The Kosciusko star. (Kosciusko, Miss.) 18??-1898, 1895-01-11

upon the pitIablc fund set aside f.,
the remuneration of both.
Although the Government mich,
satisfy its immediate claim of a.
100000 and $4,000 900 interestont
of the fund, it would only be TAX
ing from itself, as il will in II.
end have to submit to satisfac
ton ofthe first mortgage bondhold.
ers.
There is no possible hope that
Congress will take any action fl
forestall the default on the part Of
the road, although Chairman Rel.
ly of the House Committee on Pa.
cific Railroads still hopes to have
time allotted to the bill reported
from that committee to ad inst
debt of all the bondaided roads,
One very interesting question In.
volved will be brought to an issue
by the coming default. This il
the theory of the personal liability
of the individual stockholders Of
the Central Pacific, acting under
which Acknowledgement Olney
filed last spring claim for S15,.
100000 against the estate of lie.
land Stanford. This claim was not
matured until there should have
been an actual default in payment
by the road, although the laws Of
California gave the Government
the right 20 file its claim to pre-
vent the distribution Of the estate
without a settlement if anything
should be due. In his annual re-
port Mr.. Olney advised the Presi-
dent that he intended to push this
claim to an adjudication, and it
will no doubt, if tried, furnish one
Of the most interesting cases Of the
year.
1t may be well to concisely lay
the situation before the Republic
readers, as there is generally a
cloudy understanding OF the case
There is practically contract be-
tween the United States on one
hand and the original stockhold.
ers of the road on the other in that
by certain acts of Congress a prof.
fer of the Government credit was
made to the road and accepted by
it, the proffcr being made in the
interest of the great public enter
prise. By the Pacific Railroad
acts of 1862, 1864 and 1865 the
Government agreed to issue Ger.
tain subsidy bonds in aid of the
enterprise, and the road accepted
the aid and received the bonds. It
issued to the Central Pacific bonds
amounting to S25, S95, 100, and to
the Western Pacific, which was
soon joined to the larger road by
consolidation, 81 $40, 800. The
Government very soon found out
the character of its debtors, found it
out, in tact, almost as soon as the
first interest on these bonds had to
be paid. There was default in
interest very soon and a long con-
tentlon over it. The clever attor,
neys for the road either discovered
the unexpected reading of the law
which was to the benefit of their
clients, or else their clients had
been more clever still and hac
seen to the wording of the law as
it was passed by Congress. This
claim was nothing less than that
under the language OF the acts Of
t OF Congress making the loans the
j interest on the subsidy bonds wa:
S not due until the principal va;
5 due. This claim was sustained
5 IN an opinion of the United States
) Supreme Court rendered by Judge
S David DAVIS. This is why it wa:
e said above that the Government
: had been long suffering in making
| payments in behalf Of its partial
C railroad building enterprise. The
: principal and interest of this pecu.
S liar and interesting debt which thu
f government owes, and which II
e turn Is also owed to the Govern
/ menl, amounts to nearly 100000,
t OO0, And before it is paid SOM
0 OF the most interesting of the pub
TIC debt history of the country vii
' be ready for writing
q Next November similar bond,
r issued to the Union Pacific Rail
G way Company will fall due, bu
e they have lived different histor.
and theirs is quite another story