The Cincinnati daily star. [volume] ([Cincinnati, Ohio]) 1875-1880, 1879-10-30
THE PACIFIC RAILROAD DECISION.

Va ""eS-l pioSS iCNtCdtioH' Inv hSSS"'
decision pronounced by the Supreme
Court of the United States in the Central
and Union Pacific Railroad case, how
ever, presents matter of exceptional in
terest to all readers, professional or nom
professional. The manner in which the
dissenting opinion of Judge Field was de-
livered is described by the average WASH
ington correspondent as almost dramatic;
and its effect was such as to actually dis
turb the usual slumberous monotony of
that drowsy Court.
Certain points III that decision were
supposed to involve political questions,
and consequently attracted more than
ordinary attention. The law under which
the Court was to decide, likewise, in
volved the views of certain political per-
sonages; and this also served to fix pub
lie attention. And the opinions as pro-
nounced, being in the nature of the
stump speech, were listened to with un-
usual interest. Moreover, the decision
itself, by giving direction to one hundred
and sixteen millions of the public money,
naturally awakened some interest among
the people at large, and railroad people
especially.
1t must he remembered that, for the
purpose of affording aid to the construc-
ton of the Union Pacific Railroad, the
United States issued subsidy bonds to
the amount of SSO,OOO,0O0, and also took
capital stock in the concern to the
amount of SS6, 100000 more, For this
large amount the United States had no
security, beyond what might accrue
from the earnings of the company and
the proceeds of the surplus land-grants.
The Government had requested from the
Corporation payment of the annual in
terest on thesubsidy bonds loaned. This
the Corporation resisted, claiming that
by the terms of the law enacted by Con-
gress the interest was not payable till the
maturity Of the bonds, some twenty years
to run.
To determine this matter suit has been
instituted, and in reaching the Supreme
Court, the final decision was against the
United States. Consequently the Gov
ernment had to pay the annual interest
on its own bonds, while the railroad cor
poration enjoyed the use of the money.
Meanwhile the corporation managed its
affairs so as to provide no means for the
ultimate payment of this immense debt;
and the security was altogether made
quate.
To provide for this, an act of Congress
was passed in May, 1878, requiring the
Central and Union Pacific Railway Com
panies to appropriate and set aside GER
tain portion of their vast annual income
as sinking fund whose accumulations
should be applied to meet their subsidy
bonds and mortgage debts when they ma
ture, for which the U. S. Treasury was
held liable.
This would seem to be very sensible
and reasonable requirement.. But the
law was strenuously resisted by corpora
tions. Their Directors refused compli-
ance. They urged that the Act Of Con
gress was an infraction of vested rights;
that it deprived the companies of their
property without due process Of law;
that it was a violation of their charter
contract, and therefore unconstitutional
and void. They went further and
claimed that it was an invasion of State
rights, as the Central Pacific Company
which also held and operated the Union
Pacific, was corporation created by the
State of California. These were certainly
very formidable arraignments Of the
law as enacted by Congress,
The contest became bitter and acrimo-
NOUS. 1t was carried to the Supreme
Court of the United States, where the
controversy has just been decided. By
that decision it is held that the act OF
1878 is not UNCONSTITUTIONAL that rail
way corporation, whose business affects
public interests of the country at large,
is subject to the legislative control of
Congress; that a legislative requirement
directing the corporation to make its just
contribution of its means towards the
payment of its debt guaranteed by the
United States, can not in any sense be
said to deprive it of its property without
due process of law.
In pronouncing the decision that Court
uses this very significant language: "1,he
United States occupy towards this cor
poration a twofold relation, that of SOW
ereign and that of creditor. In the rela-
ton of sovereign it is the duty of Govern
ment to see to it that current share own
ers do not appropriate to their own use
that which in equity belongs to Others y
This must strike common sense people as
entirely sound law.
| Rut .Judpa Field as n member of tbo4