The daily gazette., 1879-05-07
SECOND EDITION
Tine Pacfnc naiIreaA.--An Impor.
i tant Dec1saen ~ ths geuPEeme
Court. s....s

T0O Pacific BotlrO00sssAm lmWOP.
ii tent Decasa0n ~ tAe Supreme
Court .s.Is
The Supreme Court Of the United
States decided the great Pacific Railroad
case yesterday, but the written grounds
for its judgement haYe not yet been filed.
The decision affirms the constitutionahty
Of the act Of Congress popularity known
as the Thurman oct, which requires :
certain proportion of the net earnings of
the Central Pacific snd Union Pacific
roads to be annually Get apart as contri-
buttons toward sinking fund for the
payment Of their creditors. Eight Of the
nine judges were present, Of whom 1--we
supported the decision and three dissent,-
ed. Justice Hunt was absent in conse-
quence Of the paralytic stroke from
which he has not yet recovered. A4A
The decision does not surprise us; the
only reason for surprise 10 the fact that
there is dissenting opinion. The act,
whose constitutionality was contested by
the Central Pacific road, had the support
of the ablest lawyers in the Senate, in
Guiding Judge Edmunds, Judge Thur
man and Judge Davis, and was passed
by q vote of 40 yeas to 20 nays, being .
majority of two-thirds. In the House
the affirmative vote was nearly unani-
nous, the vote having been 243 yeas and
only two nays. The great strength of
the vote by which it was passed III both
houses proves its accordance with the
general sense Of Justice and the public
interest, for party influence had nothing
to do with its passage. sety
Il was the manifest intention Of the
Pacific roads to evade the payment Of
the bonds issued to them BY the govern
ment. While the government was paying
the interest on those bonds semi-annual-
ly the roads denied that they were un-
der any obligation to meet interest before
the maturity ofthe principal at the expira-
ton of thirty years, and they we're man
aging their affairs in such Q way that the
lien of the government on their property
would be Of no value at the maturity Of
the bonds. ~ salf q
BY the act of 1894 the government re-
linquished its right Of priority and author
ICED the roads to issue first mortgage
bonds, postponirg its claim, until these
first mortgage bonds were satisfied. The
policy of the roads seemed TO be to let
both classes of indebtuess run on for
the thirty years and then allow . fore
closure by the creditors who have the
prior lien, bidding in the property st .
price barely sufficient to discharge the
first mortage, and leaving nothing TO re.
imburse the government. 1t was the
purpose of the Thurman act, TO illustrate
such policy and to secure the interest
of the government as q creditor OF the
roads. The sinking fund which the act
establishes is to be used fort payment
of the Indebtedness ofthe roads and to be
applied according to the order Of priority
of the several obligations. The holders
Of the first mortgage bonds will be paid
In full and the government will take its
chance in what property is left. But 1t
will have lien on the unenc numbered
roads at the maturity Of the bonds, and
their value will then be sufficient to re-
imbursc the government. 1t ID asserted
In the dissenting opinion that the Thur
man act is in violation OF contract. But
the original acts granting aid to the roads
expressly reserved the right of amend
ment, and this reservation 10 q par Of
the contract. There iso no violation un-
less the subsequent legislation inffinges
the rights Of the first mortgage bondhold-
ers but the Thurman act makes careful
provision for the payment OF their Inter-
est as it tails due and oftheir bonds 8
the first use that IL to, be made of the
sinking fund. The act violates no con-
tract, and 10 a simple measure OF equity
for the protection Of the government as =
principal creditor Of the roads. We re-
joice that the Supreme Court affilms the
constitutionslity Of the act.-N. 2. Her.
MD