The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1888-01-18
hey represented only their own interests

cerned in the transaction. They became
the incorporatos OF the company that was
to build the road subscribed for its stock
and were the only subscribers. Therefore
il is difficult TO sec how any one was
wronged by their action. The rule OF
equity invoked-which has its origin in the
injunction, No man can serve two mas
certainly did not apply to them, be-
cause they were acting in their own inter
csts and were not charged with the duty OF
caring for others rights, there being no
other persons interested in the subject
matter
In view Of this statement and the com
missioners' report IL seems proper TO recall
the grants and benefits derived from the
general government by both tho Union
and Central Pacific companies, for the pur-
pose of aiding the construction OF their
roads.
by an act passed in 1852, il was provided
that there should be advanced 10 said
companies by the United States TO aid such
construction, the bonds OF the government
amount to $4,000 for every mile con-
s,ructed, IA often as section OF, forty
miles Of said roads should be built that
there should also be granted TO said com.
panies upon the completion Of every said
section OF forty miles OF road, five entire
sections OF public Land for each mile 10
built; that the entire charges earned by
said roads on account OF transportation and
serving for the government, should be APP
piled Ia the reimbursement OF the bonds
advanced by the United States and the
interest thereon, and that to secure the
payment OF the bonds 40 advanced and in
ierest, the issue and delivery to said com
panies OF Rid bonds should con.
stitute hrt mortgage on the
whole line Of their roads, and on their roll
ing stock, fixtures and property OF every
kind and description. The liberal dona-
tons, advances and privileges 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 connections between our
eastern and western coasts, and they were
based upon a consideration Of the public
benefits which would accrue TO the entire
country from such construction. But tho
projectors of these noadls were not content,
and the sentiment which then seemed 10
pcrvade the Congress had not reached the
limit al iis generosity.
Two years after tho passage OF this law
II was supplemented and amended in
various important particulars in favor Of
these companies. by an act, which pro.
yided among other things, that bonds at
the rate already specified should be deliv.
cred upon the completion Of sections Of
twenty miles in length instead Of forty,
that tho lands TO be conveyed to said com.
panies ON the completion Of each section
oil said roads should lie ten sections per
mile ipsiead Of five, that only half Of the
changes Tor transportation and services due
from time TO tins from the United States
should be- retained and applied TO the ad.
vanccs made 10 said companies by the gov
eminent, thus obligng immediate pay
mcnt to the debtor ON the other half Of
said charges, and that the lien Of the
United states Ia secure rcimbunements Of
the amount advanced TO said companies In
bonds, which lien was declared by the law
oil 1862 "a constitute n tint mortgage upon
all the properly Of said companies, should
become TO a junior lien and be sub.
prdinated 10 mortgage which the
companies were by the amenda-
tory act authorized 10 execute bonds
which they might from time 10 time
Issue In sums not exceeding the
amount 81 United States bonds which
should be advanced 30 them. The i'm.
inense Advantages 10 the companies Of this
mncndatory act are APPARENT and in these
days We may well wonder that oven the
anticipated public Importance Of the con.
siruc,ion Of thcsc roads. induced what
must now appear 10 he rather reckless
and unguarded appropriation Of the public
fundenh Che public domain.
Under the operation Of these laws the
principal ol the bonds which have been
advanced is s6i, 023,5l2 M given 10y the
imports Of the commissioner, and tho in.
forest TO November I, 1887, il calculated b
10 $40, 02i, 206.6s making an aggregate at
the date named 81 sll0,Oi7, 7l05s. The
interest calculated % the maturity OF the
bonds added 10 the principal products an
aggregate 81 Si76,SSi, 1880. Against
these amounts there has been repaid b,
the companies the sum Of S3O,Ojj, 03g u
II Is almost needless 10 say that the com
panies have availcd themselves Ia the ut
most extent Of the permission given then
90 issue their bonds and 10 mortgage their
property IN secure the payment Of
the same by an encumbmncc, hay
ing preference Of the government,
lieu and precisely equal e
II in amount II will b. seen that there
was available for the building of each mile
of thcsc roads, $4,000 Of United States
bonds due In thirty years with per cent
interest, $4,000 in bonds oi the compan
zee secured by n first mortgage ON nll thci
property and ten sections Of government
lsnd-to say nothing Of the stock Of IN,
companies. When the relations create,
between the government and these com
panics by the legislation referred 10 Is con
sidewd, Il " astonishing that the claiu
should he made that the directors Of thes,
roads owed no duty cxccpt 10 themselves
In their construction, that they need ~
gard no Interests but their own, aud tina
they were justified In contracting will
themselves and making such bargains NJ
rcsulied IN conveying 20 their pockets MI
The asscis Of the companies A loanrr
the government was vitality intcps,c,
IN the amount Of the morigngc 10 Nhicl
IT. security had been suborlinaied. and /
had the night 10 insist Tat none of III,
bonds secured by this prior mortgag,
should he issued fnudulcnlly or for IN,
purpusc u division among ihcso stock
huldcu without consideration.
The do,trino oi complete independents,
on the part Of the directors Of the com
panios and their freedom from any obli
cation 10 care for other interests than thci
own IN he construction of ihcsc rad
seem 10 have developed the natural conao
luenccs OF iis application, portrayed a. FOL
lows In the majority report Of the commits
eionen The rsul, " that those Win
have controlled and directed the construc
ton and development u these companic
have become poscSed Of their surplu
assets through bsuca Of bonds, stocks an,
payment Of dividcndsvoied bythemsclycs
while the urrat creditor the Init.d S,,,..