New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1888-01-05

missioner of Railroads In his report Tor 1888 says
"The saving to the Government has greatly OK
ceedcd he current interest II has paid
shall II be said. In Wow Of such an cnorm's rnah
cal benefit TO the Government, ard its fail ir. -
to hcsc VII, c ,ntracied wr'h IT, ana SLo have !.'n
the factors &C. IIodnce This fes u. ne hrn,m's ~
,haf ,"r" are n conltIes to be in dc'crmn'
ing the present rotation ~ he cr'i~l i'af nj
road Co,nrany and the rTrfcd states As tho com.
missioner heretofore quoted from said, In his report
fof 1899:
An those considerations appeal with great force
3, the beraty OF Congress- and we add. but more To
its Of Justice.
CAN TIE NATION VIOLATE ITS PLEDGES'
There shonld be no unllnd feeling Tho part OF
the Government any Of ts departments toward the
and tho corporations causing this saving to It's
Treasury
These men should not lie met with viiuperatlon or
disdaln there arc equities in their position which 1t
would be Infamous I'm tho Government TO disregard
They should be treated with Justice.
Tho United States invited these men. using the Ian
rnare of Mr. Justice Davis. TO aid them In performing
a National work They have done than their
Iart: bit the Government has failed in the most
valuable part Of its engagement.
Not only this hut II has changed the contract by
tn, nero might OF ifs legislative power compelling
these men to mcot Obligation before u was due
1t docs not afford these men even he aovan,ase OF
a res pectful or impartial hearing. They arc met D.
tho Government and its organs with aSperSloh ahc
contemptuoUs abuse.
comnany from Government transportation upon the
aided road the Government has refused TO pay or mo
,rivate capital now amounting to abont Two millions.
The loss Of which and payment of Interest and The
Hedging OF securities to borrow an equal amount,
subjects the company TO great embarrassment.
The question as the liability of tho Government
to Isy the COMPANY the money ed h o 1 of Of Claims
and the Judgment Of that court has been anlrmea Dy
the Supreme Court OF the uhsa ec WooSs said
"The subsidy bonds granted to the company being
granted only in respect to the original roaa are iIe c
earnings Is only demanded on the net earnings OF sao
portion
And citing from the opinion of Mr.. Justice Bradley
In previous case. the following:
.Wih this decision In View II would be impossible to
for services rendered the United stass which by he
same section. Is required TO 10 applied 10 the payment
rendered by road tho construction OF which had rot
been aided by the issue to the company Of Government
bonds. As the contract between the United states
ard the railroad company, contained in the Acts OF
July ], 1862. and July ., 1864: has been intcrprced
by this court TO authorize tho retention by tho
Government of compensation for services only on the
road which the United States aided In building tho
construction which the appellant seeks 10 put upon
the second section OF the Act of May 1873 woud not
only render that section breach OF faith on INC
Constitutional rights of the appellee. We are bounl
possible to so eonstc the law as TO lay %em
faith of the Government"
But Notwithstanding that decision. although rcnd.
cred at the October term OF 1885, tho Government
SIN refuses to make payment to the Company for tho
retains in its Treasury nearly - 100000 on which
company is losing the same rate OF interest It Is
There is no reasonable prcfcxt for tho Government
refusing to obey the Judgment Of the highest court
which by authorized receive and its refusal
t. accord to the Central Pacific Its rights as decare
unworthy Of any civilized government. IL has used
its power to make forced loan. and to retain me
property Of a citizen: was said by Mr.. Justice
bradley It has asserted the principle thar might maErs
right and Is guilty OF acts Of oppression that We 81 sho h
authorities Of petty Central American state or by
ruler in Algiers.
DIVIDENDS
The Commissioners charged to inquire whether
any dividends have been unlawfnlly declared by the
directors, paid the stockholders OF sSich company,
and IL so, TO what extent and whether the amount
thereof NAV not nc recovered from the directors unaw
fully declaring the same, the persons who have I'M
law fully received the
As an original proposition II would scem as IL this
was a matter that rested between the stockholders
and the corporation. and not between The Government
and the company.
States In the case of the United States VS.. the Union
Pacific Railroad aud others, los q. S. p 1921 decides
That the United 81 ates has two distinct relations
TO the railroad company, VIZ: the legislative and
vIsItoria power of the Government creating the cor
ptrail0n and the relation growing out OF the contract
formed on the charter and It's amendments.
The suIt in that brought under tho statute
t o. q, nIon Pacific Railroad Company for money
for capital stock, for money or property received
from II on fraudulent contracts, aud ior money OF
property which ought, in equity, to belong to 'hc
Company.
It was held that the bill exhibits no right to relief
on the part OF the United States, founded on Inc
charter contract that tho company has constructed
road to completion, Keeps In running order ana
carries for the Government all that IS required Of H.
1t owes the Government nothing that due and tho
Government has the security which by law provided
such is the position of the central Pacific Railroad
Company toward the Government, al ms tne. In ils
relation of debtor and creditor, the United STATES mas
a linz is now ae or and it
has with the disbursement OF the earnings
OF The road. until some default occurs I'm the pay
menis which are fixed by the contract, or in the forced
changes thereto made 10y statutes.
il viii lie remembered that the Central Pacific Rail
read Company was not completed on no proceeds OF
the bonds furnished by tho Government That aid
OF at that time, the price Of gold being 90 would
yielded but S0.C03407 but as after the close OF
by selling the bonds TO the best advantage that the
haste in which the road was consrncied enabled II to
do something over twenty millions was realized, which
less than twoGftlS OF the cost OF The road from
Sacramento to Ogden But. after all. the asset;
the aided road including the proceeds OF such portion
of its stock which had been sold. were. as we have
debt. which It could not have retired If It had been
pressed to do at that time.
In the course of the investigation witness was
asled by one of the commissioners What effect world
IT have had on the Central Pacific Railroad Cora
lions between 1877 and 1884 among Its stockholders
It had been applied TO lettering the condition of -
read. ard extending lis earning capacity Do you not
think that If this had been done the road would have
been In better shape TO repay IFS debt to The Govern
I
hy the Commission on behalf II The Government. and
NAV be answered here: The Central Pacific has dis
charged all u financial obligations 10 the government
as they II is not in default. II has rendered
t. The Government everything the contract required
I'm kcepn IFS road In good condition. In Welding II 10
TIE use of the Government whenever demanded II
has paid The Government all that II agrce To pay, all
that has been cxtOrted from II by legislative hostility
In adding contract burden and the Government
having provided tic manner I'm which The principal
sud interest Of The bends should be paii must take
lis satisfaction In that way The mortgage which ire
hct of 1869, Sec 5. says shond ipso facto exist In
favor Of tho United states the Issue and delivery
OF the bonds 10 the company. is not npon the tolls
Income. rents profits 0f the company. except 10 tho
extent Of per cent OF its net earnings but Is on
the whole line Of railroad and telegraph. together with
the rolling stock fixtures and property ~ every kind
and description and In consideration OF which said
bonds may be Issued"
SHOULD INNOCENT STOCKHOLDERS BE DE
SPOILED7