The record-union., 1896-01-29

the functions, obligations and liabili-
ties of all the companies the Govern
ment looked to the companies alone for
the performance of all that the Acts inn
posed, and did not contemplate, rely
upon, or intend the personal liability
OF the stockholders Of either, but on the
contrary did intend that in respect to
the subsidy bonds there should be no
liability of the stockholders of either
company to the Government. Decisions
of the Supreme Court of the United
States in support of this assertion were
quoted at great length.
Second-In addition to the fact that
no individual liability was imposed by
the Acts of Congress. the estate of SEN
ator Stanford was also certainly free
from any individual liability for the
subsidy bonds by the law of Califor.
mia in force at the time of the passage
Of the Act of 1862, which provided the
terms on which the bonds were to be
issued, and also at the time of the issue
of the bonds, from 1865 to 1869.
Third-But even the qualified liability
Of stockholders for contracts OF the
corporation did not exist under the Con-
stitution and laws of California at the
time Of the contract between the United
States and the company, evidenced by
the Act of Congress of July l, lS62, and
the written acceptance of its condition
by the railroad company. At that time
there was no liability of stockholders
whatever, as the Supreme Court OF
California has uniformly held AS the
rights of the United States must and
do depend wholly upon that contract,
and as no liability of stockholders to
Congress under the contract could be
imposed by any subsequent legislation
of California the bill sets forth no cause
of action whatever.
Fourth-But in fact, by the true con-
struction of the Acts of Congress, there
was no obligation on the part of the
Union and Central Pacific Companies
to repay the moneys represented by the
subsidy bonds, except in the manner
and by the method agreed upon in the
Act, which imposed a, statutory lien for
the subsidy bonds without personal
covenant, promise or obligation to re-
pay, otherwise than In the manner pre-
scribed by the Act.
s.The Government was not dealing
with these parties merely as a money
lender seeking security and interest,
said Mr.. Choate. "In effect, in reality,
in providing for these great national
enterprises, the Government was par
ticipating, in a certain sense, with those
parties whom it called to it's aid to eff
feet this great national work. The
Government was to gain great advan-
itages, the right to transmit its dis
patches, the right to send it's troops and
munitions of war and other material
over the road, and the right to control
the operation of the company in fixing
its fares and freights under certain con-
ditions specified in the Act
''It protected its own interests in the
most ample and complete manner. 1t
could enforce all rights that the ex-
trenist advocate on the part of the Gov
ernment could have suggested at the
time of the framing of these acts, that
it would be proper or wise or advanta-
geous for the Government to have.
tAll these rights the Government had,
and it provides specifically and in de-
tail just how those rights should be car
ried out. No bonds could be wasted
They could not be taken by the COM
pany or squandered for its purposes, be-
cause the Act was carefully guarded
in this respect.
There must be a certificate by the
proper officer of the Government that
forty miles had been properly con-
structed before the bonds of the Gov
ernment could be issued therefor. Thus
the Government provided that every
dollar which it advanced, every dollar of
these subsidy bonds, should go into per-
formance of this work, into the crea-
tion of this railroad in which the Gov
ernment was so largely and beneficially
interested, as it were, as a part pro-
prietor by virtue of the rights DIT re-
carved in the ron 4 ,,