The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1895-01-28
They Meet and Agree to Support the
Substitute.
REGULATIONS FOR PACIFIC ROADS
Provisions Are Made to Prevent the
Government From Being Cheated
by SubterfugeS.

and agreed upon Boatner's substitute. 1t
was completed at late hour tonight and
is telegraphed exclusively to THE CALL.
The Californians are much encouraged of
late and believe there is possibility Of
passing Boatner's substitute. The follow
ing contains It's provisions in full:
1t amends section 10 of the act approved
July ?, 1864, by requiring companies which
issued bonds under that section having
priority of lien over subsidy bonds issued
by the United States to provide for pay
ment thereof in principal and interest
under penalty of forfeiture of all rights
under their several charters, which in that
case shall revert to and vest in the United
States. The act of 1862 which creates
mortgages to secure the Governments sub
sidy bonds is amended to the same effect
The Secretary of the Treasury is directed
in case of such default to declare for
fixture and take possession in the name of
the United States of the entire railroad
and telegraph line, together with all prop
erty of every kind and description, and de-
liver the same TO the Pacific Railway Com
mission created by the act.
1t is made the duty of the officers and
directors OF the several roads, on forfeiture
of their charters, to deliver the same, with
all property records, books, accounts and
vouchers, to the Pacific Railway Commits
sion, and under penalty of fine and i'm
prisonment for failure. The Railway Com
mission is to be composed of five mem
bers, two of whom are to reside west of the
Missouri River, and they are invested with
all powers conferred by law on officers and
directors of companies whose charters have
been forfei ted. They are required to oper-
ate roads as common carriers, and are
directed forthwith on taking possession
thereof to ascertain: First, how much, if
any, of the principal stock of said com
panies was issued contrary to law in the
names of persons or corporations receiving
the same; second, how much of said stock
was paid for in money and how much on
contracts; third, to what extent con-
tracts for construction or other purposes
were awarded to companies or individuals
representing the directors of the roads and
to what extent said contracts were fraudu-
lent; fourth, to what extent land grants
have been diverted to unlawful purposes
and the benefciaries thereof; fifth, to what
extent the property and franchise of the
roads have been granted or bargained
away by officers thereof to persons or cor
porations representing themselves, and the
extent of losses to said roads in conse-
quence thereof; sixth, to what extent the
funds or property of the roads have been
applied to Improperly influence legislation.
All contracts made by officers of roads
with themselves or with persons represent
ing themselves are declared fraudulent, and
4 oo1o 10 xa5 Ix-
ally bound to account to the company
for all profits on the contracts. The Pacific
Railway Commission is directed to insti-
tute suits against all officers who have is
sued stock contrary to law and all parties
who received it; to annul all obligations
created contrary to law and recover what
has been paid on them; to recover any
dividends paid contrary to law; to recover
all property wrongfully disposed Of to re-
cover profits on all contracts entered into
by directors with themselves. For the
purpose of institUting these suits they are
authorized to employ competent counsel
and fix their compensation. All Circuit
Courts are vested with jurisdiction to hear
and determine cases, which are to be tried
by preference in the first instance and on
appeal. All recoveries in such suits are to
be applied to the payment of subsidy bonds
and interest thereon. All property &C
quired with the proceeds of unlawful &C
QUESTION by officers and directors by con-
tracts with themselves is declared to be
trust property, unless it has been sold for a
consideration to an innocent vendee. A
lien is created in favor of the Pacific Rail
way Commission on lands and heridita-
ments OF officers and directors of the bond
aided roads to secure the payment of all
sums that may be found due to the same
under the provisions of this act.
The courts of the United States are de-
prived of the jurisdiction to interfere with
the possession or control of any railroad
operated by the Pacific Railway Commits
sion, and all roads which NAV now be in
the hands of receivers shall be turned over
TO the commission on declaration of for
feiture of their charters by the Secretary of
the Treasury. Whenever the Railway
Commission reports to the Secretary that
the suits authorized by this act are deter
mined such recoveries as have been made
shall be applied to indebtedness of the
United States and the foreclosure of its
lien.
assume all responsibilities and be invested
with all powers granted by the original
act with the following limitations: No
stock shall be issued except so far as paid
for, and no increase of capitalization or
issue of bonds shall be permitted except
by consent of three of the five Government
directors, approved by the Secretary of the
Treasury. The Interstate Commerce Com
mission having the right to reduce and
regulate charges and tolls, they shall
have the right to assume the balance
of the Government debt by issuing
ffty-year bonds at per cent interest, with
asinking fund of per cent per year, and
the right is vested in the Secretary of the
Treasury to increase the sinking fund and
retirement whenever annual payments
fall below L per cent of the total bonded
debt and to reduce the same whenever it
exceeds that amount, the sinking fund to
be applied annually in payment of the
bonded debt, and the charter to be for
feited in case of compliance with the
terms sand stipulations of the indenture
mortgage. the bonds are to operate a first
mortgage on the entire line and all prop