The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1884-08-20
A Chapter OF American History.

A recent number of the New York
Times gave, at great length, the details of
congressional action respecting the Union
Pacific railway. With many of these
facts the public have long been familiar.
Others are new, and all will bear review
ing in these times when railway corpora
tions have come to have 80 great an iDAu-
ence upon national legislation. The
Christian Union has compressed the Times
story, and we give below the epitome
that journal has made of legislation
which constitutes remarkable revela.
ton both of the power of great railroad
corporations and of the United States
senate
"The Union Pacific railroad was un.
dertaken by company of eastern capital
lists, to whom the United States govern
ment in consideration of their undertak.
ing, agreed to give one hundred and
twenty square miles of land for every
mile of road, and 49,, 900 per mile in gov.
eminent bonds. These bonds were only
loan, for the principal and interest of
which the road was to provide out of its
earnings. The road, as all our readers
know, was built, not by the company,
nor by contractors who dealt directly
with the company, but by the Credit Mo-
bilier, corporation organized, to a great
extent, out of the capitalists who consti.
tuted the railroad corporation, and for the
sole business of contracting to build the
road. According to the Times, the road
cost the Credit Mobilier $4,000 900,
while the railroad corporation paid the
Credit Mobilier for it S93,00O,000, leav.
ing net profit on this transaction to the
capitalists, in their double capacity, of
$49,O00,000. The total capital they put
in to start the road was $218,O0O; they
all became millionaires. In 1878, despite
a vigorous opposition from lobby with
out and railroad legislators within, what
is known as the Thurman bill passed
congress. 1t provided, under heavy pen
alties and forfeiture of the charter, that
twenty-five per cent of the net earnings
of the road, and the whole of the receipts
, from government transportation on the
subsidized lines, should be turned into a
sinking fund for the payment of principal
and interest due to government, and that
no dividend should be paid until this was
done. 1t further provided that any officer
who should make or pay, and any stock.
holder who should receive, any such divi-
dend should be liable to the United States
for the amount thereof, to be paid, when
recovered, into the sinking fund; and
that every person who should knowingly
vote, declare, or pay such dividend should
be guilty of misdemesnor, and liable to a
fine not exceeding $4,000 and imprison.
ment not exceeding one year.
meanwhile Mr.. Jay Gould had OBJ
tanned controlling interest in the road.
The Central Pacific complied with the
terms of the law; the Union Pacific un-
der Mr.. Gould's administration paid no
attention whatever to it; and the road
continued to pay dividends, and to leave
the debt due to the United States govern
ment-thst is, to the people of the United
Ststes-wholly uuprovided for. Senator
Edmunds, on the republican side, and
Senator Thurman, on the democratic side,
had made it their business to see that
Justice was done to the United States in
this matter; and, fortunately, they are
not men to be trified with. Senator Ed
munds brought the matter before the
executive; but for reasons best known to
themselves the law officers of the admins
tration took no steps whatever to compel
the road to comply with the law. Then he
brought the matter again before the SEN
ate, and the senate referred it for inves-
tigation to committee of which Mr.. Ed
munds was one. The committee directed
him to prepare report. Apparently this
report has come into the possession of the
New York Times. This report embodied
the facts that we have given, and closed
with a resolution calling the presidents
attention to them, and asking him to d.
rect the attorney.general to take proceed
ings against the offending directors to
have the law enforced. The considers.
ton of this report was set down in the
senate for fixed day last May. But the
markets were unsettled there was danger
of panic; any exposure which would
produce general distrust might bring one
on representatives of the road appeared
on the scene with ample powers to sign
any treaty with the senate committee
necessary to secure the suppression of the
report; it was argued with some force
that delay could not prejudice the govern