Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1888-04-14

IN detail and here in evidence shows tbat 81
Iie pIahch lnes, as well as the Southern Pacific
Halfway OF California, Arizona and New Mexico
were constructed with the money or rnon the
creclt OF the parties who constructed them
me! were nearly all built by construction
company or the stockholders of each of the
roads so constructed. The Construction rom.
pany received for building those roads some
tlnes part cash, but generally the stock and
bonus or the company, backed rs these bonds.
were by the individual liability of the stoclr
holders but never in a single case was the credit
or money OF the Central Pacific road used in
men, men eoLsstq non; The company temporarily
borrowed OF The Central Pacific road sums ii
money which were not being used bv that com
paily ior which they have ample security and
al oi when were promptly repaid at the cur
il IS unnecessary to say anything further IN
der this mead, as IL viii not be assumed in view
OF the testimony which has been taken and
winch IS before you, that The charge will be
made again. The Directors OF the Central Pa
ciiie road, by consolidation brought into that
company me valuable Lines OF road which con-
nectSu u with san Francisco upon their own in
diYidusl credit. They built and brought into
that company the san Joaquin and sacramento
lines whieh now constitute the very iounda-
non Oh Lne Elprie. 1hey secured upon its name
but upon their own credit. the terminal lines In
Oakland. They secured Us q gift from the state
but IN the name Of the Central Pacific thirty
acres OF land IN Mission BAY i'll San francisco
which win, IS times rolls along be as plopor,
tlonately valuable for terminal purn0ses as are
Ine grounds OF the New York Central in New
act 10 impair the value OF the aided line al sho
Central Pacific road, they have directed their
credit End iheiF power TO strengthen and SUP
port II, 20 that it msy truly be said nov
that but for the things which they xrora
not bound to do, and but for the pledges of their
individual credit the aided lines of the. Central
rS as Ioaa Wound nave ceased to pay salaries
ana wages. II was asserted that the Directors
OF the Central Pacific were diverting money
rom It's treasury by paying excessive salaries to
its chief officers. Here again investigation diSl
a "a
Stanford has only been $1,000 per annum. the
Directors as such, only received s. for each
meeting; al general officers received salaries in
proportion. The truth was that the salaries
paid by the company to its principal officers
were far less than the salaries paid generaIlv nv
great railroads 10 such officers. On the other
hand, the wages paid by the Central TO is
skilled employees are and always have been thu
highest paid in the country Since 1855 fbe
date OF the lease to the Southern Pacific Com
pany, no salaries whatever have been paid 10
the President or other principal executive Of
nceIs. Inc duties have been performed without
might spend the day in examining and
citing anu
TIE REPORT OF THE COMMISSION.
TO prove that upon all material points their
decision fully sustained the COMPANY. on
some irnnaterial points their opinion was adj
verse, but an examination shows. as in the case
OF the - lost books" and the Oregon contract
that the Commission misapprehended the facts.
Nor IS this strange when we consider how
broad the field of Investigation was and how
limited was the lime in which the field had To
be traYeTsed. Part III. of the report of the Com
MISSION MISSION IS defoted 10 specific answers to the
questions contained in the Act OF 1887. and
these answers are in the nature of a special YER
diet or finding of fact. This verdict or finding
IS IN lavor OF the company. Had the issues
been tried by jury and special verdict been
rendered IN the language of the answers of the
commissioners, O Judgment for the railroad
Would necessarily have followed. This report
Will be widely circulated 1t is before YOU To
pursue u f1rtL er in detail is not possible in the
time %hlch can take from this committee To
1t call your earnest attention
The bill introduced by the Senator from Ne,v
YORK Is before you. In the main il deals fairly
with the matter involved. 1t guards the rights
oil both parties. IL provides for judicial deter
mlnahon OF all things at issue, TO the end that
truth may DE ascertGined. and the integrity of
the Directory be viadicated if the truth MAY be
ascertained, u the truth shall constitute such
Flndlcation- IL Is drawn in PLAIN language
language which cannot be misunderstood. and
colnmends ITSELF by reason of its fairness 10 all
Just men But, as said in the beginning yours
Is the duty TO look over the wide field and TO re-
port bill which shall as near as possible do
exact Justice to all parties which, while il
secures all just claims of the United States will
not De oppressive to the company or to the com. |
munlties from which the road derives its reve-
hues. nave tried TO point out that the task Is !
not so oifhcult as at first glance it might APP
pear. nave tired to show that the apprecia-
Non OF the principles which govern fair-minded
people IN dealing with each other will speedily
Drlng TINS controversy TO an end secure ali
crenltoIs, ana leave the company in peace to
pursue Us Yocatlon-that of common carrier
ana TO discharge the other obligations imposed
upon II as an agency of the nation the obi !
CATION to maintain for all time to come its line
OF ROAD, 10 no d II 10 the great Governmental
uses; for which in part it was constructed and !
Gated.
fHg PACIFIC RAILROAD COMMISSIONERS
Have presented two bills, which appear on |
pages "A to 30 of their report All these refer |
enceS are to the report first published The !
committee, in considering these bills, must bear
IN mind the fact that the constitutionality of |
the entire Thurman bill has never been passed !
upon by the Supreme Court of the United states; |
that the late lamented Chief Justice, who de |
nYered the opinion OF the majority of the Court |
II that case ex industrio confined that decision
10 the question whether the United States had |
the right, under the Acts of 1862 and 1861 to in
crease the percentage which the companies
were TO pay into the Treasury, provided that in F!
crease did not affect the operations of the road
Neither the Chief Justice nor the Court passed
upon the question of the constitutionality ofthe
thurman Act as an entirety. On the contrary,
they LETT tnht IN very grave doubt. Said the
learned Chief Justice in delivering the opinion
OF the majority of the Court in that case; THE
single question presented by the case of the
Jnion facinc Railroad Company is as to the
constitutionality of that part of the Act of May
4 lSSI-'1he Thurman Act'-which estab-
lished in the Treasury of the United States
sinking fund. The validity of the rest of the
Act Is not necessarily involved" He further
said, delivering the opinion of a majority
of the Court, and in this respect there was
no dissent on the part of the minority " The
United states cannot, more than a State inter
fere with private rights, except for legitimate
governmental purposes. They are included
within the constitutional prohibition which
prevents States from passing laws impairing the
obligations of contracts. but, equally witt the
States they are prohibited from depriving per-
sons or corporations of property without due
process OF law they cannot legislate back to
themselves, without making compensation the
lands they have given this corporation to aid in
the construction of this railroad. Neither can
they by legislation compel that corporation to
discharge its obligations respecting the subsidy
bonds otherwise than according to the terms of
the contract already made in that connection.
The United States are as much bound by their
contracts as any individual. If they repudiate
their Obligations IL is as much q repudiation,
with al the wrong and reproach that term i'm
Plies, as i would be II the repudiator had been
4 State OF q municipality or a citizen. No
change can be made il the title created in the
grant OF lands or in the contract for the subsidy
without the consent of the corporation. All
this is indiSputaoie.''
Thus we have the Judgment of the Supreme
Court Of the United States that the Acts of Con
gress of 1862 and SCI constitute contract be-
tween the Uni ed States and the companies in
terested-a contract as sacred as contracts be-
tween individuals, and which
CANNOT BE VIOLATED
by either party. The bill which the Pacific
Railroad Commissioners presented relating to
the Central and Western Pacific Railroad Com
pany provides for many changes in that con-
tract. They recognize the fact that the changes
cannot be made without the consent of the Cen
tIal Pacific tiailroad Company, but in section Is
they provide that if the company does not
accept the provisions of the bill they present.
the annual earnings of the subsidized portions
of this railroad shall be paid into the sinking
fund created by the Thurman Act. In other
words, they submit to the Central Pacific Rail
road Company the alternative of accepting a
change in the contract or submitting to a pen
atty when would, in effect, render the opera
ton and maintenance of its main lines an inn
possibility. The Pacific Railroad Commission
does not assume that one party to a contract has
the right to change Ii at lis will. but they do
assume that the legal power rests in one party
to demand of the other that sucn change shall
be made, and to impose penalty If the other
party does not consent 20 the change. This pro-
position is, ia my Judgment so INDUSTRIOUS that
no Court will entertain IL for a moment. The
contract is TO be sacred and inyiolate, but one
of the contracting parties has the right. accord
ing to these Commissioners, 10 say that if the
other does MT agree to q change he shall submit
TO any punishment which the other proposes To
iniict. such O position can find no support
either in law or morals. The right TO
alter TO amend or repeal has It's
limitations. The limitations have been
fixed by the Supreme Court, and they
must not, either by direction or indirection de
stroy or affect in the contract entered into The
COMMISSIONS were, by the Act of Congress.
charged with the duty of inquiring as to what
sums the Pacific Railroads and their branches
can seyerally pay annually on account of their