Springfield daily republic. [volume] (Springfield, O. [Ohio]) 1887-1888, 1888-01-18
PRESIDENTS MESSAGE.
THE REPORTS OF THE PACIFIC Rail-
WAY COMMISSION
Transmitted to Congress by the Presi.
dent, Together with a Message Bear
Ing Upon the Ma,tcr-Ihs History u
the Pacific Railways.

accompanied by q message. The message
opens by rcCiting the story of the appoint
rlcnt and object OF the Commission. 1t
states what work has been done by the
Commission, and that the members have
not been able 20 agree upon one report.
The President does not elaborate upon the
substance of the reports, saying that this
had been made generally known through
the press III" saws:
have been furnished with statement.
OF argument, in defense Oi the transactions
connected with the construction OF the Cen
trail Pacific road and its branch lines, from
which it may not be amiss tOquote, for the
purpose of showing how some Of the opera
tions of the directors Of such roads strongly
condemned by the Commissioners, are de-
Tended by the directors themselves. After
speaking of contract for the construction
of ole OF these branch lines by u corpora
ton, called the Contract and Finance Com
pany. owned by certain directors Of the
Central Pacific Railroad, this language Is
used:
lit may be said of this contract as of
many Others that were let tD the different
construction companies in which the dircc-
tor5 Of the Central Parinc have been stock
holders that they built the road with the
moneys furnished by themselves and had
the road fOr their outlay. In other words,
bonds and stock OF the railroad 81 construct
ed. and waited until such time as they could
develop sufficient business on the road built
to induce the public 10 buy the bonds or the
stock. Ii the country through which the
road ran developed sufficient business, then
the project was Il success. il II did not,
then the opcratipn was Il loss Those gem
tlemcn took all the responsibility; any loss
occurring was necessarily rIc!rs, and of
right the profit belonged TO them.
But il is said that they violated 4 well
known rule OF equity i'll dealing with them
selves, that they were trustees and that
they were representing both sides oi the
contract The answer is that they did not
find anybody else 10 deal with. They
could not find any one who would take the
chances of building IA road through what
WAS then all almost uninhabited country.
and accept the bonds and stock of the road
in payment And when II is said that they
were trustees, ii they did occupy such re-
lation. il was merely technical. for they
represented only their own interests on bo.h
sides, their being no one concerned in
the transaction. They became the incor
porators of the company that was Ia build
the road, subscribed for IL, stock and were
the only subscribers Therefore 1t is diff
cult Ia see how any one was wronsed by
their action. The rule Of equity, which ha
its origin in the injunction, no man can
serve two masters. CeI.ilnly did not apply
To them, because they were acting IN their
own interests and were not charged with
the duty Of caring for other rights. there
being no other persons interested IN the
subject matter.
In view OF this statement and the facts
developed in the Commissioners report, il
seem. proper 10 recall the grants and Dene-
Il tt.f,. Il
by both the Union and Central Pacific
Companies for the purpose OF aiding the
construction Of their rDa.is.
BY an act passed in 1852, il w2s provided
that there should be advanced 20 said COM
psny by the United S.alcs. tp aid in such
construction. the bonds OF the Government
amounting to sixteen Thousand dollars for
every mile constructed. ~ often Rs u section
of forty miles Of said roads should be built,
that there should also be granted TO said
companies, upon thS completion of every
said section OF forty mics of road, five en-
tire sections of public Ian, ,tor each mile 81
built; that the entire changes earned by
said roads on account Of transportation and
service for the Government. should be ap-
piled 70 the reimbursement OF the bonds
advanced ty the United States and the in
terest thereon, and that tO secure the re-
payment of the bonds 81 advanced and
interest the issue and delivery tD said COM
panies of said bonds, should constitute q
first mortgage on the whole line of their
roads. and on their rolling stock, fixtures
and property of every kind and descrip-
ton.
The liberal donations. advances and
privileges provided for in this law. were
granted by the General Government for the
pun pose Of securing the construction Of
these roads, which would complete the con-
nection between our Eastern and Western
coasts; and they were based upon a con-
sideration Of the public benefits which would
accrue 10 the entire country from such con-
struc.ion.
But the projectors Of these roads were
not content and the sentiment which then
seemed 70 pervade the Congress had not
reached the limit of its generosity.
Two years after the passage oi this law il
was supplemented and snended in various
important partics lars in favor Of these com
panies by an act, which provided among
other things, that the bonds at the rate
ALREADY specified, should be delivered upon
the completion Of sections OF twenty miles
in length instead of forty, tha. the land to
be conveyed 10 said companies on the COM
pletion Of each section o: said roads, should
be ten sections per mile. instead Of five that
only half of tie charge for transpOi tat on |
and service due from time 10 time from
the United States should be restrained and
applied 10 the advances made to said Com
panies by the Government, thus ubliging
payment to the debtor of the |
other half Of S,id charges, and that the lien |
OF the United States 10 secure the REIN |
burscmcnt of the amount advanced to said |
i'll bonds, which lien was de- /!
clared by the law Of 1852 TO constitute a |
first mortgage upon all the property Of said |
should become a Junior lien |
and be subordinate 10 a mortgage, which |
the companies were by the a'ncndatory act |
authorized Ia execute 10 secure bonds |
which they might from time To time issue |
IN sums not exceeding the amount of the |
United States bonds which should be ad- |
sanCed to them.
The immense advantages to the COM |
paries Of this amendatOry act are apparent; |
md iii these days Ne may well wonder. |
hat even the anticipated public importance |
# the construction Of these roads, induced |
what must now appear To he a rather reck-
css and unSuardcd appropriation of the
public funds and the public iemain
Under the operation Of these laws the |
OF the bonds which have been ad- |
'anced is S1ii.r25, 81 a. given in the re-
,ortS of the Commissioners: the interest To
/, 1871, is calculated 10 lie SI6.-
~, 1S.oS. making an aggregate at the date
lamed OF 81 .IlS.hS. The interest cal
ulated 10 the maturity Of the bonds, added
o the principal, produces an aggregate Of
l1S, sSi, 1880. Against these amounts
here has been repaid by the comps! lies the
um of SO, 9o5. 0396l.
IL is almost needless 10 state that the
ompanies have availeh themselves 10 the
Utmost extent of the permission given
hem 10 issue their bonds and To mortgage
heir property 10 secure the payment O.
he same hy an incumhrancc having pref
renee o. the Governments lien and pre-
isely equal to it in amount.
1t Will be seen that there was available
,r the building OF each mile OF these rocds
xteen thousand dollars Of United States
onds due in thirty yeirs. with six per
cnt interest, sixteen thousand dollars in
onds Of the companies, secured by Ii first
Mortgage on all their property, and ten
ections Of Government land. to say moth
lg of the stock Of the companies.
When the relations created between the
government and these companies by legis- ,
alton referred to, is considered. it is aston ,
hing fhp. the claim sinuld he made fj., .