The morning news. [volume] (Savannah, Ga.) 1887-1900, 1888-01-18
pACIFICROADS MUST PAY
-, ,rvELAND'S MESSAGE READ IN
BOTH HOUSES.

eo,o+or Hoar Shows His Hostility to
+ba Document by Endeavoring to
Have It Referred to a Special Com
,,,i-tee The Presidents Document
non't Mince Words.
WASHINGTON, Jan. Il. - The Presi-
do,t's message conveying the re-
.r+e Of the Pacific Railroad Commits
l;.rors was listened to with attention by
.ho members of the Senate and House to-day.
In tbe House it was promptly referred to
.bocomnittee on the Pacific railroads, and
400 COPIES of the message and reports
,rdarad printed. In the Senate on motion
If Senator Hoar it was referred to a special
committee of five to be appointed by the
President protein, instead of to the Judci
orv Committee, which has heretofore con-
sidered this subject Later in the
day the Democrats concluded in
on informal conference that Mr.. Hoar's
action was unfavorable to the message and
moved. through Mr. German, to reconsider
The vote bv which the motion of Mr. HOar
was adopted This motion is pending and
,,;Il nrobably be contested. The House
committee on the Pacific Railroads will go
IN work at once to prepare a bill on the
basis of the Cultivate bill, while Chairman
Holman. of the Public Lands Committee,
will probably bring to the attention of his
committee the recommendation of the mes
SAGE as to the California and Oregon land
grants.
WHAT THE PRESIDENT SAYS.
The Presidents message says that
among other things contemplated
the investigation included a history
81 Hl,-,
roads their relations and indebtedness to
the government and the question whether,
in the interest of the United States, any ex-
tension of the time for the performance of
the obligations of said roads to the govern
ment should be granted. The commission
ers have been unable to agree upon the
manner in which these railroads should
he treated respecting their Indebtedness to
the United States, or unite upon plan best
calculated to secure payment of such in
debtednesS. This disagreement has resulted
in the preparation of two reports, both of
which are herewith submitted to Congress.
BAREFACED DISHONESTY.
"These reports exhibit such transactions
and schemes connected with the cOnstruc-
ton of the aided roads and their manage
ment. and suggest the invention Of such de-
vices on the part of those having them in
charge, for the apparent purpose of defeating
any chance for government reimbursement
that anv adjustment or plan of settlement
should be predicated upon the substantial
interests of the government rather than
any forbearaH.o or generosity de-
served by the companies x
majority OF the CO ,ur-is Ion are in favor
Of an extension of the time for the payment
Of the governments Indebtedness of these
companies upon certain conditions But the
chairman of the commission, presenting a
minority report, recommends, both upon
principle and policy. the institution of pro-
ceedings for the forfeiture of the charters of
the corporations, and winding up their
affairs.
DIRECTORS DEFEND THEMSELVES.
81 have been furnished with statement,
or argument in defense of the transactions
connected with the construction of the
Central Pacific road and its branch lines,
from which it may not be amiss to quote
Tor the purpose of showing how some of the
operations Of the directors of such roads,
strongly condemned by the commits
soners, are defended by the directors
themselves. After speaking of the contract
lor the construction of one of these branch
lines, by a corporation called the Contract
and Finance Company, owned by certain
directors of the Central Pacific railroad,
this language is used: 1T may be said of
Nhlo NOllIdCl, dS Ol IidDY OJtlelS ludU
were let to different construction
companies in which the directors of the Cen
trail Pacific have been stockholders, that
they built the road with moneys furnished
by themselves, and had the road for their
outlay. In other words they paid to the
construction company bonds and stock of
the railroad so constructed, and waited
until such time as they could
develop sufficient business on the road built
TO induce the public to buy the bonds or
STOCK. II the country through which the
railroad, ran developed sufficient business,
then the project was a success; if it did not,
then the operation was q loss. These gentle
men took all the responsibility
any loss occurring was necessarily
theirs, and of right, the profit
belonged to them, but it is said that they
violated well-known rule of equity in
dealing with themselves that they were
trustees, and that they were representing
Doth sides Of the contract The answer is
that they did not find anybody else to deal
WIN They could not find any
one who would take the chances
I building the road through what was
then an almost uninhabted country, and
accept the bonds and stock of the road in
payment And when it is said that they
We're trustees, if they did occupy such re-
!aoion 1t was merely technical, for they rep
=, '0Ht0u only bnelf interests on DOtu sizes,
tuere being no one else con
cefned in the transaction. They be
came the incorporators of the
eoInpany that was to build the road, sub
scrlbed for its stock and We're the only sub
Nrlbers. Therefore it is difficult to see
n, no" any one was wronged by this action.
me rule of equity invoked, which has its
@lSin IN the injunction that no man can
serNe Two masters, certainly did not apply
" Vnefn, because they We're acting in their
V"h interests and were not charged with
sLe DUTY of caring for others rights, there
i4elhg no other persons interested in the sub
Ject matter.
GOVERNMENT GRANTS.
IN view of this statement and the facts
developed in the commissioners reports, it
etnlS ems proper to recall the grants and bene-
h,, hS derived from the general government
.y poth the Union and Central Pacific com
paules psts Tor the purpose Of aiding the con
euuctlon of their roads. The President here
guo5eS ro the act of 1862, granting aid to these
ttGiauS' and says: "The liberal dona-
IONS; wons; advances and privileges pro
h,ued Tor in this law were granted
~ lne general government for the purpose
securing the construction of these roads,
,",lcn would complete the connection be-
b"een our eastern and western coasts; and
EEney We're based upon consideration of pub
U peuellts which would accrue to the entire
souiury from such construction. But the
moJectors of these roads were not content,
a.V,k Nnl n