The Big Sandy news. [volume] (Louisa, Ky.) 1885-1929, 1888-01-26
PACIFIC RAILROADS.
The President Transmits the Re-
port of the Commission
To Congress In Lengthy Message and
Asks That tho Questions Involved
be Settled by Legislative
Enactment.
THE LITTER.

WASHINGTON, Jan. 1S.-The following Is
The Presidents message transmitting the
Pacific railroad reports TO Congress;
To the Senate and House Of Representatives;
ON the Sd dny OF March last an act was passed
authorizing the appointment OF three conhs,,
sioners who should investigate the affairs ol
such railroads rs have received ala rom the
United States government.
Among other things, the contemplated inyes- |
tigation Included history OF the construction |
OF these roads. their relations and indeplenhess
10 the government and the question whether IN /
the interest of the United States any EXTENSION |
OF the time for the performance oil lhe onl IS |
lions OF said roads 70 the government snouiu ue
Granted: and II so. the said commissioners were |
directed TO submit scheme for such extension |
The commissioners were further urecteu uS
said act TO report in luN TO we 1 10 Sas
nv said act required to forward sad report 70
Congress- with such recommendauons or com
ments as he should see iii 10 make IN inc prem
INC commissioners Immediately after their
election entered upon the discharge OF their ~.
ties, and have prosecuted their inquiries ,Sn sn
pommcndable Industry, intelligence anu tnor.
ouRhuess A large amount oil tesuuoly nus
been taken. and all the facts have neen aeNei'
oped which appears 10 DC necessay Ios ~, nv @
sideration Of The gu stuns arising from me con
ditiOn Of these aided rairoads ana lielr iela-
tions 10 the government. The commissioners
have however. been unable TO agree upon tne
manne, in which the railroads should be treated
respecting their Indebtedness 70 inc Olnteo
States, or 10 unite upon the plan pest ea.eg g
lated TO secure the payment oil sAoh inuepteu
ness. -. ....,.
.This disbursement has resulted In the prepa-
ration OF TWO reports, both OF which are herewith
submitted TO the Congress.
These reports exhibit such TRANSACTIONS anu
E schemes connected with the construction OF the
aided roads and their management, ana sugses.
the invention OF such devices on .no pst. 20, ",
those having them in charge for the apparent
purpose OF defeating any chance ior the govern.
ment,s reimbursement, that any adjustment oI
plan OF settlement should ~pyh
rather than any forbearance or generosity de-
served by the companies. -.
THE wide publication which has already been
given 10 the substance of the commissioners ~
mort obyintes the necessity OF detailing IN TINS
communication the facts found upon the inVes
tigation. ~
methods adopted by those who formerly had
charge OF the Union Pacific railroads, declares
that since us present manageem ar "a sary and
prudently conducted, and that the present au
ministration .has devoted itself honestly anu
inteIligenty TO the herculean iask o.
the Union Pacific railroad from the insolvency
which seriously threatened u az the incePtsl9!sl
of its work; that II has devoted itself Dy rlglu
economy by inieigeni ny iSe Earning ing cspa
CITY Of the system to its improvement ana pet,
terment, to place that company on souhu anu
enduring financial foundation
The condition of the present management VI
the Union Pacific company has an importaht
bearing upon its ability TO comply WIN h. tne
terms of any SettleulenI OF us liuOptSelAS79
which may be offered by the government
The majority OF the commission are IN FAVOR
OF an eAtension of time for the payment OF the
government Indebtedness Of these eoinpanie .,
Inon certain conditions. But the chairman OF
the commission, presenting the majority report
recommends, both upon princlpal ana poicy Wy
institution OF proceedings for me i9r.eltute q
the charters OF the corporations anu thV VIM
ing up of their affairs.
have been furnished with statement, OF NJ
gument, in defense of the transactions con
n. cfrttr tnUn
cihc road and its branch lines from which IL ma,
not be amiss TO quote, for the purpose o. snow
ing how some OF the operations OF ihe alrectot
of such road strongly condemned by the CON
missioners are defended by the directors them
selves. After speaking OF n contrary LOT In
construction OF one OF these Draheh mus w
CORPORATION called the Contract and tlnanc
Company. owned by certain directors OF IN
Central Pacific railroad, this LANGUAGE Is usee
at may be said of this contract US Oh nan
others that were let to the different constru
tion companies in which the directors OF "
Central Pacific have been stockholders, I'M
they built the road with the moneys iurnlsnt
by themselves and had the road for their outla
In other words, they paid TO the construcii'
company the bonds and stock oil the raliroa ~,
constructed, and wa ted until such time as th
could develop sufficient business on the roi
built. TO induce the public TO buy the pohus
the stock. II the country through wnlcn !.
road ran developed suffic ent business, tneh =
project was q success: If IL did not then the 9
Grafton was a loss. Those gentlemen look
the responsibility; any loss occurring was ny
essarily theirs, and OF right the proft oeiony
TO them. But II is said that they violated
well-known rule OF equity in dealing with the
selves; than they were trustees and that Ia
were representing both sides OF the contract.
ssThe answer is that they did not ind anyDo
else to deal with. They could not find any
who would take the chances OF building 70
through what was then an almost uhinna 10 !,
country and accept the bonds and stock OF u
road In payment. And when IL is said that IN
were trustees, if they did occupy such relate
IL was merely technical. for they represent
only their own interests on both SIDES, tne
being no one else concerned in the transactc
They became the incorporators OF the compa
that was 10 build the road, subscribed LOT
stock and were the OILY subscribers Inc
fore il is difficult TO see how amy one "
wrongcd by their action. The rule OF equity
voked, which has its origin In the inlunet,on,
man can serve two masters, certainly ala
anply 10 them because they were acting in IN
own Interests, and were not charged with |
duty Of caring for others rights, there being
other persons interested In the subject matte
In view OF this statement and the facts dey
oped in the commissioners report II see
proper to recall the grants and benefits derlN
from the General government by both the un
and Central Pacific companies for the purpe
OF aiding the construction OF their roads
BY an act passed in 1862 IT was provided y
there should be advanced TO said companies
the United States to aid in such Construct
the bonds of the government amounting 10 !
90 for every mile constructed as otten as q
tion OF forty miles OF said road should be bu
that there should also be granted to said C
panies, upon this completion OF every sectloi
forty miles OF road five entire sections OF pu'
land for each mile so built; that the EN-
charges earned by said roads on account
transportation and service for tne goNernIh
should be applied to the reimbursement OF
bonds advanced by the unitea S.a, ~, ana M,
men. OF the bonds so advanced and interest
issue and delivery TO said companies OF
bonds should constitute first mortgage on
whole OF their ROADS, and on their rolling ST.
fixtures and property OF every kino ana oesc
ton.
leges provided for in this law we're granted
the General government for The purpose OF
curing the construction OF these roads, wi
would complete the connection between
eastern and western coasts, and they were Ok
upon consideration of the public benefits WI
would accrue 10 the entire country from
construction But the pro.ectors q tnss seh :, |,
seemed TO preyade Congress hal hot rea'
the limits OF its generosity.
Two years after the passage OF this law it
supplemented and amended in various iml
ant particulars in favor OF these companies
an act which provided, among other thlngs,
the bonds at the rate already specified, sh
be delivered upon the completion OF sector
twenty miles in length instead OF forty, thai
land TO be conveyed to said companies on
completion OF each section OF said roads sh
be ten sections per mile instead OF hve,
only half OF the charges for transportation
service due from time TO time from the VI
States should be retained and applied 10
advances made 10 said companies by the
erument-thus obliging immediate p0ymer
It's debtor OF the other half ofsaid charges
that the lien OF the United States secur
reimbursement OF the amount advanced 10
companies In bond. which lien was declare
the law OF 1862 TO constitute first mort
upon all the property OF said companies, 81
become lien and be subordinated TO
gage which the companies were, by the an
atory act authorized TO execute OBSCURE I
which they might from time TO time iss
sums not exceedingthe amount OF the U
States bonds which should be advanced TO
The immense advantages TO the compan
this amendatory act are apparent; and In
DAYS we may well wonder that even the a.
pated public Importance OF the Construct
these roads induced what must now appe
be d rather reckless and unguarded appr'
ton OF the public funds and the public DO
Under the operation Of these laws the ?
pal Of tho bonds which have advanced Is
i235le, as given in the report Of the col
Sinners the interest to November J, u
calculated to be s7t. 02i, So. making an
gate nj the date named OF Sii00H11s.5S.
interest calculated TO the maturity OF the