Rutland weekly herald. [volume] (Rutland, Vt.) 1859-1877, 1873-02-27


and then the labors of the Commission
will be resumed.
wilson Credit HTobiIier Report
Jeremiah NJ. Wilson, Thursday after
noon. made report, in part, relative to
the affairs of the Union Pacific railroad
company, the Credit MObilier, and other
matters specified in the resolution of the
House The report enters deliberately
into the history of the Union Pacific
railroad and shows that the act of in
corporation was not passed to further
the personal interests of the cOrpOrators,
not for the advancement of commercial
interests. nor for the convenience of the
great public alone, but for the general
interest of the government as such. The
committee also give the history of the
Credit Mobiler in connection with the
Union Pacific railroad, based on testi-
mony already made public.
Tn speaking of the HoXie contract the
committee say the interests of the Union
Pacific railroad company was utterly
disregarded The committee do not
doubt it was deliberately done. They
draw the conclusions from the facts as
certained, that the cost of the road in
round numbers was $50, 900 600, which
was wholly reimbursed from the pro-
cecds of government bonds and first
mortgage bonds, and that from the stock.
the income bonds, and the land grant
bonds. the builders received in cash val
ne. at least 1913, 900 900 as profits, being
a per ccntage of about fOrty-eight per
cent on the entire cost of the road.
The committee showed the different
amounts received by various parties, and
say: If it was impossible to build the
road according to the act of Congress,
they had no right to build it. They
could easily have represented their diff
Guilty to Congress, which has dealt gen
erOuslv with them from the beginning.
IF al the stockholders shared the
profits from the contract, it was in sub
stance a dividend. but nothing is better
settled than that the Pacific railroad
corporation has no right either as
against a creditor or a minority of its
stockholders, to distribute any of its
capital as dividends; that Court of
Equity will interfere to prevent it.
There is still less justification for us
ing the proceeds of money borrowed
either Of the government or on first
mortgage bonds, for the purpose of
dividend. The committee do not con-
ceive it to be their duty to express or
to form an opinion as to the degree of
moral blame that attaches to persons en-
gagged in these transactions, except so
far as it may rightfully affect the eXer-
else of the discretion of Congress in deal
ing with their franchise.
Congress cannot accept the general
intentions of the persons combined, as
an excuse for the deliberate violation of
its law. if it expects them to be Obeyed
or respected, hereafter. But we do not,
the committee say, like to close our mar
rative of this case and pronounce judg-
ment upon the transactions, without OBJ
serving that there are many persons con
nected with the Credit Mobilier who
held their course openly and without
ConCeament. and had no knowledge of
any wrongful use of the stock or funds
Of the railroad. Some of the persons
are of eminent character, holding high
public positions, and it is difficult to be-
lieve they had any consciousness they
were doing wrong, or saw the state OF
proceedings in the light in which the
committee now state it.
After further remarks the committee
say the division of the substance of the
corporation has so weakened it as to
make its control by capitalists and pow
erful railroad companies, in the manner
above described, easier. 1t is now help
less and dependent. 1t is proper to state
that nothing has been disclosed in the
testimony indicating any misapproprla-
ton of the money of the company by
the present management of the Union
Pacific railroad The company think
the facts shown would furnish grounds
for Judgment for the forfeiture of all fran
chises of the corporation, but ii would
be hard and unjust to forfeit the rights
of the present stockholders, large ma
iority of whom have bought this stock
in good faith in the market, for the
wrong doing of their predecessors. The
report concludes as follows:
We have the case of a corporator
which is trustee in the management OF
persons who have divided the trust funds
among themselves, who have promised
to pay for its capital stock in cash, which
promise they have not kept and on
which they are not liable, and which
the corporation neglect to enforce, and
who have made contracts with them
selves in reference to the trust fund.- the
profits of which contracts they ought,
in equity, to account for to the trust
fund. Upon the most simple principle
in equity suit can be maintained to
compel the collection of these assets,
and that the trustees shall hold them
hereafter as part of the trust prop
ertY.
1t will be no answer to this statement
TO say that the ultimate security of the
United States has not been impaired.
This is far from being true, and, in fact,
if il were true. the United States have
the right to have the security which
they stipulated for, even if it be more
than is necessary. If we are wrong in
this opinion there is no remedy except
by resorting to the extreme power of re-
pealing the act These questions are
| judicial questions, AS we have said, we
propose a simple method of raising and
determining them in one suit; of secur-
| ing, so far as we can, administration of
| the fund according to law in future.
| The committee then find there are per-
sons connected with the Credit Mobilier
holding such bonds who are holders of
the same in good faith, and for value,
but did not procure the same Illegally.
! We do not recommend that the United
States refuse to pay these bonds, or their
! interest, without first ascertaining the
| facts. We think that, as many persons
hold first mortgage bonds of the Union
Pacific railroad in good faith, and for
value, said mortgage ought not to be SET
aside. We report facts, not the charac-
ter of the organization of the Credit Mo,
bilier. The committee then referred to