Custer chronicle. [volume] (Custer City, Black Hills, D.T. [S.D.]) 1880-1890, 1888-01-28
PACIFIC RAILWAY REPORTS.
The President Sends Them to Con
gress with a Message Thereon.


WAsnIEoToN, Jan. 1S.-The president sent
to congress today q message transmitting the
Pacific railroad reports. The president said:
The commissioners have prosecuted their
inquiry with comiGendablc industry, intelli-
gcnce and thoroughness. They have, how
ever, been unable 10 agree upon the manner
in which these railroads should be treated
respecting their Indebtedness to the United
States, or Ia unite upon the plan best calcula-
ted 10 secure tie payment OF such indebted
ness. This disagreement has resulted in the
preparation Of tive reports. The reports eX-
hibit 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 chance for the governments
reimbursement that any adjustment or plan
OF settlement should be predicated upon the
substantial Interests of the governmentra rather
than any forbcaranco or generosity deserved
by the companies.
The majority report, while condemning the
methods of those who formerly had charge OF
the Union Pacific, declares that since its pres
emit management was inaugDraled, in 1884, its
affairs have been fairly and prudentiy con-
Quoted, and chat the present administrator
has devoted ITSELF honestly and intelligcntiy
to the Uerculcan task OF rcscuing the Union
Pacific from insolvency which seriously threat
cnca !: ut the inception Of its work. That il
has devoted itself, by rigid economy, by intel
ligent management aud by the application OF
every dollar of the earning capacity Of the
system to it, Improvement ana betterment,
to place that company on a sound and endur-
Ing financial foundation.
The condition of the present management
Of the Union Pacific company has an import
ant bearing upon IT, ability 10 comply with
the terms Of settlement Of its Indebtedness
which may he offered by the government. /
have been furnished with n statement or argu-
mcnt IN defense Of the transactions connected
with the construction OF the Central Pacific
road, and liz branch lines. from which II may
not be amiss Ia quote for the purpose of show
ing how some OF the operations Of the direct
ors of such road, strongly condemned by the
commissioners. are defended by the directors
themselves. After speaking Of the contract
for the construction of one Of those branch
lines, by a corporation called the Contract
and Finance company, owned by certain
directors of the Central Pacific railroad, this
language is used:
at may be said Of this contract, as Of many
others that were let to different construction
companies ia which the directors of the Cen
trail Pacific have been stockholders, that they
built the road with money furnished by them
selves, and had the road for their outlay. In
other words, they paid 10 construction com
panios bonds, and the stock Of the railroads
50 constructed, and waited until such time as
they could develop sufficient business on the
road built to induce the public 10 buy the bonds
or stock. If the county through which the
road ran developed sufficient business, then
the project was q success; il ii did not, then
the operation was "A loss.'
Any loss occurring was necessarily theirs,
aud OF right the profit belonged 10 them
but it ia said that they violated a well-known
rule of equity in dealing with themselves,
that they were trustees, and that they We're
representing both sides Of the contract. The
answer is that they did not find anybody who
would take the chances of building the road
through what was then an almost uninhabited
country, and accept the BONDS and stock OF
the road in payment; and when il Is said that
they were trustees, If they did occupy such
relation, IL was mere technical, for they rep
resented only their own interests on both
sides, there being no one else concerned I'm
the transaction. They became incorporates
Of n company that was 10 build the road,
subscribed for It's stock, and were the only
subscribers. Therefore ii Is difficult to see
how any one was wronged by their action.
The rule of equity invoked, which has It's
origin in The iniunction that no man can serve
two masters, certainly did not apply TO them,
because they were acting in their own inter
csts, and not charged with the duties OF caring
for others rights, there being no other per.
sons interested in the subject matter. IL
view Of this statement and the facts developed
in the commissioners report, it seems proper
to recall the grants and benefits derived from
the general government. 10y both the unior
and Central Pacific, for the purpose OF aiding
the construction OF these roads. BY an ne
passed in 1862 it was provided that there
should be advanced to said companies by tn
United States, 10 aid in the construction
bonds OF the government and lands from tn
public domain, and that 10 secure the repay
ment Of the bonds 81 advanced said bond
should constitute "a fret mortgage IN th'
whole line II their ROADS and on their propert.
If every h!nl and description. The liberia
donations, advanccs and provided for in thi
law were granted by the general govcrnmen
for the purpose Of procuring the constructor
OF these roads, which would complete the con
~nection between our eastern and wester
coasts. and they were BASED on the considers
ton Of public benefits which would accrue
the entire country from such construction, bu
the projectors Of these roads were not certain
and the sentiment which then seemed to pre-
vail IN congress had not reached the limit G
its generosity. Two years after the passag
Of this Law il Yas supplemented and smendc
In various important particulars in favor c
these companies, 10y which 1t was provided
among other things that the government
mortgage should become the junior lien, an
be subordinate Ia the mortgage which III