Wyandot County Republican. [volume] (Upper Sandusky, Ohio) 1869-1903, 1873-03-06
The Government Suit Against
the Union Pacific Railroad.

The House Comm ittee on the Un-
ion Pacific and Credit Mobilier en-
quiries of which Hon. j. Nj. Wilson
is chairman, reported on Thursday
on the aspects of the swindla of the
Ames combination upon the govern
ment and presented bill providing
for a suit on the part of the govern
ment against the Union Pacific Co.,
for the recovery of the moneys, land
and mortgage rights, out of which
the government has beed defrauded.
The report is important as collateral
to the findings of the Poland Com
mittee as to the participation of
Congressman in the Credit Mobilier.
and gives definite practical point to
the Investigations which must result
in some positive advantage to the
public, whatever may or may not be
done in the way ofpurifying politics.
The Wilson Committee fine, with
the Poland Committee, that the Cred
it Mobilier was first class swindle
from beginning to end. They show
that the cost of the road was wholly
met by the government bonds and
first mortgage bonds; and that the
builders realized from stock subscrip
tons, land grant bonds and income
bonds, cash value of at least twen-
ty-three millions, all clear profit. be-
ing about AZ per cent, on the total
cost OF the road. This use of money
borrowed either from thegovernment
or on first mortgage bonds. for dis
tribution in dividends. is contrary to
equity. and constitutes fraud, CIV
ing basis for suit for recovery. The
lavish use of it in trust funds by the
company in the payment of dividends
and profit on improper contracts,
have so weakened the company that
it is now "helpless and dependent"
and liable before long 10 fail alto
gether to meet its obligations.
The committee are Of opinion that
the company has forfeited all claim
on the government to favor or Glenn
ency; but inasmuch as the rascality
which robbed the road of its resour-
ces were perpetrated by former
management, thev think that it would
be harsh and unjust to proceed to
to the forfeiture all the franchises
OF the corporation" since many of
the present stockholders have bot
the stock in good faith and their
rights should be respected. But
they urge that the old stockholders
that is, the swindling managers. who
subscribed for the stock but never
paid cent for 1t, be used by the
government to make good the liza
bility created by these subscriptions.
They hold also that the managers
who divided the trust funds of the
road among themselves as profits on
contracts made with themselves,
ought to be compelled to account
for misapplication of the trust fund
to the company whose trust they
were. They also find that the
Credit Mobilier share holders who
received dividends thereon in Union
Pacific bonds or stock, "are not hol-
ders of the same in good faith, and
for the value. but did procure the
same illegally" They do not rec
commend that the first mortgage
bonds be not paid or that the mort
gage be set aside; but that persons
who receive such bonds fraudulently
and illegally be used for their recov-
cry. This makes all Credit Mobiles
stock holders defendants in tn,
suit to be instituted by the govern.
ment.
The bill reported by the commit
tee provides further for the futur
proper management of the Uniol
Pacific road. by enacting that here
after no dividend shall be declare,
by that company, except from actua
net earnings, and no new stock is
) sued or mortgage made without al
act of Congress, except for funding
aud securing the present debt. 1
! elso enacts that no director or offlc
q er shall be interested in any con
' tract. and fixes penalty Of fine an
imprisonment for such offense. Their
can be no doubt but that the bi
will pass, and the suit presented b
the Attorney General of the Unite
i States as directed in the bill.-(
d Herald.