The New York herald., 1870-12-18

DEPARTMENT OF JUSTICE, Dec. Is, 1870.
| To GEORGE y BOUTWELL,, Secretary OF tho Trea-
sury:--
Sm-I have considered the question presented IN
your letters Of October and November 90 last In
| relation to the claim Of the United States on the
| Union Pacific Railroad Company for reimbursement
OF interest paid by the United States on bonds issued
| as o subsidy to that company.
BY the act OF July /. 1862 tsecton 2 10 U. s. Stat
page 1927, bonds or the United States were TO be
| issued to the company to the amount OF $4,000 a
mile upon the completion and equipment OF each
forty miles OF. the road. payable in thirty
| years after date, bearing six per centum per
annum interest, the interest payable semt-annually:
and to secure the repayment to the United states as
hereinafter provided OF the amount Of said notes,
together with all interest thereon which shall have
been paid by the United States the issue Of said
| bonds and delivery TO the company fpso Jacto con-
stitute first mortgage bond on tho whole line or the
! railroad and telegraph, &c.
Section SIX provides that the grants afor esald are
| made upon condition that said company shall pay
said bonds at maturity, and shall keep said rail-
ROAD ana telegraph line In repair ana USE
| and shall at all times transmit dispatches
| over said telegraph line, and transport
| mails troops and munitions OF war, supplies
and public stores upon said railroad for the govern.
| ment whenever required to do so by any depart.
ment thereof; and that the government shall at all
times have the precedence in the use OF the Same
Tor all the purposes aforesaid at fair and rea-
sonaple rates OF compensation, not to exceed
the amounts paid by private parties for the
same kind OF service; and all compensation
for services rendered for the government shall
be applied to the payment OF said bonds and
interest until the whole amount il fully paid, The
said company may also ray the United states
wholly or In part In the same or other bonds Trea-
sury notes or other evidences OF debt against the
bonds and interest are paid at is least ave nve
sa Be- al a as aspea gs % ss Of said
thereof This was succeeded by the act OF July
1894 na Q; s stat. page sS6) the NTH section Of
ton for services rendered Tor the government by
said companies shall be required to be applied to
aid Of the CONSTRUCTION Of said roads, Secrion ten
further provides taat the companies participating in
Issue their Grs. hon- their respective rail-
sS S mot
date time OF maturity rate and character Of interest with
respectvey and the lien OF the United States
to that Of the bonds Of either said
Snd Of % ae e. s to- e the
ment. ~ v "A''' 49, - Al A"0na
The act of 1862. above quoted relates to the
transmission of dispatches and the transportation
OF malls, troops munitions OF war, supplies and
public stores for the government OF the United
States.
The government has issued its bonds to the Union
Pacific Railroad Company to the amount OF many
millions, and has paid the accrued interest on these
bonds. upon an application to the company to re-
mburse this interest the company refuses, contend
ing that the government mas no valid claim upon
Interest until the principal Of the bonds shall be due
except as to one-lalf OF the compensation for
wee; ~ rendered 9 BY the company for the government
road after It's completion Ii the company Is right,
the government must go on paying out the interest
twice year, and wait thirty years for It's pay ex-
cept the probably small amount OF one-haf the COM
pensatlon due to the company as carrier for
earnings. The amount which the company viii thus
owe the government at the expiration OF thirty
years viii be nearly treble the principal OF the bonds
charged against the company and while this heavy
debt shall be accommodating against the company the
pany onehaf Of the value OF the services rendered
to II BY the company. Without a won
esoSaDy ass me va%s rUsa sss seS + D
appurtenant property VIII be worth at the end Of
thirty years the thus increased debt then due to the
government after the first mortgage creditors shall
nave been satisfied. Meanwhile the company may
be paving dividends to its stockholders out OF the
earnings which natural Justice would apply TO the
relief OF that creditor through whose benefacti0ns
the ROAD has been mainly built. construction
which leads TO such results ought NOT TO De
adopted unless clearly required by the language
OF the law. In considering the subject / have ffl-
CURED whether rate Of construction favorable to
OF the statute leaves the mind in doubt. Between
grantor for a valuable consideration and the
the atter where the transaction is an act OF country
the construction, II doubtful language, should
be In favor OF the donor. Fourteen opinions
OF Attorney Generals, pp. SO and 80, Dubuque and
Pacific Railroad Company vs.. Ltchheld, 23 How.
ss) Iregard the aid to the Union Pacific Railroad
q *: fHers s' Is ras
thing ike a valuable consideration In the stpula.
matter and see how much government does Tor
the company. and how little the company is re-
a hs ws mss afs
substantially in the relation Of don or and doneA
cna and nteest fn bs 20 feoay sas prn
vcrsy Is as to the time when the interest is to be re-
paa In the absence Of distinct provisions upon that
subject 1t would seem just that soon as the gov
| ernment pays money for the company the company
| should be bound to reimburse the government. the
action for money paid Is there ANYTHING IN the AID.
lng acts which makes this principle imperative heres
! donations OF land The lands are gwen absolutely,
| and the titles as the conditions are compiled with
1 from time 10 time issue TO the company 1t was
| ernment should lose, ana that the company should
acquire the lands, but in the case of the lands, the
idea Of reimbursement is standing attendant upon
| all the provisions for this form of aid.
The fifth section OF the act OF 1852, in order Ito
secure the repayment TO the United States, as here
4 matter provided, OF the amount Of said bonds so
issued and delivered to said company, together with
all interest thereon which shall have been paid by
! the United Statesn makes the issue and de-
\ livery OF the bonds TO constitute first
mortgage on the road and connected property, and
then provides that the Secretary OF tile Treasury
may take possession In case OF default. This Sec
! tlon does not specify the time when the interest
shall pe repaid the main stress OF the argument for
the company depends the first clause OF the next
section. The grants Aforesaid are made upon con.
| dition that the said company shall pay the said
| bonds at maturity. AS construed by the company,
| this clause should be read ~ :
The said company shall said bonds and interest at the
maturity OF the principal of the bonds.
But Ii IS observable that at the first mention Of
reimbursement In the fifth section the bonds and
interest arc seyeraly named. In tho language
quoted from the beginning OF the sixth section no
separate mention is made OF interest. II the omis-
sion OF the mention OF interest were designed, the
time OF paying Interest Is not affected by this
tons In the III the omission casual and the
word "bonds' as used in the sixth section embraces
q nj prln a WI =