The Highland weekly news. [volume] (Hillsborough [Hillsboro], Highland County, Ohio) 1853-1886, 1873-03-20
msborough, County, Ohio Thursday,
CREDIT MOBILIER AND
UNION PACIFIC IL. R.

t CREDIT MOBILIER AND
/" UNION PACIFIC Il. Il.
- G
How the Government Was
sr SwiBdleG. m r-a
The Facts as Officially Report.
aa ed. EqA4sYe lra
f Report of the Wilson Commit
3 tee.
In the House of Representatives at
the late session, report was pre-
sented by the special committee
charged to inquire into the affairs of
the Union Pacific Railroad Company,
the Credit MobiIer of America, and
other matters connected with the
sar1e, This report gives a history of
the rise and progress of these two
companies, and of their transactions,
extending over period of the last
ten years. It shows the enormous
profits accrrling to the managers and
most prominent persons who obtain
ed control of the enterprise of build
ing the Pacific railroad 1t presents
very fairly the grounds of defense set
up by these managers and operators
of the road, and comedies the force of
this defense in some particulars.
The points of complaint and repi-
cation against them are as follows:
1, The provision of the charter re-
quiring the stock to bepaid form mon
ey has been grossly violated.
| 2. If the company could not build
the road according to the act of Con
gress, they had no right to build it
at all.
3. The enormous dividends declared
were in palpable violation of law.
4, The claim that the gentlemen of
those two companies had aided the
enterprise by their own personal cred
it to large extent, though at first
glance plausible, is controverted by
the actual condition of the facts The
risk they took is far less than it is
represented, for it clearly appears
that in December, 1867, they actually
divided among themselves as profits, a
larger sum than they ever put at risk
In the whole transaction.
5. The claim that the profits are not
excessive, in view of the risks of these
gentlemen, is not supported, because
the chief risk was always on the side
of the Government.
6. The claim that these gentlemen
acted under legal advice does not ap-
pear in the evidence, though the COM
mittee earnestly invited the presenta-
ton of proof upon this point.
% Z. The claim that large sums have
been saved to the Governments by the
building of this road, is answered by
the fact that it was constructed out of
the resources of the Government.
s. The claim that the Government
could have procured no better terms
for the construction of the road from
any quarter, is an assumption, found
ed only on the opinion of parties
whose conduct is now in question.
Having set forth these answers to
the plea Of the respondents, the re-
port goes on to say:
1. That while the charter of the
Credit Mobilier Company required its
affairs to be managed by a board of
directors, and its principal business
Office to be in the city of Philadelphia,
the actual management was by
board of trustees in the city of New
York, thus creating disguise for the
operations of these trustees under a
fictitious and pretended use of the
corporated powers of the Credit Mo
bilier Company.
2. While the charter of the Union
Pacific Railroad Company required
it's powers to be exercised by board
of fifteen directors, ten of whom
should be bona tide holders of stock,
and should be elected by stockhold-
ers representing capital which had
been actually paid in full and in
money, this contrivance of the Credit
Mobilier virtually placed all the power
and control of said railroad corpora
ton, its property and franchises, in
the hands of the same persons, and
beyond the management provided by
law and thus scheme was adopted
which was in its inception, progress,
and results entirely unlawful and
fraudulent.
8. While the United States subor-
dinated its own line to a mortgage
for the security of the bonds of the
company, moneys were borrowed un-
der the privilege SO conferred, and
shared among those parties as divi-
dends..
4. Large quantities of the capital
stock required by law to be paid for
in money at par value, have in fact
been bought and sold at price not
exceeding thirty cents on the dollar.
5. Thus the Union Pacific Railroad
Company, instead of meeting the de-
mands of the Government and the
current conditions of the times, has
been reduced to weak, poor, and in
competent corporation, unable to full
fl its obligations, and liable to be at
tached as mere appendage to some
of the powerful railroad corporations
of the East.
Having recited these items of their
finding, the committee proceed to re-
commend bill providing that the