far as the opinion in the case of Railway Co. vs. Prescott asserts a.different doctrine, it is overruled. But the proposition that the State cannot tax these lands while the cost of surveying them is unpaid, and the United States retains the legal title, stands upon a different ground. The act of 1864, section 21, declares that before any of the lands granted by this act shall be conveyed to the company, there shall first be paid into the Treasury of tile United States the cost of surveying, selecting, and conveying the same. That the payment of these costs of surveying the land is a condition-2precedent to the right to receive the title from the Government, can admit of no'doubt. Until this is done, the equitable title of the company is incomplete. There remains a payn:ent to be inade to perfect it. There is something to be done, without which the company is not entitled to a patent. The case, clearly, is not within the rule which authorizes State taxation of lands the title of which is in the United: States. The reason of this rule is also fully applicable to this case. The United States retains the legal title by withholding the patent, for the purpose of securing the payrent of these expenses, and it cannot be permitted to the States to defeat or embarrass this right by a sale of the lands for taxes. If such a sale could be made, it must be valid if the land is subject to taxation, and the title would pass to the purchaser. If no such title could pass, then it is because the land is not liable to the tax; and the treasurers of the counties have no right to assess it for that purpose. But when the United States parts with her title, she has parted with the only means 4which that section of the statute gives for securing the payment of these costs. It is by retaining the title that the payment of costs of survey is to be enforced. And so far as the right of the State to tax the land is concerned, we are of opinion that when the original grant has been perfected by the issue of the patent, the right of the State to tax, like the right of the company to sell, the lands has become perfect. As already stated, part of the lands in dispute have been patented, and part of them have not; and the circuit judge, in his opinion and decree, divides them into the, patented and the unpatented lands, and we concur in his opinion that there is no, reason why the patented lands should not be taxed. As to those which are not patented, it may be assumed from the evidence in the case that on none of them have the costs of survey been paid or tendered to the United States, and if they are all subject to that provision of the act of 1864, they are not. liable, on the principle we have stated, to be taxed. It is said, however, by counsel for the State, that the Interior Department has never demanded the costs of surveying the lands within the original ten-mile limit, in cases in which they have issued patents, and do not claim them in those for which no patent has been issued. That as the nonpayment of these costs, therefore, is no impediment to demanding and receiving the -patents, the equitable title is complete, and they should be held subject to taxation. We held, however, in the case of Railway vs. Prescott, supra, that these costs of survey attached to all the lands granted to the road, whether by the original act or by the amendatory act of 1864, and we have no sufficient evidence before us that the Department of the Interior has acted on a different principle. If, however, they have done so heretofore, it is not for us to say thatf they will grant patents hereafter without payment of these costs; and in a case where we are called on to decide whether such costs are lawfully demandable before the legal title of the company is.perfect, we must abide by our own construction of the statute. It is said, however, that these lands have been mortgaged by the company under -sanction of the act of Congress on that subject, and that the mortgage conveys the legal title out of the United States, so that her rights can no longer be interposed to protect them from taxation. It is not necessary to go into the merely technical question whether the legal title passed from the United States by virtue of that mortgage and the act of Congress, which authorized it, nor whether, if it ever becomes necessary to foreclose that mortgage, the rights of the United States in the land would be divested by the proceeding, because we are satisfied that the United States, until she conveys them by patent or otherwise, has an interest, whether it be legal or equitable, which the State of Nebraska, is not at liberty to divest by the exercise of the right of taxation. Under these views we are of opinion that the State had no right to.tax the lands for which the cost of surveying had not been paid and for which no patent had been issued; and as the decree Qf the circuit court was made in conformity with these prin-.ciples, it is affirmed. PACIFIC RAILROADS. 197 THE QUESTION' OF TERMINUS. SUPREME COURT OF THE UNITED STATES. NO. 584.-OCTOBER TERM, 1875. THE UNION PACIFIC RAILROAD COMPANY In error to the circuit court of the?lainti~ff in error, C'MPANY] In error to the circuit court of the Plaintiff in error,, United States for the district of Iowa. SAMUEL E. HALL and JOHN WV. MORSE. J Mr. Justice Strong delivered the opinion of the court: This is a proceeding instituted under the act of Congress of March 3, 1873, (17 Stats. at Large, p. 509, sec. 4,) which confers upon the proper circuit court of the United States jurisdiction to hear and determine all cases of mandamus, to compel the Union, Pacific Railroad Company to operate its road as required by law. The alternative writ, as amended, commanded the railroad company to operate the whole of their road from Council Bluffs westward, (including that portion thereof between Council Bluffs and Omaha, and constructed over and across their bridge spanning the Missouri River,).as one continuous line for all purposes of communication, travel, and transportation, and especially commanded them to start from Council Bluffs their regular through freight and passenger trains westward-bound, and to run their eastern-bound trains of both descriptions through and over said bridge to Council Bluffs under one uniform time-schedule with the remainder of their road, and to desist and refrain wholl.y from operating said last-mentioned portion of said road as an independent and separate line, and from causing freight or passengers bound westward or eastward to be transferred at Omaha, or to show cause why they did not obey the writ. To the alternative maudamus the railroad company put in a return; which was mlet by an answer filed by the relators, and the case was heard by the circuit court on the facts stated in the writ, the return, and the answer, (the averments of the answer not being controverted,) and a peremptory mandamus was ordered. It is of this final judgment that the plaintiffs in error now complain. The obligation of the Union Pacific Railroad Company to operate their road as a continuous line, throughout its entire length, is not denied.; The company is a creatureof congressionlal legislation. t was incorporated by the act of Congress of July 1, 1862, (1'2 Stats., 489,) and its powers and duties were prescribed by that act, and others amendatory thereof. By the twelfth section it was enacted that the " whole line of the railroad and branches and telegraph shall be operated and used for all purposes of,communication, travel, and transportation, so far as the public and Government are concerned, as one connected, continuous line." And a similar requisition was made in ithe fifteenth section of the amendatory act of July 2, 1864, (13 Stats., 35t;.) The ontest in the case does not relate to the existence of this dity. It is principally over the question whether the railroad-bridge over the Missouri River, between Omaha in Nebraska, and Council Bluffs in Iowa, is a part of the Union Pacific Railroad, for if it as, there can be no doubt. that the company are required by law to use it in connection with, and as part of, their entire road, operating all parts together as a continuous line. The answer to this question must be found in the legislation of Congress, and in what has been done under it. By the first section of the act of 1862, tlie Union Pacific Railroad Company was authorized to construct, maintain, and enjoy a continuous railroad and telegraph, with the appurtenances, from a point on the one hundredth meridian of longilude west from Greenwich, to the western boundary of the Territory of Nevada:. There it was intended to meet and connect with the line of the Central Pacific Railroad Company of California, (section 8,) thus forming a continuous line to the Pacific Ocean. This was the main line. But the same act made provision also for -several eastern connections. The ninth section authorized the Leavenworth, Pawnee and Western Railroad Company of Kansas, (now the Kansas Pacific,) to construct a railroad from the Missouri River, at the mouth of the Kansas River, (on the south side thereof, so as to connect with the Pacific Railroad of Missouri,) to the point of western departure of the Union Pacific on the one hundredth meridian. Thus provision was miade for an eastern connection by an unbroken line of road to Saint Louis on the Mississippi. This was not all. By the fourteenth section of the act the Union Pacific was authorized and required " to construct a single line of railroad and telegraph from a point on the western boundary of the State of Iowa, to be fixed by the President of the United States, X X so as to form a connection with the lines of the said company at some point on the one hundredth meridian of longitude aforesaid, from the point of commencement on the western boundary of the State of Iowa." Thus provisions were made for the Iowa eastern branch of the main line. It was doubtless intended to render possible a connection with any railroad that might thereafter be- con-.structed fromn the western boundary of Iowa eastward. None was then completed, but a railroad was in progress of construction through the State from its eastern border to the Missouri River. 198 PACIFIC RAILROADS. The fourteenth section also made provision for another eastern connection. It enacted -that whenever there should be -a line of railroad completed through Minnesota orIowa to Sioux City, then the said Pacific (Union Pacific) Railroad Company should be authorized and required to construct a railroad and telegraph from said Sioux City, so as to connect with the Iowa branch, or with the main line, at a point not further west than the one hundredth meridian of longitude. The scheme of the act of Congress, then, is very apparent. It was to secure the connection of the main line, by at least three branches, with the Missouri anrd Iowa railroads, and with a railroad running eastwardly from Sioux City in Iowa, either throughl that State or through Minnesota. An observance of this scheme, we think, will aid in considering the inquiry at what place the act of Congress, and the orders of the Pres — ident made in pursuance thereof, established the eastern terminus of the Iowa branch. From it may reasonably be inferred that the purpose of Congress was to provide for connections of the branches of the main line of the Union Pacific Road with railroads. rulnning through the States on the east of the territory, and to provide for those connections within those States, at points at or near their western boundaries. Thus the northern branch was required to be constructed from Sioux City (which is in the State of Iowva) westward toward the main line, and the southern branch was authorized to build their railroad from the south side of the Kansas River, at its mouth, so as to connect with the Pacific Railroad of Missouri. If, now, the provisions of the.act re — specting the central, or Iowa branch, be examined, the same purpose is evident. Those provisions are found in the fourteenth section, and they are as follows: "And be it further enacted, That the said Union Pacific Railroad Company is hereby authorized and required to construct a single line of railroad and telegraph from a point on the western boundary of the State of Iowa, to be fixed by the President of the United States, upon the most direct and practicable route, to be subject to his approval, so as to form a connection with the lines of the said company at some point on the one hundredth meridian of longitude aforesaid, from the point of commencement on the western boundary of the State of Iowa." This clause contains the only provisions of the act respecting the eastern terminus of the Iowa branch, and it twice defines that terminus as a "point on the western boundary of the State.of Iowa." The legal boundary of the State is the middle of the channel of the Missouri River, (9 Stat. at Large, 52.) But it is very evident that Congressndid not intend that the road should start from a point in the mid-channel of the. river. That would be impossible; and were it possible, it would not carry out the. general design of the act, which, as we have seen, was to provide for connections with the eastern railroads then in existence or contemplated. And it is conceded by the counsel of the company that Congress ought not to be held to have intended to fix the initial point in the mid-channel of the river, exactly on the line which is the legal boundary of the State. Such a construction of the law, it is acknowledged, would be unreasonable, because it would involve the requirement of an impossibility. But if Congress did not mean to' require a construction of the railroad from the imaginary line which is the legal boundary of Iowa, namely, from the mid-channel of the river, - they must have intended the initial point to be either on the Iowa shore or on the Nebraska shore. If the Nebraska shore was intended, why was it not mentioned? Why was not the west'branch of'the Missouri River designated? Or, why was not the eastern boundary of Nebraska fixed as the point of departure? Still more, why was Iowa mentioned at all, or why was the initial point described as a point on the western boundary of Iowa? It is impossible to give a satisfactory answer to these questions, if the eastern or Iowa shore of the river was not intended to be the terminus of the railroad. Unless it was so intended, no reason is found in the acts (f Congress for mentioning Iowa at all. The western shore of the river is no nearer the western legal boundary of Iowa than the eastern shore is, while the latter is, in common understanding, the western boundary of the State. Congress may well be supposed-to have used language in accordance with the common understanding. It is common usage to speak.: of the boundary of a State or county as a river, though the legal boundary may be the middle of the river. And particularly when anything is to be constructed on such a boundary, which, from its nature, must be constructed on dry laud, would no one understand the place of construction as any other than the shore of the river. It is perfectly legitimate, and in accordance with every-day usage, to say that a house built in Illinois, on the eastern shore of the Mississippi, stands on the western boundary of the State, though the legal boundary of the State is the mid-channel of the river. In common understanding, therefore, a point on the western boundary of Iowa would. be a point in Iowa on the eastern shore of the Missouri, precisely as a point on the eastern boundary of Nebraska would be understood to be in Nebraska, ou the western shore of the river. The words "on the boundary of Iowa" are not technical words, and therefore they are to be taken as having been used by Congress in their ordinary sig — nification. Instances are not rare in which statutes have been construed, not literally,. but in accordance with the common use of the language employed by the law-makers. Authority to construct a railroad or turnpike from A to B, or beginning at A and run PACIPIC RAILROADS. 19 9 ning to B, is held to confer authority to commence the road at some point within A, and to end it at some point within B. The words "from," " to," and " at" are taken inclusively, according to the subject-nlatter. (L Mason, 126; 1 Strange, 179; Farmers' Turnpike vs. Coventry, 10 John., 389.) So in the case of The Mohawk Bridge Company vs. The Utica and Schenectady Railroad Company, 6 Paige, 554, a similar ruling was made. The city of Schenectady was on the south bank of the Mohawk River, the north bounds of the city being the middle of the channel of the river. Yet it was held that a railroad company authorized to build a railroad " commencing at or near the city of Schenectady, and running thence on the north side of the Mohawk River," was by those words empowered to build a bridge over the Mohawk, and commence their railroad at or within the city. These decisions bear some analogy to the construction given by the circuit court to the phrase " on the western boundary of Iowa." And that construction is the only one consistent with the paramount purpose manifested in the act of Congress, to provide for connections with the railroads of the States east of Nebraska Territory, a purpose to which we have already referred. Unless the Iowa branch of the Union Pacific was intended to. commence on the Iowa shore of the Missouri River, its connection with the Iowa railroads would have been impossible. Those roads could not be extended to the Nebraska shore, for the Statd of Iowa was without power to authorize the erection of a bridge over the river, or even the establishment of a ferry. We do not propose to enter upon a consideration of the question whether Congress had power to authorize the construction of railroads within a State. It is not necessary for the present case. Even the appellants would shrink from denying the lawful existence of their bridge. What is to be sought now is the intention of Congress, not its power. Did Congress intend the place of connection to be on the eastern shore of the river? And that they did is manifest, if they intend any connection, for no other was possible, either with or without the co-opera-, tion of Iowa. In accordance with this understanding of the act of 1862 was the action of the President. The fourteenth section of the act required the company to construct the Iowa branch from a point on the western boundary of Iowa., to be fixed by the President of the United States. In discharging the duty thus imposed, the President, by an executive order, dated November 17, 186:3, fixed so much of the western boundary of the State of Iowa as lies between the north and south boundaries of the United States township within which the city of Omaha is situated, as the point from which the line of railroad and telegraph should be constructed. This designation was in one particular indefinite. While it adhered to the western boundary of Iowa, it left undetermined at what place on that boundary the initial point should be, except that it should be somewhere between the north and south boundaries of a township, those boundaries being six miles apart. The President, therefore, on the 7th day of March, 1864, by a second executive order, made a more definite location. By that order he designated and established the point from which the railroad company was authorized to construct the road, as a point " on the western boundary of Iowa, east of and opposite to the east line of section 10, in township 15 north, of range 13 east of the 6th principal meridian, in the Territory of Nebraska." Section 10 is a fractional section, its eastern boundary being the Missouri River. That the President understood this designation as fixing the point on the eastern shore of the river and within the State of Iowa, is manifest from the message which, two days afterward, he sent to Congress accompanying a copy of his official orders; iun which he declared that the orders fixed the point on the western boundary of Iowa, "within the limits of the township in Iowa opposite the town of Omaha, in Nebraska." And such appears to be the plain meaning of the executive orders. The point could not have been east of and opposite to east line of section 10, in township 15, (the section spoken of,) if it was on the western shore of the river. It would then have been in Nebraska. The designation by the President was thus in strict conformity with the act of Congress, for whenever that act spoke of the terminus of the Iowa branch with reference to its location, it described it, not as being in Nebraska, not even as being in the Missouri River, but as on the western boundary of Iowa. Thus far we have confined our attention to the act of 1862, and to the President's action under it. From that act alone we have deduced the conclusion that the comipany was authorized and required to build their railroad to the Iowa shore. The authority included within itself power to build a bridge over the Missouri. No express grant to bridge the river was needed. Whatever bridges were necessary on their authorized line were as fullly authorized as the line itself, and the'dompaiyr were as much empowered to build one across the Missouri as they were across the Platte, or any other river intersecting the route of their road. (People v's. The Saratoga and Rensellaer R. R. Co., 15 Wendell, 130; Springfield vs. Connecticut River R. R. Co., 4 Cush., 73; Mohawk Bridge Co. vs. Utica and Schenectady R. R. Co., ut szpra.) But the amendatory act of 1864 is not to be overlooked. It is to be regarded in connection with the act of 1862,- and interpreted as a part of it. By its ninth section the company were expressly authorized to- constrluct bridges over the Missouri River and other rivers, which their road might pass in its course, for the convenience of their road; 2)00 PACIFIC RAILROADS. and the act declared this authority to be given to enable the company to make convenient and necessary connections with other roads. This enactment may not have been necessary. The power may have been conferred upon the Union Pacific Railroad Company by the act of 1863, and we think it was. But whether necessary or not, it shows clearly that Congress had in view the construction of the railroad to the Iowa shore of the river. No bridge could be constructed without making use of the Iowa shore. It is well to observe here that the authority was given to the company as a railroad company, and not as a bridge company. It was for the convenience of their road, and to enable them to connect their road with other roads. They could build it. for no other uses. They were not authorized to use it for other purposes than those of their road. They were not allowed to charge rates of toll which they did not charge upon other portions of their line. If they acquired such a right it was by subsequent legislationby the act of 1871, to which we shall refer hereafter. But if, under the acts of 1862 and 1864, the company were authorized to build a railroad bridge across the river, and if such bridge was a part of their road, and not another railroad, the conclusion is irresistible that their road was intended to-have its eastern terminus on the Iowa shore of the river. It is no answer to this to urge that Congress could not have intended to invade a State by chartering a company to build a railroad in part within the State limits. The stubborn fact remains that Congress did authorize the building of a railroad bridge on land within the territorial limits of the State, and, as necessarily incidental to that, a railroad upon the necessary approaches to the bridge. So, also, Congress authorized building a railroad from Sioux City, in Iowa, across the Missouri River westsward. The statute does show a plain intention that the comnpany's.railroad should enter the State under its authority, and the twelfth section enacted what should be done whenever the route of the road should cross the boundary of any State or Territory, and authorizes the President of the United States, in case the companies met there and disagreed respecting the location, to determine it. Our attention has been called to other clauses in the acts of 1862. and 1864, in which the road is spoken of as from the Missouri River to the Pacfic coast, or to the navigable waters of the Sacramento, or from Omaha, as indicating that the eastern terminus was intended to be Omaha or the western shore of the Missouri River. But these clauses have other objects in view than designating the terminus of the road. They are. descriptive of the road, but not of its beginning or ending. Whenever the attention of Congress was turned to the eastern terminus alone, and the purpose was to determinue its location, there is no variance in the language employed. It is always "a point on the western boundary of Iowa." The different forms of expression employed in other sections and for other purposes can have no bearing upon the question. Again, it is claimed that the contemporaneous construction given to the charter of the company by its officers and by the officers of the Government, tends to show. that the terminus was fixed by the statute on the Nebraska side of the river. It must be conceded that in a case where the interpretation of an instrument is doubtful, the practical construction given to it by the parties is of weight. But we do not: discover that the United States Government, or its officers, ever acted upon the theory that the eastern terminus of the' road was on the western shore of the river. The officers of the Company asserted it for a time, it is true, but not in their.practical intercourse with the National Government. Indeed, it never became a practical question until the bridge was erected, and from that time to the present the Government has asserted that. the true terminus of the road was fixed on the Iowa shore. There is nothing, we think, in any contemporaneous construction given to the acts of Congress, which ought to have any weight in determining the question now before us. Our conclusion, therefore, is that the initial point of the Iowa branch of the Union Pacific Railroad was fixed by the act of Congress on the Iowa bank of the Missouri River. If we are correct in this conclusion, it is difficult to see why the bridge over the river, built by the railroad company, is not a part of their railroad, and required by law to be operated as a part thereof. It was commenced in 1869, under the acts of 1862 and 1864. These aits were the only authority the company had at the time of its commencement for building it. It is a railroad bridge, a continuation of the line west of tlhe river, and it connects the road with its required eastern terminus. The acts chartering the eompaW manifest no intention to distinguish between the bridge over the Missouri River and other bridges on the line of their road. If it is not a part of their road, neither is any bridge between the Missouri and the western boundary of Nevada, for the power to build all bridges was given in the same words. It has been argued, however, that the bridge is not a part of the company's railroad, because it is not located opposite section 10, east of and opposite to which, on the western boundary of Iowa, the President fixed the terminus. It is, however, the only bridge' the company has extending their road to the western boundary of Iowa, and clearly they have no authority to build any other. True, it is not opposite section 10, PACIFIC RAILROADS. 20t but the company has taken up its road from that section, and now it comes to the river where the bridge is actually constructed. Having abandoned their road, so far as it extended above that point; having commenced their bridge where it is; having applied to Congress for power to mortgage it, and for special power to levy tolls and charges for the use of it, and having obtained those powers, they are not at liberty now to assert that they have located their bridge at the wrong place. There is nothing either in the act of 1862 or 1864, or in that, of February 24, 1871, which empowers them to build more than one bridge over the Missouri for the Iowa branch, and the latter act contains an implied recognition of their right under the former acts to build. their bridge on its present location. There is no intimation in it of a distinct.bridge franchise. It grants no power to build a bridge. Its main purpose manifestly was to give the company additional means and privileges for the completion of a structure already authorized, not to enable them to construct a new and independent road. To hold that. the bridge is not a part of the road would defeat the plain object Congress. had in view in 1862 and 1864-a continuous line for connection with the Iowa roads. It:would be allowing the connection to be made in Nebraska, instead of on the western boundary of Iowa, when the act of 1871 expressly declared that nothing therein should be so construed as to change the eastern terminus of the Union- Pacific Railroad from the place where it was. then fixed by existing laws. Indeed, that proviso was quite unnecessary if the bridge was not thought to be a part of the railroad connectingl the other part with the western boundary of Iowa. Holding, then, as we do, that the legal terminus of the railroad is fixed by law on the Iowa shore of the iiver, and that the bridge is a part of:the railroad, there can be no doubt that the company is under- obligation to operate and ruan the whole. road, including the bridge, as one connected and continuous line. Thisis: a duty expressly imposed by the acts of 1862 and 1864, and recognized by that of 1871. What this means is not difficult to understand. It is a requisition made for the convenience of the public. An arrangement, such as the company has made, by which freight and passengers destined for or beyond the eastern terminus are stopped two or three miles from it and transferred to another train, and again transferred at the terminus, or by which freight or passengers going west from the eastern end of the lineo must be transferred at Omaha, breaks the road into two lines, and plainly is inconsistent with continuous operation of it as a whole. If not, the injunction of the statute has no meaning. The mandamus awarded in this case, therefore, imposes:no duty beyond what*h. 6 wlaw requires. Su;ch is our opinion of the merits of this case. A single objection made and urged againstthe form of proceeding remains to be considered. The appellants contend the court erred in holdi;ng that -Hall and:Morse, on whose petition the alternative writ was issued, could lawfully become relators in this suit on behalf of the public, without the assent, or direction of' the Attorney-General of the United States or of the district attorney for the district-of:Iowa. They were merchants in Iowa, having frequent occasion to receive and ship goodsover the company's road, but they had no interest other than such as belonged to others engaged in employments like theirs, and the duty they seek to enforce by the writ is a duty to the public generally. The question raised by the objection, therefore, is whether a writ of mandamus to compel the performance of a public duty may be issued at the instance of a private relator. Clearly in England it may. Tapping on Mandamus, page 28, asserts the rule in that country to be that, "in general, all those' who are legally capable of bringing an action, are also equally capable of applying to the Court of King's Bench for the writ of mandamus." This is true in all cases, it is believed, where the defendant owes a duty, in theperformance of which the prosecutor has a peculiar interest, and it is equally true, we think, in case of applications to compel the performance of duties to the public, by corporations. In The King rs. The Severn and Wye Railway Company, 2 Barn. & Ad., 646, a private individual, without any allegation of special injury to himself, obtained a rule upon the company to show cause why a mandamus should not issue commanding them to lay down again and maintain part of a railway which they had taken up. Under act of Parliament, the railway was a public highway, and all persons were at liberty to pass and repass thereon, with wagons and other carriages, upon payment of the rates. What the prosecutor complained of was the loss by the public, and particularly by the owners of certain collieries, (of which he does not appear to have been one,) of the benefit of using the railway taken up. The writ was awarded. It was not even claimed that the intervention of the attorney-general was needed. Other cases to the same effect are numerous. (Clarke vs. The Leicestershire and Northamptonshire Union Canal Comp., 6 Ad. & El., N. S., 898'; 1 Chitty, 700.) In this country there. has been diversity of decision upon the question whether private persons can sue out the writ to enforce the performance of a public duty, unless the non-performance of it works them a special injury, and in several of the States it has been decided that they cannot. An application for a mandamus, not here a prerogative writ, has been supposed to have some analogy to a bill in equity for the restraint of a public nuisance. Yet, even in the supposed analogous case, a bill may 202 PACIFIC RAILROADS. be sustained to enjoin the obstruction of a public highway, when the injury comnplained of is common to the public at large, and only greater in degree to the complainants. It was in the Wheeling Bridge case, 13 How., 518, when the wrong complained of was a public wrong, an obstruction to all navigation of the Ohio River. The injury to the complainants in that case was no more peculiar to Pennsylvania than is the injury to Hall and Morse, in this, peculiar and special to them. And there is, we think, a decided preponderance of American authority in favor of the doctrine that private persons may move for a mandamus to enforce a public duty, not due to the Government as such, without the intervention of the Government law-officer. (People vs. Collins, 19 Wendell, 56; County of Pike vs. The State, 11 Ill., 202; Ottawa vs. The People, 48 Ill., 233; Hamilton vs. The State, 3 Ind., 452; Hall vs. The People, 57 N. Y., 307; People vs. Halsey, 37 N. Y., 344; State vs. The County Judge of Marshall, 7 Iowa, 186; State vs. Railway, 33 N. J. Law, 110; Watts vs. Carroll Parish, 11 La. An., 141; See also Dillon on Municipal Corporations, sec. 695, and High on Ex. Rem., sec. 431-2; Canon vs. Janvier, 3 Houston, 27; State vs. Rahway, 33 N. J. Law, 110.) The principal reasons urged against the doctrine are that the writ is prerogative in its nature, a reason which is of no force in this country, and no longer in England, and that it exposes a defendant to be harassed with many suits. An answer to the latter objection is that granting the writ is discretionary with the court, and it may well be assumed that it will not be unnecessarily granted. T'here is also, perhaps, a reasonable implication that Congress, when they authorized writs of mandamus to compel the Union Pacific Railroad Company to operate their road according to law, did not contemplate the intervention of the Attorney-General in all cases. The act of 1873 does not prescribe who shall move for the writ, while the Attorney-General is expressly directed to institute the necessary proceedings to secure the performance of other duties of the company. For these reasons we think the circuit court did not err in holding that Hall and Morse were competent to apply for the writ in this case. The decree of the circuit court is affirmed. Mr. Justice Bradley dissenting: I am obliged to dissent from the judgment of the court in this case. The Missouri River is, by common acceptation, the western boundary of Iowa; and the fair con-' struction of the charter of the Union Pacific Railroad Company, which adopts that boundary as its eastern terminus, is that the road was to extend from the Missouri River westwardly. The subsequent express authority given to construct a bridge across the river, in my judgment, confirms this view of the subject. And as a mandamus is a severe remedy, requiring a clear right and clear duty to support it, I think it ought not to be granted in this case, especially as it requires the company to use the bridge as a part of their continuous line with all their trains, which may inmpose munch inconvenience on them without corresponding benefit to the public. True copy. Teste:.D. W. MIDDLETON, [SEAL.] Clerk Sueprenae Cotrt Uaited States. PACIFIC RAILROADS. 203 In the district court of the fourth judicial district of the State of California, in and for the city and county of San Francisco. JOHN R. ROBINSON, PLAINTIFF,' THE CENTRAL PACIFIC RAILROAD COMPANY OF CALIFORNIA, Leland Stanford, Collis P. Huntington, Mark Hopkins, Charles Crocker, Charles Crocker, executor of the estate of Edwin B. Crocker, deceased, Charles Marsh, Edward H. Miller, jr., B. B. Redding, Wells, Fargo & Co., James B. Haggin, David D. Colton, The Contract and Finance Company, The Southern Pacific Railroad Company, The Market-street Railway Company, The Potrero and Bay View Railroad Company, The California Pacific Railroad Company, The los Angeles and San Pedro Railroad Company, The Rocky Mountain Coal and Iron Company of Wyoming, C. HI. Cummings, Robert Robinson, Silas W. Sanderson, Atlantic and Pacific Telegraph Company, The. Western Development Company, The San Francisco and San Jose Railroad Company, The San Joaquin Valley Railroad Company, The California and Oregon Railroad Company, The Sacramento Publishing Company, William H. Mills, The Central Pacific Railroad Company, John Doe,. Richard Roe, Alexander Foe, and Richard'Joe, the names of the four last-named defendants being unknown to plaintiff, defendants. J 1. Plaintiff above named, complaining against the above-named defendants, avers that this action is brought against said defendants on behalf of this plaintiff and all' other stockholders of the Central Pacific Railroad Company, of California, who may choose to come in and contribute to the cost and,expense of this action. 2. That the defendant, the Central Pacific Railroad Company of California, was duly organized and incorporated under the laws of the State of California on or about the 27th day of June, 1861, and since that day has continued to be and is a corporation for the purposes mentioned and enumerated in articles of association, a copy whereof ishereto annexed, marked A, and made a part of this complaint, and is the same corporation mentioned and referred to as the Central Pacific Railroad Company of California, in a law of the Congress of the United States entitled "An act to aid in the construction of a railroad and telegraph line from the Missouri River to the PacificOcean, and to secure to the Government the use of the same for postal; military, and other purposes," passed July 1, 1862, and another act, passed July'2, 1864, to amend said last-mentioned act, and subsequent acts and resolutions supplemental to and amendatory of said first-mentioned act, and to which said acts, laws, and resolutions,. and every part thereof, the plaintiffs refer as a part of this complaint. That said Central Pacific Railroad Company of California heretofore duly accepted, acted upon, complied with, and is now acting upon and under the said laws, acts, and resolutions hereinbefore mentioned and referred to. 3. That whenever hereafter, in this complaint, the Central Pacific Railroad Company of California is mentioned, and intended to be mentioned, it is designated by the letters C. P. 4. That one of the principal places of business of said C. P. is, and has been for over one year last past, in said city and county of San Francisco, and during said lastmentioned period frequent business meetings of its directors have been held in said city and county. 5. That the capital stock of said C. P. is, and has been since the organization and incorporation thereof, the sum of eight million five hundred thousand dollars, divided into eighty-five thousand (85,000) shares, of one hundred dollars each. 6. That on the 15th day of April, 1862, the plaintiff duly subscribed for, and has. heretofore, in good faith, paid for to said C. P., at the nominal par value thereof, ten shares of the capital stock of said C. P., and has, ever since said 15th day of April, held and owned, and now holds and owns, said ten shares. 7. That the defendants, Leland Stanford, C. P. Huntington, Mark Hopkins, Charles. Crocker, and Charles Marsh originally subscribed to said capital stock, and agreed to take and pay for the shares thereof so subscribed by them respectively, at their par value, as follows, to wit: Said Leland Stanford, 150 shares. Said C. P. Huntington, 150 shares. Said Mark Hopkins, 150 shares. Said Charles Crocker, 150 shares. And saidi Charles Marsh, 50 shares. 204 PACIFIC RAILROADS. That afterward, but at what particular date or dates plaintiff is ignorant, all the sb'ares of the capital stock, so as aforesaid subscribed for by said last-named defendants. purport to have been issued by said last-mentioned corporation to said last-men-tioned defendants respectively. The plaintiff is informed and believes, and therefore avers, upon and according to his information and belief, that said last-named defendants did not, nor did either of them, ever pay to said corporation, or deliver to it, any money or other valuable thing for the shares of capital stock so purporting to have been issued to said last-named ~defendants respectively; but in truth and in fact the whole of such stock was so issued without any consideration ever having been paid or delivered therefor, illegally, in fraud and violation of the statute in such case made and provided, and in fraud of the rights of the plaintiff and the other stockholders of the C. P. That the only stock of said last-mentioned corporation ever paid for in good faith, according to law, and lawfully issued by it, is and has been such shares as are now held by the plaintiff, and such shares as were heretofore issued to the county of Placer,;State of California, to wit, twenty-five hundred shares; to the county of Sacramento, State aforesaid, three thousand shares; to Samuel Hooper fifty shares; to Benj. T. Reid fifty shares; to Glidden & Williams, composed of Wm. J. Glidden, Jno. A. Glidden, John M. Glidden, and John M. S. Williams, one hundred and twenty-five shares;,Orville D. Lambard, one hundred and twenty shares; Charles A. Lambard,. two hundred shares; Mrs. Anne F. Judah, twenty-five shares; Samuel P. Shaw, fifty shares; IR. O. Ives, twenty-five shares; Sam:uel Brannan, two hundred shares; and about nine hundred shares issued to divers individuals whose names and residences are unknown -to plaintiff. That the said last-mentioned defendants and their confederates, to the plaintiff unknown, assuming to act and in fact but illegally acting as directors of said Central Pacific, and composing a majority thereof, have caused to be issued to themselves and divers their confderates, to plaintiff unknown, large amounts of the capital. stock, of said corporation; but that all of said stock -so issued to them and their said confed-,erates has been issued without consideration illegally and fraudulently, and the issu-.ance thereof was. and is wholly illegal and void. 8. That nearly all of the aforesaid stcck so as aforesaid issued to the county of Placer, to wit, 2,500 shares; to the county of Sacramento, 3,000 shares; to Samuel Ltooper, 50 shares; to Benjamin T. Reid, 50 shares; to Glidden & Williams, 125 shares; to Orville D. Lambard, 120 shares;.to Charles A. Lambard, 200 shares; to Mrs. Anne TF. Judah, 25 shares; to Samuel P. Shaw, 50 shares; to R. O. Ives, 25 shares; to Samuel Brannan, 200 shares; and a portion of the other 900 shares or thereabouts as above mentioned, has been purchased by. the defendants, Leland Stanford, C. P. Huntington,. Mark Hopkins, Charles and E. B. Crocker, and who now claim to own the same;,and plaintiff is informed and believes, and so avers, upon and according to. his information and belief, that said purchase was made and paid for by said Stanford, Huntington, Hopkins, Charles and E. B. Crocker, with moneys derived by them from the earnings of the said C. P., under the name of a certain firm known as Charles Crocker *& Company, and a certain corporation known as the Contract and Finance Company, as will be hereaftershown, and not otherwise. 9. That the defendants Leland Stanford, Charles Crocker, Charles Marsh,.C. P. Huntington, Mark Hopkins, and others their confederates, to plaintiff unknown, were the directors of said C. P., to mnanage the concerns thereof, for the first three months after the organization thereof. That.at the expiration of said three months, the defendants Leland Stanford, Charles Crocker, E. B. Crocker, C. P. Huntington,'Mark Hopkins, and Charles Marsh, and their confederates, to plaintiff unknown-, pretending, appearing, and falsely claiming to be the nominal owners of a majority of the capital stock of said C. P., purporting to have been issued by:it, and by other.secret devices and contrivances unknown to plaintiff, combining and confederating together. elected themselves a majority of the directors of said last mentioned corporation, and have from thence hitherto, as nominal directors therof, exercised the entire "control and management of all its affairs, business, subsidies, and assets, to their joint.and individual benefit, advantage, profit, and gain, and to the loss, detriment, and dis-.advantage of said last-mentioned corporation, of plaintiff and the other stockholders thereof, as hereinafter more particularly averred and charged. 10. Plaintiff avers that he is advised, informed, and believes, and therefore, upon and acc6rding to his information and belief, avers, that neither of the said defendanuts Leland Stanford, Hopkins, Huntington, Charles and E. B. Crocker, or their confederates, although they claim to be respectively, and assert they are respectively, and nominally appear to- be respectively, owners of a large number of shares of the capital stock of said C. P., over and above what they respectively purport to have:subscribed for, at the time of the organization of said C. P.; yet, in truth and in fact, as plaintiff is informed and believes, and therefore avers upon and according to his information and belief, all such shares not so as aforesaid subscribed for, have in part been purchased and acquired by said last-mentioned defendants and their PACIFIC RAILROADS. 205 confederates, with the assets, mloneys, and property of said last-mentioned corporation, and in. part issued to said defendants and their confederates without any compensation moving to said last-mentioned corporation, in violation of the statute under which said corporation was organized and is acting; and all such shares are held in trust by said last-named defendants for said corporation. 11. That in and by the act of Congress first aforesaid, and the acts and resolutions supplemental to and amendatory thereof, the said defendant C. P. was and is authorized and empowered to construct and maintain a railroad and telegraph line from the Pacific coast, at or near San Francisco, California, to Echo City, in the Territory of Utah 1 in and through all the intervening States and Territories, a. distance of seven hundred and eighty-four and one-half miles, or thereabouts. That in and by said acts and resolutions last above mentioned, there was granted to said C. P. by the United States of America. the right of way for the railroad and telegraph line of said las!-:amed corporation, for the distance aforesaid, over and through 1he public lands of the United States, situate between San Francisco aforesaid and Echo City. aforesaid, including all necessary grounds for stations, buildings, workshops, depots, macliine-shops, switches, side-tracks, turn-tables, and water-stations, and the right to take from the public lands adjacent to the line of its said road for the construction thereof such earth, stone, timber, and other material as might be necessary therefor; and also twenty alternate sections of public land, (not including mineral lands containing the precious mnetals,) for each and every mile of its said road on the line thereof, and within the limits of twenty miles on each side of said road, equal to twelve thousand eight hundred acres of public lands per mile of said railroad; and also the timber on all mineral lands within said limits. And there was further granted to it, the said corporation, the C. P., and the Secretary of the Treasury of the United States was authorized and required to issue to said C. P., in aid of the construction of said railroad and telegraph line, bonds of the United States of America of the denomination of one thousand dollars each, payable in thirty years after the date thereof, bearing 6 per centum per annum interest, payable semiannually, to the amount of sixteen, thirty-two, and forty-eight of such bonds for each and every mile of said railroad and telegraph line so completed and equipped as aforesaid, according to the character of the land or country over which the same might pass, that is to say: sixteen of said bonds per mile for seven and eighteen one-hundredths (7 18-100) miles from the city of Sacramento to the western base of the Sierra Nevada Mountains, forty-eight bonds per mile for one hundred and fifty mailes across and over the Sierra Nevada Mountains, and thirty-two bonds per mile for six hundred and twenty-seven and 32-100 miles eastwardly across the Great Salt Lake Basin to Echo City aforesaid, in the Territory of Utah, amounting in all to twenty-seven thousand three hundred and eighty-nine 120-1000 bonds, of one thousand dollars each, and to the sum of twenty-seven million three hundred and eighty-nine thousand one hundred and twenty dollars ($27,389,120) in value. 12. That in and by an act of the legislature of the State of California entitled "An act to aid the construction of the Central 1t cific Railroad in the State of California, and other matters relating thereto," passed April 25, 1863, and to which said act and every part thereof plaintiff refers as a, part of this complaint, the controller of the State of California was authorized and empowered whenever the railroad of said defendant, C. P., should be completed from the city of Sacramento in said State to the eastern boundary of said State, and ready for the conveyance and transportation of passengers and freight, to draw his, said controller's, warrants upon the treasurer of' said State, and said treasurer was authorized to pay the same out of the State treasury, in behalf of and in favor of said C. P., in sums of not less than one thousand dollars each, for an amount equal to ten thousand dollars in United States gold coin per mile for each mile of its railway thus completed and equipped, and deliver such warrants to said C. P. 13. That in and by that certain other law of the State of California, entitled "An act to authorize the county of Placer to subscribe to the capital stock of the Central Pacific Railroad of California, and to provide for the payment of the same, and other mattersrelating thereto," passed April 2, 1863, to which act plaintiff refers as a part of this complaint, the board of supervisors of said county of Placer was authorized, upon the affirmative vote of the qualified electors of said county so to do, to take and subscribe, for the use and benefit of said county, to the capital stock of said C. P. to the amount. of two hundred and fifty thousand dollars, and therefor to issue and deliver to said C. P. the bonds of said county for a like amount,.payable in twenty years from the date of their issuance, with interest thereon at the:rate of eight per cent. per annum.. principal and interest payable in United States gold coin. That thereafter, and pursuant to said last-mentioned act, a majority of the- qualified electors'of the said county, at an election duly held, did authorize the issuance anud delivery of two hundred and fifty thousand dollars of said county bonds, as in said act provided. 14. That in and by that other law of the State of California, entitled "An act to 206 PACIFIC RAILROADS...authorize the board of supervisors of the city and county of San Francisco to take and subscribe one million of dollars to the capital stock of the Western Pacific Railroad Company and the Central Pacific Railroad Company of California, and to provide for the payment of the same, and other matters relating thereto," passed April 22, 1863, and to which said act plaintiff refers as a part of this complaint, among other things, the board of supervisors of said city and county was authorized and required, upon the affirmative vote therefor of the qualified electors of said city and county, to take and -subscribe, for the use and benefit of said city and county, to the capital stock of the said corporation, C. P., to the amount of six hundred thousand dollars, and to deliver to said C. P. therefor the bonds of said city and county to the amount of six hundred thousand dollars, payable in three years from the date of the issuance thereof, with interest thereon at the rate of six per cent. per annum, payable semi-annually, prin-cipal and interest payable in United States gold coin. That afterward, at an election duly held pursuant to said act, in said city and county, the qualified voters thereof did vote in favor of taking and subscribing for such stock and the issuance and delivery of such bonds. 15. That in and by a certain other law of the State of California, entitled "An act to confer additional powers upon the board of supervisors of the city and county of San Francisco and the auditor and treasurer thereof, and to anthorize the appropriation of money by said board," passed April 4, 1864, to which plaintiff refers as a part of this complaint, the board of supervisors of said city and county of San Francisco was authorized and enipowered to compromise and settle all claims on the part of said.C. P., under the act referred to in the last preceding article of this complaint, upon or against the said city and county by reason of said act, by payment of cash, or the giving of other security, in place of the bonds authorized to be issued by said law passed April 22, 1863. 16. That in pursuance of said last twno mentioned laws, the said city and county of San Francisco, by its boaid of supervisors, did issue and deliver, on or about the 21st day of April, 1865, to said C. P. bonds of the said city and county of San Francisco to -the amount of four hundred thousand dollars, payable in thirty years from the date of their issuance, with interest thereon at the rate of seven per centum per annu1m, pay-.able semi-annually in United States gold coin, and did at the same time relinquish to said company all claims in favor of said city and county, upon and against said C. P. for any of its capital stock provided to be issued by said act passed April 22, 1863. 17. That in andl by a certain other law of the State of California, entitled "An act to authorize the city and county of Sacramento to subscribe to the capital stock of the *Central Pacific Railroad Company of California, and providing for the payment of the same, and other matters relating thereto," passed April 25, 1863, to which plaintiff refers as a part of this complaint, the board of supervisors of the city and county of,Sacramento was authorized, upon the affirmative vote therefor of the qualified electors of said city and county of Sacramento, to take and subscribe, for the use and benefit of said city and county, to the capital stock of said defendant, C. P., to the amount of three hundred thousand dollars, and theref'or to issue. and deliver to the said C. P. the bonds of said city and county to the amount of three hundred thousand dollars, payable in thirty years from the date of their issue, with interest thereon at the rate of eight per centumn per annum, payable semi-annually, principal and interest payable in United States gold coin. 18. That in and by a certain other law of the State of California, entitled "An act to aid in the construction of the Central Pacific Railroad, and to secure the use of the same to this State for military and other purposes, and other matters relating thereto," passed April 4, 1864, and to which plaintiff refers as a part of this complaint, the C. P. was authorized to issue its bonds, from time to time, to the amount of twelve millions of dollars, ($12,000,000,) payable in twenty years from the first day of January, 1865, in United States gold coin, with interest at the rate of seven per cent. per annum, payable semi-annually, the payment of the principal to be secured by one or more mortgages on the railroad of said company, its rolling-stock, buildings, machinery, fixtures, and corporate franchises, and the interest aforesaid to accrue thereon to be paid by the State of California. 19., That in and by another law of the State of California, entitled "An act granting certain rights to the Central Pacific Railroad Company of California, and for other purposes," passed April 14, 1863, and to which plaintiff refers as a part of this complaint, and also by certain ordinances and resolutions duly ordained and passed by -the board of supervisors of the city and county of San Francisco and of the city and county of Sacramento, respectively, and by the authorities of other municipal bodies, bodies politic and corporate, in the said State of California, and in and by certain deeds of gift from said municipal bodies, bodies politic and corporate, and from (livers individuals, duly executed and delivered to said C. P., as grantee, as plaintiff is informed, and believes, and avers upon and according to his information and belief, the said C. P. has acquired, and now holds and owns, and is possessed of, a large amount'of real estate and other properties in said city and county of San Francisco, -in said PACIFIC RAILROADIS..207 city and county of Sacramento, and at divers other places in the State of California, and along the line of its railroad from Sacramento to the eastern boundary-line of said State aforesaid, of great value, to wit, of the value, as plaintiff is informed and believes, and therefore avers, of ten millions of dollars, ($10,000,000.) 20. That as plaintiff is informred and believes, and therefore avers, upon and according to his information and belief, and as certain other ordinances and resolutions duly ordained, made, and passed by various municipal corporations and bodies politic and corporate of the said State of Nevada, and of the said Territory of Utah, and by various other deeds-of gift duly executed and delivered by various municipal corporations, bodies politic and corporate, and divers individuals, in said State of Nevada and Territory of Utah, respectively, to said C. P., said defendant C. P. heretofore acquired, and is now the owner and possessor of, a large amount of real estate and other property in said last-mentioned State and Territory, along and in the vicinity of its railway, of great value, to wit, of the value, as plaintiff is informed and believes, and, therefore, avers, of five millions of dollars, ($5,000,000.) 21. That said railroad and telegraph line, so as aforesaid authorized to be constructed bv said C. P. from the Pacific coast, at or near the city and county of San Francisco, in the State of California, to Echo City aforesaid, have been and now are wholly completeted, equipped, and furnished, according to law, to wit, from Sacramento to Echo City, aforesaid, a distance of seven hundred and eighty-four and a half miles, or thereabout; and the samle, with all the franchises, privileges, and appurtenances thereto belonging, since the 8th day of May, A. D. 1869, have been and are now being operated by said C. P., and by the individuals, corporations, and associations hereinafter mentioned, for the conveyance and transportation of passengers and freights, and the transmission of telegraph-messages. 22. That all the bonds of the United States authorized to be issued by said acts of Congress and resolutions hereinbefire mentioned and referred to, and the grants of public land thereby authorized to be made to the said C. P. by the said acts of Congress, and the said State bonds and warrants, and the bonds of the said county of Placer, and of the said city and county of Sacremento, and of the said city and county of San Francisco, and the grants of Suate lands authorized to be made to the said C. P. by the laws of the State of California hereinbefore mentioned and referred to, and the lands donated by the said city and county of Sacremento, and by the city and county of San Francisco, and by the various other municipal bodies, bodies politic and corporate, and individuals, as aforesaid, have all been delivered and made over to said C. P., and were received in its name by the said defendants, Leland Stanford, Hopkins, Huntington, Charles Crocker, E. B. Crocker, Marsh, and Miller, acting as its bolard of directors, and the first and second mortgage bonds of the said C. P., so as aforsaid authorized to be issued, have been issued by it and delivered to its said lastnamed directors; and all of said bonds, together with the interest-coupons attached, have been sold and disposed of by said last-mentioned directors in the name of said C. P., or are fraudulently detained by said last-named directors; and the mloneys realized fiom all said sources and subsidies have been appropriated by the said directors, Leland Stanford, HIopkins, tHuntington, E. B. Crocker, Charles Crocker, Marsh, and Miller, and their confederates, to plaintiff unknown, and whose names, when ascertained, plaintiff prays may be inserted herein, with proper and apt words to charge them, to their own use, except such small portions thereof as were actually used in the construction of said road and telegraph line, as hereinafter averred. 2'3. Plaintiff further avers, on and according to his information anA belief, that under said acts of Congress and the acts amendatory thereof and resolutions supplementary thereto, in articles 2 and 12 of this complaint mentioned and referred to, said C. P. became entitled to and has become the owner of ten millions and forty one thousand six hundred acres of public lands of the United States, situate and lying between the city of Sacramento aforesaid and Echo City aforesaid, of great value, to wit, of the value, as plaintiff is informed and believes, and avers upon and according to his information and belief, of fifty million two hundred and eight thousand dollars ($50,208,000) gold coin of the United States. 24. That under said acts of Congress and the acts and resolutions amendatory thereof and supplementary thereto, there have been in fact issued and delivered to the said C. P. as plaintiff is informed and believes, and therefore avers, upon and according to his information and belief, by the United States Government, United States bonds bearing interest as therein provided, and payable at the times therein provided, to the amount of $27,389,120, to aid in the construction of said railroad and telegraph lithe, from Sacramento aforesaid to Echo City aforesaid; that said bonds now are and have been of the value, ever since the issuance thereof, in lawful money of the United States, of $27,389,120, and said last-mentioned sum has been realized from the disposition thereof, and used and appropriated as hereinafter more particularly averred. That pursuant to said law of the State of California, approved April 25, 1863, mentioned and referred to in article 12 of this complaint, the said C. P., subsequent to the passage of said acts, and in the years 1864-'65, received from the State of California the 208 PACIFIC RAILROADS. sum of $1,500,000 in United States gold coin, and which has been used and disposed of as hereinafter more particularly averred. That pursuant to said statute approved April 2, 1863, referred to iu article 13 of this complaint, the said county of Placer duly issued and delivered to said C. P. the bonds of said county to the amount of two hundred and fifty thousand dollars, gold coin, payable with interest as in said act provided, which bonds, when issued and delivered, were, ever since have been, and still are, of the aggregate value in gold coin of the United States of two hundred and fifty thousand dollars, ($250,000). That pursuant to said statute approved April 22, 1863, and the acts supplemzlentary thereto, referred to in articles 14, 15, and 16 of this complaint, there were on or about the 20th day of April, 1865, duly issued and delivered to said C. P. bonds of the city and county of San Francisco of the par-value of four hundred thousand dollars, payable at the times and bearing interest as in said last-mentioned acts provided, which said last-mentioned bonds, when issued, were, ever since have been, and now are, of the aggregate value of four hundred thousand dollars United States gold coin, ($400,000,) and that sum has been realized therefrom, by the disposition thereof; as hereinafter averred. 25. That pursuant to said statute, approved April 25, 1863, referred to in article 17 of this complaint, the said city and county of Sacramento duly issued and delivered to said. C. P. its county bonds to the amount of three hundred thousand dollars, gold coin of the United States, payable with interest as in said act provided, and which said bonds, when issued and delivered, were, ever since have been, and still are of the aggregate value of $300,000 gold coin of the United States, and that sum has been realized from the disposition thereof, and used and appropriated as hereinafter more par-ticularly averred. 26. That pursuant to said statute approved April 4, 1864, referred to in article 17 of this complaint, the said C. P. heretofore issued its mortgage-bonds, payable As in said.act provided, with interest-coupons attached, payable by, and which interest has been, from the date of said bonds to the present time, in fact, paid by, the State of California. That said C. P. has heretofore, but at what particular date or dates plaintiff is ignorant, sold or otherwise disposed of said bonds, and has received and realized therefrom, as plaintiff is informed and believes, and therefore avers, the sum of $12,000,000 United States gold coin, which sum has been used and appropriated as hereinafter more particularly averred. That pursuant to said act of Congress, and the acts and resolutions amendatory of and supplemental thereto, referred to in articles 2 and 10 of this complaint, the said C. P. heretofore issued under the signatures of its officers and its corporate seal, and delivered to defendants, Leland Stanford, E. B. Crocker, Charles Crocker, Huntington, Hopkins, Marsh, Miller, and their confederates, to plaintiff unknown, its first-mortgage bonds to the amount of $27,389,120, payable in United States gold coin, with interest at the rate of ten per cent. per annum, secured by the first mortgages of said C. P. upon its road, equipments, furniture, franchises, depots, machine-shops, and other property. That, as plaintiff is informed and believes, and therefore avers, upon and according to his information and belief, the said C. P. issued and delivered on or about the day.of, 186, and on divers other days prior to the first day of March, 1876, to said defendants Leland Stanford, E. B. Crocker, Charles Crocker, Huntington, Hopkins, Miller, Marsh, and their confederates, to plaintiff unknown, its second-mortgage bonds to the amount of $27,387,120, payable in United States gold coin, with interest at ten per cent. tier annum. That said second-mortgage bonds, with the exception of $11,787,378.17 of the nominal value thereof, and all of the said first-mortgage bonds, have been, as plaintiff is informed and believes, and therefore so.avers, delivered by the said C. P. to the said Leland Stanford, E. B. Crocker, Charles Crocker, Huntington, HIopkins, Miller, Marsh, and their confederates, to plaintiff unknown, and by them and their confederates kept and retained and appropriated to their own use, in violation of their duties as directors, in fraud of the rights of said C. P., of plaintiff, and the other stockholders of said C. P.; and said second-mortgage bonds, to the amount of $11,787,378.17, have been sold by said defendants last above named, and the sum of at least $11,787,378.17 in United States gold coin, realized therefrom by them, and by them or some of them converted to their own use. 27. Plaintiff avers and charges that the following is a correct summary statement and estimate of the various subsidies and aid~ granted to said C. P. in aid of the construction of its railroad and telegraph-line, as near as he can ascertain the same: Value in gold coin: Lands granted by United-States...,................. $50, 208, 000 00 Lands granted and donated by various corporations, &c., situate within the State of California.................................. 5, 000, 000 00 Lands granted and donated by various corporations and individuals situate within the State of Nevada,...... 3, 000, 000 00 Lands granted and donated by various corporations and individuals within the' Territory of Utah.....2, 000, 000 00 PACIFIC RAILROADS. 209 Donation by the State of California................. $1, 500, 000 00 Bonds on which the State of California guaranteed the interest.. 123, 000, 000 00 Bonls of Placer County................................... 950, 000 00 Bonds of the city and county of San Francisco -.. —------- - - -. 400, 000 00 Bonds of the city and county of Sacramento........................ 300,000 00 Currency: Bonds 6f the U. S. Government................................. 7, 389, 120 00 First-mortgage bonds of said C. P.................................. 27, 389, 120 00 Second-mortgage bonds of said C. P., delivering to defendants L. Stanford, Charles and E. B. Crocker, Huntington, Hopkins, A. P. Stanford, Marsh, and Miller, as above charged.......................... 15, 601,741 83 Second-mortgage bonds issued and sold as above charged........... 11, 787,378 17 Total...................................................... 156, 825, 360 00 28. That instead of undertaking by its own officers and agents the construction of its railroad and telegraph-line, and the furnishing and equipping thereof, or making a reasonable contract with disinterested persons therefor, or letting out the work and the fnrnishing of materials for the construction, furnishing, and equipping thereof, to the lowest bidder; and instead of endeavoring to construct, furnish, and. equip the same in the most economical manner, the said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and their confederates, then composing a majority of the directors of the said C. P., combining and confederating together to defraud the said C. P., and the plaintiff and other stockholders thereof, and to secure to themselves, jointly and severally, personally, great profits, advantages, and gains, entered into an arrangement among themselves, under the name of C. Crocker & Co., and under that name, from the commencement of the construction of its railroad at the city of Sacramento, until about the month of November, 1867, contracted with said C. P. to furnish the materials for, and to construct, furnish, and equip so much of said railroad and telegraph-line as was constructed, furnished, and equipped, or partly constructed, furnished, and equipped, prior to the first day of November, 1867. Tlhat such contract and contracts were caused to be made in the name of the said C. P., by the votes and direction of said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and their confederates, (who composed a majority of the board of directors of said C. P.,) with said'C. Crocker & Co., a copartnership, of which the said last-named defendants were members, for their joint and individual profit and gain, and the prices and rates at which the same were let were exorbitant and excessive, to wit, at the rate, as plaintiff is informed and believes, of two hundred per cent. over and above the actual and reasonable cost and expense of the work done, and the materials, furniture, and equipments furnished in the name of said C. Crocker & Co.; whereby the said last-named defendants did receive from said C. P., and appropriate to their own use, and did vote to themselves, under the pretense of being directors of said C. P., large sums of money, bonds, and assets of said-C. P., to wit, as near as plaintiff can estimate the same, seven million dollars ($7,000,000) in value, over and above the actual cost of the work done and the materials, furniture, and equipments furnished in the name of, or under the direction of, said C. Crocker & Co. 29. That afterward, to wit, on or about the 18th day of November, 1867, the said defendants Huntington, Hopkins, Leland Stanford, C..and E. B. Crocker, and divers others, their associates and confederates, to plaintiff unknown, combining and confederating together to cheat and defraud plaintiff and the other stockholders of the C. P., and the said C. P., and fraudulently to acquire and appropriate to themselves, without consideration or a just equivalent, large profits and gains and large amounts of the assets and property of the said C. P., organized themselves and some of their servants and employd6s, to plaintiff unknown, under the laws of the State of California, into a corporation styled the " Contract and Finance Company," for the purpose of taking contracts for the construction of subdivisions of the railroad and telegraph line of said C. P. and the appurtenances necessarily connected therewith, and the equipping and furnishing the same. That from and after the organization of said "'Contract and Finance Company," all the contracts made and entered into in the name of the' said C. P. for materials to be furnished for, and work to be done in, the construction, furnishing, and equipment of said railroad and telegraph line, were by said Leland Stanford, Hopkins, Huntington, C. and E. B. Crocker, and their confederates, composing a majority of the directors of said C. P., voted to be let, and in fact were let and entered into by said C. P., of the one part, and the said " Contract and Finance Company" of the other part, without advertising to let the same to the lowest bidders or bidder, and without in any manner inviting competition therefor. That under the fraudulent and illegal pretense of paying for said materials, work, H. Rep. 440 - 14 210 PACIFIC RAILROADS. equipment, and furniture nominally contracted to be furnished and done by said " Contract and Finance Company," but really and in fact by said last-mentioned directors and their confederates for their own benefit, the said last-mentioned directors and their confederates from time to time voted to pay, deliver, and make over, and did pay, deliver, and make over, in the name of said C. P., to said "Contract and Finance Company " and its confederates, large sums of money and large amounts of bonds, lands, and other valuable assets of said C. P., of great value, to wit, of the value, as plaintiff is informed and believes, of two hundred and twenty-five million eight hundred and fifty-five thousand six hundred and eighteen dollars' and seventeen cents ($225,855,618.17.) That said last-mentioned moneys, bonds, subsidies, lands, and other valuable assets so made over, transferred, and delivered to said " Contract and Finance Company," were in value greatly in excess, to wit, to the amount of two hundred and six million six hundred and thirty-two thousand six hundred and sixty-one dollars and fifty and one-third cents, ($'206,632,661,50-}) of the actual cost of; and of a fair price for, all materials, furniture, and equipments furnished by and work done by said " Contract and Finance Com-ipany," or by its subcontractors or employ6s in the construction of said railroad and telegraph-line, and the appurtenances thereof; and in said last-mentioned sum in excess of the sum in which the same could have been let out for, and contracted to be done and furnished, by responsible persons and firms who did not intend to cheat and defraud the said C. P., this plaintiff, and the other stockholders of the said C. P. The said defendants, Leland Stanford, Huntington, Hopkins, E. B. and C. Crocker, heretofore, to wit, on or about the 20th day of July, 1869, under the name of said "Contract and Finance Company," divided among themselves the said two hundred and six million six hundred and thirty-two thousand six hundred and sixty-one dollars and fifty and one-third cents, ($206,632,661.50-.,) in value of the assets, subsidies, and property of said C. P., so as aforesaid delivered to said "' Contract and Finance Company," but in what proportions this plaintiff is ignorant, but is informed and believes, and therefore avers, upon and according to his information and belief, that the saidi sum was so divided in the proportion of one-fifth to each of the last-named defendants.. And this plaintiff avers, on and according to his information and belief, that said " Contract and Finance Company" did sublet the greater portion of the work to be done, and which was done, and the materials to be furnished, and which werefurDished in the construction of the said telegraph and railroad line under its contracts with said C. P. at prices greatly below, to wit, more than ten hundred per cent. below the prices which said C. P. nominally undertook to pay to said "Contract and Finance Company" for doing the same work and furnishing the same materials. 30. Plaintiff further avers, upon and according to his information and belief, that all the bonds issued to the said C. P. by the United States Government; also all the warrants issued by the State of California; also the guarantee for the payment of interest by the State of California aforesaid; also the bonds issued and delivered by the county of Placer, by the city and county of Sacramento, by the city and county of San Francisco, and the first-mortgage bonds issued by said C. P. as aforesaid; also the second-mortgage bonds issued by said C. P. as aforesaid, have all been transferred to, and the control and benefit thereof vested in, defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and their confederates, under the pretense and pretext of paying and delivering the same to said " Contract and Finance Company," composed of said last-named defendants and their confederates, as in part a fair compensation for the work purporting to have been done, and materials, furniture, and equipments purporting to have been furnished, by said " Contract and Finance Company," in the construction of said railroad and telegraph line, and the equipment and furnishing thereof, and the same have, by the said last-named defendants, been converted to their own use. 31. That the dividends, profits, and gains so as aforesaid received and realized by the said defendants, Leland Stanford, C. P. Huntington, Mark Hopkins, Charles and E. B. Crocker, and their confederates, in the name of Charles Crocker & Co., and in the name of said "Contract and Finance Company," amount, as plaintiff is informed and beleves, and therefore avers upon his information and belief, to the sum of two hundred and eleven million two hundred and ninety-nine thousand three hundred and eight dollars and seventeen cents, ($211,299,308.17;) the whole of which ought in justice and equity to belong to the said C. P., for the benefit.of the stockholders. 32. That defendant B. B. Redding is. and has been, since the first day of January, 1865, an agent and employ6 of the defendants Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, though professing to be, and nominally appearing to be and to have been, during said period, an employ6 of said C. P.; that said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, acting as' directors of said C. P., have, as plaintiff is informed and believes, and so avers upon and according to his information and belief, heretofore voted to sell and convey, and have caused the officers of the said C. P. to convey to said Redding and his and their confederates, unknown to plaintiff, a large part of, and the most valuable portions of, the lands so PACIFIC RAILROADS.'211 as aforesaid granted by the United States to said C. P. for mere nominal considerations, to wit, for one dollar and twenty-five cents per acre. That all of said pretended sales and conveyances have been, in fact, made with the secret understanding and agreement between said Redding and his confederates, and said Hopkins, Huntington, Leland Stanford, Charles and E. B. Crocker, and their confederates, that said Redding and his confederates should hold, and from time to time dispose of said lands so conveyed to him and his confederates, as aforesaid, for the benefit of said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker. That said lands so conveyed to said Redding and his confederates are of great value, but of what value plaintiff is ignorant. That all moneys paid or purporting to have been paid, if any have been paid to said C. P. for said lands, have been, in fact, paid by said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, out of the profits and gains so as aforesaid made and realized by them in the name of the" Contract and Finance Company " and in the name of said C. Crocker & Co. That there are divers other persons, to plaintiff unknown, who purport to have received, and have received, pretended conveyances of parcels and sections of said lands, the number of acres and particular subdivisions being unknown to plaintiff. That said last-named persons hold the lands, so as aforesaid conveyed to them, in secret trust for Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker. 33. Plaintiff is informed and believes, and therefore avers upon and according to his information and belief, that said C. P., from its organization up to the 31st day of December, 1875. received for the transportation of freight, property, and passengers over its line of railroad to and from Sacramento aforesaid, the sum of fifty-five million one hundred and thirty-three thousand three hundred and sixty-four dollars and eighty-nine cents ($55,133,364.89;) and during the same period, from the transmission of telegraph messages over its telegraph-line, the sum of three million (3,000,000) dollars. That since the said tenth day of February, 1869, said C. P. has received for the transportation of freight and property (other than express freights as in Article 36 in this complaint mentioned) and passengers, the sum of five million nine hundred and seventy-three thousand and fifty-one dollars and seven cents ($5,973,051.07;) and has, since said last-mentioned day, received for the transmission of messages over its said telegraph-line, the sum of two million eight hundred and seventy-three thousand dollars ($2,873,000.) 34. The plaintiff is informed and believes, and therefore avers upon and according to his information and belief, that the first seven and 18-100 miles of said railroad and telegraph-line from Sacramento, eastwardly, was actually constructed for a little less than $11,500 per mile. That the actual cost of the next succeeding one hundred and fifty miles, eastwardly, was less than $42,000 per mile, and no greater sum was expended in the construction thereof. That the actual cost of the construction of the rest of said road and telegraph-line, to wit, for a distance of six hundred and twenty-seven and 33-100 mniles, was less than $21,000 per mile; which said cost for each distance included stations, depots, switches, turn-tables, side-tracks, water-tanks, and water-stations, platforms, warehouses, repair-shops, machine-shops, engine-houses, and all other equipments and furniture of said road, except rolling-stock. That the rolling-stock, to wit, cars, engines, hand-cars. and other equipments of said road and telegraph-lines actually furnished for and actually used by said C. P., between its organization and the first day of January, 1876, has not cost to exceed the sum of two million dollars, and the plaintiffs charge, in fact, that the same has cost much less. 35. Plaintiff further avers that he is informed and believes, and he therefore, upon and according to his information and belief, charges, that the said Leland Stanford, Huntirigton, Hopkins, Charles and E. B. Crocker, and their confederates, with the funds and assets of the said C. P., between the first day of July, 1861, and the first day of May, 1t69,,constructed and maintained a wagon-road, commonly known and called the "Dutch Flat Wagon Road," and charged the cost of the construction thereof, to wit, one hundred and fifty thousand dollars, to the construction account of the C. P., under the pretense that the construction thereof was necessary for hauling freight and materials to be used in the construction of said railroad. That said Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and their confederates, collected tolls on said wagon-road, from freights, passengers, and vehicles passing over the same, to a large amount, to wit, to the amount of three hunlIred and fifty thousand dollars in United States gold coin, ($350,000,) and appropriated and applied the same to their own use and benefit. 36. That the defendant, Wells, Fargo & Co., has been, for ten years last past, and still is, a corporation duly organized, created, and existing under the laws of the State of New York, for the purpose of transporting express-freight, coin, bullion, and other valuable packages and letters over the various lines of railroad and steamboat travel throughout the United States, and particularly from New York City, State of New York, to San Francisco, in the State of California, and places intermediate. That the said defendants, Hopkins, Huntington, Leland Stanford, Charles and E. B. Crocker, 212 PACIFIC RAILROADS. and their confederates, to plaintiff unknown, acting as and composing a majority of the board of directors of said C. P. between the first day of May, 1869, and the first day of April, 1870, but at what particular date plaintiffs are ignorant, in the name of said C. P., granted to and contracted with said defendant, Wells, Fargo & Co., in substance and to the effect, that said Wells, Fargo & Co. should have the exclusive right of running express-freight trains, and carrying and transporting express-freight, expresspackages, bullion, &c., over said C. P.'s line of railway; that in consideration thereof, said Wells, Fargo and Co. increased or " watered" its capital stock from $10,000,000.00 to 15,000,000.00, and delivered and made over to said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, or for their benefit, without any consideration except the making of said contract in the name of said C. P., one and one-half millions of said watered stock of Wells, Fargo & Co.; and from thence hitherto, said Leland Stanford, Charles and E. B. Crocker, Huntington & Hopkins, have been, and now claim to be, the owners of one and one-half millions, or thereabouts, of said Wells, Fargo & Co.'s stock, of the value of $1,500,000. 37. That the Western Pacific Railroad Company of California, on, and long prior to, the 13th day of December, 1862, was and ever since has been a corporation duly organized under the laws of the State of California, for the construction and maintenance of a railway and telegraph-line fiom a point at or near the city of San Jos6, Santa Clara County, California, by way of Stockton and intermediate places, to Sacramento aforesaid, a distance of about one hundred and twenty-five (125) miles. That said last-mentioned corporation, whenever hereinafter mentioned in this complaint, is designated by the letters W. P. That said W. P., was, and is, by various laws and statutes, entitled to have and receive large subsidies in bonds, lands, rights, franchises, and other valuable privileges. That as plaintiff is informed and believes, and therefore, upon and according to his information and belief, avers, on or about the 10th day of August, 1867, the defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crooker, purchased of one Charles McLaughlin and other persons unknown to plaintiff, but who composed the stockholders of said W. P., all the capital stock of said last-mentioned corporation, and took and received a transfer and assignment thereof to themselves and their confederates, and at the same time took a delivery of, and there was delivered to them by the directors of said W. P., so much of the railroad of said W. P. as had then been completed, and partly completed; and they have, since said day, controlled and managed the affairs and business of said last-mentioned corporation, and have constructed and completed a railway and telegraph-line from San Jos6 aforesaid to Sacramento aforesaid, and are using as the rolling-stock and equipments thereof in running the same the rolling-stock and equipments of said C. P. That the stock of said W. P., so as aforesaid purchased, was purchased, and said last-mentioned railroad and telegraph-line has been wholly stocked, equipped, and furnished with the moneys and assets of the said C. P., wrongfully and illegally appropriated for that purpose by the said Stanford, Huntington, Hopkins, Charles and E. B. Crocker. That said last-mentioned defendants and their confederates hold said-stock, so purchased, and said last-mentioned railroad and telegraph-line so delivered in trust for the said C. P. and.its stockholders. That afterward, to wit, on or about the 20th day of December, 1869, the said Stanford; Huntington, Hopkins, Charles and E. B. Crocker, and their confederates, received from the United States Government its bonds and coupons for sixteen thousand dollars per mile, for the distance from Sacramento to a point near Vallejo's Mills, in the county of Alameda, to wit, one hundred and twenty-five miles, as subsidies to aid in the construction of the railroad and telegraph-line of said W. P., from San Jos6 aforesaid to Sacramento aforesaid, and have converted the same to their own use. That such bonds when so converted, to wit, on the 1st day of January, 1870, were and still are of the value of two million dollars, ($2,000,000.) That from the running and management of said last-mentioned road and telegraphline, said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker have heretofore received and appropriated to their own use large sums of money, to wit, three. millions of dollars, ($3,000,000;) that said last-mentioned bonds and sums of money, of right and in equity, belong to said C. P. and its stockholders. 38. That said Stanford, Huntington, Hopkins, Charles and E. B. Crocker, with other moneys and assets of said C. P., so as aforesaid received, realized, and appropriated by them in fraud of the said C. P. and its stockholders, heretofore, to wit, between the 1st day of May, 1868, and the 20th day of March, 1870, constructed and equipped a branch of the said W. P., from a point near the Alameda Creek, near Vallejo's Mills, in Alameda. County, to a point at or near San Antonio, in the county of Alameda, and they and their confederates now claim to own, and in fact manage, and control, and are running said branch in connection with the said W. P., said C. P., and the San Francisco and Oakland Railroad Company's road, hereinafter mentioned, and are and have been receiving sine September 1, 1869, as net gains and profits of running the same, about ten thousand dollars ($10,000) gold coin per month. PACIFIC RAILROADS. 213 That said last-mentioned branch, its furniture, depots, and equipments, and the net earnings thereof are, in fact and in truth, held by said Stanford, Huntington, Hopkins, Charles and E. B. Crocker in trust for said C. P. and its stockholders. 39. That the said San Francisco and Oakland Railroad Company has been for several years last past, and is, a corporation duly incorporated and existing under the laws of the State of California for the purpose of running a railroad and ferry, and by means thereof transporting freight and passengers from San Antonio, Alameda County, through Oakland, to the city and county of'San Francisco. That, as plaintiff is informed and believes, and therefore avers upon and according to his information and belief, on or about the 20th d4y of March, 1S69, the defendants,. Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and their confederates, to plaintiff unknown, purchased from A. A. Cohen, Michael Reese, and others, the owners thereof, nearly all of the capital stock of said last-mentioned corporation, and the same was by said vendors transferred and assigned to said last-named defendants and their confederates; and at the same time there was delivered to said last-named defendants and their confederates by the directors of said corporation the possession of the railroad, railroad-depots, rolling-stock, furniture, and equipments belonging to the said San Francisco and Oakland Railroad Company, and the ferry-boats belonging to it, to wit, the El Capitan and other boats. That, in consideration of said assignment, transfer, and delivery, as plaintiff is informed and believes, and therefore avers upon and according to his information and belief, the said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker agreed to pay, and have in fact paid to said vendors, Cohen, Reese, and others, the sum of five hundred thousand dollars ($500,000) in United States gold coin, which said sum has been and was wholly paid out of the funds and assets of the said C. P., so as aforesaid realized and appropriated to their own use by the said defendants, Stanford, Huntington, Hopkins, Charles and E. B. Crocker, as contractors as aforesaid, in the name of Charles Crocker & Co. and in the name of the said Contract and Finance Company, and as managers of the said C. P. That said stock, so as last aforesaid acquired and purchased by said last-mentioned defendants, is held by them in trust for said C. P. and its stockholders. That the said last-named defendants by means of said last-mentioned purchase, and since consummating the same, have elected their own confederates and employ6s and some of themselves directors of said San Francisco and Oakland Railroad Company, and have since said last-mentioned day been running and operating said last-mentioned railroad and ferry for the transportation of freight and passengers, in connection with said branch of said W. P., said W. P. and said C. P., and have received and realized as net proceeds of running the same about $30,000 per month, gold coin. That, out of the assets of the said C. P., the profits and gains of running the said branch and said San Francisco and Oakland Railroad and Ferry, the said defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, have expended in extending into the bay of San Francisco a wharf and pile-track, in the direction from Oakland toward San Francisco, about the sum of nine hundred thousand dollars, ($900,000;) and which extension was designed to be an extension of said San Francisco and Oakland Railroad, and is designed to connect the city of Oakland with Goat Island in the bay of San Francisco by a railroad. 40. That tile San Francisco and Alameda Railroad Company is and has been, for three years last past, a corporation duly organized, created, and existing under the laws of the State of California, and heretofore, to wit, on the first day of August, 1869, was the owner, possessed of, and engaged in running a railway, and transporting freight and passengers from Haywards, Alameda County, to the end of the Alameda wharf, in said county, and from thence to the city and county of San Francisco by means of ferryboats by it owned. That on the day and year last aforesaid, as plaintiff was informed and believes, and therefore avers, upon and according to his information and belief, Alfred A. Cohen, E. B. Mastick, Charles Minturn, Edward Minturn, and F. D. Atherton were the owners of all the capital stock of said last-mentioned corporation, and on the day and year last aforesaid, at the city and county of San Francisco aforesaid contracted to sell and assign, and did sell and assign, to defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and their confederates, unknown to plaintiff, all of the capital stock of said last-mentioned corporation, for some sum and consideration to plaintiff unknown, but which, upon and according to his information and belief, he avers to be, and to have been, for the sum of five hundred thousand dollars, ($500,000.) That on the day and year last aforesaid, the railroad, rolling-stock, and equipment, wharves, ships, and ferry-boats of the said San Francisco and Alameda Railroad Company, were delivered to and accepted by the said defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and since said day said railroad has been run, managed, and controlled by said last-mentioned defendants for their own benefit, profit, and advantage, and they have received and realized therefrom large gains and net profits, to wit, ten thousand dollars ($10,000) per month, gold coin, and threaten to 214 PACIFIC RAILROALS. continue to run, control, and manage the same, and to appropriate the proceeds thereof to their own use. That said last-mentioned purchase was made and has been paid for, by said lastmentioned defendants, with the moneys and assets of the said C. P., and with the moneys, gains, and profits so as aforesaid received, realized, and appropriated to their use by the said last-named defendants and their confederates, under the names respectively of " Charles Crocker & Co.," and said " Contract and Finance Company." 41. That as plaintiff is informed and believes, and therefore avers, upon and according to his information and belief, all the expenditures made in the construction of the said W. P. Railroad and Telegraph-line, and said branch thereof, and in the purchase of said San Francisco and Oakland Railroad Company stock and said San Francisco and Alameda Railroad Company stock, and in the construction of said hereinbeforementioned extension of wharf and pile-track, and all the expenses of running and managing said last-mentioned railroads, ferries, and telegraph-lines, have been by said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and their confederates, charged to, and now are charged to, the construction-account of said C. P., and to the running expenses of said C. P. * 42. That on or about the 25th day of June, 1870, the said San Francisco and Oakland Railroad Company, and the said San Francisco and Alameda Railroad Company, merged and consolidated their capital stock, debts, assets, and franchises, under the name of the " San Francisco, Oakland, and Alameda Railroad Company," with a capital stock of two million of dollars, divided into twenty thousand shares, of a par value of one thousand dollars each. That on or about the first day of July, 1870, the said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, being then the holders of nearly all the stock of the said San Francisco, Oakland, and Alameda Railroad Company, except about fifty shares thereof, procured the acting president and secretary of said corporation to execute in the name of said corporation fifteen hundred bonds, for the sum of one thousand dollars each, gold coin of the United states of America, payable in twenty (20) years from the said first day of July, 1870, with interest thereon at the rate of 8 per cent. per annum, payable semi-annually. And to secure the payment of said bonds, and the interest thereon, the said Leland Stanford, Huntington, Hopkins, Charles and E.'B. Crocker, further procured the acting secretary and presiident of said San Francisco, Oakland, and Alameda Railroad Company to make and execute and deliver, in the name of and under the seal of said company, to D. O. Mills and William H. Tillinghast, trustees, a mortgage upon all the property and assets and franchises of said company. And plaintiff avers that said bonds are now held by said Leland Stanford, Huntington, Hopkins, and Charles Crocker, and Charles Crocker as the executor of the estate of E. B. Crocker, deceased, who claim to be the owners thereof; and that the said last-mentioned defendants hold the same in trust for the said C. P. 43. That the San Francisco and San Jos6 Railroad Company is, and has been for the six years last past, a corporation created and existing under the laws of the State of California, and having its principal place of business at the city and county of San Francisco, and is the owner of a railroad from the city and county of San Francisco to the town of Gilroy, in Santa Clara County, together with the necessary furniture, equipments, turn-tables, switches, side-tracks, depots, warehouses, &c., connected therewith. 44. That the Southern Pacific Railroad is, and has been for three years and upwards, last past, a corporation duly organized, created, and existing under the laws of the State of California, having its principal place of business at the said city and county of San Francisco, for the construction and maintenance of a railway from the Mississippi River, by way of San Diego, to the city and county of San Francisco. That under and by various laws of the United States and of the State of California, mentioned and referred to in Schedule B, hereunto annexed and made a portion of this complaint, the said corporation last mentioned has become, and is, entitled to large subsidies and grants of land of great value, to wit, of the value of $2,000.000 and upwards. That said defendants, Leland Stanford, Huntington, Hdpkins, Charles and E. B. Crocker, and David D. Colton, and their confederates, to plaintiff unknown, have by the use of means, moneys, and assets of the said C. P., and the gains and profits so as aforesaid acquired by them under the name of Charles Crocker & Co., and under the name of said Contract and Finance Company, and not otherwise, purchased and ac*quired, on or about the 20th day of December, 1869, a majority of; and almost the entire amount of, the capital stock of the said Southern Pacific Railroad Company. 45. That immediately thereafter, and on or about the first of March, 1870, with the intent and design of making said San Francisco and San Jos6 Railroad Company's road a part of the contemplated railway to be constructed by said Southern Pacific Railroad Company, from the Mississippi River aforesaid to the city and county of San Francisco aforesaid, the said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker contracted with the said San Francisco and San Jos6 Ra-ilroad Company and its stockholders, to purchase in the name of the Southern Pacific Railroad Company, and for PACIFIC RAILROADS. 215 their benefit, the railroad franchises, privileges, furniture, and equipments of said San Francisco and San Jos6 Railroad Company, and its capital stock, for a large sum of money, to wit $3,000,000; and on or about the first of April, 1870, as plaintiff is informed and believes, and therefore avers, upon his information and belief, paid to said San Francisco and San Josd Railroad Company and its stockholders, to wit, Charles Mayne, Peter Donahue, H. M. Newhall, and others, to the plaintiff unknown, $500,000-part and parcel of said $3,000,000-and have since paid the balance of said sum of $3,000,000. That said last payments were,made by the appropriating thereto of the assets of said C. P., and the moneys, profits, and gains of said defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, so as aforesaid acquired under the name of Charles Crocker & Co., and under the name of said Contract and Finance Company, and not otherwise. That said defendant, David D. Colton, claims to be the owner of and entitled to some portion of the capital stock of said Southern Pacific Railroad Company, but of how much, plaintiff is not advised; but, as plaintiff is informed and believes, and therefore avers upon and according to his information and belief, the said Colton has made no payment therefor. That since said purchase, so as aforesaid in this article set forth, the said defendants, Leland Stanford, Huntington, Hopkins, and Charles Crocker, have, as plaintiff is informed and believes, and therefore avers, upon and according to his information and belief, by and through a certain corporation known as the " Western Development Company," constructed and built a certain line of railroad from Gilroy to Tres Pinos, about twenty (20) miles in length. And also have constructed and built a certain other railroad, from a point about one and a half miles south of Gilroy to Soledad, about seventy (70) miles in length. And also, a certain other railroad, from a point about six miles below Los Angeles to Anaheim, about twenty-one (21) miles in length. Also,. a certain other railroad from Los Angeles to San Fernando, about twenty-four (24) miles in length. Also; a certain other railroad from Los Angeles, via San Gorgonia Pass, to White Water, about eighty-five (85) miles in length. And that the said Leland Stanford, Huntington, Hopkins, and Crocker are now engaged in extending such road to Fort Yuma, on the Colorado River. Also, a certain other railroad, from Goshen to Caliente-a distance of one hundred and fifteen (115) miles. All of which said railroads, in this paragraph set forth, are claimed to belong to and form a part of said Southern Pacific Railroad. And plaintiff avers, that all said railroads in this paragraph mentioned have been built by appropriating thereto the assets of the said C. P., and the moneys, profits, and gains of said defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, so as aforesaid acquired, under the name of Charles Crocker & Company, and the name of the said "Contract and Finance Company," and not otherwise; and that said roads are nearly all, if not entirely, operated by and with locomotives and cars belonging to the said C. P. 46. That the Potrero and Bay View Railroad Company is, and has been for three years last past, a corporation duily organized and existing under the laws of the State of California; and heretofore, to wit, on or about the first of March, 1873, was the owner and possessed of certain line of street railroad in the city and county of San Francisco; and was also the owner of a long and valuable bridge in said city and county of San Francisco, known as Mission Bay Bridge, over which the cars of said last mentioned corporation run for hire; and that said corporation owns a franchise under which it is entitled to receive and does receive tolls for vehicles and animals passing over said bridge. That on said last-mentioned day, as plaintiff is informed and believes, and therefore avers, according to his information and belief, the said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker purchased all the capital stock of said corporation and have ever since and do now claim to be the owners thereof. That the earnings of the said corporation since the said last-mentioned day, amounting. as plaintiff is informed and believes, to the sum of five thousand dollars per month, have been controlled and used by the-last mentioned defendants for their own benefit, profit, and advantage. That said last-mentioned purchase was made and has been paid for by said last-mentioned defendants with the moneys and assets of the said C. P., and with the moneys, gains, and profits so as aforesaid realized and appropriated thereto by the said lastnamed defendants, under the names, respectively, of " Charles Crocker & Company," and the saidl " Contract and Finance Company," and not otherwise. 47. That the plaintiff is informed and believes, and therefore avers, upon and according to his information and belief, there has not been any meeting of the stockholders of the said C. P. since the first annual meeting, at which the said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and their confederates, were elected directors of said C. P., and ever since the second Tuesday of July, in the year A. D. 1862, the entire mana.grement and control of said C. P., its assets and subsides, have been exercised by the last-named defendants, secretly, and without having made any 216 PACIFIC RAILROADS. statement or statements of the receipts thereof, or of the true expenditures made by it or its officers, to the plaintiff, or to any stockholder or stockholders of said C. P. 48. That the said C. P. is now under the management and control of said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and their confederates, who compose a majority of the directors of the said C. P., and, as they claim and assert, a majority of the stockholders of the said C. P., and who have refused, and though requested, still refuse, and said C. P. has refused, and though re-requested, still refuses, to institute this action, or any similar action, or to make any inquiry into, or any showing of the disposition of, the earnings, assets, and subsides of said C. P. 49. That the San Joaquin Valley Railroad Company is a corporation, created under the laws of the State of California; that with the assets of said'C. P., so as aforesaid acquired by said Charles Crocker, E. B. Crocker, Leland Stanford, Huntington, and Hopkins, and their confederates, the said last-mentioned corporation was organized, and said last-mentioned persons have acquired a majority of its capital stock, and have procured to be granted to it large subsidies of land of great value, to wit, of the value of three million dollars ($3,000,000.) 50. That the California and Oregon Railroad Company is a corporation, created under the laws of the State of California, with the assets of said C. P., so as aforesaid acquired by thesaid Charles Crocker, E. B. Crocker, Leland Stanford, Huntington, and Hopkins, and their confederates, under the name of said Contract and Finance Company; and by the arts, devices, and frauduleat practices hereinbefore mentioned, said lastnamed persons have acquired, and now claim to own, a majority of its capital stock of great value, to wit, to the value of two millions of dollars ($9,000,000.) 51. That on or about the 1st day of June, 1870, the said C. P. and the said W. P., under and in pursuance of the laws of the State of California, amalgamated and consolidated their capital stocks, debts, assets, and franchises, and formed a new corporation under the name of the Central Pacific Railroad Company, and that on the 20th day of August, 1870, the said last-named corporation and the said The California and Oregon Railroad Company, and the said The San Joaquin Valley Railroad Company, and the said.The San Francisco, Oakland, and Alameda Railroad Company, amalgamated and consolidated their debts, assets, and franchises, in manner and form as is provided by the laws of the State of California, and the name of the Central Pacific Railroad, and that said last-named corporation assumed and became liable for all the debts and liabilities of all the corporations in this paragraph mentioned. 52. That all the railroads which the defendant corporations named in this complaint were organized to build, and the capital stock of which, respectively, the said defendants Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker and their confederates, claim to hold and own, and have purchased and subscribed for, as aforesaid, with the moneys of the said C. P., appropriated by them as aforesaid, and acquired by them as aforesaid, in the name of Charles Crocker & Co., and in the name of said Contract and Finance Company, are, and will be, entitled to large and valuable subsidies, franchises, privileges, and properties. That the said last-mentioned railroads and corporations have been organized and established, and procured to be organized and established, by the said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, while acting as directors of the said C. P. for their own personal benefit and advantage, with the moneys and assets of said C., P. by them misapplied for that purpose, and which, in justice and equity, belong to the stockholders of said C. P. And said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, procured themselves to be elected directors of said last-named corporations, respectively, and have procured for said last-mentioned corporations, from the Congress of the United States, and by State laws, grants of large and valuable subsidies of lands, moneys, and bonds, with intent to appropriate the same to their own use and benefit, and in violation of the rights of said C. P. and its stockholders. That in procuring said railroad companies to be organized, and themselves to become stockholders and directors thereof; and said subsidies to be granted, as aforesaid, they have expended large amounts of money, to wit, one million dollars ($1,000,000) and upwards, moneys of the said C. P., and which, in justice and equity, belong to said C. P. and its stockholders. That the same was expended in lobbying and buying congressional and legislative votes, and in perverting legislation in favor of their said schemes. That some of the corporations heretofore mentioned, to wit, said Southern Pacific Railroad Company, and said San Joaquin Valley Railroad Company, and said -California and Oregon Railroad Company, have been organized and established by said defendants. Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, for the purpose of preventing all competition with other schemes conceived by them for their private emolument, and in fraud of the said C. P. and its stockholders. 53. That the plaintiff has received no dividends upon the shares of the said capital stock of said C. P., so as aforesaid owned by him, although the plaintiff, as a stockholder as aforesaid, has often requested the said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, composing a majority of the directois of said C. P., to PACIFIC RAILROADS. 217 make a settlement and declare a dividend from the assets of the C. P., after deducting the actual cost of the construction of the railroad and telegrapl-,iue. The plaintiff avers that he is informed and believes, and upon and according to his information so avers, that a dividend of one hundred million dollars might be declared and divided among the stockholders of said C. P., still leaving a large sinkingfund and surplus in the hands of the treasurer of the said C. P., if said defendants, Leland Stanford, Huntington, Hopkins, and Crocker, and their confederates, would make an honest and correct statement and showing of the actual cost of the construction of the railroad and telegrapL-'ines of the C. P., and deduct the same front the amount of assets, subsidies, profits, &c., of the said C. P., over and above all lands granted to it by the said United States, and received by the said Stanford, Huntington, Hopkins, Charles and E. B. Crocker, in the name of Charles Crocker & Company, and the said " Contract and Finance Company," and divided among themselves. That, although frequently requested, the said majority of the directors of the said C. P. have heretofore refused, and still do refuse, to account to the said C. P. and its stockholders, in any manner, for their actings, doings, and expenditur es spent in furnishing, equipping, and operating the railroad and telegraphl'ine of tl e said C. P., or of the disposition made by them of the subsidies, moneys, properties, earnings, and assets received by them in the name or through the said C. P. 54. That heretofore, to wit, on the day of the said C. P., by the votes of said so-claimed directors, Leland Stanford, Charles and E. B. Crocker, Huntington and Hopkins, appeared to determine to, and did, execute and deliver to trustees therein named a first mortgage on its road, telegraph-line, franchises, rolling-stock, &c., to secure bonds to the amount of ($27,389,120) twenty-seven million three hundred and eighty-nine thousand one hundred and twenty dollars. That said mortgage was so executed and delivered, and said bonds were so caused to be issued by said so-claimed directors, as though issued by said C. P., with the secret design and intent, on the part of said Leland Stanford, Charles and E. B. Crocker, Huntington, and Hopkins, to secure said bonds to themselves, and they have secured a majority thereof, to wit, twenty-two millions of dollars, ($22,000,000,) to themselves, without ever having paid or delivered to said C. P. any money or valuable consideration therefor, and now claim to own and hold the same; that said Leland Stanford, Charles and E. B. Crocker, HuntiDgton, and Hopkins, at the time of voting as directors of said C. P. to execute said first-mortgage bonds, and at the time of forming the design of securing the bonds to themselves so secured as aforesaid, formed the design, and it is now their purpose and intent, as the holders of a Iajority thereof, to foreclose said first mortgage and purchase said railroad and telegraph-line for their benefit, and thereby to defraud the holders of the second-mortgage bonds of the said C. P., to wit, the United States Government and other parties and persons holders thereof, to plaintiffs unknown, and this plaintiff and the other stockholders of said C. P. out of any dividends, benefit, or other interest in said railroad and telegraph-line. That to the end aforesaid, and in carrying out said secret design and intent, among other things, said last-mentioned directors entered into said contract with Wells, Fargo & Co. to run over said road at much less rate than they charge other freighters and transporters, and also have concealed, and do now conceal, the actual running-expenses of said road and its actual receipts. That said first mortgage purports to be, and said Leland Stanford, Charles and E. B. Crocker, Huntingtoa, and Hopkins assert and pretend that the same is, a valid and binding security upon said railroad and telegraph-line, the franchise, equipments, &c., and that it was necessary to issue the said bonds and execute said mortgage to secure the same in order to construct said road. Whereas in truth and in fact the said several donations and subsidies hereinbefore gran ted to said C. P. were sufficient and more than sufficient to build and construct said railway and telegraph-line without using any of said first-mortgage bonds, and none thereof were used in the construction, completion, equipping, and furnishing thereof, but, on the contrary, the same were fraudulently issued and delivered to said Leland Stanford, Hopkins, Huntington, Charles and E. B Crocker, as said "LCharles Crocker & Company," and said "Contract and Finance Company," and were ann are wholly void. That on or about the 10th day of April, 1870, one Samuel Brannan, being then the owner of 200 shares of the capital stock of the said C. P., and being about to commence proceedings by an action to compel the said defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, to account to him for and in respect to the earnings of the said C. P., and the management of its affairs, and said defendants, Stanford, Huntington, Hopkins, Charles and E. B. Crocker, learning thereof, procured from the attorney of the said Brannan a draught and a copy of the complaint intended to be filed,. and thereafter filed by and on the part of said Brannan. That, in order to cover up their fraudulent practices and business, and to still keep control of the said C. P. corporation, and to prevent the said Brannan and this plaintiff:and other stockholders thereof from inquiring into and ascertaining the true condition of its assets, and the disposition thereof made by them, and to re-elect themselves as 2 18 PACIFIC RAILROADS. directors, the said Huntington, Hopkins, Charles and E. B. Crocker, and Leland Stanford, in the name of and by the agency of D. O. Mills & Co., and really for their benefit, since the said 10th day of April, 1870, purchased and had transferred and assigned to the said D. O. Mills & Co. 3,000 shares of the capital stock of C. P. so issued to the city and county of Sacramento, and said 2,500 shares so as aforesaid issued to said county of Placer. That the said D. O. Mills & Company, although apparently the real actors in such purchase, were secretly acting therein, and were instigated to act therein by and for the benefit of said Stanford, Huntington, Hopkins, Charles and E. B. Crocker, the same last-named persons; and upon the agreed secret understanding and agreernment between the last-named persons, or some of them, on the one part, and the said D. O. Mills & Company upon the other part, and the said D. O. Mills & Company would hold the stock thus transferred to.the latter in secret trust for the said Stanford, Huntington, Hopkins, Charles and E. B. Crocker, or some of them, and would.transfer the same to them, or some of them, when thereto afterward requested, and would in the mean time cause the same to be used as should be requested by said Stanford, Huntington, Hopkins, Charles and E. B. Crocker. That, as plaintiff is informed and believes,and therefore charges and avers upon and according to his information and belief, that in order to induce said D. O. Mills & Co. to appear to purchase the said 55,000 shares of said capital stock, and to secure said D. O. Mills against a loss, said Stanford, Huntington, Hopkins, Charles and E. B. Crocker, or some of them, deposited with said D. O. Mills &.Co., or with some person or persons, to the plaintiff unknown, in trust for D. O. Mills & Co., $50,000 of the first-mortgage bonds of the said C. P. corporation, and there now exists, or did exist, a secret and binding agreement between the said D. O. Mills & Co. on the one part, and the said Stanford, Huntington, Hopkins, Charles and E. B. Crocker, or some of the last-named persons on the other part, to the effect that the said last-named persons would pay to the said D. O. Mills & Co. for said stock, the amount paid in advance by them to purchase the same, with interest at the rate of 1 per cent. per month on such advance when thereto afterward requested. That at the time said D. O. Mills & Co. purported to have purchased said 55,000 shares, they had been informed by the averments in the complaint of said Braunan as above set forth, and had been informed thereof bysthe defendant, Leland Stanford. 55. That some time in the year 1869, the said defendants, Leland Stanford, Huntington, Hopkins, and Crocker, being then engaged in a controversy with a certain newspaper, known as the' Sacramento Union," and published at the city of Sacramento, in this State, for the purpose, as plaintiff is informed and believes, and avers upon and according to his information and belief, of injuring and destroying the prosperity of said " Sacramento Union," established or purchased a certain newspaper in said city.of Sacramento, known as the " Sacramento Record." That for the purpose of enabling said "Sacramento Record" to injure and destroy the business and financial credit of said "Sacramento Union," and to prev;ent the " Sacramento Union" from printing, publishing, and exposing the acts and doings of said defendants Stanford, Huntington, Hopkins, and Crocker, they, the said last-named defendants, advanced from time to time to the defendants William H. Mills, and the Sacramento Publishing Company, and other persons to plaintiff unknown, a large sum of money, to wit, the sum of $200,000 in gold coin. That on or about the 20th day of February, 1875, the defendants, the Sacramento Publishing Company and William H. Mills, purchased the said newspaper known as the "Sacramento Union," and the good-will and property thereof, for the sum of $55,000, and plaintiff avers that he is informed and believes, and avers upon and according to his information and belief, that the said sum of $55,000 was paid by the defendants Stanford, Huntington, Hopkins, and Crocker. That the said defendants, the Sacramento Publishing Company and William H. Mills, claim to be the owners of said newspapers, but plaintiff avers that the same are held in trust for said C. P. That all the moneys so as aforesaid paid by said defendants, Stanford, Huntington, Hopkins, and Crocker, were paid from the moneys and assets of said C. P. derived by said last-named defendants under the name of Charles Crocker & Co. and the Contract and Finance Company, and not otherwise. 56. That on or about the 1st of January, 1871, there was a corporation existing pursuant to the laws of the State of California, known a~s the Oakland Water-Front Company. The property of said corporation consisted of a large amount of property situated on the water-front of the city of Oakland, and the town of Brooklyn, and the town of Alameda-all within the county of Alameda-of great value, to wit, the value of five million dollars. That plaintiff is informed and believes and avers, upon and according to his information and belief, that the defendants, Leland Stanford, Huntington, Hopkins, Charles and E' B. Crocker, purchased from said Oakland Water-Front Company one-third of PACIFIC RAILROADS. 219 the capital stock, and the same has been delivered by the said last-mentioned defendants. That the said purchase was made by said last-mentioned defendants with the moneys and assets of said C. P., and with the moneys, gains, profits, so as aforesaid received, realized, and' appropriated to their use by the said last-nanmed defendants under the names, respectively, of Charles Crocker & Co. and the said Contract and Finance Company, and not otherwise. 57. That the Rocky Mountain Coal and Iron Company of Wyoming Territory was and is a corporation formed and existing pursuant to the laws of the Territory of Wyoming, having a capital stock of one million of dollars, divided into ten thousand shares of one hundred dollars each. That plaintiff is informed and believes, and avers upon and according to his information and belief, that the defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, on or about the 1st day of July, A. D. 1872, purchased, from persons unknown to plaintiff, about eight thousand shares of the capital stock of said last-mentioned corporation, and now hold the same, and claim to be the owners thereof. That the dividend upon said stock has been and is eight thousand dollars per month. That payment for the said stock was made by the said defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, by appropriating the earnings and profits of the said C. P., and from the moneys, gains, and profits, so as aforesaid received by said defendants in the name of Charles Crocker & Co., and in the name of the Contract and Finance Company, and not otherwise. 58. That the Los Angeles and San Pedro Railroad Company was and is a corporation duly.organized, created, and existing under the laws of the State of California, having its principal place of business at the city of Los Angeles, and on or about the last day of February, A. D. 1873, was the owner of and operating a line of railway about twenty-two miles in length, between San Pedro and said city of Los Angeles, both in the county of Los Angeles. The above said day and year last aforesaid, as plaintiff is informed and believes, and therefore avers upon and according to his information and belief, Henry B. Tichenor and others were the owners of the capital stock of said last-mentioned corporation, and on the day and year last aforesaid did sell and assign all of said capital stock to defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, for and in consideration of the sum of seven hundred and fifty thousand dollars, and that ever since said purchase the said defendants, Leland Stanford, Huntington, Hopkins, Charles Crocker, and Charles Crocker, executor of the estate of Ed. Crocker, deceased, have controlled and managed the same, and have appropriated the proceeds thereof, amounting to twenty thousand dollars per month, to their own use. That said last-mentioned purchase-was made, and has been paid for, by said lastmentioned defendants, with the moneys and assets of the said C(. P., and with the moneys, gains, and profits, so as aforesaid received, realized, and appropriated to their own use by said last-named defendants, under the names, respectively, of Charles Crocker & Co. and said Contract and Finance Company, and not otherwise.. 59. That the Market Street Railway was and is a corporation organized and existing under the laws of the State of Calif'ornia, and on or about the Ist day of March, A. D. 1870, was the owner of a line of street railroad on Market street, in the city and county of San Francisco. That on said day and year last aforesaid, as plaintiff is informed and believes, and therefore avers upon and according to his information'and belief, Henry M. Newhall, Charles and Peter Donahue, were the owners of all the capital stock of aforesaid lastmentioned corporation, and on the day and year last aforesaid did sell and assign all of said capital stock to defendants Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, for and in consideration of the sum of three hundred thousand dollars, *and that ever since said purchase the. said last-named defendants have controlled and managed the same, and have appropriated the proceeds and earnings thereof, amounting to.about five thousand dollars per month, to their own use. That said last-menuioned purchase was made and has been paid for, by said lastnamed defendants, with the moneys and assets of said C. P., and with the moneys, gains, and profits, so as aforesaid received, realized, and appropriated to their own use by said last-named defendants, under the names, respectively, of Charles Crocker & Co. and said Contract and Finance Company, and not otherwise. 60. That the Chesapeake and Ohio Railroad Company was, and is, a corporation formed and existing pursuant to the laws. of the State of Virginia, for the purpose of' constructing and maintaining a railroad from the James River to the Ohio River, about four hundred miles in length. The plaintiff is informed and believes, and avers upon and according to his information and belief, that the defendant, Collis P. Huntington, on or about the 1st day of April, 1870, purchased a majority of the capital stock of said last-named corporation, and claims now to be the owner thereof; and was then elected, and has ever since continued to be, the president and manager of said company. 220 PACIFIC RAILROADS. That said defendant Huntington has, as plaintiff is informed and believes, and avers upon and according to his information and belief, paid for, and in respect to, the interest which he claims to own in the last-mentioned corporation the sum of two and one-half million dollars. That such payment was made by appropriating the earnings and profits of the said C. P., and from the moneys, gains, and profits, so as aforesaid received by said defendants, in the names, respectively, of Charles Crocker & Co. and the Contract and Finance Company, and not otherwise. 61. That on or about the - day of ~, 187-, the said Central Pacific Railroad Company made and issued to the defendants Charles Crocker and Silas W. Sanderson, esq., as trustees, 1,000 bonds, each for the sum of $1,000, payable in - years from the date thereof, with interest at the rate of 6 per cent. per annum. And to secure the payment of said bonds and the interest thereon, this said C. P. made, executed, and delivered to the said defendants, Charles Crocker and Silas W. Sanderson, esq., as trustees, a mortgage upon all the lands granted to said C. P. by the UJnited States, in pursuance to the acts of Congress in this complaint already mentioned and set forth. The plaintiff is informed and believes, and avers upon and according to his information and belief, that said defendants, Leland Stanford, Huntington, Hopkins, Charles Crocker, Charles Crocker, executor of the estate of E. B. Crocker, deceased, have and hold said bonds, and claim to be the owners thereof; but that all the said bonds are the property of the said C. P., and are held by said last-mentioned defendant in trust for the said C. P. 62. That on or about the 10th day of June, 1874, the said C. P., having made large advances to a corporation known as the California Pacific Railroad Company, the said defendants Leland Stanford, Huntington, Hopkins, and Crocker, claiming to own and to be entitled to the sums of money so advanced by the said C. P., made an assignment thereof to the defendant James B. Haggin. That thereafter, the said Stanford, Huntington, Hopkins, and Crocker caused judgment to be confessed by said California Pacific Railroad Company in favor of said James B. Haggin, in the district court of the sixth judicial district of the State of California, for about the sum of $1,309,041.84. That said James B. Haggin holds said judgment in secret trust for the use of said Leland Stanford, Huntington, Hopkins, and Crocker, and that the same of right belongs to the said C. P. 63. That the said defendants, Leland Stanford, C. P. Huntington, Mark Hopkins, and Charles Crocker, have, since the incorporation of the C. P., been acting as directors and managing agents thereof. And as such directors and managing agents, it is and has been their duty to keep said C. P. in good and sufficient repair, and to use the revenue thereof for such purpose. But instead of so doing, and unmindful of their duty in this regard, the said defendants have diverted the revenues of said company to the use of the Southern Pacific Railroad Company, and other corporations, and have allowed the tracks, bridges, culverts, water-ways, and superstructure of the said C. P. to become in an unsafe and unsound condition, and in want of great and immediate repairs; so as to render the same in many places unsafe for the transportation of passengers. And that the said works and superstructure of the said C. P., at this time, are in need of large and extensive repairs; the cost of which repairs, as plaintiff is informed and believes, and therefore avers upon and according to his information and belief, will amount to the sum of two million dollars and upward. 64. That on or about the 1st of May, 1871, the California Pacific Railroad Company was a corporation organized pursuant to the laws of the State of California, then engaged in running a line of railroad from Vallejo to Marysville, with some branch lines connecting therewith, and having a capital stock of twelve million dollars. That on or about the said 1st day of May, 1871, the said defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, purchased nearly all the stock of the:said last-mentioned corporation, and now claim to be owners thereof. That said purchase was made, and has been paid for by said last-mentioned defend-;ants, with the moneys and assets of the said C. P., and with the moneys and profits so.as aforesaid received and realized, and appropriated to their own use by the said lastnamed defendants and their confederates, under the names, respectively, of said Charles Crocker & Company, and the said Contract and Finance Company. That at the time of making said. purchase there were issued by the said California Pacific Railroad, and delivered to said defendants, Leland Stanford, Huntington, Hopkins, and Charles and E. B. Crocker, 1,600 bonds of the said California Pacific Railroad, each for the sum of $1,000, made payable in 20 years from the date thereof, with interest at the rate of 6 per cent. per annum, payable semi-annually; which said bonds.are held by said last-mentioned defendants in trust for the said C. P. 65. That the Western Development Company is a corporation formed pursuant to the laws of the State of California, for the purpose, as plaintiff is informed and believes, and avers upon and according to his information and belief, of taking contracts for building and equipping railroads, and for the repair of such railroads as may be controlled by the said defendants, Leland Stanford, Huntin gton, Hopkins, and Crocker;.and was organized for the purpose of taking the place of the said Contract and Finance PACIFIC RAILROADS. 22 1 Company, so as to carry on business of the same nature, and to enable the said lastmentioned defendants to effectually conceal from this plaintiff, and the rest of the world, their fraudulent and nefarious practices, done and perpetrated through the agency and instrumentality of said Contract and Finance Company. And that the said Western Development Company is in fact owned and controlled by the said defendants, Leland Stanford, Huntington, Hopkins, and Charles Crocker. And that all contracts given by said last-mentioned defendants to said Western Development Company, and all services rendered by said Western Development Company, on or to the railroads controlled by said last-mentioned defendants, are and have been paid for at prices greatly in excess of their actual value; with the intent to cheat and defraud this plaintiff and the other stockholders of the said C. P. out of their proportion of the earnings thereof. 66. That as plaintiff is informed and believes, and, upon and according to his information and belief, charges and avers, the defendants, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, have become and are the owners of large amounts of valuable property in the leading cities and towns of this State. and in many of the counties thereof: and, especially, in the city and county of San Francisco. The title to some of which property stands in the name of the defendant Stanford, and some in the names of the other defendants, or some of them; and some in the name of persons for the uses of said last-mentioned defendants-the names of said persons' being unknown to the plaintiff; but whom, when discovered,.plaintiff asks may be made defendants herein. That as plaintiff is informed and believes, and so avers upon and according to his information and belief, all of said property so held by said last-mentioned defendants, -or either of them, acquired since the 1st of January, 1862, has been paid for by said last-mentioned defendants with the money and assets of the said C. P., and with money, gains, and profits so as aforesaid received, realized, and appropriated to their use, by the said last-mentioned defendants, under the names, respectively, of Charles Crocker,& Co. and the said Contract and Finance Company, and not otherwise. 67. That on or about the- day of -, 1875, the defendants, Leland Stanford, Huntington, Hopkins, and Charles Crocker, caused an application to be filed in the county court of the county of Sacramento, praying for the dissolution of the corporation of the said Contract and Finance Company. And on the day of, 1875, an order was made by said county court. declaring said Contract and Finance Company to be dissolved and disincorporated. That said application and all proceedings had therein were made without the knowledge of, and without any notice to, the plaintiff. And plaintiff avers that said application was made, and that said order was obtained, wrongfully and fraudulently, and for the purpose of cheating and defrauding this plaintiff, and of depriving himl of his just rights in the premises, and for the further purpose of preventing him from having the evidence which the records and papers of the said corporation would supply in support of this action. 68. That since the said defendants, Leland Stanford, Charles and E. B. Crocker, Huntington, and Hopkins became informed and advised of the contents of the complaint of the said Samuel Brannan, as is hereinbefore set forth, except matters contained in the foregoing article 67, and that said Brannan intended to file said complaint, they, with the gains and profits made by them in the name of said Charles Crocker & Co., and in the name of said Contract and Finance Company, have purchased and secured to themselves a majority of the capital stock of said C. P., which was lawfully issued upon the basis of eight million five hundred thousand dollars ($8,500,000) capital, as hereinbefore mentioned. 69. That plaintiff is informed and believes, and therefore avers upon and according to his information and belief, that the said defendants Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker are not worth, and have not in their possession or under their control, or jointly or severally are not the owners of property exceeding in value two hundred and fifty thousand dollars, over and above the property purporting to have been acquired by them, and of which they obtained possession and control, by misappropriating the assets and subsidies of the said C. P., as hereinbefore averred. 70. That as plaintiff is informed and believes, and therefore charges and avers upon and according to his information and belief, said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, at the time they became directors of said C. P., were respectively comparatively poor men, that is to say, the said Leland Stanford was not worth to exceed fifty thousand dollars; and said C. P. Huntington was not worth to exceed fifty thousand dollars; the said Mark Hopkins was not worth to exceed fifty thousand dollars; the said Charles Crocker was not worth to exceed thirty thousand dollars; and the said E. B. Crocker was not worth to exceed the sum of ten thousand dollars. That none of the property of the said last-named defendants, or either of them, was applied.or used in the construction of said C. P. Railroad and telegraph-line, but the same has con inued to be held and owned, and is now held and owned, by said last-named 222 PACIFIC RAILROADS. defendants, respectively, as the same was held and owned at the time they first became directors of the said C. P., except as the same has been by them, respectively, exchanged for other property. That beyond, and over and above, the capital stock of said C. P. and W. P., and the other railroad companies herein mentioned, the said Leland. Stanford, Huntington,.Hopkins, and Charles and E. B. Crocker have, by means of appropriating for that purpose the subsidies and assets of said C. P., and not otherwise, acquired and now claim to hold and own, respectively, large amounts of real and personal estate of great value, to wit, of the value of two million dollars, ($2,000,000.) 71. That the plaintiff has been wholly ignorant of the fraudulent devices, practices, and misappropriations of the earnings, assets, and subsidies of the said C. P., hereinbefore mentioned and averred, until about the first day of January, 1.875, and did not, until said last-mentioned day, know of, suspect, or believe, or have any cause to suspect or believe, any of the said fraudulent acts, transactions, and doings hereinbefore mentioned and charged upon the said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and their confederates. 72. That the plaintiff is informed and believes, and upon and according to his information and belief so charges and avers, that as owner and holder of ten shares of the only capital stock legally issued, he is entitled to demand and receive, and have of and from the said Central Pacific, and from the said Leland Stanford, Huntington, Hopkins, Charles Crocker, and Charles Crocker as executor of the estate of E. B. Crocker, deceased, as plaintiff's part and portion of the profits made in constructing, fiurnishing, equipping, and operating the railroad and telegraph-line of said C. P., the sum of about one million two hundred thousand dollars, and to fifteen thousand and fifty acres of land, so granted to the said C. P. by the said acts of Congress. Wherefore, the complainant prays the following judgment and relief, to wit: First. That during the pendency of this action, a receiver may be appointed by this honorable court, to take charge of, manage, and run said C. P. Railroad and telegraphline, said W. P. Railroad and telegraph-line, and the branch thereof hereinbefore described; said San Francisco, Oakland and Alameda Railroad and ferries; said San Joaquin Valley Railroad; said California and Oregon Railroad; and all the other properties consolidated under the name of The Central Pacific Railroad Company; said California Pacific Railroad; said Southern Pacific Railroad; said Los Angeles and San Pedro Railroad; said Market-Street Railway; said Potrero and Bay View Railroad; and said telegraph-lines; and to discharge such other duties relative thereto as to this court shall seem meet. Second, That during the pendency of this action, said Leland Stanford, Huntington, Hopkins, and Charles Crocker, and their confederates, be restrained and enjoined from. acting as members of the board of directors of the said C. P., or of any of the other corporations in this prayer hereinbefore mentioned; and that they be restrained from voting at any meeting of the stockholders of the said C. P., as representing any of the shares of the capital stock of the said C. P., and as representing any of the shares by them.or either of them acquired since April 10, 1870. Third. That the said Leland Stanford, Huntington, Hopkins, Charles Crocker, and their confederates, be restrained and enjoined from selling, transferring, pledging, or otherwise disposing of any portion of the stock of said C. P., or of any of the said railroad corporations in this prayer above set forth, or of the stock of said Wells, Fargo & Co., or of the stock of the said Oakland Water Front Co., or of any mortgage-bonds of said C. P., or of said California Pacific Railroad Co., or of said San Francisco, Oakland and Alameda Railroad Co., or of said Southern Pacific Railroad Co.; or of the bonds issued upon said land-grant, as in this complaint set forth; and of the stock of the said Rocky Mountain Coal and Iron Co., of Wyoming; or of the Atlantic and Pacific Telegraph Co., or of the Contract and Finance Co., or the Western Development; Co.; or of any bonds heretofore received by said defendants, Stanford, Huntington, Hopkins, and Crocker, or either of them, for the use or benefit of said C. P., or any other of said corporations, defendant herein. Fourth. That said Wells, Fargo & Co. be restrained and enjoined from paying any dividends on its capital stock, so as aforesaid issued to said Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and their confederates, or either of them, as in this complaint averred. Fifth. That the said Oakland Water Front Co. be restrained and enjoined from paying any dividends on its capital stock, so as aforesaid. issued to said Leland Stanford, Charles Crocker, E. B. Crocker, Huntington, Hopkins, and their confederates, or either of them, as in this complaint averred; or from making any transfer of any portion of the property of the said corporation to said last-named defendants, or either of them, until the further order of this court. Sixth. That the said Rocky Mountain Coal and Iron Company, of Wyoming, be restrained and enjoined from paying any dividends on its capital stock, so as aforesaid issued, to said Leland Stanford, Charles Crocker, E. B. Crocker, Hnntington, Hopkins, and their confederates, or either of them, as in this complaint averred. PACIFIC RAILROADS. 223 Seventh. That *ny contract of sale, or any written agreement therefor, or any deed concerning the same, by which the lands, or any part thereof, granted by the United States to the C. P., have been passed, or are hereafter passed, into the possession and disposal of said B. B. Redding, be set,aside as fraudulent and void. Eighth. That th'e said B. B. Redding and his confederates, the said Leland Stanford, Huntington, Hopkins, and Charles Crocker, and each of them, and their confederates, be restrained and enjoined, and the said C. P. and the said W. P. and all of the said corporations in this prayer above mentioned, and the officers of each of said corporations, be restrained and enjoined from selling, disposing of, mortgaging, or conveying, or contracting to sell, mortgage, or dispose of any of the lands granted by the United States to the said C. P. and said W. P. in aid of the construction of the said railroads, or either of them. Ninth. That each and every of the contracts purporting to have been made between the C. P. on the one part, and Charles Crocker & Co. on the other part, relating in any manner to the construction and equipment of the said C. P. Railroad and telegraphline, be adjudged and decreed to be and to have been null and void, and a fraud upon the said C. P. and upon the plaintiff and other stockholders of the said C. P. corporation. Tenth. And that each and every of the contracts purporting' to have been made between the C. P. on the one part, and the said Contract and Finance Company on the other part, and relating in any manner to the construction of the said C. P. Railroad and telegraph-line, or repairs therefor, be adjudged and decreed to be and to have been null and void, and a fraud upon the said C. P., and upon the plaintiff and the other stockholders of the said C. P. corporation. Eleventh. That each and ever'y of the contracts purporting to have been made between the the C. P., or any of the railroad corporat ions, or either of them, hereinbefore mentioned, on the one part, and the said Western Development Company on the other part, and relating in any manner to the construction of the said C. P. Railroad and telegraph-line, or any of the lines of the aforesaid corporations, be adjudged and decreed to be and to have been null and void, and a fraud upon the said C. P., and upon the plaintiff and the other stockholders of the said C. P. corporation. Twelfth. That an accounting be taken of the actual cost of the building, construction, completion, and furnishing and equipping of said C. P. Railroad and telegraphline, and of said other railroad lines; also, the receipts and income thereof, from the time the same commenced running to the time when the receiver to be appointed by this court shall take charge of said railroads; and a fair charge against and upon said Wells, Fargo & Co. for the exclusive and special privileges so as aforesaid granted to them; and also, an accounting of all sales of land acquired by said C. P. Co. and said W. P. Co.; and also an accounting of the disposition of all the stock of the said C. P.; of the bonds issued to it by the United States; by said county of Placer; by the said city and county of San Francisco; by the said city and county of Sacramento; of the bonds issued by it, the interest on which was and is guaranteed by the State of California; of the moneys received by it from the State of California; of the moneys received by it from the subscriptions to its capital stock; the gains and profits made by said Redding, Leland Stanford, Huntington, Hopkins, Charles and E. B. Crocker, and their confederates, by the resale of lands which were heretofore belonging to the said C. P. and W. P. and the said Calif6rnia and Oregon Railroad, and the said Southern Pacific Railroad; of the dividends received from said Wells, Fargo & Co.'s stock, and the stock of the Rocky Mountain Coal and Iron Company, of Wyoming; and that in said accounting, the said Leland Stanford, Huntington, Hopkins, Charles Crocker, and Charles Crocker, the executor of the estate of E. B. Crocker, deceased, and J3. B. Redding, and their associates and confederates, be charged with the gross receipts and amounts of all subsidies, moneys, bonds, and other assets received by the said C. P., and in its name, and be credited with the actual expenses only, at the fair cash value thereof, and the actual cost of constructing, of equipping the said railroad and telegraph-line from Sacramento aforesaid to Echo City, aforesaid; such actual cost as was actually paid by said Contract and Finance Company, and by said C. Crocker & Co., without taking into account the profits and gains made by them, or either of them. Thirteenth. That thb e said Leland Stanford, Huntington, Hopkins, Charles Crocker, and Charles Crocker, executor of the estate of E. B. Crocker, deceased, and Redding, and their associates, be adjudged to surrender to the said C. P. all bonds of the United States and of the said C. P. Co., and all of the stock of the said C. P. Co., by them or either of them held, or held by any person in secret trust for them or either of them. Fourteenth. That the newspapers known respectively as the " Sacramento Union" and the " Sacramento Record," and the good-will and property of each and either of them, be adjudged to be held in trust for said C. P., and that the said defendant the Sacramento Publishing Company and the said William H. Mills be adjudged to account to said C. P. for the issues and profits thereof. Fifteenth. That the stock of the said W. P. and the bonds issued to it be adjudged to be the property of the said C. P.; that the stock of the said San Francisco. Oakland 224 PACIFIC RAILROADS. and Alameda Railroad Company, and the bonds secured upon the property thereof, be adjudged to be the property of, and be transferred to, the C. P. aforesaid. That the capital stock of the said Southern Pacific Railroad Company, and the bonds issued by said company, and the lands granted to it, and the stock of the said San Francisco and San Josd Railroad Company, and of the said San Joaquin Valley Railroad Cornpany, and the bonds issued thereon, and the stock of the California and Oregon Railroad Company, and the bonds issued thereon, and the lands granted to it, owned or claimed to be owned by the defendants, Leland Stanford, Huntington, Hopkins, Charles Crocker, and Charles Crocker, executor of the estate of E. B. Crocker, deceased, or' either of them, and their confederates, or by any person on their behalf, be adjudged to be the property of, and to be transferred to, the said C. P.; and that all the lands and property mentioned in this complaint, and all lands and property which may be found to have been acquired by the said Leland Stanford, Huntington, Hopkins, Charles and E.: B. Crocker, or either of them, since the first day of January, 1862, be adjudged to have been acquired with the property and assets of the said C. P. corporation, and be adjudged to be transferred to it. And that said defendants, Leland Stanford, Hunt!ngton, Hopkins, Charles Crocker, and Charles Crocker, executor of the estate of E. B. Crocker, deceased, B. B. Redding, and their confederates, be adjudged to pay into the treasury of the said C. P. corporation the sum of one hundred millions of dollars. That said Wells, Fargo & Co. be adjudged to transfer one and a half millions of its capital stock to the said C. P. corparation. That the said Rocky Mountain Coal and Iron Company, of Wyoming, and the said Oakland Water Front Company, be respectively adjudged to transfer to the said C. P. corporation all the stock now held in said corporations by said defendants, Leland Stanford, Huntington, Hopkins, Charles Crocker, and Charles Crocker, executor of the estate of E. B. Crocker, deceased, or standing in the name of any person or persons for their use, or for the use of either of them. And for such other and further relief as shall be equitable, and the nature of the case may demand. ALFRED A. COHEN, DELOS LAKE, Attorneys for Plai ntiff. STATE OF CALIFORNIA, City and County of San Fra:ncisco, ss: John R. Robinson, being first duly sworn, says that he is the plaintiff above named - that. he has read the foregoing complaint and knows the contents thereof; that the same is true of his own knowledge except as to the matters therein stated on information and belief; and as to those matters, he believes it to be true. JOHN R. ROBINSON. Sworn to before me this 15th day of March; 1876. [SEAL.] HOLLAND SMITH, Notary Public. SCHEDULE A.-ARTICLES OF ASSOCIATION. First. The name of the association shall be the-" Central Pacific Railroad Company of California." Second. The number of years the same shall continue is fifty years. Third. The amount of the capital stock of this company shall be eight million five hundred thousand dollars, divided into shares of one hundred dollars each. Fourth. The names of nine directors, to manage the concerns of the company, are Leland StanfoTrd, Saramento; Charles Crocker, Sacramento; James Bailey, Sacramento; Theodore D. Judah, Sacramento; L. A. Booth, Sacramento; C. P. Huntington, Sacramento; Mark Hopkins, Sacramento; D. W. Strong, Dutch'Flat; Charles Marsh,. Nevada. Fifth. The places from and to which the proposed road is to be constructed are the City of Sacramento and the eastern boundary of the State of California. Sixth. The counties into and through which this road is intended to pass are Sacramento, Placer, and Nevada. Seventh. The length of road, as near as may be, is one hundred and fifteen miles. Eighth. The names of five commissioners, to open books of subscription to the stock, are B. F. Moore, Dutch Flat; Edward J. Brickell, Illinoistown; E. G. Waite, Nevada; E. McLaughlin, Grass Valley; Samuel Cross, Sacramento. Ninth. We, the undersigned, do hereby subscribe to the above articles of association PACIFIC RAILROADS. 225 our names, and the amounts of stock taken by us, respectively, in said Central Pacific Railroad Company of California: James Bailey, Sacramento, 150 shares; Mark Hopkins, Sacramento, 150 shares; C. P. Huntington, Sacramento, 150 shares; Charles Marsh, Nevada, 50 shares: Theo. D. Judah, Sacramento, 150 shares; D. W. Strong, Dutch Flat, 50 shares; N. W. Blanchard, Dutch Flat, 10 shares; C. Cole, Sacramento, 10 shares; John F. Morse, Sacramento, 5 shares; P. H. Russell, Sacramento, 5 shares; N. L. Drew, Sacramento, 5 shares; Wm. G. English, Sabramento, 10 shares; Chas. G. Hooker, Sacramento, 10 shares; Millikin Bros., Sacramento, 10 shares; Lord, Holbrook & Co., Sacramento, 10 shares; Lucius A. Booth, Sacramento, 10 shares; E. J. Brickell, Illinoistown, 40 shares; B. Brickell, Illinoistown, 20 shares; B. F. Moore, Dutch Flat, 10 shares; P. T. Mathewson, Dutch Flat, 5 shares; E. L. Bradley and R. M. Trim, Dutch Flat, 25 shares; E. G. Waite, Nevada, 10 shares; John Williams, Nevada, 10 shares; T. Ellard Beans, Nevada, 10 shares; J. N. Lumay,, Nevada, 10 shares; E. McLaughlin, G-rAss Valley, 10 shares; Wm. Lontzenh eim, Grass Valley, 5 shares; Leland Stanford, Sacramento, 150 shares; C. Crocker, Sacramento, 150 shares; Samuel Cross, Sacramento, 10 shares; total, 1,250 shares. STATE OF CALIFORNIA, City and County of Sacramento, ss: Be it remembered that, on this 27th day of June, 1861, personally appeared before the undersigned, a notary public in and for said city and county,. Leland Stanford, Mark Hopkins, and C. P. Huntington, three of the directors of the within-named Central Pacific Railroad Company of California, and being by me duly sworn, say that the stock to the amount of at least one thousand dollars for every mile of the railroad intended to be built by said company, to wit, an amount of stock exceeding one hundred and fifteen thousand dollars, has been in good faith subscribed by the members of said company, and that 10 per cent. on the amount of stock subscribed as aforesaid has been actually and in good faith paid in cash to Mark Hopkins, the treasurer appointed by the directors named in the within articles of association, and that the subscribers are all known by some one of said afilants to be subscribers thereto, and to be the persons so represented. LELAND STANFORD. MARK HOPKINS. C. P. HUNTINGTON. I hereby certify that the foregoing affidavit was duly subscribed and sworn to by said Leland Stanford, Mark Hopkins, and C. P. Huntington, by and before me, the dlay and year aforesaid. In testimony whereof I have hereunto set my hand and official seal this 27th day of June, A. D. 1861. [SEAL.] ELIJAH SWIFT, Notary Public. Schedule B. By the act of Congress of July 27, 1866, incorporating the Atlantic-and Pacific Railroad Company, there is granted to the defendant, the Southern Pacific Railroad CompanySEC. 3. " Every alternate section of public land, not mineral, designated by odd numbers, to the amount of twenty alternate sections per mile, on each side of said railroad line;" provided, if the route shall be found upon the line of any other railroad to construct which Congress has granted lands, as far as " the routes'are upon the sanme general line, the amount heretofore granted shall be deducted from the amount granted by this act." (Acts first sess. Thirty-ninth Cong., 1866, p. 304.) By act of legislature of California, thirty acres tide-lands in San Francisco Bay; value, $500,000. H. Rep. 440-~15 2'2'6 PACIFIC iRAILROADS. REPORT TO THE STOCKHOLDERS OF THE UNION PACIFIC RAILROAD FOR THE YEAR 1875. BOS'TON, March 8, 1876. To the Stockholders of the Union Pacific Railroad Complany: In submitting the report of the board of diiectors for the year 1874, the earnings of 1875 were estimated at twelve millions of dollars. The actual gross earnings for 1875 were.- -$1, 993, 832 09 Operating expenses, including taxes.-.............................. 4, 982, 047 95 Leaving surplus earnings.................. 7, 011,784 14 Operating expenses being 41-,5o4 p6r cent. of gross earnings. Compared with the year previous, there has been an increase in the gross earnings of $1,433,951.97; an increase in expenses of $127,344.08; increase in surplus, $1,306,607.89. By referring to the statements herewith submitted, it will be seen that the commercial-passenger business gains during the year were $467,614.90, being 12-'o3,- per cent.; commercial freight earnings gain $938,818.02, being 1914-0-r per cent. Government business shows a decrease in passengers of $74,459.11, being 29-171- per cent., and in freight $82,244.08, being 25-uli per cent. Mail earnings have notr, changed in amount since July 1, 1873, being $315 per mile per annum. The rate of expenses to earnings last year was considered as very small; this year it has been decreased from 45 —19j to 41-i5(4 per cent., a decrease of 4-4-c) per cent., and this is accomplished in the face of the extraordinary expenses incurred during the spring floods. There has been expended for new construction during the year, $500,365.90. Included in this are 12 new locomotives, 41 second-class passenger-cars, 85 new freight-cars, iron bridge for Dale Creek; new headquarters and depot at Omaha; eating-houses at Rawlins, Grand Island,.Sidney,gand other]points, and permanent water-works at Omaha, Grand Island, and Dale Creek; also a large sum to complete the rolling-mill at Laramie, and the new scrap-furnace at Omaha. Fifteen hundred and sixty-one tons of steel, and 7,422 tons of iron rails; 449,738 pine ties, and 55, 594 hard-wood ties have been placed in the track. One hundred and( eighty-two thousand five hundred and eighty-nine dollars and sixty-four cents has been expended in replacing wooden bridges with iron and steel, and repairing permanent structure, all of which has been charged to the operating expenses. The entire road-bed, together with equipment, depots, water-supply, and snow-defense, has been brought to a high order of efficiency, as demonstrated by the winter's experience. No such wrinter as this of 1875-'76 has been experienced since the road was finished. In the winter of 1871-'72, with less than half the snow of this winter, trains were delayed weeks; this winter we have combated the heavy drifting fall of snow and extraordinary cold weather successfully, with no unusual delay of trains or hinderance to travel. The important work of filling and replacing all temporary structures was completed in 1874, but the company has added much to the efficiency of the road in past years, by continuing the raising of banks and the widening of cuts, thus obviating the necessity of maintaining expensive snow-sheds. The providing for extraordinary floods, and the general protection fronl damage by snow orwvater, will add important savings in the future operating expenses of the road. These improvements, and the reduction in the cost of fiel, leads to the belief that for-the next year, on the same volume of business, notwithstanding the extraordinary expenditure on account of the severe winter, even a further reduction of the per cent. of operating expenses may be attained. The consumption of fuel by the motive-power for 1875 was 148,8761 tons coal, 7.137 cords. of wood, at a cost of $4.75 per'ton for coal and $6.50 per cord for wood. The increase of consumption over 1874 was 31,3641 tons coal and 906j cords of wood. The equipment of the road is now ample for present business, and consists of 164 locomotives, 167 passenger and baggage cars; and 3,060 freight-cars. The new rolling-mill at Laramie has been completed, and has cost $212,503.33, and has a capacity to roll 20,000 tons per annum. It is now in full operation,, turning out satisfactory work; and has re-rolled for the company during the year, 6,378 tons of iron, at the contract price of $18.50 per ton. Arrangements have -been made, during the year, with the Kansas Pacific Railroad, so that its system of railroads in Kansas and Colorado is working in harmony with the Union Pacific and its system, proving mutually beneficial to both. The dfevelopment of new mines in Colorado is adding to the volume of business, and the coming year, in our opinion, will show a large increase of the mountain business to both roads. During the year 1875, the furnishing of coal to the road, and for commercial uses, PACIFIC RAILROADS. 2:27 has been thoroughly systemized. At Rock Springs and Almy, Chinese labor has been substituted for white labor, which has proved a great success, both in cost and in the reliability of the laborer. The productions of the mines, for 1875, are as follows: Tons. Carbon...................................-............... 61,750. Rock Springs-............................................................. 104, 667 Almy....................... 41,805 Total. —-.....-.... —--.... —. 208, 222 The snow at Rock Springs and Carbon has been so heavy that it has slightly interfered with the supply of coal during the winter. For commercial purposes, the demand has been greater than we could meet for a short time. In former years, with less than half the snow, the muiners were idle for months, and our coal from Laramie east was. purchased from Iowa; we have succeeded this winter in furnishing all the coal required for the company's use and all for commercial purposes, except at Salt Lake. Another year will place us in position to supply the entire demand, and at better rates than could be obtained from any other source. The reduction in cost of fuel to the country adjacent to the line of the road, adds greatly to the development of the country; andc it is evidently the true policy of the company to deliver coal to the manufacturer and settlers at a small margin above actual cost of mining and delivery.. The total amount of land-sales for 1875 was 111,049-15r acres, purchased by se'ven hundred and five different persons, at an average price of $3.66 per acre, amounting to $404,462. The total amount of land sold since organization of department was 1,082,893-1%-g- acres, at an average price of $4.47 per acre, amounting to........................... - $5,336,044 02 Amount of interest received on contracts............................. 333, 458 20 Amount received on forfeited contracts............................., 140 94 Total proceeds-........... a... O........ 5, 670, 643 16 Total expenses of land-department...................... $653, 566 66 Total taxes paid...-.......... 385, 244 69 1,038,811 35 Leaving net proceeds as.............................. 4, 631, 831 81 The total amount of land-grant bonds issued and sold by the company, was- -.-..-............................................ $10,400,000 00 Amount retired and canceled to date........2,768,000 00 Remaining outstanding..- 7.......... 7,632,000 00 There are in the hands of the company notes and contracts bearing interest, which is to be applied as fast as due and paid, to canceling outstanding bonds..................... - -................... 3,012,501 68 Leaving to be provided for by future sales........................ 4,619,498 32 Thus showing that this portion of the bonded debt of the company will, in a short time, be entirely paid off and canceled, without encroaching upon the revenues of the road. A small part of the acreage left at present prices will create a fund sufficient to meet the balance of the land-grant bonds outstanding. The treatment and disposition of the lands west of North Platte are questions as yet undecided by the company. A portion of them, especially in the valleys of streams, are suitable for agriculture; the balance are fine grazing-lands. The already immense herds of cattle, sheep, mules, and horses along the road, and the increase of future traffic to the road from the natural increase, will bring very large earnings. The past year 3,000 cars of stock were sent over the road, and it is desirable to so dispose of or retain the lands as shall best foster and build up this trade. The vast country through which the road runs will soon be the grand section for supplying all the Eastern markets with beef and mutton. The recent discoveries of the mines in the Black Hills, calling attention to that heretofore undeveloped country, and the discoveries on the Medicine Bow range, including the new Centennial lode, bid fair to equal anything heretofore discovered in gold quartz in that country, and must draw a large emigration over the road the ensuing spring. Both of these new discoveries must add greatly to the travel and traffic of the road from a heretofore unexpected source. Machinery and skilled workmen are en route from Europe to develop and work the soda-beds on Laramie Plaihs. The entire consumption of soda in the United States now amounts to 118,000 tons, and is 228 PACIFIC RAILROADS. all importel. As soon as the beds are developed and worked there is no reason why we should not supply the entire trade. The question of the constrnctionof the acts of Congress under which the road was built, which have been matters of difference with the Government, are being rapidly settled by the courts; but, so far, in most cases, the decisions are upun the basis claimed by the company. The late decision of the United States Supreme Court, decreeing that the interest paid by the Government upon the Government bonds is to be paid by the company at the time and in the manner of the principal of fhe bonds, (leaving half of the Government transportation to be paid to the company,) has lifted from the property the only cloud that rested upon it; by that decision, there is due the company from the Government $1,095,547.02, which will, undoubtedly, be paid as soon as the remaining question now pending in the United States Court, being " what is due under the 6th section of the act of 1862, known as the five per cent. clause," is decided. The Government and company are using due diligence in bringing this question to a final decision, after which, we trust, there will be no delays in the company receiving promptly its half-earnings of all Government business. It is also believed that when all the questions are finally settled by the courts, the Government will accept the company's proposition, and agree upon some plan that shall provide a sinking-fund, or a fixed sum, to be paid by the company, to meet the Government debt and interest. Although the ceorlpany, under the decisions, are relieved from making any provision of this nature, they are disposed to carry out any plan that will do justice to, the company and the Government, and that shall not be burdensome to the property, and that will settle finally and for all time all questions bearing upon the'points heretofore in dispute, and the company have so informed the Executive Department of the Government and Congress. The future of your property is no longer in doubt. The steady growth of its local trade; the continual and unexpected development of the zone of country through which the road runs, demonstrating that every part of it is valuable in agriculture and grazing-lands. ores, minerals, and hidden treasures that daily come to light, and that for over 1,000 miles long east and west, and 300 miles wide north and south, are tributary for all time to this one great artery. This will insure a steady, healthy, and rapid growth to the business of the road. Its coal, iron, silver, gold, soda, sulphur, paint, oil, lead, and copper products are daily increasing, and the Union and Central Pacific Roads will soon carry east and west to markets a greater variety of products and precious metals than any road in the country. Its coal traffic to-day in its i:lftlncy controls almost the entire fuel-trade from the Missouri River to the Pacific coast, and as the manufactures, furnaces, mnills, and other powers become necessary, the traffic in this one product cannot to-day be estimnated. The road has passed through the severest year in flood and snow that it has yet experienced, and has come out with comparatively small cost and no delay, and has demonstrated that its present improvements to meet both are ample and well conceived, and will avoid future great expenditure on this account. The amicable' arrangements and relations with connecting roads place its in a position to meet promptly unfriendly attacks, or competition, intended to obtain the traffic properly belonging to us, and will enable us to hold the great bulk of the travel and freight for the Pacific coast, and to China, Japan, and other important ports in the Pacific Ocean. Your board congratulates you upon the steady increasing value of the property, and predicts for the coming year an equally if not.more remunerative one than the past. In concluding the report the hoard warmly commends the general superintendent, Mr. S. H. H. Clark, the heads of departments, and local officers of the company, engaged in operating the road, for the successful manner in which they have administered the property the past year. To their fidelity, capacity, and energy the favorable results which have been obtained are largely due. By order of the board: SIDNEY DILLON, President. E. H. ROLLINS. Secretary. PACIFIC RAILROADS. 229 Classification, of earnings. 1875. Passenger. Freight. Mail. Express. Miscellane- Total. OUS. January........ $194, 036 33 $31,7, 756 70 $27, 095 25 $25, 456 19 $10, 585 61 $574, 930 08 February..... 188, 717 09 358, 273 58 27, 095 25 33,188 76 13, 032 56 620, 307 24 M]arch.... 357, 872 52 476, 665 18 27, 095 25 38, 355 01 18. 975 09 918, 963 05 April........... 455, 066 52 574, 8'21 90 27, 095 25 28, 058 03 10, 772 64 1, 095, 814 34 May....... 544, 226 26 645, 303 82 27, 095 25 35, 465 74 21,134 04 1, 273, 225 11 June........... 411, 264 04 502,187 00 27, 095 25 50, 251 76 51, 736 32 1, 0421, 534 37 July —....... 374, 486 76 634, 797 44 27, 095 25 45, 124 31 7, 477 69 1, 088, 981 45 August -.... --- 339, 471 04 596, 649 62 27, 095 25 36, 1C6 46 16, 1:36 36 1, 015, 458 73 Septeminbe.9..... 393, 008 96 686, 192 49 27, 095 25 35, 810 12 1', 837 54 1,155,944 36 October........ 439, 607 06 729, 274 79 27, 095 55 46, 847 39 31, 104 53 1, 266, 9)29 02 November..... 390,186 83 588, 605 88 27, 065 25 30, 440 05 1, 264 87 1, 037, 592 88 D)ecember....... 258, 070 93 5371 981 87 27, 095 25 39, 070 41 40, 931 00 903, 151 46 Toal....... 46, 014 34 6, 641, 512 27 395, 143 00 444, 174 23 236, 988 25 11, 993, 832 09 ( onpacl a/ire,c':enle n/ of lpssengcr-carn ings durivng 174 and IE75. 1874. 1875. Decrease. Increase. January.................. 155, 314 62 $194, 036 33.. $38, 721 71 February........................... 163, 3.8 74 188, 717 09...... 25, 318 35 March........................... 252, 532 71 357, 872_52............. 105, 339 85 April................... 3,13, 064 40 455, 066 52.............. 122, 002 12 May........................... 412,890 49 544, 226 26..131,335 77 June.............377, 874 20 411,264 04......... 33, 389 84 July................... 372,668 51 374,486 76 1,818 25 August............................. 363, 668 26 339, 471 04 $,4, 197 22.............. September................................. 421, 522 28 393, 008 96 28, 513 32.. October.................................... 459, 934 54 439, 607 06 20, 327 48............. November................. 371, 557 13 390, 186 83.. 18, 629 7 Deceinber.................................. 268, 432 67 258, 070 93 10, 361 74 Total................... 3, 952, 858 55 4, 346, 014.34 8?,:399 76 47, 555 5 83, 399 76 Net increase in 1875 over 1874..................................................... 393, 153 7 Percentage of gain, 9.95. Table showing the lllumber of way ad through passengers carried, and the nu11mber carried one mfile, during the year 1875. ~,....~ }.4 C ~ ~j~~ I ~C.. 0 Oo January............ 2, 558 2, 851 1, 025, 890 1,027 2, 977 4, 132, 128 9,412 5, 1.58, 018 February......... 2, 403 3, 644 1,507, 481 1,231 3,355 4, 732,752 10,633 6,240,233 March................. 3,140 5, 823 1, 975,910 1,964 7,893 10, 172, 494 18,820 12,148,334 A pril.. —-------------- 2,793 8,111 2, 274,'150 2,372 10,096 12,866,976 21,373 15,141,126 May................... 3, 586 69 583 2, 932, 566 3, 595 8, 582 12, 566, 664 22,9 46 15, 499, 230 June.. —---------------- 3, 726 5, 678 2, 263, 975 2;906 6,515 9,722,472 18,825 11,986,447 July.................. 3, 718 7,300 3, 765, 558 2, 635 4, 910 7, 786, 440 18, 563 11, 551, 998 August............... 3, 934 4, 789 1, 741, 229 3, 763 5, 008 9, 051, 672 17, 494 10, 792, 901 September............. 4,384 ]5,763 2, 258, 562 3, 071 6, 477 9, 853, 536 19,695 12, 112, 098 October --------—.. 4, 314 6, 047 2,695,657 3 154 7,625 11, 123, 928 21,140 13, 819, 585 November........... 4,638 4, 952 2, 178, 377 2,'668 6, 075 9, 092, 776 18, 333 1', 201, 153 December.. —-------- 3, 665 4, 069 1,302, 404 1, 870 3,:593 5, 637,816 13, 197 6, 940,290 Total. 40 859 63 (10 23, 921, 759 30, 256 73, 106 106,669,584 09,.831 132,591,.343 1874.................... 50 592 59, 906 24, 251 078 22, 968 55, 411 80, 887, 128 188', 877 105, 138, 206 Gain.o1................ 3:704 1'670,681 7 288 17 695 2 5782, 456 2'), 954 27, 453,137 Loss............,.. 7....-..................... e- ---- -- ----- 23 0 PACIFIC RAILROADS. Statemett showing the nlmber of through passengers east and west, and the revenue derived therefrom, during the year 1875. East. West. Months. ~ } ce C~,January............................................ 1,027 $32, 784 42 2, 977 $!11, 895 46 February............;.............. 1,231 40,180 23 3, 355 102, 360 61:]March............................. 1, 964 63, 017 33 7, 893 214, 732 91 April.................................. 2, 372 80, 049 74 10, 096 294, 835 33 May......-............. 3, 595 131, 459 04 8, 582 282, 190 35.June...-.................................. 2;906 103, 771 22 6, 515 [ 210, 108 48 July..-.................... 2, 635 82, 941 56 4, 910 156, 312 66 August -...-.... — -—...... —-...- -........ 3, 763 111, 9-25 78 5, 008 149, 738 91:September............................. 3, 071 95,142 60 6, 477 206,142 16 October...................................... 3, 154 100, 966 72 7, 6-25 239, 795 93 November..-... -......... 2, 668 90, 571 15 6, 075 206, 362 3:1 December........................................... 1, 870 73, 925 26 3, 593 129, 760 63 Total.....-................ ------ 30, 256 1, 006, 735 05 73,106 2, 304, 235 76.Revenue from east-bound --—..$ —-.. ——.... --......-.-. 1, 006, 735 05 -Reveuue from west-bound..... -.. 2, 304, 235 76 Total revenne from through travel............... 3, 310, 970 81 Statement showuing the number of tway passengers east and wvest, and the revenue derived therefrom, during the year 1875. East. West. ~0 MlIonths. a a |;.$ Revenue.,P l Revenue. January.....-............................... 2, 558 $23, 281 25 2, 850 $26, 075 20 February..................................... 2, 403 18, 470 65 3, 644 27, 705 60 March........................................ 3, 140 27, 9)7 75 5, 823 5-2, 214 53 April............................ 2,793 25, 225 33 6, 112 54, 956 12 May................................ 3586 46, 063 08 6, 583 84, 513 79 June............ 3, 726 38, 332 26 5, 678 59, 052 08 July... 3,718 45,487 43 7,300 89,745 11 July............................................... 3, 718 4., 4t7 43.7, 300 89, 745 11 August................................... 3,934 33, 977 60 4, 789 4:3, 828 75 September....................................... 4, 384 37, 543 44 5, 763 54, 180 76 October........................ 4,314 41, 265 39 6, 047 57, 579 0-2 Noveimxber...... 4 638 42,; 922 14 4, 952 50, 331 21 Decelmber......,,................... 3,665 26, 133 44 4, 069 28, 251 60 Total..................................... 4859 406,609 76 63, 610 628, 433 77 Revenue from east-bound...................................... $406,. 609 76 Revenue from west-bound.......... 628, 433 77 Total.revenue. from way travel'..............-.. 1, 035, 043 53 PACIFIC RAILROADS. 231 Comparative statement of freight-earnings dauring 1874 and 1875. Months. 1874. 1875. Decrease. Increase. January.................................... $407, 399 68 $:317, 756 70 $89, 642 98........... February................................... 396, 414 79 358, 273 58 38, 141 21......... March...................................... 379, 004 60'476, 665 18.............. $97, 660 58 April....................................... 438,116 78 574,-821 90.............. 136, 705 12 May......................................... 432, 253 90 645, 303 82......... 213, 049 92 June.............................. 421, 912 17 502,187 C0.............. 80, 274 83 July..................................... 401, 879 19 634, 797 44.............. 2:32, 918 25 August.................... 494, 026 43 596, 649 6.............. 102, 623 19 September................................... 570, 851 22 686,192 49..... -... 115, 341 27,October...................................... 618,463 96 722, 274 79 -. 103, 810 83 November................................... 556, 340 91 588, 605 88 -..-.... 32, 264 97 December.................-.............. 548, 067 70 537, 983 87 10, 083 83.......... Total...-................ 5, 664, 731 33 6, 641, 512 27 137, 868 02 1,114, 648 96.137, 868 02 Net increase, 1875 over 1874............................................ 976, 780 94 Comparative statement of total freight-earnings forl 1874 and 1875. From — 1874. 1875. Decrease. Increase. Commercial.............................. $4, 819, 661 00 $5,758, 479 02............ $938, 818.02 Government..............-. — 316, 840 21 234, 596 13 $82, 244 08 Company.............................. 528, 230 12 648, 437 12..-... 120, 207.00 Total.-......................... 5, 664, 731 33 6, 641,512 27 82,244 08 $1, 059, 025.02 82, 244.08 Net increase 1875 over 1874...........................................976, 780 94 Percentage. Commercial............................ Gain........ 19- 48 Government..........L...........oss......... 25Company............................... Gain.......................... 22-1zoTotal.................... Gain. 17-. - Statemtent in pounds of classified freight forwvarded during thle years 1874 and 1875._____ Through Through Loafrrh Class. and ar ticles, eastk-bou-nd, west-bound,' Total, 1874. T~otal, 1875. Increase. Decrease. 1875. 1875. -Mineral prodncts: Stone and brick-............................ 25, 070 2, 439, 600 7,-295, 165 7, 689, 436 9, 759. 835 2, 070, 399........Cement, plaster, and lime......................... 33, 765 128, 610 2, 439, 829 2, 967, 295 2, 602, 204........ 365, 091 Salt ——.............................................. 1, 941, 680 1, 634, 558 1, 941, 680 307,122 -....... Metallic ores —.............................. -440,618 -. 43, 660 13, 726, 419 26, 640,1-21 14, 210, 697........ 12, 429, 424 Other, and coke —-........................................ 9, 713, 885 2 1, 412, 880 9, 713, 885 —....... 11, 698, 995 IDrngs —........I.....................T289, 060 3, 960,'200 58, 864 2, 689, 619 4, 839, 124 2,149, 505....... Borax, &c..-................................ 1, 563, 039 139, 620 41, 770 1, 845, 588 1, 744, 4!29....101, 159 D~ry goods-.................................. 374, 333 26,1l1i, 515 4, 860, 404 126, 361, 626 31, 346, 252 4, 984, 626 -..... Silk-..................................... 805, 794 76, 490 650 368, 067 882, 934 514, 867 -......... Green fruit...................................... 2, 937, 693 495, 590 2, 824, 395 6, 219, 469 6, 257, 678 38, 209....-.. Dried fruit and nuts-............................ 649, 885 2, 620, 330 2, 094, 004 5, WV, 214 5, 364, 219 300, 005 -...... Agricultural products:Wheat and barley-........................... 7, 447, 919 44, 070 63,-229, 265 100, 693, 62-2 70, 7-21, 254.......... 29, 972, 368 Corn and oats..-............................ 16, 850, 13, 190 30, 892, 559 27, 237, 959 30. 922, 599 3, 684, 640 -...... iRye, flax-seed, &c............................ 94, 416 10o7, 960 2, 672, 8-5 1, 585, 2-24 2, 875, 261 290, 037....... Potatoes and vegetables-.......................- 1, 188, 418 276, 930 11, 343, 039 ii, 126, 732 12, 808, 387 1, 681, 655 -...... Hay-7,..............3,.....420......7,....492,.......568.. —— 7, —- 7233, 40,4 420-259, 40 ------— 148, 4 Flour and meal-............................. 47, 0010 77, 810 12, 061, 085 11, 021, 538 12,185, 985 1,164,7 447 —----- Gro-oeries:. Candles-....................................3, 89 1,290 449, 555 4, 618,812 4, 340, 845-....... 277,1967 Canned goods.............................. 706, 471 t, 655, 460 3, 40:2, 87-2 3, 706, 214 4, 764, 803 1, 058, 589 -....... Soap and starch-................................... 1, 300, 000 1, 516, 857 2, -286, 238 2, 81t6, 857 530, 619 -...... - Sugrar and sirup-........................... 1, 8-20, 165 7, 216, 940 7, 044, 520 10, 468, 767 16, 081, 625 5, 612, 858 -...... Tea-.................................. 18, 244, 475 1, 930 171, 965 1 1,60:1,124 18,418, 370 6,815, 246. -..... Coffee-................................. 1, 291, 380o 60, 240, 543, 949 1, 545, 720) 1, 895, 569 349, 849 - Ba'king-powder, &c ------------------—....... 3, 695 654, 600 311, 265 914, 689 969, 560 54, 871 —----- Other-.................................. 301, 055 885, 460 8, 861, 76:1 12, 756, 171 10, 048, 278 -2, 707, 893 Fancy goods.................................. 466, 219 959, 060 289, 166 430, 971 1, 714, 445 1, 283, 474....... W~indow-glass, —---------------------------— 830 1, 274, 560 2?88, 8538 545, 946 1, 564, 248 1, 018,302,....... Glasswar e and crockery-68, 386 2, 364, 710 1, 318, 325 2, 324, 187. 3, 731, 421 427, 234.,..... Furnituire and household goods ----------------- -5-29,467 13, 320, 337 7, 721, 465 16, 590, 275 21, 571, 269 4, 980, 99-1....... Hardware ald. metals: Hardware-............................... 77, 865 11, 182, 839 3, 119, 751t 9, 646, 381 14, 381, 455 4, 734, 074....... Nails,-................................. 1, 285 5,194, 510'2, 373, 906 3, 510, 674 7, 569, 701.4, 059, 0127....... Stoves —..............................7 —-------- 1, 850, 490 1, 357, 683 2, 459, 630 3, 208, 17:1 748, 543....... Iron, rdilroad-..................................; —- 5, 756, 050 13, 949, 800 17, 142), 710 19, 705, 850 2, 563, 140....... Iron, bar, &c..-...........................375 20,215, 685 2, 315, 358 112,112, 940 2-2, 531, 418 10, 418, 478....... Iron, other-............................... 1,375 15,513,980.4, 618, 711 8,165, 844 20,134, 066 11,968,2-22....... Steel, copper, &c-........................... 33, 700 3, 249, 140 475, 360 2, 067, 842 3, 7,58, 200 1, 690, 358....... Tin And~quic'ksilver-.......................... 718, 530 1, 569, 440 32:3, 072. 1, 086, 734 2, 611, 042 1, 524, 308....... Lead-................................. -545 278, 630 171, 689 8038, 332 450, 8(i4........ 7, 587, 468 B3ullionu -...... r- —..................... 31, 380 41, 200 50, 175, 571 386:'172, 654 50, 24 8, 151L 14, 075, 497 -....... Hat s and millinery goods --—...................... 77, 838 1 1, 17-2,500 146, 775 1, 221, 932 1, 397, 113 175, 181..... Leather and rubber: Boots and shoes ---------------------------- 1, 798 2, 413. 740 888, 079 3. 479, 823 3, 323, 617 --- -3 —- 56, 2!66 Leather and leather goods —---------------------- 498, 389 793, 045 391, 862, 2,165, 706 3, 683, 296 -.............- 482, 410 Hubber goods ------------------------ ------ 7,665 1, 278,730 99, 735 1, 499, 967 1, 386,130-........ 113, 837 Hides, wool, &C.: Bfides, pelts, &c -------------—............ 1, 934, 776 70, 5.50 9,107, 587 3,92-2,750 4, 112, 913 190, 163 ------ Furs-.................................. 1, 478, 767 51 680 37, 481 1., 650,385 1, 5-21, 928 —------ 128, 457 -wool-.................................. 41, 524, 382-3........, 596, 778 3~2, 610, 555 43, 121, 160 10,510,685...... Live stock: Shoresp and hlg ctl..............-..85, 500 1,0212,560 3P, 495, 230 34, 01i1, 370 39, 873, 230 5,861, 860...... Sheep and bigs. - - - - —.................900 281I, 200 2,127,703 4, 687, 282 2,409, 805-....... - 2, 277,477 Liquors: Whisky, &c-............................401, 265 5, 4537, 5-2 2, 2-27, 810 5, 006, 690. 8, 086, 595 3, 079,905 ------ Wie-5,096,28............................. 8 349, 340 261, 335 5, 54, 23-2 5, 706, 963 158, 731....... Beer, &c-~~ ~ ~~~~~~~~~ ~~~~~~~~ — -------- 735, 190 1, 601,5-27 1, 934, 605 2, 336, 717 402, 11-2....... Oil....................................3.... 17, 455 5, 930, 760 3, 625, 178 9., 166, 897 9, 893, 393 726, 496......,. Machinery-................................ 18, 480 9,769,480 4,084,100 9; 393, 2130 13, 872, 060 4,478,830....... Musical instruments-28, 005 2, 093, 660 232, 465 2, 350, 213 2, 354, 130 3, 837. -...... Military and naval. stores: - Powd;er, cartridges, &c-62,...215...305....570..983,...296.1, 486, 795 1, 351, 081-135, 714 Tro and pich-ae...............-.....45, 660 27,9-29 61, 085 73589 10, 504. -..... Hpe and..cordage-. 6,400 f 1, 512, 900 328!, 014 1, 318,110 1, 877, 314 559, 204. -..... Provisions: Hog products —........................26, 830 8, 3lF, 089 3, 967, 288 14, 616, 655 12, 309, 207 ------ - - 2,307, 448 Beef-.............................46, 465 10, 050 660, 306 1, 090, 379 716, 8-21 —. —---- 373, 558 Fish and game -~~~~~~~~~~........... 6, 879, 321 6, 633, 470 743, 250 13, 68-2,639 14, 256, 041 573, 402 —------ Butter, eggs, and cheese ----------- ----------— 4, 200 3, 907, 476 1, 433, 850 4, 735, 674 5, 315, 526 609, 852. -..... Paper-................................... 48, 73:3 7, 817, 085 755, 48-2 4, 811, 475 8, 621, 300 3, 809, 825.....-.. LBooks-.................................. 45, 273 1, 26-2,650 133, 002 1, 540, 953 1, 440, 925. —------ 100, 028 ~ d Stationery-................................. 2, 065 543, 000 1-26, 709 457, 381 671, 774 214, 393. —----- Paint and varnish-............................. 305, 090 2,766,411 5-26. 693 1, 586#146 3, 598, 194 2, 012,048...... Tobacco-.................................. 941,027 6, 350, 7,20 691, 0:17 7, 744, 267 7,135, 784. —------ 608, 483 Cigars and pipes-.... ---------- 103, 825 329, 440 97, 825 468, 310 531, 090 6-2, 780. -...... G Wood and manufactures of wood: Agricultural implements-........................ 50, 540 7, 753, 87.5 3, 893, 630 9, 760, 639 11, 698, 045 1, 937, 406....... Vehicles --------------------------------- 361, 465 10, 42!7, 871 7,.629, 006 14, 076, 301 18, 418, 34-2 4, 34-2,041 ------ Lumber and timber-........................... 42, 000 2, 762, 710 40, 007, 955 51, 607, 536 42, 813, 265...-..... 8, 794, 271 Shingles, laths, and staves-....................... ------- 1, 154, 070 1, 377, 884 2, 303, 960 2, 531, 954 227, 994.. —--- Wood-............ ——:11-1-1111-I —-, —............-. 5,946,970.9,311,730 5,946, 970........ 3, 364, 760 Charcoal-................................. 16,109,155 15,483,390 16,109,155 625,765....... Manufactured wood ------------------------.... 7, 421 9-26, 375 462, 836 1, 013, 376 1, 19, 632 383, 256....... Wood in shape...................... 4,555 2, 395, 820 367, 470 1, 417, 907 2, 767, 845 1, 349, 938....... Barrels and casks —............................ 1, 5.30 97, 380 678, 544 547, 827 777, 464 229, 637 --—. — Merchandise —..................; — -- ---------- 266, 607 41, 950 700, 118 2, 127, 937 1, 008, 675 -........ 1, 119, 262 Total ---------—...................... 100, 041, 818 23:1, 045, 603 689, 731, 9-5 985, 612, 855 1,.00-2,819, 346 133, 634, 960 98, 428, 469 CO~ 234 PACIFIC RAILROADS. Number of tons of through and local commercial freight carried one mile during each month of the year 1875. Number of tons carried one mile. Months. Through. Local. Total. January................. 8, 973, 704 6, 704,171 15, 677, 875 February..-................................................. 8, 481,509 6,136, 612 14, 618,121 March..-.......................... 13, 739, 323 6, 464, 593 20, 203, 916 April.........................................I............. 16,125, 199 6, 381, 536 22, 506, 735 May.-...-....-... —-.....-.-.- -....-.. —. 18, 621, 708 7, 218, 408: 25, 840, 116 June.-...................................13, 439, 037 7, 066, 983 20, 506, 020 July................................... 15, 965, 384 9, 883, 548 25, 848, 93;2 August....- -....... —. —. —--............ —--... —. 13, 029, 233 12, 848, 530 25, 877, 763 September. ——.................................................. 15,062, 433 12, 244, 656 27, 307, 089 October.............................................................. 17, 532, 918 12, 410, 223 29, 943,141 November............................................... 12, 537, 423 10, 798, 079 23, 335, 502 December.-.............................. 9, 515, 85'2 8, 233, 927 17, 749, 779 Total for 1875......-............................... 163, 023, 723 106, 391, 266 269, 414, 989 Total for 1874....................................... 139, 850, 277 122, 388, 560 262, 238, 837 Increase.-.......................................... 23,173, 446............ 7, 176,152 Decrease. 24.......................................................... 15,997,294............ lverage rate per ton per mile. 1875. 1874. West-bound..-.....$1........................................... $1 84 $1 57 Through. < East-bound..............................................................1 58 1 4-2 Average........... -................................ 1 75 1 51 ( West-bound.........-..................-............... 3 14 2 83 Local..