Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1883-05-04
And Figures Out an Enormous
Balance in Favor of the
Company,
But Prudently Refralns from
M .ntloning the Old Debt
Of Seventy Millions.
The Diplomatic Bluuder About
the Border Explained by
the Mexican Minister
A General Assortment Of Wash.
ineton Notes.
THE SUBSIDY ROAD.
Special Dispatch to THs BHR.

DILLoN'S REPLY TO TELLER
WASHINGTON, May 3 3-Sidney Dill
lon, president OF the Union Pacific,
has written long letter to Secretary
Teller concerning government olti ne
sg ainst the road. He says there Is due
the company q sum largely In excess
of the amount claimed by the score.
tary of the interior to be due the gov
ernment and that any claim of the
United States for Immediate judgment
under the Thurman act must be based
either upon the rate of allowance for
postal services fixed by the postoffi ,e
department, which the supreme court
has rejected, or upon the allowance
for that service at express rates ~
claimed by tue company. Adopting the
rates thus claimed by the company,
the government Is indebted to the
road 81, ,733 ,8S9, q sum far In excess
of the amount sought to be recov.
cred by the interior department.
The letter Is follows:
UNION PACIFIC RAILWAY Co.,
Boston, Mass, May l.
To Hon H. NJ. Te Ter, Secretary Of the Inter or,
Washington:
SIR:-Your letter OF the 2lst ult.,
stating the claims of the government
upon this company, has had the care
full consideration of Its directors. The
purpose of the company has been
and is to discharge fairly and imp 'icit-
ly Its obligations to the government,
and In explanation and l,tiication of
Its view that there Is due tho company
a sum large in excess of the amounts
claimed in your letter to be due the
government, it may be proper, to
state briefly the relations between the
parties as they stood at two different
periods, namely, under it's original
charter, before the passage OF
the so.called Thurman act" and
under the amendments made by that
act. Prior to July l, 1878, when the
'Tnurmsu acc took effect, the company,
under Its charter, was entitled, for
performing postal service for the gov.
ernment, to fsir and reasonable rates
of compensation, not to exceed the
amount paid by private parties for
the same kind of service. The gov.
ernmsnt contended that, notwith.
standing this provision, the postoffi Sc
department had right to fix the com
pensation of the company on Its own
view of what was reasonable and to
to the same extent and In the same
manner as 1t prescribed rates for all
other railways. This question has
been submitted to Judicial determine
tion and the supreme court of the
United States has disaffirmed the view
of the postoffice department and af'
firmed that of the company. There
is, therefore, an account for posta
services to be settled, pursuant
to this decision, between the
COL ,pany and the government, up te
the first of July, 1873. and If tha
account Is justly stated shall leave, a,
we are confident 1t does, very large
sum of money due the company |
would be a severe and hardly jus
course for the government to CLAIM
that, Notwithstanding the sum thu
due the company upon which tn
government allows no interes') 1t wa
Its duty In disregard thereof to make
the payments required by your lette
In assumed compliance with the Thur
man act, when, as will be seen here
after, the actual amounts payable t.
the government under that act cal
only be ascertsined when the question
of what constitutes reasonable rate
for transportation of mail shall b
judicially determined, and when, afGe
that has been 30 determined, tn
sum due to the company for posta
services prior to the Thurman &C
will be defoi:ely fixed and at ono,
payable to the company. 1t shoul'
be added that a. the date In question
there was also further admitted a bal
ancs due from the government TO
services which We do not refer to Il
detail, but confine ourselves to tn
question of postal services. The com
papy has caused to be stated, an &C
count made up to July 1,t, 1873, upo
the principle that compensation shoul
be fixed with references to expres
service, as being most nearly the sam
kind of serylcs referred to
lta cnattet, huu IL result
that the amount due from the govern
ment Is 81, 64S, 99l. vi this amour
1t is admitted by the government thu
at the rates attempted to be fixed ,
above by the postotfice department
there Is due to the company 1864 To-
leaving In dispute $500, 800 The que
tlon whether the standard adopted |
the company Is a sound one remaiI
for judicial determination by the cou
OF claims, to which the cause has bee
remitted since 1t was declared by Il
supreme court. Some other elemen
may possibly be shown which,
shown, would affect the question
= reasonable compensation.
Next, as TO the account between Il
government and the company, ain
the Thurman act went into effec
down to the period ending Dscemb
81, 1882. to which period the accoun
as stated In your letter, Is brough
The Thurman act prescribes no rat
for postal service, but leaves the cor
pensstion therefor to be governed