National Republican. (Washington City (D.C.)) 1872-1888, 1883-05-04
UNCLE SAM AND THE U. P.
Mr.. Dillon States the COmpany's Side Of the
Controversy With the Government
He Objects to the Rate Allowed by Law
For Carrying the Mails,
And Claims That They Should Be Paid the Same For
This Service as For Express Business.
On This Basis the Government and Not
the Company wonld Have 10 Settle.

Pacific railway, in replying to Secretary Tel
lers letter of the twenty-frst ultimo in ref
erence to the settlement of its accounts with
the government says: "The purpose of the
company has been and is TO discharge fairly
and completely It's obligations TO the govern
ment and in explanation and justification of
its view that there is due the company sum
largely In excess Of the amounts claimed in
your letter 10 be due to the government, 1t
may be proper to state briefly the relations
between tho parties as they stood at two diff
ferent periods, namely, under its original
charter before the passage Of the so-called
Thurman act and under the amendment
made by that act.
"Prior to July 1, 1878, whom the Thurman
act took effect, the company, under its charter,
was entitled for performing the postal service
for the government to fair and reasonable
rates of compensation not to exceed the
amounts paid by private parties for the same
kind of service. The'government contended
that, notwithstanding this provision, the
Postofiice department had the right to fix the
compensation of the company upon its own
view of what was reasonable, and to the same
extent and in the same manner as IL pre-
scribed rates for all other railways. This
question has been submitted to judicial de-
Termination, and the supreme court of the
United States has disafirmed the view Of the
Postofiice department and affirmed that Of the
company. There is, therefore, an account
for postal services to be stated pursuant
to this decision between the company and
tho government up to the first of
July, 1873; and If that account justly
stated shall leave, as we are confident IL does, a
very large sum ofmoney due to the company, it
would be a severe and hardly just course for
the government to claim that, notwithstand-
ing the sum thus due the company upon
which the government allows no interest), it
was its duty, in disregard thereof, to make
the payments required by your letter in as
sumed compliance with the Thurman act
when, as will BIO seen hereafter, the actual
amounts payable to the government under
that act can only be ascertained when the
question of what constitutes reasonable rates
for the transportation of the mail shall be
judicially determined and when, after that
has been so determined, the sum due to the
company for postal services prior to the Thur
man act will BIO definitely fixed, and at once
payable to the company.
1t should be added that at the date in
question there was also further admitted
balance due from the government for other
services, which we do not refer to in detaii
but conhne ourselves to the question Of postal
services.
"The company has caused to be stated an
account made up to July /, 1878, upon the
principle that the compensation should DO
fixed, with reference to express service, as
being most nearly the same kind of service
referred to in its charter, and it results that
the amount due from tho government is
$1,694, 991.25. OF this amount it is admitted
by the government that at the rates attempted
to be fixed as above by the Postoffice depart
ment there is due to the company 1854, 101. IL,
leaving in dispute tho sum of $500, S90.14.
"The question whether the standard
adopted by the company is a sound one re-
mains for judicial determination by the court
of claims, TO which the cause has been remit
ted since. As declared by the supreme court
some other elements may possibly be shown,
which, If shown, would affect the question of
reasonable compensation.
Next, as to the account between the gov
eminent and the company since tho Thur
man act went into effect down to the period
ending Dec. 81, 1882, to which period the ac-
counts stated in your letter are brought
The Thurman act prescribes no rate for pos
tai services, but leaves the compensation
therefor to be governed by the original
charter,
I" 1t prescribes by the fourth section that
there shall be carried to the credit of sink
ing fund therein provided for, on the first day
of February in each year. one-half of the com
pensation for services Including postal SER
vice. rendered for the government mot ap-
piled under section 9 in liquidation Of in
terest), and in addition thereto there is to be
paid into the treasury to the credit of the
sinking fund $S50,000 or SO much thereof as
shall be necessary 10 make the per centum
of the net eaenings of its road payable to the
United States under said act Of 1862; and the
whole sum earned by it as compensation for
services rendered for the United States, to-
gether with the sum by this section required
to be paid, amount in aggregate to 20 per
centum Of the whole net earnings of said rail-
way company for the year ending thirty first
OF December next preceding.
Now, it is shown that to determine what
will constitute 25 per centum of the net
earnings, the amount due for postal services
must be ascertained; and the question, as
above stated, is still pending for judicial
determination as to the rates which shall
constitute reasonable compensation. Any
claim, therefore, of the government for i'm
mediate payment under the Thurman act
must be based either upon conjecture or upon
the rate of allowance for postal services fixed
by the PostofAce department, which the
supreme court has rejected, or upon tho al
lowance for the service at express rates, as
claimed by the company. Adopting the rates
thus claimed by the company the directors have
caused an account TO be stated for the entire
period after the Thurman act took effect
down to December 81, 1882, the period at
which the account transmitted by you ends,
which account 1t will furnish you if you de-
sire This account shows that the whole
amount due the company for postal services
during the period and upon the principles
above stated is Gents omitted) $4,650,027.
ltuuclluB rum Ihib puu uuOunU OF postal
services as fixed by the department (under
the rules applicable to all other roads, 81 ,9l1,-
1873, leaves the sum in dispute between the
company and the government for this period
$2,79s,5s9.
1t is to be noted that your account does
not credit the S69,35s paid in by the company
in July, 1881, and referred to in your letter.
"The sum stated above S2,73sss9) it will
be seen is far in excess Of the balance due the
government, as stated In your letter (without
taking into account the SS20,S90 due the
company for postal services prior to the Thur
man act as above), and IL seems hardly rea-
sonable TO require the company, under these
circumstances TO pay the balance thus
claimed by you until the question in contro-
versy can be judicially settled
"In submitting this, their view, tho di.
rectors ask that any error of principle or of
detail, If such be found, may be pointed out
by you, and the same will receive their re-
spectful consideration"
BASE BALL to-day. National VS.. Defiance
of Philadelphia, Athletic park, Ninth and $,
Barrett, Mccullough, and Murdoch.