The record-union., 1896-06-20
Report Of the Senate Committee on the
Subject
Reasons Given Why the Government
Ought Not to Acquire and operate
the Roads and Why Foreclosure
Of the Government Lien WOuio De
"LittIe Less Than PrepOsterous"-
A Bill by Which the Government
Will be Paid in Full.

Following is the full report mace py
Senator Gear. from the Committee on
Pacific Railroads of the United states
Senate. ON Senate bill No. 1884, provld-
ing for the funding of the debts or the
Pacific Railroads. 1t is worthy OF care
full reading and study by those VINO oe-
sire to know the facts:
IN THE SENATE OF THE UNITED
STATES.
Mr.. Gear. from the Committee on
Pacific Railroads, submitted the fol-
lowing report, to accompany >. 1o94'
The Committee on Pacific Railroads,
reporting bill S. 1894, entitled "a bill
to amend an Act entitled An Act to AID
in the construction of railroad and
telegraph line from the Missouri RlVer
to the Pacific Ocean, and to secure 10
the Government the use of the same Tor
postal. military and other purposes,
approved July l, 1862, also to amend an
Act approved July 2, 1864, and also an
Act approved May Z, 1873, both in
amendment of said first mentioned Act,
and other Acts amendatory thereof and
supplemental thereto; and to provide
for the settlement of claims growing
out of the issue of bonds to aid in the
construction of certain railroads, and
to secure the payment of all indebt-
edness to the United States Of certain
companies therein mentioned" submit
the following:
The material legislation relating to
the Pacific Railroads, and affecting the
subject with the consideration Of which
this committee is charged, is embraced
of T,1Tx a T.,
1890, July 2, 1864 Q3 Stat L. 1850,
March 8, 1865 Q3 Stat. L. 504), May Z,
1873 GO Stat L. so, and March 3,
1887 GA Stat. L. 4SS).
The Act of Congress July 1, 1862 az
Stat L. 4S9), incorporated the Union
Pacific Railroad Company for the con-
struction of the easterly portion of the
proposed main line Of railroad to the
Pacific, and designated the State cor
porations Gncluding the Central Pa
cific Railroad Company of California;,
which were authorized to construct the
other Pacific Railroads. This Act de-
scribed in general terms the lines of
railroad to be constructed by the cor
porations so created or adopted for the
construction and operation of those
railroads, and prescribed the aid in
lands and bonds to be furnished by the
Government toward securing a result
deemed to be, and which undoubtedly
was, of vital interest to the United
States.
The Act Of 1862 provided that all
compensation for services rendered for
the Government should be applied to
the payment of the subsidy bonds and
interest and that after the completion
of the roads at least 3 per cent of their
net earnings should be appropriated to
the same purpose.
By the Act of 1864 it was provided
that only one-half Of the compensation
for services should be retained by the
Government.
The bond subsidy under the Act Of
1862 was of currency bonds of 81 900
each due in thirty years after date,
bearing 6 per cent. interest, payable
semi-annually, and to be issued at
prescribed rates Of S4S,000, So, 600 and
$4,000 per mile, according to the char
acter Of the country in which the roads
were to be constructed
The Act of 1864 Q3 Stat L. 1860 re-
duced to one-half the amount Of COM
penSation to be retained from the Gov
ernment transportation, and permitted
the issue by the companies of first
mortgage bonds equal in amount to the
subsidy bonds, and enacted that such