Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1888-01-18

VIM. interest SiO,ODD III DDuub Oh III
companies, secured by first mortgag
on all their property, and ten sections
Government land, 20 say nothing OF tn
stock OF the companies.
"When the relations created betweel
the Government and these companie
by the legislation referred TO is consid
cred it is astonishing that the clair
should be made that the directors O
these roads owed no duty except b
themselves in their construction, tbs
they need regard no interests but thei
own, and that they were justified in thei
contracting with themselves and malinj
such bargains as resulted in conveying
to their pockets all the assets of tn
companies As lienor, the Govern
ment was vitality interested in TIN
amount OF the mortgage TO which it
security had been subordinated, and i
had the right 10 insist that none Of TIN
bonds secured by this prior mortgage
should be issued fraudulently or for TIT
purpose of division among these stock
holders without consideration.
80 The doctrine of complete indie
pendence on the part OF the directors o
these companies, and their freedom from
any obligation to care for other interests
than their own in the construction O.
these roads, seems TO have developed
the natural consequences of its 9pplica
ton, portrayed as follows in the majority
report OF the commissioners
he result is that those who have
controlled and directed the construction
and development of these companies
have become possessed of their surplus
assets, through issues of bonds, stocks,
and payment Of dividends voted by
| themselves, while the great creditor the
UNITED States, finds itself substantially
without adequate security for the repay
ment of its loan.
" The laws enacted in aid OF these
roads, while they illustrate proiuse
hberality, and la generous surrender of
the Governments advantages, which it
is hoped experience has corrected, were
nevertheless passed upon the theory
that the roads should be constructed ac-
cording to the common rules of business,
fairness, and duty and that their value
and their ability to pay their debts
should not be impaired by unfair
manipulations, and when the Govern
ment subordinated its lien to another
1t was in the expe, tation that the prior
lien would represent in its amount
only such bonds as should be
necessarily issued by the companies
for the construction of their roads Vt fair
prices, agreed upon in an honest way,
between real and substantial parties.
For the purpose Of saving or improving
the security afforded by its junior lien
the Government should have the right
now to purge this paramount lien of all
that is fraudulent. fictitious or uncon-
scionable. If the transfer to innocent
hands of bonds Of this character secured
by such first mortgage prevents their can
collation., 1t might be well 10 seek rem
cdy against those who issued and trans
ferred them. If legislation is needed to
secure such a remedy the Congress can
readily supply 1t.
81 desire to cQll attention also to the
fact that if all that was to be done on
the part of the Government to fully vest
in these companies the grants and adj
yantages contemplated by the acts passed
in their interest has not yet been per-
fected, and if the failure of such com
panies 10 perform in good faith their
part of the contract Justiiics such a
course, the power rests with Congress to
further performance on the
part of the Government. If donated
lands are not yet granted to these com
panles, and if their violation of con-
tract and of duty are of such as in
Justice and morals forfeit their rights to |
such lands, congressional action should /
intervene to prevent further consumma- /
ion. Executive power must be eXer- /
Used according to existing law, and Elk
'cutive direction is probably not broad .
'nough to reach such difficulties.
"The California and Oregon railroad |
S now part of the Central Pacific sys-
EN-, and is a Immigrant road. It's CON
uuctlOn has been carried on with the /
anne features and incidents which have
the other constructions of
his system, rs is made apparent on
lages y, ~, and so of the report of the
of the commissioners. / have
n my hands for approval the report of
appointed to examine two
sections of this road. Upon
uch approval the company or the Cen
raj Pacific Company will be entitled to
atents for a large quantity Of public
lnds. | especially commend to tn at
anuOn of Congress this condition of
fairs, in order that it may determine
neither or not it should intervene to
ave these lands for settlers if such a
purse is iustifable.
lit is quite time that the troublesome
surrounding this entire
inject which has been transmitted to
, as "A legacy from former days should be !
ijusted and settled.
" No one, think, expects that these
ilroad companies will be able to pay +
cir immense Indebtedness TO the Gov .
nment at its maturity.
Amy proceeding or arrangement that {
)uld result now or at any other time in ;
lttiug these roads or any portion of
EN- in the possession and control OF the
overnment is, in my opinion, to be re-
cted-certalnly as long as there is the q
lst chance for indemnlticatiOn through :
v other means. -.
Il suppose we are hardly justified in y
iulging the irritation and Indignation Y
turally arising from n contemplation Z
malefeasance 10 such an extent as to !,
ID 10 the useless destruction of these :
ads or the loss of the advance made by >
e Government | believe that our q
orts should be in a more practical
,ection, and should tend with no con-
nation Of wrong doing TO the collection
the Government on behalf of the peo-
E of the public money nowin jeopardy. I,
q While tn Iplan presented by majority "
the commission appears TO be well de "
ed, and gives at least partial promise n
the results sought, the fact will not es- G.
pc attention that its success depends L
ON its acceptance by the companies p
L their ability TO perform its conditions b
er acceptance. 1t is exceedingly i'm p
rtant that any adjustment now made o.
3uld be final and effective. These
suggest the possibility
It the remedy proposed in the ma
ity report might well be applied to a
t only OF these aided railroad compa- III
4. Ol
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