Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1889-05-04

| OF controversy, tnat the government Will no
have dime 70 pay on account OF It's credit, no
risk dollar by authorizing the construction o
this work
1t was costing them over $1,000, 900.
investigated that afterwsrd and made q re
port, in which showed how this expense
came. Subsequently the service performed
by the roads for the Government was ter
times greater than what was formerly re
quired, but the amount paid has beer
merely nominal. 1t has been performed a
the same rates charged on Eastern roads
Besides, much of the Government business
and perhaps the larger part, has been di
verted from this road to other continental
roads, including the Canadian road.
The amount paid to the subsidized roads
for the Government service has been {
mere bagatelle. 1t has done very little
toward keeping down the interest, much
less paying the principal, of the bonds
The Government has saved all the money
it anticipated, but it has not allowed it tt
the railroads. In fact, it has diverted
| freight from the roads and made limited
| allowances, so that the carrying of mail!
and the service done for the Government
has not paid off the bonds as was aDtici-
pated. That is the reason; not because the
roads did not serve as good a purpose a!
the most sanguine ever anticipated.
Mr.. McDougal, of California. a clear
headed lawyer and man who understood
what he was saying, made the following
| remarks:
As have had occasion before to remark the
Government is now paying over seven millions
/ per annum for the services which this raid ID
bound TO perform. That is about 100 per cent
more than the maximum interest upon the en-
! tire amount of bonds that will be issued by the
United States when the road is completed. The
Government is to-day on peace establishment
/ without any war necessity, paying for the same
| services 100 per cent more than the entire in
terest on the amount of bonds called for by the
bill. Besides that, 1t is provided that per cent
| of the net proceeds shall be paid over to the
Federal Government every year. Now, let me
say If this road is to be built, IL is to be built moi
merely with the money advanced by the Gov
ernment but by money out of the pockets OF
| private individuals.
| It is proposed that the Government shall ad.
vance sixty millions. or rather their bonds al
| thirty years, as the road is completed, in the
course of series of years: that the interest al
no time can be equal to the service to be rem.
dered by the road as it progresses; and that the
| Government really requires no service except q
compliance on the part of the company with the
contract made. 1t was not intended that there
should be judgment of foreclosure and sale
of this road on a failure to pay. We wish it to
be distinctly understood that the bill is moi
| framed with the intention to have a foreclosure
In case they failed to perform Their
contract, that is another thing. That is stipu-
| lation; that is a forfeiture, in terms of law; a
very different thing from foreclosure for the
| non payment of bonds. The calculation can be
simply made that at the present amount OF
| transportation over the road. supposing the
Government did no more business, that that
alone would pay the interest and the principal
OF the bonds in less than twenty years, making
had to pay for them all. However, am not
disposed TO discuss this matter. say it was not
understood that the Government was to come
| in as creditor and seize the road on the non.
ont into 10 10
Government to pay the interest because we fur.
nish the transportation.
Mr.. Sargent, of California. said:
| When the road is fully completed and we are
experiencing all the security and commercial
| advantages which it will afford, the annual
| interest will be less than 100000, and that
| sum will be but gradually reached year after
year. The War Department has paid out on al
average, So 900 900 per year for the last five years
for transportation to the Pacific coast, and the
mails cost s.. 600 600 more at their present re.
| duced rates. The saving to the Government,
| Will be S2,eO0,OO0 year on these items alone.
The case has been before the Courts, and
| they have reviewed these laws and stated
| the manifest purpose of them. In Otto
81, Justice Davis, commenting upon this
| contract between the roads and the Govern.
| ment, said:
| Many of the provisions in the original Act OF
1862 are outside OF the usual course of Legislative
| action concerning grants to railroads. and car
| not be properly construed without reference to
| the circumstances which existed when it was
passed. The war of the rebellion was in pro
gress and, owing to complications with Eng
| land, the country had become alarmed for the
| safety of our Pacific possessions. The loss o.
| them was feared, in case those complications
| should result in an open rupture, but even il
| this fear were groundless it was quite apparent
| that we were unable to furnish that degree OF
protection to the people occupying them which
| every Government owes to its citizens 1t is
| true the threatened danger was happily averted
but wisdom pointed out the necessity of making
suitable provision for the future This could be
| done in no better way than by the construction
/! of a railroad across the continent. Such road
| would bind together the widely separated parts
of our common country and furnish cheau
troops and supplies If it did nothing more
than afford the required protection to the Pacific
States, 1t was felt that the Government in the
performance OF an imperative duty, could not
justly withhold the aid necessary to build it,
| and so strong and pervading was this opinion
that II was by no means certain that the people
| would not have justified Congress If it had de.
parted from the then settled policy of the coun.
\ try regarding works of internal improvement
and charged the Government itself with the di.
| rect execution of the enterprise.
This enterprise was viewed as a national nm.
/ dertaking for national purposes; and the pub
| lie mind was directed to the end in view
| rather than to the particular means of securing
1 it. Although this road was military nece ssity
| there were other reasons active at the time ia
producing an opinion for its completion beside:
the protection of an exposed frontier There wa.
| vast unpeopled territory lying between the
| Missouri and sacramento rivers, which wa
practically worthless without the facilities af
forded by railroad for the transportation O.
| persons and property. With its construction
the agricultural and mineral resources of thi.
territory could be developed. settlements made
| where settlements were possible, and thereby
the wealth and power of the United State,
| largely increased; and there was also the press
in of
aud cheaper method for the Transportation O
the mails and of supplies for the army and the
Indians 1t was in the presence of these facts tina
Congress undertook to deal with the subject q
thi> railroad. The difficulties in the way o
| building it were great, and by many intelligen
persons insurmountable. O
necessity there Were risks to be taken. in adm,
with money or bonds an enterpr Sc unparalleled
in the history of any free people, the COMP etioI
| of which, if practicable at all. would require a
| was supposed, twelve years; but these risk
were common to both parties. Congress wa
Obliged TO assume its share and advance tn,
bonds, or abandon the enterprise for clearl,
the grant of lands, however valuable after III,
road was finished, could not be available as
resource for building it.
And again, Justice Miller, in the case O
the United States against the Union Pacif
Company, in 9S United States Reports, pag
6l9, says:
There are many matters alleged in the bill il
this case. and many points ably presented il
argument which have received our careful at
tentiou, but of which we can take no specia
notice in this opinion. We have devoted s,
much space to the more important matters tina
we can only say thar, under the view which W,
take of the scope of the enabling statute, the,
furnish no ground for relief in this suit. Tn,
liberal manner in which the Government ha
aided this company in money and land is muci
urged upon us as a reason why the rights OF tn,
| United states should be literally construed
This matter is fully considered in the opinion
of the Court. already cited in the case of tn.
United States vs. the Union Pacific Railroad
Company (9l U. S., 72), in which it wa
shown that 1t was wise liberality fo
which the Government has received al
the advantages 70, which 1t bargained
and more.than it expected. In the feeble in
fancy of this child of its creation, when its lif
and usefulness were very uncertain, the Gov
eminent, fully alive to its importance did al
that IL could to strengthen. TO support, and I,
sustain IT, since it has grown to a vigorou
manhood 1t may not have displayed the graft
tude which SO much care called for If this b
human affections which is said to characterize
all corporations. 1t must, however. be admitte,
that IL has fulfilled the purpose of its creation
and realized the hopes which were then cher
ished, and that the Government has found 1t
useful agent, enabling 1t to save vast sums O
money in the transportation of troops mail
and supplies, and in the use of the telegraph
Court of justice is called on to inquire, NO
into the balance of benefits and favors on eacl
side of this controversy, but into the rights o
the parties as established by law, as found Il
their contracts. as recognized by the settled
principles of equity, and 10 decide accordin sly
Now, when it is SO perfectly manifest tina
the whole
! Il