The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-05-15
c. M. IN COURT.
The Government Suit Against the Union Pacific
To BE Tried in Hartford-The Counsel En-
gaged-Text Of the Law Authorizing
the Proceedings-The Bride
Taking Congressman To Be
Made Parties to the Suit.
WASHINGTON, May "a, 1873.

Made Parties to the Suit.
WASHINGTON, May ~, 1873.
The great suit which is TO be brought against the
stockholders OF the Union Pacific Railroad as the
result OF the weeks OF investigation into the Credit
Mobilier swindlc by Congress, took definite shape
to-day, when the able counsel selected by the gov
eminent, Messrs. Ashton, Perry and Jenckes, LAID
on the desk OF the Attorney General proof OF the
bill In equity. After discussing for some time the
best point at which the suit should be brought it
was agreed that Hartford, Conn.,. would be the
most convenient as wen as the most favorable TO
the prosecution OF a suit OF this magnitude.
Judge Shipman, recently appointed District
Judge, II is satd, is on eminent lawyer, and will
give this case his virgin love as Judge. Hartford
Is not oppressed with BUSINESS while il the suit
were brought in New YORK, where the docket is in
termnable. or in Boston, where the stockholders
and interested parties are innumcrabie, the suit
might never progress. But at Hartford,
the centre Of the Nutmeg state, that never
dabbed in Credit Mobilcr or Pacific stock, there is
not only show OF justice, but o fair promise that
the Credit Mobers and their accessories will be
brought up on short curve. The document to be
filed by the United States on Tuesday or Wednes-
day next in the Clerks Office Hartford is bill in
equity, consisting OF an elaborate statement OF the
case, the relici asked for and the documents
nected with the transaction. The theory OF the
bill is understood to be, in the MAN, that the Con-
gressonal grants TO the Pacific Railroad Company
were upon the trust that the property should be
managed for the benefit OF the security OF the
United States on account Of the govern
mcnt bonds and the interest which the
United States pay on them, and that
| the managers OF the company have not
performed the trust, hut have distributed large
nf 70 fhan alv for hoir
private benefit. The counsel for the United States
contend that the Courts have power to compel
these parties to restore the property obtained from
the company in order that the security OF the
United States may be rendered unimpaired. This
distribution OF property among the defendants was
accomplished, it Is claimed, by means OF fraudulent
contracts, in which botn sides were represented
by the same parties. The eminent counsel for the
defendants, so far as known, Caleb Cushing, or
Washington; Benjamin Il. Curtis and Sidney Bart
lett, OF Boston, and william M. Evarts, Of New
York. They will, 1t Is underst God, make their de-
fence first on demurrer denying the jurisdiction
Of the United States to sue under the act Of Con.
gress which Is as follows--
| The Attorney General shall cause suit in equity
to be Instituted, In the name OF the United States,
against the Union Pacific Railroad Company and
against all persons who may, in their own names
or through any agents, have subscribed for or re-
ceived a capital stock In said road, which stock
mas not been paid Tor IN full in money or who may
have received as dividends or otherwise, portions
OF the capital stock Of said road or the proceeds
avais or other property OF said road unlawiuly
| and contrary to equity; or who may have received
| as profits or proceeds OF contracts for con-
struction or equipment OF said road Obher
contracts Herewith moneys or other property
which ought in equity to belong to said railroad
corporation; or VINO may, under pretcnce OF having
complied with the acts TO which this Is addition,
have wr0ngluly and unlawfully received from the
United States bonds, moneys or lands which ought
in equity be accounted for and paid to said railroad
company or to the United States, and TO compel
payment Tor said stock, ana the collection and pay
lnent OF such moneys and the restoration Of such
poration or to the United States, whichever shall
| IN equity be held entitled thereto. Said
suit may be brought in the Circuit Court
in any circuit, and all said parties may be made
| defendants in one suit. DEGREES may be entered
and enforced against any one or more parties de-
| fendant without awaiting the final determination
! OF the against other parties. The Court
| where said cause ~ pending may make such orders
and DEGREES and issue such process AZ 1t shall deem
necessary to bring in parties or the representa-
| tves OF parties deceased, or to carry into effect
the purposes OF this act. On filing the bl writs of
| subpoena may be issued by said Court against any
| parties defendant, which writ shall run into any
district and shall be served as other like process by
/ correspondence and all other documents OF the
Union Pacific Railroad Company shall at all times
nry or sucn persons as he may delegate for that pur
/ pose The laws OF the United States providing for
proceedings in bankruptcy shall not be held to ap-
! ply to said corporation. No dividend shall here
! alter be made by SAID company but rom the actual
| net earnings thereof, and no new stock snail be
issued or mortgages or pledges made on the prop
/ erty or future earnings oil the COMPANY without
] leave OF Congress, except Tor the purpose OF
a9S recprg deg now ex n or tae
road shall hereafter be interested, directly or in
directly, in any contracts Herewith, except Tor his
| Lawful, compensation as such officer. Any director
officer who shall pay or declare and In paying
| or declaring, any dividend or creating any mort
punished BY imprisonment not exceeding two wears
! ana by fine not exceeding 5000. The proper CIR
cult Court OF the United states shall have urisdic
ton and determine all cases Of mandamus to compel
said Union Pacific Railroad Company to operate lts
road as required ny law. And the Secretary OF tn6
| Treasury Is directed to withhold all payments to-
| any railroad company and its assigns on account
ofireight or transportation over their respective
by the United States for interest upon bonds the
| United States issued to any such company and
which shall not have been reimbursed, together
unapplied as provided by law, and any such
company may bring suit in the Court
freight and transportation, and in such suit
| the right or such company to recover the
same upon the law and the facts OF the case shall
be determined, ana also the rights OF the United
states upon the merits OF all the points presented
by 1t in answer thereto by them, and either party
and both sai1 courts shall give such cause or
causes precedence OF all other business.
This act will be the legal disputing ground
Whether 1t comprehends all that was intended by
the friends OF the government. 1t is said
| admits OF elaborate argument, and as Judge
Woodruff, the Circuit judge and Associate
Justice Ward Hunt who is assigned 10 hear cases
in this circuit, may have to sit in judgment, the
height, the depth and the mystery of the Credit
Mobilier plague may not be known in this day and
generation. Should the demurrer, however, be
overruled the counsel for the defendants will ap.
peal to the Supreme Court. and II not sustained
they will then be compelled TO 60 on
and take evidence. On the other hand, should
the demurrer be sustained the government will
appeal and bring the whole matter before the
Supreme Bench. The most complicated part Of
the suit is whether the Congressman whltewashed
at the last session shall be included in the list of
defendants, against whom the suit must be brought
The act, as will be seen, makes the recipients OF