Ottumwa weekly courier. (Ottumwa, Wapello County, Iowa) 1872-1899, 1873-02-27
From the Washington Chronicle Of Feb. e1st.
REPORT AND RECOMMENDATION OF
THE WILSON COMMITTEE

Y. r. R0aA---A Scathing Indics.
ment- Legal Proceedings AgaiRst
Stockholders Adpised-.A Bin for that
Purpose Recommended.
Hon. Jeremiah NJ. Wilson Yesterday
afternoon made a report in relation to
the affairs of the Union Pacific Rail-
road Company, the Credit Mobiler of
America, and other matters specified
in the resolution Of the House.
The report enters deliberately into the
history OF the Union Pacific Railroad,
and shows the act incorporating it was
not passed to further personal interests
of the corporators, nor for the advance
mcnt of commercial interests, nor for
tho convenience OF the great public
alone, but In addition to these the in
tcrcsts, present and future, of the Gov
eminent, as such, were to be subscry.
cd.
The committee also gave a history
Of the Credit Mobilier, in connection
with the Union Pacific Railroad, based
OH the Testimony already made public.
In speaking Of the Hoxie contract
the committee say the interests Of the
Union Pacifia Railroad Company were
utterly disregarded. The committee
do not doubt that 1t was deliberately
done. This belief is founded upon the
summary of the evidence, which they
append. And they draw the concIu-
sion, speaking in round numbers that
the cost of the road was $50, OOO. 900.
which cost was wholly reimbursed
from the proceeds Of the Government
bonds and first mortgage bonds, and
that from the stock, the income bonds,
and land-grant bonds, the builders re-
ceivcd in cash value at least $23, OOO, GOO
as profit, being a per centagc Of about
forty-cight percent. on the entire cost,
The committee then show the differ
ent amounts received by various par.
ties, and say: IL ii was Impossible to
build the road according to the act
of Congress-. they had no right to build
it. They could easily have represent
cd their difficulty to Congress, which
has dealt generously with them from
the beginning. 1t may be that the ex-
listing stockholders shared these profits,
80 that what was in form contract
was in substance a dividend. But
nothing is better settled than that a
railroad corporation has no right, eth
er as against creditors or minority
of its stockholders, to distribute any
portion of its capital as dividends, and
that a court Of equity will interfere to
prevent it. There can be still less JUS
LITIGATION for using the proceeds OF
money borrowed, either of the Govern
ment or on the first mortgages, for the
purpose of dividend.
The committee do not conceive it to
be their duty to express or to form an
opinion as to the degree of moral
blame that attaches to the persons en-
gagged in these transactions, except so
far as that may righttully affect the ex-
ercise of the discretion of Congress in
dealing with their franchise.
Congress cannot except the general
intentions Of persons combined as an
excuse for deliberate violation OF it's
laws, If it expects them to be obeyed
or respected hereafter. But we do not
like to close our narrative of this case,
and pronounce judgment upon thes g
illegal transactions, without observing
that there are many persons connected
with the Credit MObilicr who held
their stock openly and without conceal
ment from the beginning, and who
seem to have had no share in its man.
agemcnt, and no knowledge Of the
wonderful use of its stock or of the
funds Of the railroad. Some OF these
persons are persons Of eminent charac-
ter, holding high public positions. II
is difficult to believe that they had any
consciousness that they were doing
wrong, or saw the whole preceding in
the light in which the committee now
state it. After further remark the com
mittcc say the division of the substance
of the corporation, las SO s~aaI<es.ed-i IL
as to make fts control by capitalists
and powerful railroad corporations, in
the manner above described, easy. 1t
is now helpless and dependent.
Ia making the investigation the COM
mittee say they have labored under
great disadvantages. The books con-
tanning the records of these transac-
tions arc. voluninous and complicated ;
the estimates of engineers made before
the letting of the various contracts can
not be found. Tho presence as a
witness of Gen. Granville nj. Dodge,
the chief engineer, under whose super
vision the principal part of the work
was done, could not be procured, al.
though diligent efforts were made to
that end.
Mr.. John j. Cisco, who was treasur-
er OF the Union Pacific Railroad Com
pany, was unable 10 attend by reason
of illness.
Governor John A. Dix, who was
president, could not be present by rca-
son Of his executive duties as Governor
of the State of New York.
Many Of the incidents in these trans
actions have not been investigated as
rs was desired, for want of
time. 1t is proper to state that othing
has been disclosed in the evidence in
any Interpretations OF the
moneys of the company by the present
of the Union Pacific rail
road.
The committee think the facts shown
would furnish ground for Judgment
Of forfeiture Of all the franchises Of the
but it would be harsh
and unjust to forfeit the rights Of the
present stockholders, large majority
of whom have bought their stock in
good faith in the market, for the wrong
doing of their predecessors.
The report concludes as follows:
We have the case Of corporation
which is a 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 still liable,
and which the corporation neglects to
enforce, and who have made contracts
with themselves in reference to the
trust fund, the profits OH which con-
tracts they ought, in equity, to account
for to the trust fund. Upon the most
simple principles of equity a suit can
be maintained by any cestui que trust
to compel the collection of these as
sets, and that the trustee shall hold
them hereafter as part of the trust
1t will be no answer to this state
mcnt to say that the ultimate security
of tho United States has not been I'M
paired. This is far from being true in
fact. If it were true, the United
States have right to have the sccuri-
ty which they stipulated for, even il il