Indian chieftain. [volume] (Vinita, Indian Territory [Okla.]) 1882-1902, 1888-01-26
SPECIAL MESSAGE.

/ WASHINGTON. Jan. 1S.--The following is
the Presidents message transmitted 10
| Congress on tho Pacific railroad invcstiga-
| uon:
10 ire scn,s, and Hogs, Of Representatives.
On March last an act was passed authoriz-
| ing the appointment OF three Commissioners
who should investigate the affairs OF such rail.
roads ns have grants OF land from the United
States Government
The Commissioners, Immediately after their
| election, entered upon the discharge OF their
| duties and have prosecuted their inquiries with
intelligence and thoroughness. A large amount
Of testimony has been taken and all tho facts
have been developed which appear TO be ncces-
sary for the consideration OF the questions aris-
ing nom the condition Of these aided railroads
and their position toward the Government
The Commissioners have, however been una.
| bic TO agree on tho. manner in which the rail.
roads should be treated respecting their indebt-
cdncss 70 the United States. or TO light upon
INC plan best 10 secure the payment Of such in
ocbtcdncss. This Disagreement has resulted in
the preparation Of two reports, both OF which
arc herewith submitted.
These reports exhibit such transactions and
tchcmcs connected with the construction Of tn.
aided roads and their management and suggest
The invention OF such devices on the part of
those having them In charge for the apparent
purpose Of defeating any chances for the Gov.
crnments reimbursement that any adjustment
or plan OF settlement should be prcdlcatcd upon
tho substantial interests Of the Government
m her than any iorbcarnnce or generosity dc.
served by the companies.
The wide publication which has already been
given to the substance OF the Commission
reports obviatcs the necessity OF detailing In
this communication the facts found upon the
Investigation. The majority report, while con
dcmning the methods adopted by those who
formerly had charge Of the Union Pacific rail
rnaI ITN hat aNN fNa
mcnt was inaugurated. In 1884, its affairs have
been fairly and prudcntly conducted, and that
tho present administration has devoted
itself honestly and intelligently to the
Herculean task OF rcscuing the Union Pa
cihc railroad from the insolvency which
seriously threatened II at the inception Of It's
work; that IL has devoted itself by rigid econ
omy, by intelligent management and by an ap-
plication Of every dollar OF the earning cnpac
Ivy OF the system 10 its improvement and bet
terment TO place that company on a sound and
enduring financial bas
The condition Of the present management OF
the Union Pacific Company hos an important
bcaring on It's ability 10 comply with the terms
OF any settlement OF its indebtedness which
may be offered by the Government. The ma.
iority OF the Commission is In favor OF IN cx.
tension of the time for the payment OF the
Government Indebtedness OF these companies
upon certain conditions, but tho chairman OF
the Commission. presenting the minority re.
port. recommends, both upon principle and
policy, the institution of proceedings for the
forfeiture OF tho charters OF the corporations
aud the winding up Of their affairs.
l have been furnished with statement
or argument in defense OF the transac.
iions connected with the construction OF the
Central Pacific road and It's branch lines
in view OF this statement and the facts devcl.
opcd In the Commissioner reports II seems
proper 70 recall the grants and benefits derived
from tho General Government by both the
Union and Central Pacific Companies for the
purpose Of aiding the construction OF their
roads. by the act passed IN 1867 Il was pro
vided that there should be advanced to said
companies by the United states TO aid suoh
construction the bonds OF the Government
amounting 20 si6,0o0 for every mile constructed
as often as section Of forty mics OF such
roads should be constructed; that there should
also be granted 20 said companies upon the
completion Of every said section Of forty miles
OF road 1--WE entire sections OF public land for
each mile so built; that the entire charges
earned by said roads on account OF transporta-
hon and service for the Government should be
applied to the reimbursement OF the bonds al
vanced by the United States and tho interest
thereon; and that 10 secure the repayment OF
the bonds 50 advanced and interest the issue
ana delivery TO said companies OF said bonds
should constitute n frst mortgage on the
whole line OF their roads and on their rolling
stock, fixtures and property Of every kind and
description. The liberal advances and priv.
hcgcs provided for In this law we're granted by
the General Government for the purpose Of
securing the construction Of the roads, which
would complete the connection between the
Eastern ana Western consts, and they were
based upon consideration OF the public benc-
hts which would accrue 10 the entire country
from such construction. hut the projectors Of
thcsc roads were not content, and the sentiment
which then seemed 10 porvado Congress had not
reached the Limit of its generosity. Two years
after tho passage OF this law II wns supple-
mcnie1 and amended in various important par.
nculars In favor OF these companies, by an at
which provided among other things that the
bonds at the rate already specified should be
delivered upon the completion OF sections Of
twoniy miles In length instead Of
fortyi that the lands 10 be conveyed
20 said companies on the compile
tion OF each section OF said roads should be ton
sections per mile Instead OF i've, that only half
Of the charges for TRANSPORTATION and services
due from time 70 time from the United States
should be retained and applied 70 the advances
made 10 sneh companies by the Government
thus obliging immediate payment 10 the debtor
OF the othor half OF said charges; and that the
lien Of the United States 10 secure the re,
imhurscment OF the amount advanced TO said
companies In bonds which lien was declared
b. the law OF lSi2 20 constitute a first mortgage
upon all The property Of said companies should |
become junior lien and be subOrdinated TO n |
mortgage which tho companies were by the
amendaiary act authorized 20 execute 10 Sc
cure bonds which ,ih9y might from time 10
time issue In sums not exceeding the amount
OF the United States bonds which should be al. |
Vanccd 20 them.
The immense advantages 20 the companies OF
TITS amcndatory act are apparent and In these
days Ne inay well wonder that even the antici.
paied public importance OF the construction Of
these roads, induced what must now appear 10
be rather reckless and uuguardod appropria.
ton Of the public funds and the public land. |
Under the operation ~ these laws the prineinal |
Of The bonds which had been advanced 4, g1. |
t23,5i2, a. given IN tho reports OF the COMMITS. |
siOners; the interest 10 Ncsember l. isy7. il /
calculated 10 be- ssG,0ei, ,e}.5S making an aggre. |
gate az the date nam;d u nto.Ois. .5isG The |
interest calculated 10 he maturity OF the bonds |
added 10 the principal produces an aggre. |
gate OF Isd.ssi'sn5O Against these amounts /
here mas been repaid by the Com |
panics the sum Of t2n9 5.Gs9 6i. II ts almost /
needless 10 state that the companies have /
n'aiicd themselves 10 The utmost extent OF the /
permission given them 10 issue bonds and TO /
mortgage their property 20 secure the payment /
o. We same by an inenmbrnncc having prefer.
cnce of the Governments lien and precisely /
equnl 10 ~ IN amount. II will be seen that there
was available for the building of each mile Of /
these roads iiG.toi Of United States bonds due /
In thir'y years az siE per cent interest, tiGOlu
in bonds u the company's secured by a FIRST /
mortgage on al their property and ten sections
Of Cove nmsni land, 70 say nothing Of the stock
of the companies.
When the relation created between the Gov.
efDmont and these companies by the legislation
referred 10 - considered, n Is astonishing that
lhe claim should BE- made that the directors Of
lhese roads owed no duty except 20 themselves
m their construction; that they needed 70 re-.
gard no Interests but thoir own; and that they
Eere justified In contracting with Themselves
md making such bargains as resulted IN con.
'eying 10 their pockets an the assets OF the
companies. A. icnor the Government was
ritaily interested In the amount OF the mort.
'nge 70 which ~ security had been subordin.
lied AMI n had the right 10 insist that nothing
y the bonds secured BY the prior mortgage
'houd be issued frauduienuy or Tor the pur.
'ose OF division among these stockholders with