Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1888-01-18
PACIFIC RAILROADS.
TIE REPORTS OF TIE INVESTIGATION
COMMISSIONERS.
The Presidents Message Transmitting the
Same to Congress lie Diagnoses the
Status OF the Reads, &c.

icy telegraph 10 thc Dlspaich.l
WASHINGTON, Janutry THE PrCsi-
dents message transmitting to Congress
reports Of the Pacific railroad iuvestiga-
ton commissioners SAYS that among
other thiug& contemplated the investiga-
ton included the history Of the con
s'ruction Of these roads, their relations
and indebtedness 10 the Government.
and the question whether in the interest
Of the United States, any extension Of
time FOR the performance Of the obhca-
tons Of SAID road 10 the Government
should be granted. The commissioners
have been unable 20 agree upon the
manner IN which these railroads should
be treated respecting their Indebtedness
10 the United States or to Hnite upOn
plan best calculated 10 secure
the payment OF such indebtedness
This disagreement has resulted in the
preparation of two reports. both of
which are herewith submitted 10
Congress. These reports exhibit such
Transactions and schemes connected
with the construction Of the aided roads
and their management. and suggest
The invention of such devices on the
the apparent purpose of defeating any
chance for Government reimbursement,
that any adjustment or plan of settle
ment should bee predicatcd upon the sub.
f,autial interests Of the Government
rather than any forbcarance or gene
rosiiy deserved by the companies.
4 majority of the commission are in
favor of an extension of time for the
payment OF the Government indebted
ness Of these companies upon certain
conditions But the chairman Of the
commission presenting a minority re-
port recommends both upon principle
and policy the institution Of proceed
ings for the forfeiture OF the charters Of
the corporations and the winding mp of
their affairs. ] have been furnished /
with statement or argument in defence /
Of the transaction connected with the /
construction of the Central Pacific road /
md ITS branch lines. from which 1t may /.
not he amiss 10 quote for the purpose /
az showing how some of the operations |
Of the directors of such roads strongly F..
condemned 10y the commissioners are
defended by the directors themselves
After speaking Of the contract for the
construction Of one of these branch lines
by a corporation called Contract and
finance Company, owned 10y certain
directors of the Central Pacific railway,
tins language is used II may bc said of
this contract as of many others that were
let to different construction compaDiesin
which the directors of the Central Pacific
have been stockholders, that they built
the road with moneys furnished by them
selves aud had the road for their outlay.
I'm other words. they paid to the con
etuction company bonds and stock Of
the railroad So constructed and waited
until such time as they could develop
sufficient business on the road built to
induce the public to buy bonds or stock
II the country through which the rail-
roads ran developed sufficient business.
then tine project was a success. If II
did not, then the operation was
loss. These gentlemen took all
the responsibility. Any loss occurring
WAS necessarily theirs and of right the
profit belonged to them. But It is said
they violated the wcll-knOwn rule of
equity III dealing with themselves that
they were trustees. and that they were
representing both sides Of the contract.
The answer Is that they did not find any !
body else 10 deal with. They could not
find any one who Wouid take the chances
If binding a road through what was J
then an almost unmhabited country and
accept bonds and stock of the road III u
payment; and when 1t Is SAID that they
were trustees if they did occupy such {
relation. 1t Wa merely technical, for
they represented only their own interests {
on both sides. There being no one else
concerned IN the transaction they be- ,
came the incorpOrators of the company u
that was to build the road, subscribed y
for It's stock. and were the only sub o.
Fcuhers Thor .fore 1t Is difficult 10 see e
bow any one WIS wrongod 10y their ac- u
ton The rule Of equity invoked, which J
has ITS origin IN the Injunction that no u
man can serve two masters certainly il
did not apply to them, because they C
were acting m their own interests and g
were not charged with the duty OF caring 81
for others rights, there being no other u
persons interested IN the subject mat p
Ter Ia
In view az this statement and the facts L,
developed In the commissioners reports al
10 seems proper to recall the grants and '"
benefits derived from the General Govern D"
ucnt by both the Union and Central 60
Pacific companies for the purpose of
iiing the construction of their roads. CO
he President here quotes the act of S''
So granting ald TO these roads, and us
avs " The liberal donations, advances, au
uI privileges provided for IN this
were granted 10y the General Govern ia
ientior the purpose of securing the con W.
truction Of these roads. which would CT
1upIe,e the connection between our
asicrn and western coasts, and they We
ere based upon the consideration Of pu
he public benefits which would accrue tu'
D tine entire country from such con- HC
.rucuon. Bot the projectors of these zee
Dads were not content. and the sentl- H."
rent which then seemed topervade Con IN,
ress had not reached the limit of It's
aucrosty. Two wears after the passage jill,
Z THIS law il was supplemented and Ha'
.nended in various important particu- 81
rs IN favor of these companies by an tea
It which provided, among other ro0
uu9s. that bonds at the rate al Tue
.aly specified should be delivered enc
pou thecompletion OF sections of twenty or
ilcs IN length, instead Of forty that uoi
be- lands to ne conveyed to said com ny
lnics on the completion OF each section PIE
said roads should be ten sections per
lie instead Of five that only half of the OF
large for transportation and service due WIS
ON time 10 time from the United States Oh
ould ice retained and applied TO ad- CAP
.nces made 10 said companies by up'
e COMMUNICATING oblgng the ah'
mediate payment to It's debtor al''
the other half OF said charges, poI
"a that the lien of tho United Sho
ates 20 secure the reimburse con
ent Of the amount advanced to said tina
,mpanics in bonds, which lien was de JON
AIRED by the law OF 1862 70 constitute par
e first mortgage upon all the property Mel
Said companies, should become ju-
or lien and be suboriinated 10 the the
ortgage. which the companies were Wit
? The amendstOry act authorized TO tue
ecute 90 secure the bonds which they mar
iPht from time 20 time issue in tins