The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-06-30
Judge Ross Says the Pacific
Railroad Debt Is Unlike
Other Debts.
THE CONSTITUTION OF ls4s.
No Further Action on the Part of
the Federal Officials Is Ex-
peCted.

demurrer to the Governments complaint
against the Stanford estate had been sus-
tanned by the United States Circuit Court,
though by this decision the case of the
: United States against the private fortunes
of the hooters of the Central Pacific Rail-
road is practically thrown out of court.
Judge Erskine NJ. Ross wrote the de-
cision. There are nearly 5000 words in it,
and its burden is that these railroad debts
are not ordinary debts; that the law pre-
scribes a certain manner in which they
shall be satisfied; that private fortunes
may not, therefore, be mulcted to pay
them.
81 told you so, great many people are
saying, and with much reason, for it did
not require even the son of prophet to
foretell the outcome of lawsuit wherein
the whole people were compliments and
the estates of four millionaires would have
been defendants.
Judge Ross decision is black eye for
the Government. Naively he remarks, at
the end of it, that ut is apparent no
amendment of the bill can make good the
compliments claim in this case"
No amendment nor appeal on the part of
the Government is expected. 1t is gener-
ally understood that the case of The United
States OF America VS.. Jane l.. Stanford,
executrix of the last will of Leland Stan
ford, deceased, is at an end.
Ii will go down in history as famous
case, and Judge Ross decision, no doubt
will become part of the common law of
the land. The news will be agreeable to
Mr.. Huntington and to the heirs of the
Croker and the Hopkins estates. And if
not satisfactory to all, it has certainly been
surprise to no one.
Judge Ross begins his decision by citing
- c&a+ H. o.
trail and the Union Pacific railroad COM
panies came into existence. Proceeding,
then, to his reasons for sustaining the de-
murrer, the opinion says:
''The only questions here are, What
were the liabilities assumed by
Stanford? and If he shall be The Onlu
found to have assumed an in Questions
dividual liability for the repay Invotued.
ment of the bonds loaned by
the United States to the railroad COM
panies in which he was the holder of stock,
whether the suit of the Government is
barred by the lapse of time?
1.-THE Central Pacific Railroad Company
of California which was incorporated June
%, 1861, was organized and put into opera
ton prior to the passage by Congress of
any of the Pacific railroad acts. Leland
Stanford, G. P. Huntington, Mark Hop.
kins and Charles Croker were among its
incorporators and each of them subscribed
for $50 of the $1,000 shares into which the
stock of that corporation was divided by its
articles OF incorporation. There were also
other subscribers for its
Incorporation stock-two for similar
of the amounts as the four al.
Southern Pacific. ready named, and still
others in smaller
amounts. The then existing laws of the
State of California, under which the Gen.
trail Pacific incorporated, were sections 81
81 and Sc of article Nv of the constitution
of 1S49, and the provisions of an act of the
Legislature of the State of California en-
titled an act to provide for the incorpora-
ton of railroad companies and the man.
agement of the affairs thereof and other
matters relating thereto, approved May 90
1861.
Notwithstanding the urgent needs for
such road, it was not until July l, 1862
that Congress passed the first of what are
known as the Pacific Railroad
acts. The reasons which finally The First
moved it to action IN the prem Action of
Uses are very clearly and tersely Congress.
stated by the Supreme Court in
the case entitled United States VS.. Union
Pacific Railroad Company, 81 U. S., Y.
AS said by the court in that case, many of
the provisions in the original act of 1862
are outside of the usual course of legisla-
tive action concerning grants to railroads,
and cannot be properly construed without
reference to the circumstances which ex-
16UeQ WQeu III WAS passed. 1t was eQaCteQ at
q time when the very life of the nation was
in peril, and in large measure in the inter-
est of National safety.
Congress undertook to secure the
building of the road. 1t found in existence
q California corporation called the Central
Pacific Railroad Company, organized to
build railroad from Sacramento to the
eastern boundary of the State. and it
adopted that corporation by the act it
passed July l, 1862, as one of its instru.
ments in the undertaking.
Birth Of the By the same act it created
Unidn Pacific. corporation and called it
r. r. Company. heUnion Pacific Railroad
Company, to build line
of railroad and telegraph from point in
the Territory OF Nebraska to the western
boundary of the Territory of Nevada, there
TO meet and connect with the line of the
Central Pacific Railroad Company of Cali
fornia; and it also made provision for
various Eastern connections with the main
line.
"The terms and conditions OF those
grants are to be ascertained
by resort to the statute. The Contract
Having been duly accepted Cannot be
by the railroad companies Broken Now.
in question, they constitute
the contract between the respective parties,
from which the companies cannot depart,
and which the Government cannot chan e
or alter except i'll the mode reserved to 1t
by law. Ii, upon so elementary a propo-
sition, authority is needed. it may be found
in the decision in the Sinking Fund cases,
so U. s., 1919 and in the Union Pacific
r. r. Co. V. United States, 104 q. s., 662.
Undoubtedly, the contract between the
United States and the respective railroad
companies, embodied in the statute of July
1. 1862, contemplated
The Repayment the repayment by the
Has Contemplated companies to the
by Congress. United States of the
amount of the princi-
pal and interest of the bonds SO loaned to
them. But how? Did the companies re-
ceiving the benefit of the bonds thus issued
and delivered to them by the Government
thereupon become indebted to the United
States therefor in the ordinary sense of
that term. to pay which all of their prop
erty of every character is liable, or was the
obligation assumed by the companies for
the repayment of the principal and inter-
est of the bonds so issued and delivered to
them to be performed in certain defined
and specified ways2 This question was
not involved, and therefore not decided in
any OF the cases cited by counsel in which
the Pacific railroad acts
have been under con- No Personal
slderatiOn bv tine Su- 0bJin1fjo, IN