Dodge City times. [volume] (Dodge City, Kan.) 1876-1892, 1888-01-26
SPECIAL MESSAGE.

SouSreSS on the I0csu0 Railroads Invos.
HSatlon.
WASHINGTON, Jan. 1S-The following is
the Presidents message transmitted to
congress on the Pacific railroad investiga-
ton:
10 the S>nat> and Hosss 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 rs 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 amour,
OF testimony has been taken and all the facts
have been developed which appear to be neces-
sary for the consideration OF the questions arts.
ing from the condition OF these aided railroads
and their position toward the Government.
The Commissioners have, however, been una
Die TO agree on the manner in which the rail
roads should be treated respecting their indebt-
edness TO the United States, or to light upon
the plan best TO secure the payment Of such in
debtedness. This disagreement has resulted In
the preparation Of two reports, both Of which
are herewith submitted.
These reports exhibit such transactions and
schemes connected with the construction OF the
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
ernment s reimbursement, that any adjustment
or plan OF settlement should be predicated upon
the substantial interests OF the Government
rather than any forbearaacs or generosity de-
served by the companies.
The wide publication which has already been
given TO the substance OF the Commissioners
reports obylates the necessity Of detailing in
this communication the facts found upon the
Snv-a ~S,raf
dcmning the methods adopted by those who
formerly had charge OF the Union Pacific rail-
road, declares that since its present manage
ment was inaugurated, in 1884, its affairs have
been fairly and prudently conducted. ard that
The present administration has devoted
itself honestly aad iuteligently to the
Herculeah task OF rescuing the Union Pa
citic railroad from the insolvency which
seriously threatened it at the inception OF its
work; that il has devoted itself. by rigid econ
ODy. by intelligent management and by an ap-
p!ication OF every dollar Of the earning capac-
ity OF the system TO its improvement and bet
termcnt. to place that company on a sound and
enduring financial basis
The condition of the present management Of
the Union Pacific Company has important
bearing on lis ability to comply with the terms
OF any settlement Of its Indebtedness which
may be offered By the Government The ma
jority OF the Commission is in favor of an ex-
tension Of the time Tor the payment of the
Government Indebtedness OF these companies
dSoE certain conditions bu. the chairman OF
the Con,nisr'.o--, presenting the minority re-
tj-t, recommends, uoLL mon principle and
policy, the institution 0: proceedings for the
forfeiture Of the charters c. the con !, crations
and The winding up OF their affairs.
1 have been furnished with statement
or argument in defense OF the transac-
lions connected with the construction OF the
Central Pacific road and its branch lines
In view of this statement and the facts devel-
cred in the Commissioners reports it seems
proper TO recall the grants and benefits derived
from the 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 1862 Il was pro
yided that there should be advanced to said
companies by the United states TO aid such
construction the bonds Of the Government
amounting TO $1,000 for every mile constructed
often section OF forty miles o: such
roads should be constructed: that there should
also be granted to said companies upon the
completion of every said section of forty miles
OF road five entire sections OF public land for
each mile so built; that the entire charges
earned by said roads on accoun: OF transporta-
ton and service for the Government should be
applied to the reimbursement OF the bonds adj
vanced by the United States and the interest
the bonds advanced and interest the issue
ana delivery to said companies of said bonds
should constitute first 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
iiores provided for In this law were granted by
the General Government for the purpose of
securing the construction OF these roads which
would complete the connection between the
Eastern and Western coasts aud they tye,a
based upon consideration of the public bcne-
fits which would accrue to the entire country
from such construction Bat the projectors of
these roads were not content. and the sentiment
which then seemed 10 pcrvade Congress had not
reached the limit of its generosity. Two years
after the passage of this law 1t was supple
Ipentod ana amended in various important par
ticulars in favor OF these companies, by an act
which provided among other things that the
bonds nj the rate already specified should be
delivered upon the completion OF sections of
twenty miles in length instead Of
forty; that the lands TO be conveyed
TO said companies on the compile
ton of each section OF said roads should be ten
sections per mile instead of FIVE; that only half
of the charges for transportation and services
due from time 10 time from the United States
should he retained and applied to the advances
made - such companies by the Government,
thus obliging immediate payment TO the debtor
OF the other half OF said charges; and that the
lien Of the United States TO secure the re-
endorsement OF the amount advanced to SAID
companies in bonds which lien was declared
rs the law OF 1S62 10 constitute u first mortgage
upon all the property o: said companies should
become junior lien and be subordinated to 1,
mortgage which the companies we're, by the
amendaIary act authorized to execute TO Sc
cure bonds which they might from time to
time. issue Ia sums rot exceeding the amount
CT the United States bonds which should be ;d-
vaHccd 10 them.
The immense advantages 10 the companies Of
this a.nenG2tory act are apparent and in these
days we may well wonder that even the antici-
pated public importance OF the construction Of
these roads, induced what must now appear to
be a rather reckless AID unguardei appropria-
tion Of the public funds and the public lands
Uncer the operation of these laws the principal
Of the bonds which had been advanced IS sj4-
tssS.5iS as given in The reports of the Commits
stoners: the interest TO November l. 1887. is
calculated TO be s16.c2I, eo.5S mating an aggrc-
gate at the date named of sI+l,oi17lS5S The
interest calculated 10 the maturity OF the bonds
added TO the principal produces an aggre-
gate OF S1s6.SS<,15eA Against these amounts
there has beca repaid by the Com
panics the sum Of s$oa5,iS96l. 1t is alrnos:
needless 20 state thar the companies have
awaited themselves TO the utmost extent OF the
permission given them 10 issue bonds and to
mortgage their property TO secure the payment
OF the same by az incuiEbrancs having prefer
cncc of the Governments lien and precisely
equal 10 it in amount II will be seen that there
was available Tor the building OF each u,ile OF
these roads SlG,oea o. United States bonds due
IN thirty years at six per cent interest si6Ooo
in bonds Of the company's secured by trst
mortgage on all thei- property and ten sections
OF Government land. 10 say nothing Of the stock
o. the companies
When the relation created between the Gov
erntnent and those conpnnies by the LEGISLATION