THE E^OIEIC SUGGESTIONS . SUBMITTED TO THE ! I Hon. Charles Devens, Attorney-General of the United States, ON THE RESOLUTIONS OF THE SENATE AND HOUSE OF REPRESENTATIVES ' IN RESPECT TO THE OPERATION OF THE UNION PACIFIC RAILROAD AND BRANCHES. 01 BEHALF OF SAID KAILROAD COMPANY. By A. J. POPPLETON, Oen'l Att’y, U. P. R.R. Co. WASHINGTON, D. C. Gibson Brothers, Printers. 1877. 1 THE] T’^GIT’ZO SUGGESTIONS SUBMTTED TO THE Hon. Charles Devens, Attoriieij-^Teneral of the I nited States^ ON THE llESOLUTIONS OF THE SENATE AND HOUSE OF IIEPIIESENTATIVES IN KESPECT TO THE OPERATION OF THE UNION PACIFIC RAILROAD AND BRANCHES. ON BEHALF OF SAID lUlLBOAD COMPANY. JIv A. J. POPPUETON, GerCl AtVy, U. P. R.R. Co. WASHINGTON, D. C. Gibson Brothers, Printers, 1877 . THE PACIFIC RAILROADS. ORIGIN AND PURPOSE OF THE RESOLUTIONS. The resolutions under consideration, tliongli adopted by botli Houses of Congress, are identical in substance, and un- questionably received their inspiration from the same source. Though, in form, a simple resolve that the “ President be re- quested to inform the respective bodies what legal imj)ediments, if any, exist which prevent him from executing said laws in accordance with the obligations accepted and agreements made b}^ said Union Pacific Railroad Company and bi-ancJies,” they are, in truth, under the guise of solicitude for the public inter- est, an assault by one corporate body upon another, and they originate in a private grievance. Thus their introduction into the Senate was made the occasion of an elaborate arraignment of the Union Pacific Company, upon assumed violations of the law, without proof of such delinquency, without anj^ exposition of the provisions alleged to have been disregarded; but, on the ^ contraiy, with a studied perversion of facts and law — conclusive of the animus and purpose from which they spring. It is well, - therefore, to proceed somewhat cautiously, lest it may turn out an inquiry whnt impediments, if any, exist to the accomplisli- I ^ ment of some pecuniary, private end by the corporation insti- ^^ating and pressing this controversy. 2 I propose, therefore, to inquire : qO 1- What specific acts of the Union Pacific Company are al- jf^eged as breaches of the acts of Congress creating and regulating ^ that corporation ? 2. Which, if any, of them are true iii fact ; and, if true, are they a violation of said acts of Congress ? 3 . To what extent is the Kansas Pacific Railroad Com- pany entitled to tlie benefit of the provisions of the acts of Congress invoked on its behalf against the Union Pacific; Com- pany ? 4 4. What impediments exist to tlie judicial establisliment of its alleged legal riglits ? 5. What is the interest of the piil)lic and the Government in res])ect to tliis controversy ? ACTS OF ALLEGED VIOLATION OF CHARTE:R. As tlie resolutions are silent in respect to the specific acts constituting a violation of the acts of Congress, we must look elsewliere for a statement of tliem. Two sources are available for this purpose, originating — tlie one in the circuit court of tlie United States for tlie district of JS^ebraska ; the other in the Senate, both finding their confluence in this hearing, the advo- cacy of the public wrong being now transferred from the ])ublic servaTit and devolved upon the advocates of a private interest and client. As the specifications of offences against the statute contained in the speech in support of the Senate resolution are singularly vague and uncertain, it will be safer to resort mainly to the more exact statement contained in the bill of complaint of the Kansas Pacific Railroad Compaii}^ in its suit to comp'el the Union Pacific Company to obey and observe its alleged rights, lately, by consent and agreement of parties, submitted upon full argument to the court, and now by it held under advisement for speed}^ decision. Lest, however, it might give rise to misapprehension not to make some reference to the alleged breaches of the law enumerated in the arraignment of the Union Pacific Company accompanying the senatorial reso- lution, a brief reference will be made to them. They are con- tained in a single page, of the sixteen-page exposition of them, now under consideration, and commence as follows : ALLEGED DISCRIMINATIONS. The young and vigorous State which I have the honor in part to represent in this chamber is practically embargoed “ by the refusal of these roads to compl}^ with the law. No “ article of commerce raised or manufactured can be transported ‘‘ west of Cheyenne without paying more for freiglit, even for fifty-seven miles, than is charged from Omaha to Ogden, a “ distance of 1,032 miles, 1 select a few examples of discrimi- 5 “ nation from late tariff* rates hy tlie car-load of ten tons: On bacon the charges from Cliejmnne to Ogden exceed those from “ Omaha to Ogden $45 ; for beans, $85 ; for mess-l^eef, $81 ; “ coal oil, $81 ; grain, $88; liides, $213.50 ; lard, $71.50; lum- “ her, $70; powder, $108; sugar, $81. Excess of charges in a “ single train of fourteen cars for 516 miles over 1,032 miles is “ $1,054.40. Neither Kansas, Colorado, nor Missouri can ship “ bacon, mess-beef, grain, live stock, &(*,., via Cheyenne, to any of the AA^estern States or Territories, and all are entirely shut ‘‘ out from the markets of Utah, Montana, Nevada, and other regions. Like discriminations are made by tiie Union Pacific Company in freight traffic by the hundred weight.” The statements contained in the foregoing paragraph are erroneous — not true in fact. No freight or passengers of any kind or class, whether received from the Kansas Pacific, or otherwise, at Cheyenne, is charged more for carriage from Cheyenne to Ogden than is charged on like freight and pas- sengers from Omaha to Ogden. It is not done in fact, nor do the tariffs and orders of thePTnion Pacific Company permit it. The statement of excess of charges is wholly unfounded in fact, as witness the order annexed, marked Exhibit ‘‘A.” If the State of Kansas and the Territory of Colorado cannot ship via Cheyenne to any of the AVestern States or Territories, it is due not to the rates imposed upon freight and passengers between Cheyenne and Ogden l^y the Union Paca’fic., but the rates imposed by the Kansas Pacific Company or Denver Pacific Company, or by both. A brief arra}' of figures, taken from published tariff's, will establish this fact. In connection with this it sliould be remembered that b}^ the act of Congress — the act of Alarcli 9, 1869 — relied upon by the Kansas Pacific to impose itself upon the Union Pacific as a branch, tlie power of the Denver Pacific to regulate its own tariffs is expressly re- served to that corporation by Congress, its tariffs being, by affirmative act of Congress, placed beyond the reach of either of the other companies. NO DISCRIMINATION AGAINST COLORADO AND KANSAS. Nine-tenths of the freight and passengers originating in Colorado, to reach the Western States and Territories via f; Clieyeniic, must pass over tlie entire lengtli of tlie Denver Pacific, wliicli lias always been practically managed by the Kansas Pacific. A comparison of tariff's reveals the astound- ing fact that the rates of freight from Che_yenne to Denver, a distance of 106 miles, are in all instances nearly equal, and in some instances greater than on the same class from Cheyenne to Ogden, a distance of 516 miles, nearly five times the greater distance. 100 Miles olf) Miles Ben'oer to Cheyenne. Cheyenne to Ogden. First class $2 35 per 100 $2 19 jier 100 Second class 1 75 “ 1 89 “ Third class 1 35 “ 1 61 These figures show conclusively not only that tlie exorbitant tariff of the Denver Pacific (whi(di is in no respect subject to our control or influence) is the chief and effectual obstacle a^’ainst the trade and commodities of Colorado reaching the Western States and Territories, lint that, so far from discrim- inating against business brought by it to us, we carry their business over the Union Pacilic, from Cheyenne to Ogden, at about one-fifth the rate per mile charged by that company over its own road. This shows why Colorado products do not go westward, and why Utah potatoes and California fruit are com- pelled to pay such enormous tribute to reach Colorado. Of that tribute, the Union Pacific, with 516 miles of road, takes one-half, and the Denver Pacific, with one-fifth the mileage, takes the other half. If, then, the following statement is true and the figures therein given correct, one-half the respective amounts go into the treas- ury of the Denver Pacific, thus reducing the amount received by the Union Pacific to a less mileage rate than received by the Central Pacific or Denver Pacific, and affording a conspicu- ous example of the extent to which figures may be manipulated to dei^eive and mislead : “ During the years 1875-76, the crops in Colorado were ‘‘ nearly all destroyed by grasshoppers, and our people had to “ depend on California and other States to supply the defi- ciency. Potatoes were purchased iu Texas and shipped to “ Denver, a distance of over two thousand miles, cheaper than thc}^ could be had from Ogden, in Utah, about one-quarter 7 the distance. On cal>bai>:e 1)\" the car-load the charo-es from “ Sacramento to Denver are $515, distributed as follows: Sac- “ ramento to Ogden, 74:3 miles, $195.50 ; Ogden to Cheyenne, ‘‘516 miles, $229.50; Clie\mnne to Denver, 106 miles, $90. “ One firm in Denver purchased in California last year 160 car- “ loads of frnit, the freight rates being more to Denver than to Chicago. In car-load lots tlie rate from San Francisco per “ 100 pounds to Chicago are $1.50 ; to St. Louis, $1.50 ; to New “ York, $1.50; to Cincinnati, $1.60 ; to Denver, $1.94:, or forty- “ four cents per 100 pounds niOre to Denver, being one thou “ sand miles less distance tlian the nearest of the other points “ named.” While tlie disparity in tlie carriage of passengers is less, it is also true that tlie Union Pacific has heretofore carried and still transports passengers, originating in Colorado and reaching its road at Che 3 mnne, both east and west, at a less mileage rate than charged on tlie Denver Pacific. The assertion that freight on car-load lots of fruit per hundred pounds from San Francisco to Chicago, New York, Cincinnati, and St. Louis, is less than from San Francisco to Denver, if true, is due to the fact that the rate from Cheyenne to Denver, 106 miles — over the Denver Pacific — is more than from Omaha to Chicago, New York, Cincinnati, or St. Louis ; that is to say, it is due to the outrageous discrimination of the Denver Pacific — which has absolute control of its own tariffs — in exacting a rate for 106 miles greater than that exacted east of Omaha over a distance of from 500 to 1,000 miles, the actual excess of exac- tion 1)}^ the 106-mile road being 4:4 cents per hundred pounds. Great stress is laid upon the assertion that a car-load of beer was charged a higher rate from Cheyenne to Laramie than the entire through rate on like carriage. Yet it is notorious that at this time the Denver Pacific maintained i*ates on its road which amounted to an embargo on any freight tendered hy the Union Pa- cific. This discrimination was made, if at all, not, as is asserted, to compel the Colorado car-load of beer to traverse the whole line of the Union Pacific road, but to reciprocate the courtesies of the Denver Pacific in absolutely shutting the Union Pacific out of Colorado. If Colorado is a “forbidden laud” to overland freight and passengers, it is due to the exactions of the Denver 8 Pacific, over whose rates tlie Union Pacific or tlie Government have no control. Recently a railroad has been built from Cheyenne to Long- mount, thus making connection with Denver by way of the Colo- rado Central, whicL will result in relieving the ])eo|)le and busi- ness of Colorado from the exactions of the l)env(*r Pacn'fic, and enable it to flow to and from both the East and West, via the Union Pacific, at reasonable I'ates. An examination and com[)arison of the local tai'iffs of the Kansas Paca'fic will conduct to like conclusions, as a})pears from the following, and show that it j)ra(^tises the same discrimina- tions charged u})on us : The rates from Kansas City to Denver, a distance of 639 miles, and from Kansas City to Cheyenne, a distance of 745 miles, compare as follows : K. C. to D. K. C. to GlCy'ne. First class $2 40 $1 90 Second do 2 00 1 60 Third do 1 75 1 30 Fourth do 1 40 1 25 giving an average from Kansas City to Denver — the shorter dis- tance — of $1.88, and from Kansas City to Cheyenne, the longer distaiH'.e, of $1.51, both being nearly the average rate of the Union Pacific west of Cheyenne, which is $1.89, It thus appears not only that the Kansas Pacific practises the same discrimina- tions with which we are charged, but that we haul its freight west of Cheyenne at a mileage i*ate exceeding theirs less than the excess to which we are entitled by reason of the increased cost of the maintenance and operation of our road, as hereafter ap- pears, while the discriminations of the Denver Pacific greatly exceed those of either of the other companies. An examination of the passenger business interchanged between the roads will conduct to like conclusions. Upon this subject it only remains to notice the statement con- tained in Appendix B of the Memorial of Committee of Bond- holders of April 21, 1877, and in tlie memorial of citizens of St. Louis, being tabular statements of comparative rates from Omaha to Ogden and from Cheyenne to Ogden, showing excesses of the latter over the former. These statements, like those con- tained in tlie senatorial exposition of this subject, are simply erroneous, not true iu fact, as already appears from the order of General-Freight Agent Yiniug already referred to as ‘‘Exhibit A.” The committee of bondholders, iu their supplemental me- morial of'- October 10, 1877, allege, “ that it is unlawful for the “ Union Pacific Railway Company to charge higher rates per “ mile on freight and passengers received from or delivered to the “ Kansas Pacific and Denver Pacific Railroad tlian the propor- “ tionate mileage charge on similar business received from or “ delivered to other persons and corporations.” Ko additional chai’ge is imposed upon their l)usiness over that of other persons or corporations at the same point, and it is hauled in most in- stances as low per mile as over tlieirown roads or any branches of tlie Union Pacific. Tlie rates from Cheyenne to San Francisco of which the Kan- sas Pacific complain are materially lower per ton per mile than are the rates charged by the Kansas Pacific for transportation from Kansas City to Denver, as is shown by the following table, viz : Class. 2d Class. 3d Class. ith Class. Rates Kansas City to Denver '...$2 dO $2 00 $1 75 SI dO Rates per ton per mile . .. 7 52 6 27 5 d9 d 39 Rates Cheyenne to San Francisco d 50 3 75 2 75 2 25 Rates per ton per mile . .. 6 dd 5 d3 3 93 3 22 Excess of K. P. rates per ton per mile above U. P. rates. . . . ... 1 08 8d 1 56 1 17 Hence it results that the Union Pacific has not discriminated against the business of the Denver Pacific and Kansas Pacific originating in Colorado and Kansas, but, on the contrary, has ti’an sported it at a mileage rate fairly proportionate to the rate charged by those companies for transportation over their own roads. THE BUSINESS OF MISSOURI AND NEIGHBORING STATES. Equally erroneous is the statement that Missouri and other neighboring States are excluded from commerce and intercourse with the Western States and Territories by the exactions of the Union Pacific. So far from having even a semblance of truth, it affords the shortest and best line from Kansas City, the eastern 10 termimis of tlio Kaijsas Pacific and Denver Pacific, to tlie West and the Pacific ocean. It has tlic advantage hotli in distance and the cliaracter of its road. From Omaha to Cheyenne tlie distance is 516 miles. From Katisas City to Cheyenne, via Denver, is 745 miles, making a difference in favor of 'tlie Union Pacdfic of 229 miles. From Kansas City to Cheyenne, via Omalia, is 720 miles, thns making a difference in favor of the Omaha route of 25 miles in distance. Therefore the statement that those States arc deprived of access to the overland route by tlie declination of tlie Union Pacific to carry their business when received from tlie Denver Pacific aiid Kansas Pacific at Cheyenne over the west half of our road at less than cost of carriage, (as I shall hereafter show,) thus making us compensate tliem foi‘ the natural inferiority of their road, arising from its greater length, is not only untrue but alisurd. If the legislatures of the States of Missouri and Illinois have memori- alized Congress on this subject, it was done undoubtedly at the instance of some private interest and without deliberate con- sideration. It is an historical fact suscejitible of absolute proof that the resolutions alleged to have been passed by the General Assembly of Illinois were defeated, and that after such defeat, when that body had dispersed and no quorum was in attendance, those resolutions were resurrected, and in some way certified and got before Congress, without ever having received the approval of tlie General Assembly of that State. The Union Pacific is open and unobstructed, affording facilities impossible to tiie Kansas Pacific, by reason of its greater length and other organic infirmities. Thus far we fail to find any discrimination against the Kan- sas Pacific or any distinct and concise statement of the exact , fact constituting our offence against the acts of Congress, nor is any statement or definition of it attempted. It is simply as- sumed that we are by law required to do something, which is overladen and measurably concealed under the oft-recurring phrase pro rate^^ and that in some way, not particularized, we have been derelict in that regard. Turning, therefore, from necessity, to the suit of the Kansas Pacific Kailway Company and the Denver Pacific Kailway & Telegraph Company, a trans- script of the entire record of which is before you, designated as 11 “ Scliediile A,” we are enabled to extract from the bill of com- plaint the exact nature and character of the offence alleged against us. It there appears that it is the theory of the parties ])ressing these resolutions that it is obligatory upon the Union Pacific under the law to receive from tlie Kansas Pacific and Denver Pachfic, at Clieyenne, the point of junction, witliout re- gard to the place of its origin, all business brought by tliem, and transport it east or west to points on its road, or to the ter- mini of its road, at a rate ])er mile obtained b}^ dividing the lowest tlirougli rate of tlie Union Pacific, on business of the same class, l)y the number of miles hauled, and to deliver all business destined to said roads at Cheyenne, witliout regard to tlie place of its origin, at like rates, and give it speedy and like transit with its own. (3r, to simplify the statement in its appli- cation to through freight — Cheyenne being cqui-distant from Omaha and Ogden, the eastern and western terminus of the road — that it is the duty of the Union Pacific to charge said rail- road comj)anies^ “ the Government^ and the for the “ transportation of freight and passengers going to or from “ your oratods railroad^ between Ogden and Cheyenne^ * * ‘‘ a rate of freight and fare not exceedhig one-half of their rate for business and trajfic of a similar description and “ character for the entire length of their line between Ogden “ and Omaha. ; that all excess of charge over said rate is un- “ lawful^ and a violation of the provisions of said acts of “ Congress in that behcdfC Having, then, at last, a clear, comprehensive, sweeping, but specific stateinent of our alleged dereliction, we are now con- fronted with the inquiiy, Do these allegations constitute a vio- lation of the law ? which necessarily leads to a construction of the provisions of the statute under which the question at.issue arises. Assuming for the present that these, provisions are binding u])on the Union Pacific Company, the negative of which I shall hereafter show, I address myself to an interpretation of them. CONSTRUCTION OF SEC. 12, ACT 1862, AND SEC. 15, ACT 1864. Sec. 12, act of 1862, (12 Statutes at Large, 492,) so far as it relates to this subject, is as follows : “ The whole line of said 12 niilrojid rtkI branches iind t(dcgra])h sliall be operated and “ used for all purposes of coininnnication, travel, and transpor- “ tation as one connected continnous line.” feec. 15, act of 1864, (18 Statutes at Large, 358,) is as follows : “ That the several companies authorized to construct the afore- “ said roads are hereby i-eqnired to operate and use said roads and telegraph for all pur[)oses of communication, travel, and ‘‘ ti’ansportation, so far as the public and the Government are “ concerned, as one continuous line, and in such o[)eration and “ use to afford and secui-e to each equal advantages and facili- “ ties as to rates, time, and transportation, witliout any discritiii- “ nation of any kind in favor of the road or business of either “ of said companies, or adverse to the road or business of any ‘‘ or either of the others.” THE HOADS NOT COMMON PROPERTY. Any rule derived from the consideration of these sections which would have the effect to impose upon tlie one the duties and burdens or debts of the othei’, whicli would render tlie ojie liable for the defaults, failures, or delinquencies of the other, or whicli would consolidate the several corporations, used in constituting the main trunk of the road and its branches, and convert the capital lodged under the protection of the several charters into a common fund, is obviously and manifestly un- warranted in law. Else wh_y are five different corporations, four of them State and one Federal — the Union Pacific — the Leavenworth, Pawnee & Western, alias Kansas Pacific E. D . — the Hannibal and Saint Joseph — the Sioux City and Pacific — and the Central Pacific — provided to accomplish a work which, if it was to be the product of a group of corporations practically consolidated, might better have been committed to a single company at the outset? Why provide in the legislation itself (sec. 7, act 1864, p. 356, 13 Stat.) that ‘‘the failure of au)^ one “ company to comply fully with the conditions and require- “ ments of this act or the act to which this is amendatory shall “ not work a forfeiture of the rights, privileges, or franchises “ of any other company or companies that shall have complied “ with the same;” or why, as in section 16 of the same act, make elaborate provision for the consolidation of these several 13 companies, by which the distinctive rigiits of property invested under tlie shelter of each individual franchise might become converted into a common fund, but that onl}^ by tbe consent of tlie stockholders of all ? That Congress could have contem- plated any construction of these acts which practically consoli- dated the property of these diverse corporations, without pro- viding a common and single management, and merging them into one, with corporate power to administer the entire property, outruns credulity, and is too absurd for discussion. Sucb a construction would be equivalent to a declaration that tbe strongest corporation, the one freest from organic infirmities and under tbe wisest management, should bear the burdens, assume the weaknesses, pay the debts, and become the sponsor of the other, in i*espect to its duties and obligations to the Gov- ernment and the public. We must look, then, for some inter- pretation which, while it will not communize^’’ the vast prop- erty sheltered by these different franchises, will insure such an administration of them as to afford and secure to each equal ‘‘ advantages and facilities as to rates^ time, and transj)ortation, “ without any discrimination of any kind in favor of the road ‘‘ or business of any or^ either of said comqoanies, or adverse to “ the road or business of any or either of the othersP THE PHRASE ‘‘ PRO RATE.” In all the papers referring to this controversy filed in the dc[)artments and in public speeches and memorials to either house of Congress, it is insisted that the Union Pacific is under legal obligation to pro rate^^ with the Kansas Pacific. The ])hrasc recui’S too frequently to call for refei’ence to any partic- ular person or paper. These words are not found in the statute, and whatever they mean, if they are to control us, they must be injected into it by judicial construction. If we are to consider the signification of the words alone, the demand of tbe Kansas Pacific, strictly speakiipg, means this : that the lowest through rate of the Union Pacific from Omaha to Ogden, a distance of 1,032 miles, shall be equallj^ apportioned, mile for mile, over the entire distance from Kansas City to Ogden, a distance c»f 1,261 miles, or 229 miles greater than from Omaha to Ogden. This would compel the 14 Uinon Pacific to carry tlie business of the Kansas Pacific between Clieycnne and Ogden for a less sum ]>er mile than it would receive on its own business east of that point. A simple calculation will sliow that by tliis rule, wliile on its own first- class passengers tlie Union Pacific would receive, say, five cents per mile east of Clieyenne, for tlie same passenger brought to it by the Kansas Pacific it would receive four cents per mile west of Cheyenne, thus forcing upon the Union Pacific a gross discrimination e gainst itself in favor of tlie Kansas Pacific. This construction of the phrase, according to its literal significa- tion, is too obscure to deserve furtlier consideration. The section under consideration must be construed with refer- ence to the ])ractices and usages and recognized modes of busi- ness in vogue in railroad management at the time the act was passed. I assert, as a fact not susceptible of refutation, that the absolute obligation to ‘‘pro rate,” eitlier in its literal signi fication or in the sense ascribed to it by our antagonists, accord- ing to distance, is a thing unknown in railroad management. The apportionment of rates upon no two roads in the United States is made on that basis, except as it is indicated and justi- fied by the character of the roads. ADowance is universally made for difference in grades, difference in curvature, difference in local or thi’ough business, cost of fuel and water and labor, and the numerous elements which enter into the cost of main- tenance and 0})eration of railroads. Kor can it be otherwise, until some process is discovered to equalize what nature has made unequal — to convert mountains into plains, to make crook- edness straight, or in some miraculous manner obliterate the in- equalities inherent in different works of the Creator. The phrase “ pro rate,” then, not being found in the law — not recognized or applied in actual business — and leading to out- rageous discriminations against the Union Pacific, is not to be incorporated into the statute, except by clear and emphatic words, Irresistibly leading to that result. Notwithstanding, it has been repeatedly and often assumed that we are required to pro-rate with the Kansas Pacific, but never argued^ we insist tliat iteration and reiteration not impose upon us that obligation, but that such a duty must be derived from the lam- guage of the statute jxlone. 15 Turning, then, to the statute, it is manifest from its language that it declares the rule of non-discrimination only. In the sense most unfavorable to us it prohibits discrimination against the branches^ or either of them>^ in resp>ect to rates, time, and transportation, even in favor of the main trunk, viz., the Union Pacific. No other rule can possibly be derived from the language used, and the question thus reduces itself to the simple inquiry. Will the apportioment of the through rate claimed by the Kansas Pacific operate as and result in a dis- crimination against the Union Pacific and in favor of tlie Kansas Pacific ? If so, it is as completely within the inhibition of the statute as if against the latter company and in favor of the fonner. It has been said tliat in construing a statute its words must be given their ordinary and obvious import witliout regard to the results involved ; but this is oidy measurably true. Where a literal construction involves consequences palpably not designed by the legislative power, or when, as in this case, the effect, the result, the consequence — viz., discrimination or non- ' discrimination — is made the actual and absolute test of con- struction, the rule invoked has no application. Whatever maj’ l>e the true construction of the statute under consideration, any construction which can be demonstrated to establish a rule whicli would necessarily inflict gross, palpable, and destructive discrimination upon tlie Union Pacific must be not only rejected, but outlawed, as unworthy of serious consideration. CHARACTER OF UNION PACIFIC WEST OF CHEYENNE. Assuming, then, what is a recognized fact of railroad man- agement, that tlie cost of operating and maintaining a railroad depends upon grades, curvature, fuel and water supply, climate, remoteness from base of supplies and material, and other ele- ments not necessary to mention, and bearing in mind that the rate of fare and freight claimed by the Kansas Pacific is a mile age rate of the lowest through competing rate from Omaha to Ogden, I call attention to the following indisputable facts, showing beyond controversy that nearly, if not quite two-thirds, of that rate is earned on the west half of the Union Pacific, viz., that portion traversed by the business of the Kansas Pacific. 16 Tlie cast half of the road is built through tlie Platte V'alley and the Lodge Pole Yalley, along a level plain, witliout curva- ture, and at a gradual and regular ascent of about ten feet per mile. The western lialf crosses three ranges of mountains — the E-ocky Mountain range, tlie Black Hills range, and tlie Wa- satcli range, and encounters the manifold difficulties of opera- tion and maintenance incident to a tnountainous, remote, unin- liabited, storm-swept country. The cliaracter of the two divis- ions of the road is best sliown by tlie following tacts, shown by the map before you, marked “ Schedule B.” The aggre- gate curvature east of Cheyenne is 2,504 degrees ; west of Cheyenne, 21,080 degrees. Maximum grades per mile, east of Cheyenne, thirty-five feet per mile ; west of Cheyenne, ninety feet pei‘ mile. Ca|)acity of standard engine, east of Cheyenne, 22 cars ; west of Cheyenne, 9 cars. Proportion of engine expenses to total operating expenses, east of Cheyenne, 32 per cent.; west of Cheyenne, 51 per cent. Total operating expenses per train per mile, east of Cheyenne, 87 cents ; west of Chey- enne, $1.34. It is a fact conceded by civil engineers that each 21 feet of ascending grade costs as much in operation as one mile of level road, and that 527° of curvature involves an ex- penditure equal to one mile of straight level road. The total ascent from Omaha to Cheyenne, westward, is 5,454 feet, equal to 260 miles of added level road. The total ascent from Chey- enne to Omaha, eastward, is 379 feet, equal to 18 miles of added level road. The total curvature is 2,504°, equal to 5 miles of added level road, making the additional road arising from grade and curvature equal to 283 miles. The total as- cent from Cheyenne to Ogden, westward, equals 6,622 feet, equal to 315 miles of added road. From Ogden to Cheyenne, eastward, the total ascent is 8,279 feet, equal to 394 miles of added road. The total curvature is 21,180°, equal to 40 miles of added road. The entire additional road arising from grade and curvature equals 749 miles, which gives an excess of actual distance arising from grades and curvatures, between Cheyenne and Ogden over between Omaha and Cheyenne, of 466 miles. A very simple calculation, based on these facts, will demon- strate the mathematical and absolutely correct result, that, of the through rate from Omaha to Ogden, move than two-thirds 17 is earned between Cheyenne and Ogden ^ and that to divkie that rate eqtially at Cheyenne vjould leave the loest half of the road not only without profit^ hut with an absolute loss. Yet tliis is tlie exact demand of the Kansas Pacific.. HOW THE RULE DEMANDED BY THE KANSAS RxiCIFIC WILL DIS- CRIMINATE AGAINST THE UNION PACIFIC. The following are fair illustrations of the practical eff(;ct of tlie eonstriiction contended for. The thi-ongli rate on a car load of merchandise is $100. Of this amount $60 is eai-ned west of Cheyenne and $-1:0 east, and the profit of the carriage is $10 west and $10 east. The Kansas Pacific demands that its business be carried over the west iialf of the road at one-lialf the through rate, $50, which is simply the cost of carriage., wliile it receives $10 more on the same business east of Chey- enne than the Union Pacific. Suppose it reduces its rate $10, as it may do, and still receive the Union Pacific rate. This reduction will take tlie business, unless met by the Union Pacific,. To meet it a reduction of $10 on the through rate is made, one-lialf of which, $5, applies to the west lialf of the road, making one-half the through rate $-1:5, at which rate the Kansas Pacific insists its business must be transported under its rule, or in other words, at $5 less than the cost of carria<^»’e. It is easy to see that successive reductions must increase this loss, until in self-defence the through rate, which is determined by the competition of the Pacific; Mail Steamship Company, must be abolished, and the intercontinental business given uj), except upon a limited amount of light and costly freight, thus endangering the solvenc}" and existence itself of the chief member of the Pacific railroad system. Or take another illustration : the cost of carriage of a pas- senger being east of Cheyenne 3 cents per mile, and west of Cheyenne 5 cents per mile, the through rate is fixed at an average of d cents per mile, being 1 cent less than the cost of carriage over that portion of the road traversed by Kansas Pacific passengers, while giving that company 1 cent per mile more east of Cheyenne than received by the Union Pacific, thus enabling it to further cut its rate, to which the Union Pacific must respond by cutting its through rate., one-half of which 18 enures to tlie benefit of the KansMS Paeific, tlins enablino: it to continue tlie process to the destruction of the Union Pacific, thus infii(ttin<^ the grossest discrimination. Again, the througli rate from Omalia or Kansas City to Ogden pel* c-ai*-load of mercliandise, say : sixty ])er cent, of tlie cost of carriage from Omalia to Ogden is imuirred west of Cheyenne, or $-i8.00. Now, suppose the Kansas Pacific, wliicli is left free as to rates, should cut the through rate to $90, it would follow — if the Union Pacific meeds that rate — that hut half the through rate could he charged west of Cheyenne, or $45.00, which is $3 less than the cost of hauling — a loss of that amount. Take the emigrant rate of $45 from Omaha to San Francisco, with uniform i*ate from Kansas City to San Francisco, and ap- ply the Kansas Pacific rata basis of divisions to such rate, and we have as the re'sult $17. ‘25 earmal by Kansas Pacific between Kansas City and Cheyenne, while the Union Pacific will get but $7.05 for the haul from Cheyenne to Ogden over its mountain division. Fifty-four per cent, of $45 earned east of Ogden, or $24.30. Now, if the Union Pacifii^ competes from Kansas City, it must first pay $10.20 to get its passenger to Omaha, which leaves it through rate to Ogden $14.10 — Of which the Kansas Pacific must pay the Union Pacific one-half, or $7 05 Which leaves the Kansas Pacific’s proportion 17 25 $24 30 Og den to Cheyenne, $50. Che^^enne to Omaha, $50. Cheyenne to Kansas City, $50. If the $100 through rate he cut by Kansas Pacific $10, and Union Pacific follows, this is the result: Coat of trampoi'tation. $100 $80 00 Profit. $20 00 45. 45 U. P. 40 K. P. 45 45 U. P. to Ogden. 45 40 K. P. to Ogden. $90 $85 19 This still leaves tlie Union Pacific tliroiigli rate $5 above the Kansas Pacific. To meet this the Union Pacific reduces to $85, witli tliis result : $42 50 $42 50 U. P. $40 K. P. $42 50 $42 50 42 50 U. P. 40 00 K. P. $85 00 $82 50 Kansas Pacific is still $2.50 below the Union Pacific without itself cutting rates f urther. The effect of the construction demanded is l)est illustrated, perhaps, by the following plain statement : A standard engine starts from Omalia and hauls to Cheyenne 22 loaded cars. At Clieyenne it must either drop 13 of these cars and make two trips to haul its train to Ogden, or take on an additional engine of increased powei’, with the manifold in- (treased expenses, to get its train to Ogden. It is obvious the expense mnst be nearly twice as great west as east of Cheyenne. Yet the Kansas Pacific, having the same numl)ei’ of cars at Cheyenne, insists tliat it sliall be hauled to Ogden at the same cost as from Omaha to Cheyenne. This is the lengtli and breadth of their demand, simplj’ stated. The discriminating and destructive operation of the rule con- tended for against the Union Pacific, as well as the falsehood of the alleged discriminations against the Kansas Pacific, is further strikingly set forth in the following letter, tlie import ance of which justifies its incorporation with the l)ody of this statement : Omaha, December 13, 1874. A. J. PoppLETON, Esq., Washington, D. C. : Dear Sir : 1 desire briefly to direct your attention to certain charges of discrimination in Union Pacific passenger rates be- tween Omalia and Ogden and Cheyenne and Ogden, against passengers from Missouri, Kansas, Colorado, etc., made by the press and certain memorialists of St. Louis, and notably in the speech of the Hon. J. B. Chaffee, of Colorado, delivered in the United States Senate, on the thirteenth of last month. Mr. Chaffee says : “ By refusing to pro-rate and give equal advantages to the 20 “ l)raiicli linos, as required by the act of incorporation, all that ‘‘ part of the c.ountry north or south of a direct raih-oad c.onnec.- “ tion with the eastern terminus of tile main line is compelled “ to make connection at (Omaha, for the tariff* rates for passen- (/ers and freight are more from any j) obit loest of Omaha^ at the point of connection of any branchy than from Omaha to “ Oyden. “These unjust, illei^al, and prohihitory discriminations are “ very severely felt hy the people of Colorado, Kansas, Mis- “souri, and all States south of the Ohio I’iver.” 1 am jit loss to conjecture from what sourc-es the houorahle gentleman obtained information on whicdi to hnse these state- ments. Our otficial passenger rates now in force have heen [)uh- lished and in the hands of connecting railroad companies and the public since 1872, and I defy him or any one else to show a single instance in which we have (diarged a higher passenger rate from any ])oint west of Omaha to Ogden than from Omaha to the same destination. Piissenger rates from Kansas City, the eastern terminus of the Kansas Pacitic Kailroad, to the western terminus of the Union Pacific Railroad, (Ogden,) and to all points west thereof to which rates are l>ased on local tariff's, have always heen made way of Omaha, it l)eing twenty-five miles the shorter route, and the sum of such tariffs being less through Om^dia than through Denver from Kansas City to Cheyenne — the common point to both roads. These rates are applied without discrimination in all the ter- ritory referred to by Mr. Chaffee, and are divided between the lines in interest as follows: Via Omaha. Isi Clasf,. 2d Class. Emigrant. Kansas Citv to Omaha $10 50 $10 50 $10 00 Omaha to Cheyenne 31 00 24 00 15 00 Chej^enne to Ogden 4:6 50 ,36 00 25 00 Through rates $88 00 $70 50 $50 00 Via Denver. Isi Class. 2d Class. Emigrant. Kansas City to Cheyenne . ... $4:1 50 $34 50 $25 00 Chejmnne to Ogden 4:6 50 36 00 25 00 Through rates $88 00 $70 50 $50 00 Observe that the rates are the same by both routes, and that the passenger who pays Ids fare from Kansas City to Cheyenne by either the Union Pacific or Kansas Pacific line, and pays again from that point to Ogden, gets his passage at the same cost, regardless of the route hy which he reached Cheyenne, as 21 if he Imr] })iir(;liase(;l n tlirongli ticket from Kansas City to Ogden. These rates neitlier discriminate against the Kansas Pacific, tlie public, nor the GoverntJieiit. But if we a])ply to tins same pas- senger business the imle for dividing rates l)etween tlie Kansas Pacific and Union Pacific contended for l)v the former in Con- gress and in court, namely, a mileage rata between Chey- enne and Ogden of the luxoest through rate hetiueen Omaha and Ogden^ it vill give the following discriminating results against tlie Union Pacific and in favor of the Kansas Pacific: Kansas Oily to Ogden, via Denver. !;>< Class. Kansas City to Cheyenne, K. P. pro- 2d Class. Emigrant. j)ortion $68 56 $51 60 $40 50 Cheyenne to Ogden, U. P. proportion 19 ±4: 18 90 9 45 Through rates $88 00 $70 50 $50 00 To further illustrate the absurdit}’ as well as the rank and rninons disoi-iinination against the Union Pacific Company which the rata, demands of the Kansas Pacific involve, let me again ask your attention to the division of rates which wonld follow the enforcement of such demands. Take for ex- ample existing rates of all classes from St. Lonis to San Fran- cisco, via Omaha, which are now divided thus : St. Louis, to Omaha Isi Class. $16 00 2d Class. $13 00 Emigrant. $10 50 Omaha to Oguen 51 00 40 50 24 30 Ogden to San Fi-an cisco 46 00 34 50 20 TO Through rates $116 00 $88 00 $55 50 Kow apply the mileage rata rule, before refen*ed to, in dividing these rates from St. Louis to San Francisco by the Kansas Pacific route, and it will result thus : St. Louis to Kansas City Ogden to San Francisco, C. P. Isi Class. 2fl Class. Emigrant. . $11 00 89 00 89 00 )- 52 44 27 90 20 95 1 . 19 44 18 90 9 45 33 12 32 20 16 10 S116 00 $88 00 $55 50 Similar comparison of passenger rates and divisions might be made from nearly all principal points in the country with corresponding results, but I think the foregoing are sufficient to demonstrate the iniquity of the Kansas Pacific Company’s “ discriminating rata claims. As you are well aware, it 22 is tlieso unjust demaucls of the latter com])auy wliicli have al- ways barred tlie way in every attempt to liarniouize the rela- tions of tlie two roads. There are other statements as to pas- seiii;-er matters in the Colorado Senator’s speech which are incorrect in point of fact, and otlier statements of fact whicli are ei*roncous in their application, but I have not time now to further refer to tliem. Yours, truly, THOS. L. KIMBALL, Oen'l Passenger and Ticket Agent, U. P. R.R. It is difficmlt to understand how sane men can seriously cdaim tliat a proliibition u])on the Union Pacific not to discriminate against the Kansas Pacific gives that com))any tlie right to liave its tVeightand passengers hauled over that portion of the Union Pacific which the Government itself has recognized as most difficult of consti-uction, maintenance, and operation, at an actual loss. A cdaim tliat we should make a fixed annual con- tribution to the treasury of the Kansas Pacific would be equally just, equally well founded in the law, and would have the merit of intelligibility and frankness. The truth is that this outrageous demand originates in a desperate effort to escape from the consequences of an organic infirmity of their road. The distance from Kansas City to Cheyenne exceeding that from Omaha to Cheyenne by 229 miles, and the line being of‘ an inferior character, it never can compete with the Union Pacific or share in any considerable degree in the through busi- ness, unless by some legislative device its inferiority can be made a burden upon the Union Pacific by com|)elling that com- pany to make good the deficiency in its natural earnings and resources. LEGAL RELATION OF THE KANSAS PACIFIC TO THE UNION PACIFIC. But we deny that the Kansas Pacific, as built, is a branch of the Union Pacific, in any such sense as to entitle it to share the benefits of section 15, act 1864:, as against the main trunk of the latter road. The act of July 1, 1862, which originated the system of Pa- cific railroads, authorized a trunk road from a point on the 100th meridian westward to the eastern boundary of California. From that point eastward to the Alissouri river, at such point 23 as inight l)e designated by tlie President, it autliorized a branch to he built by the Union Pacific Cornjoany. The same section autliorized and i-equired tlie same company to construct a brancli from Sioux City to connect with the Union Pacific at a point not farther west tlian the 100th meridian. We have, then, by this act a trunk road, beginning at the 100th meridian, and extending eastward from the 100th meridian tu Sioux City, Omaha, and Kansas City res[)ectively. Stop[)ing for a moment here, what would have been the (ain- struction of tlie sections out of which this (amtroversy springs if the roads hay taking upon its main trunk a better i*ate than it al- lows the Kansas Pacific. Ko sucfi (piestion could have arisen under the a(',t of 1862, for the reason that no paiaillel road whicli could be in efiect a rival to the main trunk was authorized. The question of discrimination in favor of the trunk line as against a branch could not have arisen. The broadest construction which could have been maintained would have been that the trunkline should not disc,riminate against either of the bramdies in favor of the other, but should treat all alike in (amnections, time, and tariffs. All the branches would have been feeders of the main trunk and none of them rivals to it or any part of it. Tlie claim of the Kansas Pacific is that having been authorized^ not required^ to connect its road with the Union Pacific at a point 270 miles west of its eastern terminus, on the 100th meridian, it may claim not onU equal advantages and facilities with the branches, but with the main trunk. Is it credible that Congress — the United States having a direct pecuniary interest of $27,000,000 and only $6,000,000 in the Kansas Pacific — intended to place the former company where it could be gradually but eftectually de- stroyed, by being compelled to carry the business received tVom and delivei-ed to the Kansas Pacific at a loss ? Ko such result could spring from the act of 1862, and if such obligations are to be established, they must be derived from subsequent legis- lation. By section 9, act 1861:, the Kansas Pacific was authorized to connec.r its road with the Union Pacific, at any point west of the initial point on the lOOtli meridian ; but in making such de- 24 parturo it was expressly provided that it should he “ suhjec^t to all the (‘.onditioiis and restia'ctions of this ac-t.” One of these (conditions was that it should designate its J’onte and file a nia]) thereof witliin three years from the ])assage of the a(ct of 18'02. This it failed to do, and thereby lost tlie right to diverge from its original route, and elected to build to the 100th meridian. By this failure it forfeited tlie I’ight and }H»wer to make its (con- nection with the Union Pacific at any other point than tlie 100th merivlian, and to any advantages and facilities beyond those accruing from a connection at the lOCth meridian. This was held by tlie Secretary of the Interior in Kansas Pacific Railway vs. Union Pacific Railway, (southern branch :) “ The company, “ after the passage of the act of 1864, had its option to go to ‘‘ the lOOtli meridian or to the west of that meridian. It could ‘‘ not do botli. It was oliliged to elect within the three years. “ It did so, and elected to go to the 100th meridian. Having “ done so, it was, as to this subject, functus officio. It could “ not, therefore, change its route without the consent of Con- gross.” Wliatever rights and powers tlie Kansas Pacific possesses in respect to the interchange of business with the Union Pacific at Cheyenne it must derive from subsequent legislation of Con- gress, not accej)ted by the latter comj)any. But three subsequent acts of Congress, viz., the act of July 3, 1866, (14 Stat., p. 79 ;) March 3, 1869, (15 Stat., 324;) June 20, 1874, none of which have been accepted by the Union Pa- cific, touch this question. The first is silent upon the subject of this controversy. The second is relied upon as conferring the rights claimed in the second section by the following language : ‘‘All the provisions of law for the operation of the Union Pa- “ cific Railroad, its branches and connections, as a continuous “ line, without discrimination, shall apply the same as if the “ road from Denver to Cheyenne liad been constructed by the “ Union Pacific Railway Company, eastern division; but noth ‘‘ ing herein shall authorize the said eastern division to operate “ the road or fix the rates of tariff for the Denver Pacific.” This section, in express language, enjoins upon the Union Pacific compliance only with that portion of sections 12 and 15 which requires operation as a “ continuous line,” conceding to 2o the Denver Pncific the ])Ower to opei’ate its road in its own way and to fix its own tariffs. As tlie act of 1874 does not take away this right, it is manifest tliat there can be no reciprocity in tiie obligations sought to be imposed on us. The utmost, tlien, that can be claimed, is, that we should receive and forward tlie business of tliose two roads on the same terms as the business of tlie otliei’ branches. So far as aii}^ obligation to receive and forward tlieir l)usiness on tlie same terms and conditions as the business of the main truidv is concerned, this legislation fails to connect the roads on tlie terms of mutual tariffs and operation. The Denver Pacific has unlimited control of its own road and tariffs. Keither tlie Union Pacific nor Kansas Pacific can dictate its operation or its tariffs. The connection is broken. The Kan- sas Pacific has not connected itself with the Union Pacific. It is neither a hranch nor connection of the Union Pacific, and can only i-eacli it over the Denver Pacific, which is a territoi-ial cor- poration, not created by Congress, and to which is expressly conceded, by act of Congress, exclusive control of its own oper- ation and tariffs. But it has been said we accepted the act of 1864, the ninth section of which authorized a connection west of the lOOtli meridian. While this may be time, though formal acceptance was never made, it has been shown that the Kansas Pacific failed to make its connection under that act and elected to con- nect at the 100th meridian. This present connection is made solely by authority of the acts of July 3, 1866, and March 3, 1869, th(5 provisions of none of which has the Union Pacific Company accejited, expressly or by necessary implication. The ac.t of June 20, 1874, which contains a legislative declaration that the Denver Pacific shall be deemed and taken to be part of the Kansas Pacific, is of the same character. All are sought to he im])Osed upon the Union Pacific without its assent, and if so construed as to impair and diminish the value of the pro- perty invested under its franchise, under late decisions of the Supreme Court they are clearly void We say, then, we have never consented that the Kansas Pacific should beset up as a rival parallel trunk road, to compete for the business of our truidv line, much less to shut us off from competition with it. That its rights in respect to the interchange of business are no 26 oTCuter tliaii if it liad built its road to the lOOtli meridian, as it eloc.ted to do under the aet of 186d, by failing to comply with tlie nec(^ssary c(jnditions to enable it to do otluirwise. That is to say^ vne are reguired to receive and forward its business upon as favorable terms as we receive that of other branches — no more^ no less. We are not repaired to erect it into a rival of the trank line., by giving it advantages not taken for or en- joyed by ourselves. UNION PACIFIC NOT GUILTY OF VIOLATING THE PROVISIONS OF ITS CHARTER. We tlierel*ore respectfnl.l}’ insist that we violate no provision of the statutes by whicli we are governed, so long as we extend to the Kansas Pacific the same facilities in respect to rates., time., and transportation as are extended to the other branches. Or taking the extreme view of tliat company, that we cannot discriminate in our own favor as against them and are not re- quired to discriminate in their favor against ourselves, we are guilty of no violation of the law so long as we impose on their business ivest of Cheyenne only such a rate as equals that pro - qwrtion of oar through rate earned west of Cheyenne, which must be greater than the amount earned east of Cheyenne by reason of the greater cost and expense of constructing, maintain- ing, and ogjerating the west half of the road. This map be demonstrated to be not less than tvjo-thirds the through rate. IS THERE AN ADEQUATE LEGAL REMEDY FOR ALLEGED VIOLATIONS ? The acts charged against the Union Pacific are, if true, viola- tions of the law to the iujuiy and damage of the Kansas Pacific Kailway Company. That it holds an adequate legal remedy for all such breaches of its rights seems too plain to call for discussion. Congress, mainly at the instance of that company, has singled out the Union Pacific, and aimed at it remedial and penal statutes not authorized against any other corporation in existence. They have framed statutes to meet the precise difficulties complained of. Congress has enacted them ; and yet that company is still at the doors of the national legislature, clamoring for further, and, as they think, more stringent legis- lation. Yet they have availed themselves of none already 27 enacted. The act of Marcli 3, 1873, providing; among other things, that “ tlie proper circuit court of the United States shall have jurisdiction to liear and detennine all cases of manda- “ mus to (compel said Union Pacilic Railroad Company to “ opci'ate its road as required by law,” was passed at their request, has been successfully invoked in another instance, lias received a judictial construction b}^ tlie court of last resort, and the power of any private person to institute tlie proceedings on behalf of the public fully sustained. There is a plain, sum- mary, and adequate remedy provided to meet the exact case. The statute of June 20, 1871:, highly penal in its character, was enacted in the same way, framtul by the Kansas Pacific, aimed at the Union Pacific, and passed at its instance; but none of its jiruvisions invoked, notwithstanding the lapse of three 3U3ars’ time. But we insist that the Kansas Pacific Company, at least, is estopped from asserting that any impediment exists to an en- forcement of the law on its behalf. On the 29th of Se|)tember, 1871:, the two companies entered into a written agreement, fixing the division of rates on business interchanged at Cheyenne, and providing among other things that said agreement should not be in prejudice of the legal rights of either party, but that “ the le- “ gal rights and status of the resgoective companies shall he the “ subject of an amicable legal adjudication!'^ On the same dav the president of that company, in a letter to the president of the Union Pacific Company, said : 1 will at once place a cop}^ of the “ same (the agreement) in possession of the general solicitor of “ this compaiijq with instructions to confer with the proper officer “ of your company, who, 1 trust, will be instructed by you to ex- “ pedite the adjudic^ation in conformity with the agreement.” A copy of the contract and letter is appended, marked “ Exhibit “ B.” In pursuance of this agreement, on the 21st of January, 1875, a bill in equity was filed by that compaity and the Denver Pacific Railway A Telegraph Company in the circuit court of the United States for the district of Nebraska, praying an in- junction against the Union Pacific Companjq restraining it from continuing its alleged discriminations. An answer to the merits was filed March 15, 1875. No replication was filed to this answer, and thus the matter rested until Maj^ 9, 1877 — 28 more than two years — wlien exceptions to certaiti [)oi’tions of the answer were filed. There was no reason for this delay, ex- cept the failure of the Kansas Pacific to press tlie suit Ijy excepting at once, setting the case for liearing on hill and answer, or re})lying and proceeding to proof. The excepticnis filed i*ais(' two questions : first, whetlier the Kansas Pacific and Denver Pacific constitute a branch of tlie Union Pacific ; sec- ond, is tlie inij)osition of an increased rate on the Kansas Pacific west of Cheyenne, l)ased solely on tlie increased cost of con- struction, maintenance, and operation of that part of the road, a discrimination against the Kansas Pacific? These questions were fully and elal)orately argued on both sides on the 15th of Noveinlx'r, submitted to tlie coui-t, and are now under advise- ment -all of whic.h full}’' a])[)ears from a certified transcript of said cause herewith tiled, and marked “Schedule A.” It is re- spectfullv suhmitted that it does not lie in the mouth of the Kansas Pacntic to complain of a lack of remedies to redress its alleged wrongs. That so far as it is concerned, no impediments exist to a complete, speedy, summary, and adequate vindication of its rights, and that by its own action it is estop|)ed from mak- ing that complaint. THE ALLEGED GREIYAXCE A PRIVATE ONE. The complaint of the Kansas Pacific is of a private injury alone. It has no warrant, if it was so inclined, to assume a protectorate of the public intei*est. Its charge is“ that we do not make a fair division of rates; that they ai-e so unfair as to become unlawful. The public makes no specitic com- plaint. The Government and the pulilic find transportation over the Union Pacific and Central Pacific roads at the lowest competing rates — rates not determined liy considerations local to the road, but by the competition of the Pacific Mail Steam- ship Comipany. But as that transportation is not over the Kansas Pacific, that fact decreases their earnings. In other words, the Government and the public get its transportation, but the treasuiy of the Kansas Pacific remains empty. The claim is that we must divide the through business with that company by carrying a part of it west of Cheyenne at a loss, for 29 its benefit. The evident pnr])Ose of tlie Pacnfie railroad acts, as develo])ed from every line and section tliereof, was to create a single trunk through line, with short branches at either end for the convenienc.e of particular localities. The Government and general public*, would have been as well served if no branches ba<] existed. Xo subsidies were granted the branches west of the 100th meridian, and this marks tlie line of the in- tei’est of tlie Government and the public in them. It was not intended to set up rivals to compete for the through luisi- ness of the main trunk, thus jeo[)ardizing the immense loans made to the trunk com])anies. To do this was in conti'avention of tlie manifest policy of the Government, and necessarily endang(u*ed the re[)ayment of its loans by making it impossilile for its delitors to I'epay them out of a divided liusiness. No hnancier loans money to a debtor who, he knows, has not the ability to pay bis debts, and to im|)ute to Congress tlie purpose of embarking vast loans in the trunk companies, and incor- porating into such loans provisions rendering payment im- possible, is to stultify the national Government. The assertion may be safely ventured that, if the construction contended for by the Kansas Pacific prevails, the power of making through rates will pass into the hands of the Kansas Pacific, and the onlv altei-native of the trunk lines will be to abandon thi*ough business and make a struggle for existence on local business alone. K. departure from the policy of the original act in respect to the trunk lines will threaten them with bankruptcy, and render the ultimate repayment of their large subsidies ex- tremely doubtful. It is difficult to conceive that tlie Govern- ment can be guilty of the immeasurable folly of destroying the capacity of its largest debtors to pay their debts. THE UNIOH PACIFIC NOT THE CAUSE OF THE KANSAS PACIFIc’s BANK- RUPTCY. The statement persistently made and industriously circulated by the first-mortgage bondholders, that failure of the Union Pacific Company to comply with its lawful obligations is the cause of the bankruptcy of the Kansas Pacific, is finally repeated in the late annual report of the Secretary- of the Interior, in wdiich (page 36) he says : 30 “ In a ])rinte(] paper addi-es.sed l:o me on t, lie 21st of April last “ by the (diairman and secretary ota coniiriittee of nine first-mort- “ gage bondholders, it is alleged that said failure to pay interest “ was mainly due to the fact that the Union Pacific Railroad “ Comjiany has persistently refused to transpoi’t passengei*s and “ freight in connection with the Kansas Pacific; and Denver Pa- “ cific; Companies on the terms and in the manner required by “ the acts of 1st July, 1862, 2d July, 1864-, 3d Marcdi, 1869, “ and 20th June, 187J.” This is in flat conflict with the re[)resentations of the officers of that company repeatedly made, both publicly and [irivately. In a circular addressed to the holders of the land-grant bunds of the Kansas Pacific Com|)any by AdoliJins Meyer, late jiresi- dent of that conqiany, under date of November 2, 1876, he says: “ The Kansas Pacific Railway Compaii}^ having been com- “ pelled to default on the interest-coiqions of their first-mortgaire “ hou(U^ owing to the nonjyaijment of a large sum of money due “ said comgiany by Government for the transportation of mails, “ troops, supjjlies, i&c., {notunthstajiding the decision of the 8u- preme Court of the United States that such claims should he petid,) ctnd also a falling off in business caused by the general “ dep>ression of commercial affairs, and farther, the competition “ of a new railroad, I deem it my duty to land-grant bondholders “ to place before them some information on the present state of “ the land-grant under my charge as trustee.” And oil the llth of .October, 1876, the same person, not yet having resigned the office of president of the Kansas Pacific Company, in his official capacity addressed to the Secretary of the Treasury a letter, in which, in hitter, indignant, and scath- ing terms he arraigns the Government as the cause of the bank- ruptcy of his company, and denounces its treatment in unnieas- nred language. A complete copy of this letter is hereto append- ed, marked “Exhibit C,” and its careful perusal is commended to all who would attribute the woes of the Kansas Pacific to tlie Union Pacific Company. As illustrating the increased cost of operating the mountain divisions of a railroad, I append Exhibit D, being an extract from a report made by a committee of the General Assembly of California. The facts and statements of this extract apply with 31 equal force to the luouutain division of the Union Pacific. 1 also append Exhibit E, being letter of General Freight Agent of the Union Pacific, showing comparative rates per mile on the two roads upon the different classes of freights. It is therefore respectfully but (confidently submitted that in view of the foregoing facts and reasons the following are fair and conclusive answers to the points made against the Union Pacific Company, and that it is shown beyond controvers}" that no legal impediments exist to the enforcement of an}' pul)lic or private duty or obligation of that company : First. The Union Pacificc Company has always been ready, and is mnv ready, to make rates which shall not discriminate against tlie Kansas Pacific, but it cannot pro-rate mile for mile on the basis of its lowest through rate from Omaha to Ogden, as demanded by the Kansas Pacific, because of the increased cost and expense of building, maintaining, and o[)erating the west half of its road — that [>art between Ch(cyenne and Ogden. Second. The Government loaned on the west half three times the subsidy loaned on the east half, on account of the iri*eater cost of (construction over the Black Hills, the Rocky Mountains, and the Wasat(cli Mountains. The west half three times as much in construction, and costs tiuice as much in maintenance and operation as tlie east half. Third. More than tivo-thirds of the throuo:h rate from Omaha c!> to Ogden is earned on the west half of the Union Pacific, but it has ofiered and now oilers to divide the through rate with the Kansas Pacific on that basis. That company refuses the oUer, and demands one-half of the through rate, or a joro rata mile for mile, which is more than half t\\Q through rate. Fourth. The law, if applicable at all in favor of the Kansas Pacific, (which the Union Pacific denies,) simply declares the rule of non-discrimination. One-half the through rate, or a 2 :>ro rata mile for mile, would be gross discrimination against the Union Pacific. Fifth. Until it can be demonstrated that a railroad with 32 moimtnin grades and cairves c-aii 1)0 l)»iilt and operatcid as cJienplj as a straiglit and level road of equal lengthy it is not only against law, hut unjust^ hieqaiUthle^ and contrary to all business 2 ^'>"^Gedent and usage^ to requii-e tlu; Union Panufic to irmko with the Kansas Pacufie. an e(pial division of its low('st through rate, or to rata mile for mile. Sixth. The Govei’iiment holds a, see-ond moi'tgage on the Union Pacilie for $27,000,000, and aecrned unpaid in- terest, loaned in aid of its ('onstriietiou. Its li(*n on the Kansas Paeifie, for like subsidies and acauaied unpaid interest is $0,30t),- 000. Can it afford to jeopardize the greatei- sum hy aiauing the Kansas Pacific; with powcu- to c.om[)el the Union Pacj’Hc; to carry freight and passengers at a loss ? Seventh. The Union Pacific; is not responsihle foi- the hank- ru[)tc;y of the Kansas Pac;ific. The officers of that company as- cribe its hankruptc;y to its treatment hy the United States and the com 2 )etltion of a rival 2 ^ ar all el railroad.^ viz., the Atchison, Topeka and Santa Fe Kailroad, whic;li, it is well known, has obtained most of the business of Colorado and New Mexico. Finally. The duty and obligation of the Union Pacific Coinyyany is a question of law. For any breach thereof the fourth section of the act of Mai’ch 3, 1873, affords, and was passed to afford, a summary remedy by mandamus. The act of June 20, 187J, affords a cumulative remedy, by q^'^^Fshing violations by fine and imqyrisonment^ and imqyosing treble dam- ages. Why do they not go to the courts rather than to Congress for a construction of the law? An amicable suit, instituted hy agreement of parties, presenting clearly and sharply the vital questions dividing the two companies, has been argued and sub- mitted, and is now under advisement for speedy decision. Is not the Kansas Pacific Company estopped from denying that it has a qTain., adequate.^ and summary remedy of its own choice and selection f All of which is respectfully submitted. A. J. POPPLETON, Gen'l AtVy U. P. R.B. Co. EXHIBITS. “Exhibit A.” Union Pacific Kailroad Co., General Freight Department, Omaha, January 1, 1872. Special Orders No. 4. Hereafter tlie rates upon freight lietween an}^ two local sta- tions upon tlie line of this road will not exceed the rates between Omaha and the most westerly of the two stations in question, as given in local tariffs dated June 1, 1870, and August 7, 1871. Sliould the rates, as given in the printed tariffs, in any case ex- ceed these, agents will use tlie Omaha rates in billing, and note the words “Omaha Hate” upon the way-bill, as explanation. For instance, the rate upon grain in car-load lots, between Fremont and Bryan, as given in tariff, dated April 4, 1870, is $2.30 per 100 pounds, l)ut as the I'ate l)etween Omaha and Bryan, as given in tariff dated June 1, 1870, is but $1.72, the $1.72 rate will be used in billing from Fretnont to Bryan, the explanation being given upon way-bill that “Omaha Hate” is used. E. P. VINING, Gen' I Freight Agent. Approved : T. E. SICKLES, General Sup't. “ Exhibit B.” New York, August 3, 1874- ■ Robt. E. Carr, Esq., Brest. Kansas Pacific R. R. Go . , St. Louis, Mo. : Dear Sir: The Executive Committee of the U. P. H. H. Co. has received and duly considered the proposition for an inter- change of business at Cheyenne between the Denver Pacific and the Union Pacific railroads, which was handed to Mr. Sickels at St. Louis on the 17th instant, by Prest. Hobert E. Carr, on be- half of the K. P. H. H. Co. Actuated by the strongest desire to comply to the fullest ex- tent with all legal obligations imposed on tliis company, and at the same time aiming to afford to the public tiie largest amount 34 of accommodation consistent with a dne regard for tlie protec- tion of the interests of the Government in this road, and of the interest of the liolders of the securities of this company, the Executive Committee is compelled to decline assent to the pro- position referred to as a whole, but respectfully submits the following ]>ro))osition, which is regarded by the committee to he more favoral)le to the Kansas Pacific E-. R. Co. than either the legal obligations im[)osed on tliis company or a strict com- pliance with the practice of railroads interchanging business would require. 1. The companies agree to receive from and give to each other with promptness and despatch all freights, passengers and express goods and mails going to and coming from their respe(;tive lines, and to give the same facilities and accom- modation to all such business as they do to business on their own line, providing for passengers good and sufficient room both in coaches and Pullman sleeping-cars when re- quired. 2. The Union Pacific Company to receive for the transportation of passengers and freight l)etwecn Cheyenne and Ogden going over the Denver Pacific and Kansas Pacific Railroads six-tenths of its through rate estalfiished from tini(3 to time by the Union Pacific. Conipany on like freight and ])assengers passing be- tween the same or corresponding points. 3. On all business between Omaha and Colorado, passing wholly or in part over the Denver Pacific railroad, the rate to be divided between the two roads per mile as made up, and in making up the mileage each mile of the Union Pacific to be taken and considered as one mile, and each mile of the Denver Pacific as one mile and six-tenths of a mile. Should tlie foregoing proposition be accepted by your company, it is respectfully suggested that details may be prepared by the transportation officers of the two companies, and when ap- proved they may be embodied in a formal contract. Very truly yours, SIDNEY DILLON, President. Dexyee, September 29, 1874; The above proposition of Mr. Dillon for a settlement of the division of business between the Union and Kansas Pacific railroads is accepted by the respective companies, and is con- sidered as binding from this date; it being further stipulated and agreed that the legal rights and status of the respective companies shall be the subject of an amicable legal adjudica- 35 tion, the foregoing arrangenieiit to he binding on tlie respective companies until such legal adjudication sliall be liad. . SIDNEY DILLON, President U. P. R.R. Co. ROBERT E. CARR, President K. P. R.R. Co. Kansas City, September 29, 1871. Sidney Dillon, Esq., President : Dear Sir: Referring to the agreement made tliis day re- specting the adjudication of matters in dispute l)et\veen the Union Pacific Railroad Company and the Kansas Pacific Rail- way Compan}", I will at once place a copy of the same in pos- session of the general solicitor of this cojnpany, with instruc- tions to confer witli the projier officer of your com|)any, who I trust will be instructed by you to expedite the adjudication in conformity with tlie agreement. Very respectfully, ROBERT E. CARR, President. “Exhibit C.” Kansas Pacific Railway Company, President’s Office, St. Louis, October 1I?A, 1876. Sir: The directors of this company, after consultation, have concluded that tlie condition and necessities of the company should be made known to you, and through you to the president, to the end tliat, if you shall find it to be in your power to pay for the United States the moneys due to this company, you will do so, and thus relieve the company from impending forfeitures. Three years ago the United States suspended payment to the company for services provided to be performed by the several acts of Congress. The want of the money compelled the com- jjaii}’ to ask indulgence of its bondholders for a time with the hope that the Government would not long maintain its attitude of non-payment. A large majority of the bondholders con- sented ; some did not, and have brought suit. On the first of November next a large payment will be due for interest on the first-mortgage bonds. Heretofore, in emergencies of this kind, the directors have been enabled to borrow money, partly on their own credit and partly on credit of the company, to meet such pressing demands; but within the last three months suits have been brought by the United States, for the benefit of an informer, against the company and most of its directors, claiming some ten million dollars. We are advised that such suits could not 36 Imve V)een instituted witlioiit tlie co-o])eration of tlie Administra- tion, and were nineli amazed that the suits were l)ronght. The directors of tlie com])any cannot withliold from you an expi’ession of their o])inion tliat tlie suits are an unmitigated outi'age. The astonishing sj^ectacle is presented of the largest creditor of the c.ompany seeking, by jienal action, to utterly de- stroy the credit of the company and all the individuals who are interested in it exce])t the first-mortgage bondholders. The credit of the com])any is gone, and the only wonder is that the ])orsonal credit of the directors has not been sacrificed also. With the manifestation of hostility winch the Government has sliown against the com]:>any in the last three years, the directors are unwilling to lend further aid in support of the company, and unless the Government will pay the moneys now due, amounting, as per statement below, to $485,387.50, to be ap- plied to the payment of interest on the first-mortgage bonds, I do not see how it is possible to ])revent a default on the first of November next, the consecpiences of which no one can now fore- see. I hope that the President will order the money to be paid, if you do not feel justified in doing so. I beg you to understand that it is not out of any personal dis- res]:iect to yourself or to the President that I have thought it a duty to write so plainly as I have respecting the action of the Government towards this company. When it is remembered that the company constructed nearly 700 miles of railroad, for the most part through a hostile Indian country, wdth money aid from the Government for but 384 miles of such road, of all of which, and of more than 200 miles of branch and leased roads operated by the company in addition, the Government claims and has had the primary use for the last three years, without paying according to contract, mnst not all just persons hold with the company that the action of the Gov- ernment has been unjust and oppressive to the last degree? The company has endeavored to come to an amicable settle- ment with the Government, but all its appeals have been disre- garded ; and to further cripple it, one law after another has been passed to its great injury. We feel that the Government is dis- honored in refusing to pay in accordance with its contract, ex- pounded by its own court. All the company desired or ex- pected was that its contract with the Government should be carried out. Without this it cannot survive. It does appear, indeed, that if the Government had been determined to reduce the company to bankruptcy, it could not have taken more ef- fective measures to accomplish it. Again I beg you to come to the relief of the company, di- rect the payment of what the Supreme Court of the United 37 States lias, in the Union Pacific suit, in efiFect decided to be due to the company, and save it from impending disaster. Very respectfully, your obedient servant, ADOLPHUS ^lEIER, President. Hon. Lot. Morrill, Secretary of the Treasury., Washington, D. C. Note : The total amount due from Government up to Oc- tober 1, 1876, is 8970,775 00 Less half the amount to be retained as ]ier acts of Congj-ess 4:85,387 50 Leaving the amount due this company in cash. . . .84:85,387 50 Besides the full amounts due on tlie Arkansas Valley and Junction Citv and Fort Kearney Kailwavs, being about 880,000. ADOLPHUS MEIER, President. “ Exhibit D.” Comparative cost of operating the mountain and valley divisions of the Central Pacific Pailroad. It appeared to be clearly proved that the cost of operating the mountain division of the Central Pacific Pailroad was from five to six times that of the valley divisions. From the evidence it appears tlie prominent feature of the increased cost is the in- creased })Ower required, and actually used, in doing the business of the road on the mountain division. Trains of forty -five load- ed freight-cars arriving at Pocklin, the first eastern station of that division, and drawn by one engine of medium weight and power, requires to be divided up into five trains of nine cars each, haviitg an engine of larger power, before it can be lifted over the mountain from Pocklin to Truckee. Here is at once five times the expense of handling a given number of cars en- tailed upon the management over and above that incurred in the valleys. But a severe and additional expense must also enter into the calculation from the fact that these larger engines tear and destroy the track in a much-increased ratio; that the use of brake-power upon the train, in consequence of high grades, fiattens wheels and grinds the rail, and that the strain on the beds and frames of cars demand a larger element of re- pairs than anywhere else on the line — swelling the increased cost of handling the traffic of the road from five to seven times that entailed in the valleys. AVhen this comparison is applied to the charges actually made, it will* be seen that, as sev’ere as 38 are the natural difficulties, the cuinpaiiy require the throuorli traffic to bear a very large share of the expense of doing the local luisincss uj^on tliat division. From the engineering ex- ])erts on the stand the committee gatliered interesting corrobo- ration of the main facts relating to tliis increased co&t. It ap- pears that experience and calculati<»n liave demonstrated tliat for every rise of twenyv feet in a mile the work required to over- come tlie same is equal to the traversing of an additional mile of level line. In other words/ one mile of road with a grade of twenty feet is equal to two miles of level road. This is a rule now universally admitted, and not at all depending upon the testimony of any individual. Exhibit E.” Uxiox Pacific Railroad Company, General Ereight Department, Omaha, Dec . 13 ^//, 1877 . Dear Sir: In accordance with your request, I give below tig- ures which show the difference between our local rates from Cheyenne to Ogden, and the proportion between Cheyenne and Ogden of the through rates from San Francisco, this proportion being tigured upon 'd. pro rata mileage basis ; a basis wliich is, as I shall show, wholly untenable, if the character of the road between Ogden and Cheyenne be compared with that of the re- mainder of the line. The difference between the rates per ton per mile charged re- spectively by the Union Pacilic and Denver Pacific Railroads on their local business is also shown in the following state- ment, i. e.: The present through rates, Omaha to San i Francisco, are r ■ Of -which a pro rata proportion between j Chevenne and Ogden gires j Being rate per ton per n^e of i Local rates between Cheyenne and Ogden are. . Kate per ton per mile on same : Local rates from Cheyenne to Denver are Kate per ton per mile on same ; Difference in rate per ton per mile between i OUT local rate and the pro rata proportion ; of through rate , Excess per ton per mile charged by Denver ; Pacific Kailroad over that of the Enion‘| Pacific Kailroad in local rates X X 'x X X X X 1 X ' X i : 50 $3 75 i $2 75 1 $2 25 20 1 00 ' 73 59 04.6 03.9 1 02.8 02.3 19 1 91 1 [ 1 63 1 42 OS. 4 07.4 I ’ 06.3 05.5 00 75 50 1 40 18.8 14.1 ; ! 09.4 1 07.5 03.8 03.5 j 03.5 : 03.2 10.4 06.7 i 03.1 1 1 02 39 There are some differences in the classifications used, but the above figures form as fair a basis for comparison as can be made. In tlie above statement the proportion of the through rate from Omalia to San Francisco earned between Cheyenne and Ogden is given as i |\4 of the through rate, after deducting tlie charge for transfer across the Bay of San Francisco of 5 cents per hundred pounds. In reality, however, tlie proportion earned between Cheyenne and Ogden is much greater than as the cost of liaiiling freight between those two points is much greater than upon any other portion of the Union Pacific Bailroad. From Ogden to Cheyenne the road crosses three mountain / ranges, viz., the Wahsatch mountains, the main range of the Bocky Mountains, and the eastern range between Cheyenne and Laramie, sometimes called the Black Hills. Tlie ranges are crossed at great elevations and by very heavy grades, the elevation of the summit in each case being 7,835 feet, 7,030 feet, and 8,2-12 feet above the level of the sea. The adverse grade met in going from Ogden to Cheyenne amounts to about 8,000 feet, or over one and a half miles. It is generally admitted that each 20 feet of elevation costs as much as 1 mile of haul upon level grade. If this allowance be made, the cost of haul between Cheyenne and Ogden (516 miles) is equal to a haul of 900 miles upon a comparatively level road, such as the Kansas Pacific or the eastern end of the Union Pacific. The cost of haul is still further increased by the sharp curves met while crossing the mountains. The experience of the past winter has shown that extremely heavy expenditures will l)c necessary to protect this portion of the road against snow during nearly half of the year. Upon the remainder of our road comparatively little trouble is experienced. If we had a large local business upon the western end of our road it would lielp to pay this extra expense, l)ut tlie fact is that but very little business originates upon it, and the expense of keeping up tlie road must be borne entirely by our through business. AVhile the eastern end of the road is being rapidly settled, this western half is almost without inhabitants. No land has lieen sold by the company here, and much of the counti*}^ is p r o b a b 1 y u n i n 1 1 a b i t a b 1 e . If all the facts are taken into consideration, I think that the real cost of hauling freight over the 516 miles between Chey- enne and Ogden is equal to the cost of hauling twice that dis- 40 tance over tlie nearly level and straight road cast of the moiin tains. Notwitlistanding the great difference between the cliaracter of onr line west of tl)e Kocky Mountains and that of the Kansas Pacific or other line east of that range, we have kept our local rates, as well as those for'onr throngli business, down to as low rates per ton per mile as are charged by the Kansas Pacific Pailway, as may be seen by the following comparison : 1st class. 2d class. 1 03 •J1 'o % 4th class. Kates between Ogden and Cheyenne 1 Kates between Kansas City and Denvei* $2 1‘) 2 40 $1 91 2 00 $1 03 1 75 $1 42 1 40 It may also be s^ud that at Denver tliere is competition for freight business, wliile between Cheyenne and Ogden there is no competition whatever. In view of tlie above facts, I am at a loss to see liow the .Kansas Pacific Railway Company, Denver Pacific Railway Company, or an}" other company or individual, can complain with justice of our rates between Ogden and Cheyenne. Since the completion of the Union Pacific and Central Pacific Railroads the average rate charged per ton per mile has been steadily reduced. A still greater reduction may be made upon some classes of' goods, upon which a very low rate is necessary in competition with water routes, if the freight can all go, as heretofore, over the line of our road. Should any material portion of it be diverted at Cheyenne, or any other point, our revenue would be so affected as to render any further reduction impossible. Should such a division of our legitimate business take place, it would probably prove more remunerative to us to cease our active competition with the clipper lines, via the Horn, upon the heavy freight which we are now sharing with them, and, by carrying only first-class fredght, be enabled to raise our average rate per ton per mile. Any action which should compel us to haul freight over the unsettled, mountainous, and expensive portion of our line, and then deliver the goods to some other company to haul over a smooth and well-settled country, and which should compel a division of rates upon a pro ra,ta or other similar basis, could not but be so disastrous to us as to render the Union Pacific Railroad wholly unremunerative. Such a consequence would affect not only the stock and bond- 41 holders of the company, but would reacli tlie whole country, in rendering the ultimate redemption of the bonds given by Gov- ernment impossible. We have hoped that tlie bulk of the business between China and Japan, upon one side, and Europe on the other, would eventually seek the x\merican overland route. The prospects of reacdiing this end are becoming more and more encouraging, and before long this business will largely seek tliis route, if it is not killed in its infancy by unwise legislation and interfer- ence with the laws of trade. No road m the United States gives up its business to a rival after hauling over half the length of its road. None of tlie eastern roads ask or expect us to ]Dro-rate with them, but all liave freely consented to give us about 50 per cent, more than we would be entitled to upon sucli a basis. They have not consented to tliis because of lack of competi- tion, as we meet with as severe competition by the water route as any road in the c.ountry can meet from a rival line; but simply because the cliaracteristics of the western end of our road entitle us in justice to a much greater rate per ton per mile than proves a fair compensation for tlicm. You are undoubtedly as well a(;quainted with the foregoing facts as myself, but I have stated them merely tiiat the reasons for my assertion, that much more tluin 'a pro rata proportion of the through rates was earned upon that portion of our road be- tween Ogden and Cheyenne, might be clearly shown. Yours, truly. A. J. PoppLETON, Esq., Attorney Union Pacific Railroad. E. P. VINING,. General Freight Agent. I r i t ‘ ti - IT . . •V» ^ t"^ J ■ / .* ’ ’ ' ’“i »’vf^ UNIVERSrTY OF ILLINOIS-URBANA 30112 09606639