The New York herald., 1869-06-28
THE UNION PACIFIC RAILROAD.

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Rsport 10 President Grant from Commissioners
nIOrris-Failure OF the Company to Keep
Faith with the Governnent-The Road Not
a First Class One-Its Probable Sale and
Heavy Loss 10 the United States-Sugses-
lions Made.
Mr.. Isaac N Morris, one OF the commissioners
appointed to examine the unaccepted pornons Of the
Union Pacinc Railroad, has made a report to the
President, IN which, after giving history Of its con-
structon and its present condition, he makes the
following statements and suggestions which will be
found Of curious interest to the public. He says
The charter OF the company provides that these
bonds should be first lien on the road. rolnng
stock, &C.; that no more than every alternate Sec
t0n or land for ten miles each side Of the road
should be given and that payment OF bonds should
only be made when forty miles were finished No
PERMISSION conferred on the company to issue
mortgage bonds at NIL. In TINS case as In similar
ones, the company went back to Congress- not to
surrender any right they had acqu,red-f0r corpora
tons never do thatbut 10 ask additional grants and
privileges. They asked that the government bonds
DC made q second lien upon the road and that they
be allowed to issue mortgage bonds in amount equal
70 government bonds. and that these mortgage
ponds issued by themselves, should be the first lien;
Shat they should have every alternate section OF land
for twenty miles each side OF the road instead of
twenty miles OF road was DONE instead of when each
I0rty. The legislative body most unfortunately for
be a sale OF the road on the company's mortgage
bonds, which are first lien, and the government
Will get nothing unless II prevents itself being made
party to the proceedings and thus forces settle
ment or compromise, which, however, would
amount 10 ittleor nothing in the end for 1t would
yield everything In the controversy.
Ten or fifteen millions OF the company's mortgage
bonds will fall INTO The hands Of some one; how
be imagined. The interest will not be paid, the
bonds will be foreclosed and who to bid against
the holder OF them, representing as he viii, pow
erful moneyed INTEREST," No one. The government
cannot do 1t. II owned the road ninety per cent
OF Its earnings would be stolen and It would soon
IN. 1nga 10
amount OF her bonds the holders OF the major part
OF the mortgage bonds who viii not be slirewd
capitalists but unsuspecting widows and MINORS.
Will lose from fifty TO seventydve per cent their
bonds, because they VIII only receive upon them
only writing here the experience and his
tory OF the past and what interest prompts
operate the road or not many believe it is not their
purpose to do so the result will be substantially the
same. The great object WIN be TO get clear of the
government lien by foreclosure and sale under the
mortgage bonds This will be done unless the gov
ernment as have already suggested, refuses to
alloy itself to be made party to the chancery pro-
Ceedings, unless the suggestions contained in the
following paragraph are acted on. They are OF the
highest Importance TO the whole country
The amendatory act or July 2, 1894 subordinates
the government lien secured by the charter to the
mortgage bonds issued by the company. The
twenty-secOnd and last section OF that act declares
peal this act.". The words 'ht any timer may per-
courts might hold even doubt ths) that thus salu-
tary protective clause would not apply alter the
completion completion Of the road, or more certainly after It's
there Is no question but 1t follows the mortgage
bonds wherever they go. NO matter In whose hands
the bonds are found the plea that they are held by
innocent parties often interposed, cannot avail
The purchaser is bound to take notice OF the law
bonds, as much SO as II 1t were written upon their
face. THE road Is not completed nor anything like
government. This should be done promptly and
efreNuay. The government bonds should be
restored to first lien, as they stood In the original
n ha rnany
should be made second instead Of a first lien.
This done, all cavll and diicuty with the company
means far more than sufficient to bnd the road,
and why should 1t be gwen awayi What moral or
Of the people built it. The provision ir the amend.
atory act granting an extra quantity OF land should
also ee repealed OF suspended until the road is con-
should be offered for this legislation to transpre be-
fore another dollar is paid 70 the company.
While 1t cannot be regarded that Congress chose
the most appropriate time to pass the resolution ap
proved April 10 last past, authorizing the President
20 appoint commission OF five TO examine the
whole road, after the subsidies had nearly all
paid without any hope OF their recovery, still that
Congress that lid not regard any part Of the road
as nnaly accepted. II may be that body was look
scion before it was i preciuded from doing 50 BY
lapse OF time. The title of the resolution would
seem to establish this conclusion. It, as folows:-
s 0r 81 ss o.
Central Pacific Railroad Company for other purpoSes
ing attention and 1t Is to he hoped that considera
ti0n will be Sufficient TO lift railroad matters OF
the grooves In which they have been running-some-
thing for the people and not everything for corpora
u0ns.
If the subsidies should be all paid and the lands
conveyed now the railroad companies would have
no inducements to 60 on and finish their roads, On
the contrary 1t would be for their interest to keep
them only In possible running order, even If they
intended to operate them in the future, until the
sale is made on portion Of the mortgage bonds and
ehe government lien extingushed, for the reason
wil bring the temptation to do this Is too great TO
6e resisted: Wiping out , an encumbraaee Of some
can be done by short chancery proceeding, Is Gil
advantage railroad gentlemen will not be slow TO
enment and communities furnishing the means to
build railroads and then allow those who take the
Investing dollar OF their private means to own
them after they are built Is not very wise system
OF nnancierIng on the one hand, but excessively
There is still another and more powerful argu-
ment why the railroad companies should be helo 70
the strict letter OF the contract and receive no
the provision Of the sixth section Of the Charter
pal and Interest Of the government bonds; only from
the provisions OF the ffth section making the bonds
first lien. The following statement Will show the
amount OF bonds issued on each mile OF the road or
70 he issed--
UNION PACIFIC
The eastern base OF the Rock Mountains was fixed
at point 52S miles west Of Omaha. on the sand
625 miles at SIC, 600. Ooo...............s S. s40l 24s
$50 miles at sis, Observation-Disclosures. 100000
a24 miles at $50, oo..........".... 1887. .5o4
1000 s25.OOs, 752
From the 1000 mile post to Promon.
tory Summit, distance OF SO miles,
bonds have not been issued, neither has
II been decided as to which company
viii be entitled to receive them. They
would amount. at $4,000 per mile, to-. s2,752.0oo
Total. .s2s $50. 1862
EoTKIt been asserted that tho Union Pacific
mlee he truth