The Princeton union. [volume] (Princeton, Minn.) 1876-1976, 1879-10-22


made, but it may provide for what shall be
done in the future and may direct what prepa-
ration shall be made for the due performance
of contracts already entered into. - ~ a..
In less than twenty years from the present
time there will become due from the Union Pa
ci6c company about eighty millions of dollars,
secured by first and subsidy mortgages, be-
sides the capital stock representing thirty-six
millions of dollars more. With the exception
of the land grant little if; anything except
earnings of the company can be- depended
upon to meet these obligations when they ma
ture. These earnings, the com pany after pay
ing interest on its own bonds, have been divid-
ed from time to time among itsTstockholders,
without laying by anything to meet the enor-
nous debt which is soon to become due.
Thus the stockholders of the present time are
receiving in the shape of dividends that which
those of the future may be compelled to lose.
The United States occupy towards this cor
poration two-fold relation, that of sovereign,
and that of creditor. In their relation of SOW
ereign it is their duty to see to it that current
stockholders do not appropriate to their own
use that which in equity belongs to others. A
legislative regulation which does no more than
require them to submit their first contribution
toward the payment of the bonded debt, can
not in any sense be said to deprive them of
their property without due process of law.
The court holds, therefore, that the legisla-
ton complained of may be sustained as rea-
sonable regulation of the affairs of the corpora
ton and promotive of the interests of the pub
lie and corporators. 1t is also warranted, I'M
der authority, by way of amendment to change
or modify the rights, privileges and immunity
granted by the charter. The Judgment of low
er court is affirmed. ,.,q..--
From this decision Justices Strong, Bradley
and Field dissent in long and care.
fully prepared opinions. Justice Strong
maintains that the Thurman act is a
plain transgression of legislative power;
that the government in its contract with the
railroad companies laid aside the sovereignty,
and that the contract is as part of the charter
of the Union Pacific com pany, or of the acts
of 1862 and 1864. It was q subsequent trans
action and the United States became party to
1t, not in its sovereign character, but as civil
corporation, with the same rights and obliga-
tions as private person and no more. But
what does the act of May z, 1873, attempt to
do? 1t does not purport to be repeal of the
charter. All its provisions have in view the
imposition of an additional obligation upon
the railroad companies. Its leading purpose
| Is to take control of the property of the deb
tor and sequester for security of debt, which
by the terms of the contract is not due and
prOably for years to come. To claim such
power ia to claim the right to disregard the
contract and substitute for it different one
| without consent of the debtor If the q. s.
can exact now one quarter of the net earnings
VI CoCA VI lucsc COmR du1cS auu place II: IN
| the treasury, they can by the same power and
with the same reason exact the whole of the
earnings of the property equal to the amount
of the debt. Such legislative power al this ia
| not only conferred by the constitution but in
effect is expressly denied in these clauses of
the fifth amendment which provides no person
shall be deprived of life. liberty or property
without due process of law; that private pro-
perty shall not be taken for public use with
out Just com Densation. Ia. + tr@ y..r
Furthermore it may be doubted whether, the
act of 1878 is even an attempted exercise of
legislative power. A statute undertaking to
take property of A and transfer it to B is not
legislation. 1t would not be lawful, it would
be decree, or sentence, the right to declare
which, if it exists at all, is in the judicial de
partment Of the government. Congress would
in such case be trying to perform the functions
of court. By the act under consideration
the creditor becomes the custodian of
the debtors property and acquires the
right to hold and manage as if it were
his own. 1t is absurd to say that
this is not practically radical change in the
relations between the parties established by the
contract, and it is equally impossible to main
! tain that it is not depriving debtors of their
property without due process of law. Justice
Strong concludes, therefore, that the act of
1878 is not only unauthorized by any power now
existing in Congress, but it is an infraction of
the prohibition contained in the fifth amend
ment to the constitution. +5ik43tsSi@ m
The dissension opinion of Justice Field be-
gins as follows: also dissent from the iudg-
ment of the court in these cases. The doctrines
announced will, in my opinion, create great in
security in the title to corporate property in the
country. With many assertions to the
contrary, they in fact declare that the general
government is under no legal obligation
| to fulfil its contracts, and whether it shall do
SO ia any case. or not, is . question of policy
and not of duty. They also recognize its right
to appropriate by legislative decree the earn.
ings OF corporations with which it deals, with
out judicial inquiry and determination as to
| its claim as to such earnings, thus sanction
ing the exercise Of judicial functions in its
own case, and finally they assert supremacy
of the federal over the State eovernmentIin the
control OF corporations of the latter, and ut.
terly subversive of the rights of the States
After reciting the organization of the Central
Pacific Railway company as q Corporation Of
the State of California, the reservations Of
power made in the company's charter, the con-
struction of the road and it's full compliance
in all respects with its enpa1enn enfa and