The New York herald., 1877-09-19
w A HIN GTON.
FROM OUR REGULAR coRRtspoN DENT.

WAsHIyGroS, Sept 49, 1877.
ATTEMPT AT A GIGANTIC LAND FgAUD-sHARP
PRACTICE ON THE PART OF THE MISSOURI
RIVER, FORT SCOTT AND GULF RAILROAD.
Another attempted land fraud OF rather large dimen-
sions has been discovered which, II II had not been
ferroted out by the officials OF tho Interior Depart
ment, would have cost the government about two
hundred thousand dollars. The history OF the trans
action is as iollows:-
On July 25, 1850, bill passed Congress making
grant of some thirty thousand acres OF government
lands in Kansas to the Kansas and Neosho Valley
Railroad Company, the stipualions being that tho
company should sell at a nominal figure to settlers,
under the Homestead laws Of the United States. but
should rcconyey all unsod lands the ard
cancel all ompeted contracts at liked rate refund
ing the purchase money already paid. Another and
very important section will bo seen from the
quel stipulated that in consideration OF this grant OF
land the company should carry all troops and NUM-
tons OF war FREQ for all time to come. which
matter OF some consequence considering that the
road runs through tho most popuous portions OF tho
Indian Territory and is the main channel of commu-
ncation with that whole region bordering the from
tier Just two years alter this bill be-
law--namcy, in August, 1865
stockholders OF tho company changed tho
name OF the road to the Missouri River, Font Scott and
Gulf Railroad In April following QS69) the newly
named company proceeded to execute mortgage for
$5,o00oo0 to Nathaniel Thayer, f. W. Paltrey and
George W. Weld, of Boston. This mortgage conveyed
$4,000 acres OF Kansas land including the so 600 acres
donated to the road by tho government, also the roll
ing stock &c, OF the Missouri RIVER Fort Scott and
Gulf Railroad.
so the matter rested for years, tho road meet
ing tho interest Its gage bonds, tho settlers en-
N In md fhn nn,an holm Ia
in ignorance that its rights In the grant had been
conveyed. During last Congress. in the month of
March, 1877 just preceding tho adjournment, the
emissnrics OF the company pushed through BILL ap
parently nothing more than Formally, simply
authorizing the reconvcyancc OF all unsold
lands in this domain back to tho govern
mcnt on the basis of the original contract The
agents utious In the bill 10 make auson TO
the mortgage which had been issued all this terri
tory Pursuant therefore, to the passage OF this bill
tho attorney for tho road forward recently and
requested the Interior Department to issue ccrtiG
cate to tho effect that the company had complied with
tho requirements OF the act OF March, 1871 He
merely made a marginal reference to tho mortgage
The matter was referred, in this shape, to tho law
officer of the Interior Department, Solicitor Marble
During examination of these papers he
discovered the fraud, how 1t was impossible for the
company to reconvey lands under u mortgage, and
called tho attention OF Secretary Schurz to it, who
directed the PRONUNCIATION Of the following decision
bref-
My attention has been called 10 said mortgage, and
particularly a clause therein which authorized said
company to sell sad lands and return the proceeds TO
the trustees mentioned in the mortgage or their sue
assigns, for the purpose OF paying tho bonds
OF said road principal anu interest This mortgage Is
still uncanceed and remains valid lion on sad lands
The evident intent OF Congress was TO have reconvcy
of said lands free encumbrancc that they
might be subject to homestead entry under the laws
OF the United States This can only be accomplished
by a release OF the mortgage upon said lands, ana
I'll ttis Is done must decline 10 furnish certificate
that tho company has complied with tho requirements
OF tho act Of March 3, 1877.
Had this certificate been issued the government
would at lost all interest in tho unsod lands
to be reconveyed under the bill, while at tho
time the company under tho mortgage would have
capped tho responsibility OF transporting troops and
munitions Of war, an item worth to the government,
according to the figures, about 81, 900 year.