The Cincinnati daily star. [volume] ([Cincinnati, Ohio]) 1875-1880, 1875-11-09
PACIFIC RAILROAD SUIT.

known to the judicial records OF this
country is now'under hearing before the
Supreme Court of the United States.
Its decision involves the enormous sum
of $200, 100000 which amount, should
the Judgment of the Court be against the
Government, would 60 to enrich the
Union Pacific Railroad Company.
When that company was organized
application was made to Congress fol-
aid by grant of lands and loan of bonds.
The land grants were of themselves suf'
ficient in value to build the road. But
In addition to those the company also
eceived Government bonds to the
amount of $2s, 900, 600, having thirty years
to run, with six per cent. interest pay.
able semi-annually. The eem-
pany received those bonds on
the condition that the company would
itself meet the semi-annual payments
of interest as they fell due, and make
full payment OF the principal Of these
bonds at their maturity in thirty years /;
and for security for the performance of
this condition the company was to make
its first mortgage bonds of the road to
the Government as it's indemnity for this
loan OF the Government credit.
This would seem to be perfectly
plain transaction, simple in its nature
and unequiyocal as to its terms. But
it was further stipulated that the COM
papy was to give it's services to the
Government for transportation purposes
In preference to other engagements,
whenever called upon SO to do, and to
charge the Government for such service
only so much as was usually paid by
private parties for like service. This
also seems perfectly plain.
To these terms and conditions the
company, in 1854 filed their written as
sent, and executed their mortgage bonds
10 conformity.
But the company failed to meet the
semi-annual interest accruing on the U.
8. bonds which had been issued to them;
and payment thereof had to be made by
the Government. The Government mad
had considerable transportation service
by the company, tor which the company
demanded payment from the Govern
ment. But this was refused, until the
Governments counter-claim for interest
payments on said bonds should be
liquidated by the company. Thereupon
the company assumed the ground that
the interest accruing on said bonds was
not payable by the company, nor charge
able to them, till the maturity of the
bonds, thirty years hence. And there
lies the issue.
Like arrangementswere made between
Congress and the Central Pacific Com.
pany; so that the present case covers
the determination of that issue also. Tc
these roads and their branches the Gov.
ernment has already advanced about
e65,o0O,00U In bonds bearing interest ut
six per cent, payable half yearly.
Now, Ii the claims OF the company are
sustained as againstthe Government, by
the time OF the maturity of the bonds
there will have been paid no less than
S3lS, S,035, TIA in interest, less one-half the
charges that may be for Government
transportation during that time, which
the companies concede to the Govern
ment. The companies meanwhile are
reaping all the advantages OF this vast
investment without bearing its burdens
Of interest. 1t is said that the papers
and acts oil Congress bearing upon this
matter have bee "loosely drawn;" and
from this looseness arise the complica-
tions that have led to this great law suit.