The record-union., 1896-06-20


Upon full consideration of the present
situation of these properties and the
relations of the United States thereto,
it has seemed to the committee that
cnly three courses are now open to the
Government:
% Acquisition and operation of these
properties.
% Foreclosure of the Governments
lien.
(3) Extension of the debt due the
Government.
ACQUISITION AND OPERATION OF
THE RAILROADS.
The Act of July /, 1862, provided the
original scheme for the enlistment of
private enterprise in the construction
of the Pacific Railroads and extended
for the accomplishment Of this pur-
pose subsidies in Government lands
and bonds. A true understanding OF
the essential purpose of this scheme
will aid in reaching the true solution OF
the problem with which Congress must
deal, and to which the recommends
tions Of this committee will relate.
The general purpose which actuated
Congress at a time of great national
peril to promote the construction OF
transcon tinental highways is familiar
to all. The advantages to the Govern
ment which, as it was then supposed,
would result from this construction
were probably at that time underestl-
mated rather than exaggerated. In the
statutes which cover the relations be-
tween the Government and the Pacific
Railroads, a clear purpose is d1scerned
to impose upon the corporations Gre
ated or selected for the work certain
specific duties and obligations to the
Government as conditions of Govern
ment aid, but otherwise to leave these
corporations free from any interfer-
ence with their affairs.
The legislation Of Congress, which
from the standpoint of the Govern
ment had for its purpose the creation
OF these national highways. embraced
the creation of railway corporations
and the use of corporations created by
State and Territorial legislation In
the period between July i, 1862 (when
this course of legislation was initiated)
and March 3, 1871, Congress created
four railroad corporations-the Union
Pacific Railroad Company, the North
ern Pacific Railroad Company, the At
lantic and Pacific Railroad Company
and the Texas Pacific Railroad Com
pany-atding them by subsidies in
lands and bonds, or in lands alone, and
it enacted legislation in aid of numer-
Gus State and Territorial railway cor
porations. The purpose of Congress
was a single and comprehensive one
but in carrying out this purpose Con-
gress, Notwithstanding the great ma
tional emergency. studiously refrained
from involving the Government in di-
rect construction, ownership or opera
ton Of these highways.
Congress prescribed that these cor
porations should give preference to the
Government in the transmission of dis
patches and the transportation OIL
mails, troops, munitions Of war, sup
plies, and public stores upon their rail
ways, and it reserved the usual right OF
entry in the case of default in the pay
ment of the amounts due to the Govern
ment by reason of the issue of subsidy
bonds, this Indebtedness being secured
by statutory lien upon the properties
of the companies thus aided; but other
wise the corporations were left to man
age their affairs subject only to the gen
cral rules of law applicable alike to all
railway corporations.
1t is true that, in the case OF one OF
the aided companies-and only one
provision was made for the appoint
ment by the President of a small mi
nority Of directors to be designated
Government directors" but this pro-
vision, obviously originating in no set
tied policy and never repeated in the
subsequent Congressional charters, in
dicated no purpose contrary to the gen
eral purpose clearly disclosed in all this
legislation, to wit, that the Government
should not permit itself to become di-
rectly concerned in the construction
operation, or ownership of railways.
If this policy was wise at time when
the construction of these railways was
demanded by a public exigency, and
when the railway systems of the United
States were comparatively few and un-
extended, the wisdom Of the policy must
be far more obvious at the present day
when the railways of the United States
aggregate over 10000 miles, and their
capitalizations more than So TAO, 900,
GOO. This committee will not recon-
mend any departure from the settled
policy of the Government to keep itself
free from any connection with the own
ership or operation of railways This
committee would not recommend, and
feel sure that the good sense of the peo-
pie would not approve. any legislation
locking to the control and operation by
the Government of single systems OF
railway in competition with those con-
trolled and operated by private enter
prise, or to the inauguration of a policy
the logical outcome of which must be
the ultimte control and operation by the
Government of the great railway sys-
TENS OF the United States In the opin-
ion OF this clAthittee the Government
had far better abandon its entire in
terest In these properties than take the
hrst step in scheme SO vast and peril
Gus.
FORECLOSURE OF THE GOVERN
MENT'S LIEN.
The foreclosure of the lien of the Gov
ernment is disapproved by this commit
tee, not for reasons based upon funda-
mental theory and policy, but for prac-
tical reasons which have seemed to us
&c be conclusive. The lien of the Gov
ernment embraces the aided parts OF
the Union Pacific and Central Pacific
Railroads The continuous railway af-
fected by the lien of the Government
extends from Omaha to point five miles