The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1888-01-25

there has been repaid by the companies the
sum OF ts0.9J5,03y. 1t is almost needless to
state that the companies have availed them
selves TO the utmost extent Of the permission
given them to issue their bonds and to mort
the same by an incumbrance having prefer.
ence OF tho government lien and
precisely equal to IL in amount. IL will bo
seen that there was available for the building
OF each mile OF these roads $4,000 in bonds of
the companies. secured by n fiist mortgage on
all their property and ten sections OF Govern
ment land--to saynothing OF the stock Of the
companies. When the relations created be-
tween the Government and these companies
by the legislation referred TO is considered ii Is
astonishing that the claim should be made
that the directors Of these roads owed no duty
except 10 themselves in their construction
that they regarded no interest but their own,
and that they were justified in contracting with
themselves and making such bargains re-
suited i'm conveying to their pockets all the as
sets OF the company. AS q lienor the Govern
ment was vital ~ interested in the amount of
the mortgage to which its security had be n
sub prd mated, and IL had the right TO insist
that none of the bonds secured by this pr or
mortgage should bo issued fraudulently or for
the pun ose of divis on among these stock hold
ers " without consideration The doctrine of COM
plete independence on the part II the directors
Of these companies and their freedom from any
obligation To care Tor any other interest b. {
their own in the construction OF those road 9
seemed to have devol pod the natural conse-
quences OF it's application. portrayed as follows
in the ma iority report OF the commissioners.
The result is that these who have controlled
and directed the construction and development
of these companies have become possessed Of
their surplus assets the reissue OF bonds,
stocks, and payment of dividends vCted by
themselS es, while the great cred tor. the United
States, finds itself substantially without ade-
Quate security for repayment Of its loans.
The laws enacted in aid OF these roads, while
they illustrate generous liberdlty and Il
generous sur ender OF the Governn emit adj
Nantages. which it is oped experience has
corrected, were ne erthe ess passed upol tho
theory that tic roads should DO construC to | nc
cording To the common rules OF business fair
ncgs and dnty, c" ID that their value aud ability
TO pay their debts should not be impaired by
unfair manipu alton and when the Govern
ment subordiuatod its lien to another IL was
in the expectation that the prior ] en- would
represent in its amount only such bonds "a
might be necessarily issicd by tho compan 8
for the construction of their roads at fair pri
agreed upon in an honest way between eal and
substantial parties. J. or the purpose of saving
or improving the security n orde1 by its Junior
lien, the Government should have the right now
to purge this paramount lien of all that is
fraudulent, fictitious, or unconsc ionaDle. 1t tho
transfer to innocent hands OF bonds of this char
acter secured by such first mortgage prevents
their cancellation, il mipht be well To seek n
remedy against those who issued aud trans
ferred them. IL les islaton is needed TO secure
such remedy Congress can readily supply it.
i desire to call attention also TO the fact that
III all that was to be doLe on the art of the
Government to fully vest in these conn anies
the grants and advantages contemplated by
the acts passed in their interests have rot vet
been perfected, and IL the failure Of such COM
panies TO perform in good faith their part of
tho contract luhtifies such course, tho power
rests with the Congress TO withhold further per
70 nance on the psrt of the Government. IL
donated lends are not yet granted to those oom
panies, and il their Violations Of contract ara
such as in justice forfeits their rights to such
lands, Congressional action should. intervene
to prevent further contamination
Executive power must be exercised according
TO the existing laws, and executive discretion
is probably not broad enough to reach such
dlfficultioS.
The California and Oregon Railroad is now q
part OF tho Central Pacific system and s a
laud-grant road. It's construction has been
carried on with the same features ana Incl
dents VIII CHI characterized tho other construc-
ton OF this system, as is made nppai ent on
pages 1S, 79 and 81 of the report OF the ma ority
of the Commissioners l have H. my hands for
approval the report of the Commissi ners up
pointed ID examine two completed sections OF
this road. Upon such approval the COMPANY,
or the Central Pacific Company. will be entitled
to patents for large quantity of public land.
ESPECIALLY commend to the attention of Con-
eress this condition OF affairs in order that il
may determine whether or not it should inter.
vene to save these lands for settlers If such n
course is justfiable.
It is quite time that the Troublesome compli-
cations surrounding this subject, which has
been transmitted to US as n legacy from former
days should be adjusted and settled. No one.
think expects that these railroad companies
will be able TO pay their immense indebtedness
to the Government at its maturity.
ANY proceeding or arrangement that would
result now, or At any OLler tiinc, IN putting
these roads, or any PORTION OF them, in the pos
session and control of the GOV eminent is, in my
opinion. to DO ejected-certainly as long as
there is the least chance for indemnihcatio
through any other means.
L suppose are hardly justified in Inducing
the irritation and Indignation naturally arising
from a contemplation Of malfeasance TO such
an extent as TO lead to the useless destruction
of these roads TO the loss of the advances
made by the Government. / believe that our
efforts should DO III more practical direction,
and should tend with no conformation of wrong
doing to the collection by the Government on
behalf OF the peop.e OF the public money now
in jeopardy.
While the plan presented by majority Of the
commission appears to be well devised and & ves
at least partial premise of the results sought,
the fact will not escape attention that its sue
cess depends upon its acceptance by the COM
panies and their ability TO perform its condi-
tions after acceptance. II is exceedingly i'm
portant that any ad justment now made should
bo final and effective.
These considerations suggest the possibility
that the remedy proposed in the ma jority re-
port might we'll be applied To apart only Of
those aided railroad companies.
The settlement and determinat on OF tho
questions involved arc peculiarly within the
province of the Congress. The sub ,ect has
been made quite a familiar one by Con-
gressional discussion. This is now supple.
mented in n valuable manner by the facts pre-
sented in the reports herewith submitted.
The public interest urges prompt and efficient
action. GROVER CLEVELAND.
EXECUTIVE MANSION, Jan. IL, 1888.