The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1896-01-29

any State; that the companies were re-
spectively created and adopted as govern
mental instruments for great National
purpose. in the accomplishment OF which
they were to be subject to the control of
the Federal Government; that in respect
to that purpose the functions, obligations
and liabilities of all the companies were to
be equal and identical, and that as to both
companies the Government looked to the
companies alone for the performance OF all
that the acts imposed, and did not con-
template, 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 COM
pany to the Government.
Decisions of the Supreme Court of the
United States in support of this assertion
were quoted at great length.
Seeond-In addition to the fact that no
individual liability was imposed by the
acts of Congress, the estate of Senator
Stanford was also certainly free from any
Individual liability for the subsidy bonds
by the law of California 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
constitution 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, 1862, and the written acceptance of its
conditions by the railroad company. At
that time there was no liability of stock
holders 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 the Govern
ment under the contract could be imposed
by any subsequent legislation OF Califor-
MIA, 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 i'm
posed a statutory lien for the subsidy
bonds without personal liability, and
made the grant of the bonds, as we'll as
everything else granted, upon condition
merely without personal covenant, prom
ise or obligation to repay otherwise than
in the manner prescribed by the act.
The Government was not dealing with
these parties merely as a money-lender
seeking security and interest. In effect, in
reality, in providing for these great Ma
tional enterprises, the Government was
participating, in certain sense, with
those parties whom it called to its aid to
effect this great National work. The Gov
eminent was to gain great advantages-th
right to transmit its dispatches, the right
to send its troops and munitions of
war and other material over the road and
the right TO control the operation of the
company in fixing its iares and freights
under certain conditions specified in the
act. 1t protected its own interests in the
most ample and complete manner. 1t
could enforce all rights that the
EXTREMIST advocate on the part of
the Government could have suggested
at the time OF the framing of these
acts, that it would be proper or wise or
advantageous for the Government to have.
All these rights the Government had and
1t provides specifically and in detail JUST
how those rights should be carried out.
No bonds could be wasted. They could
not be taken by the company or squan-
dered for its purposes, because the act was
carefully guarded in this respect.
There must be certificate by the proper
officer of the Government that forty
miles had been properly constructed be-
fore the bonds OF the Government could
be issued therefor. Thus the Government
provided that every dollar which it ad-
vanced, every dollar of those subsidy bonds.
should 60 into the performance of this
work, into the creation of this railroad in
which the Government was so largely and
beneticially interested, as it were, as part
proprietor by virtue of the rights it re-
served in the road.
Mr.. Choate viii continue his argument
tomorrow.