Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1888-04-28

surveys had been made impossible by the
| failure of that body to make the necessary
appropriations. Mr.. Lamar says (page II
of Report of the Secretary of the INTERIOR :
! In the granting Acts to these companies is a
| clause directing the Executive to cause the
! land to be surveyed along the line of the road
SO that the lands to which it might be entitled
shall be made over to the company as fast as
the road is constructed. But the Executive has
| been unable to comply with these directions,
| because Congress has not thought proper to
III. nish the means to make the necessary sur
yeys, and there was no other source from which
| il could come.
| Great confusion and many hardships have
resulted from the want of necessary appropria-
tons for the survey of the lands along the lines
| OF said roads.
| The report OF the United States Land
Bureau says that the selections on the rail-
road grants filed for patents are now of such
volume that with the force available at
present ''thirtytwo years will be required
to complete the examination of the land
| already selected by lists of selection now
before the department for examination
| The Central Pacific Company estimates its
loss caused by these delays at $500, COO As
| to the charge that the Central Pacific Di-
rectors were borrowers of the corporation,
the Commission reports:
1t is doubtless true that after July 7. 1864. and
during the entire period ensuing, to the COM
pletion of the road, these gentlemen stamford,
| Huntington, Hopkins and Crocker) used their
personal credit in order to assist in the consum-
1 nation OF the great enterprise 1t is also true
| that the construction itself was conducted IN
| der circumstances of extraordinary difficulty.
The engineering feat of successfully attacking
| and scaling the Sierra Nevada mountains is
| scarcely surpassed by any railroad construction
/ in the world. The difficulties encountered by
reason of the snow and violent winter storms,
| the vast excavations and fills required the eX-
| pensive sheds needed for the protection of the
| road, are yiyidly portrayed III the evidence of
witnesses.
I And the Commission might have added,
| that the knowledge that in addition to alb
| s0rbiug all the assets of its own and the
| Government bonds, the construction had
strained the credit OF the builders to
ultimate tension, made them the objects of
the mild pity of fuanciers and rendered
tue sale Of the property or its stock impos-
sible
To The repeated charge that the construc-
| ton OF other enterprises and leasing of
| branch lines reduced the earning capacity of
| the aided lines, the Commission says that
! il has, however, On the whole, been a
| source of profit to the Central Pacific Rail
road Company.
As to the charges against this company
OF Determinations. pools and other devices,
| theCommission conclude:
| We are informed that the minority Commits
| sAoAlSI us an lnIermiuaDle
| succession of alleged determinations, prefer
enees and advantages granted for corrupt or
| improper purpos S, and violations of duty of a
| similar character. We must respectfully pro-
test against such conclusion because it is based
| on no evidence worthy the name. 1t is iudg-
ment rendered against the party inculpated
without sufficient hearing; Whenever the
| practice prevails it has been found impossible
| for any railroad company in the couatry to
maintain itself except by participation in the
practice.
| The Commission confounds the Union
and Central Pacific in the matter of the re-
| quirements of Congress that stockholders
must, at intervals of six months, pay an
assessment of So per share until their stock
was paid up. That did not apply to the
| Central Pacific, for the obvious reason that
1t would have prevented its construction
entirely. Nobody would buy its stock,
though it was offered again and again to
| investors hence there could have been no
assessments of stockholders, and therefore
no completion of the road. That law did not
apply to it, for the Central Pacific was in
corporated under the laws of California.
and these laws regulated its issue of stock,
and were strictly complied with. The
road could not even borrow bonds of the
| United States until it had the consent of
the State of California
As TO its own bonds the law of this State
required that they should not exceed its
| capital stock, hence the issue of stock had
to precede or be concurrent with the issue
| of bonds. This stock, as shown above. had
no buyers and no value in the market.
until many years after its issue.
| 1t will be observed that the facts and the
| findings of the Commission, then, dispose
| of all issues down to the question of in
tention of the Central Pacific Company
| to ever pay its debt to the Government
The dividends paid until 1877 are reported
by the Commission to have been earned
and their payment to be in violation of no
| law.
1t further appears that in 1878 the corpo-
ration entered upon plan to provide for
payment of its Government debt and inter
est at maturity by semi-annual contribu-
| tons to sinking fund, to overtake and
cancel the remainder of said debt at matu-
| rity. This plan was to invest in such
sinking fund net earnings to effect an accu-
mutation OF eight per cent. per annum.
This investment was to supersede divi-
dends if necessary, but the arrangement
WAS itself superseded by the Thurman Act,
| and YVES thereby terminated. The Com
mission comedies that the company has
discharged all of lis obligations under the
Thurman Act, which, however, has proved
| defective as provision for meeting the
| debt, through no fault of the company.
Whlch has lost on the money paid in under
| that Act, for there is less in the sinking
fund controlled by the Government than
| the company has paid.
The Commission was instructed by the
law which created it TO inquire as to the
| saving effected by the Government bv
cheaper rates upon The transportation of
| mails. troops and supplies. The road was
| completed seven years in advance of the
! contract time, which matured in 1876 The
Commission, upon this point of saving in
freighis by the Government, says:
The evidence, so far as the Commission were
able to obtain the same establishes the fact that
before the completion of the Pacific RAILWAYS
| the cost of transportation was many times
greater than 1t now is. Reference is made on
this subject to the report of the War Depart
ment herewith submitted, and to the evidence
of kimball and Stanford. and the exhibits at.
tached to Stanfords statement.
By completing the road seven yearsa
sooner than the law required, the saving in
transportation TO the Government for that
seven years was