The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1896-01-28
LETTERS FROM THE PEOPLE.
AIDED RAILROADS.


MR. EsTEE SAYS THE GOVERNMENT HAS RIGHT TO
FoRECLosE.
TO the Editor of the San Francisco Call-S1R:
l think at the present time it would be in
struetive to the people to understand the legal
status OF the railroads of the country Wien
nave received aid from the Government OF the
United States. 1 therefore venture to quote
rom an act of Congress passed March 3, 1887,
emitted IAN act authorizing an investigation
OF the books, accounts and methods OF rail-
roads which have received aid from the United
states, and for other purposes"
ms is especially important at this time by
reason OF "the other purposes" OF the act
mentioned in the enacting clause.
sections and of that act read as follows:
Sec. 4. That whenever in the opinion Of the
PRESIDENT it shall be necessary the protection OF
the interests and the preservation of the security
OF the United States, In respect Of Its lien, mort
gage or other interest in any of the properly OF
any or all Of the several companies upon which
hen, mortgage or other incum brance paramount 10
the right, title or interest of the United States for
the same property, or any part of The same, may
exist and be then lawfully liable TO be enforced,
the Secretary of the Treasury shall, under the
direction of the President redeem or otherwise
clear Off such paramount lien, mortgage or other
incumbrance, by paying the sums lawfully due IN
respect thereof out of the treasury.
ana the United States shall thereupon become
and be subrogated to ali rights and securities
heretofore pertaining to the debt, mortgage, lien
or other incumbrance in respect of which such
payment shall have been made.
1t shall be the duty OF the Attorney General
under the direction Of the President, to take all
snch steps and proceedings in the courts ana other
wise as shall be needful to redeem such lien, mort
gage or other membranes and to protect and de-
fend the rights and interests Of the United States
In respect OF the matters in this section mentioned
and to take stems n f0reCl0aa mortgages or
liens Of the United States on any such railroad
property.
Sec. 8. That the sinking funds which are or
may be held in the treasury for the security Of the
Indebtedness OF either ali OF said railroad COM
panies may. In addition to the Investments now
authorized by law, be invested in any bonds of
the United States heretofore issued for the benefit
OF either or all of said companies or In any OF the
hrst-mortgage bonds of either Of said companies
which have been issued under the authority OF any
law Of the United States and secured by mort
cages on their roads and franchises which by any
law OF the United States have been made para
mount to the mortgage, lien or other security OF
the United States in respect of its advances TO
either of said companies, provided by law.
1t will thus be seen that whenever in the
opinion of the President it is necessary to pro-
tect and preserve the security OF the United
States in relation to any lien, mortgage or
other interest the Secretary of the Treasury
Slell, uHu6T uIT6cllOn VI lle ICniuCHtJ IC-
deem or clear off any paramount mortgage,
lien or other incumbrance by paying the sums
lawfully due thereon.
"And the United states,' says the statute,
''shall thereupon become and be subrogated to
all rights, and securities heretofore pertain
ing to the debt, mortgage lien or other in
cumbrance," etc.
I have ventured to refer to this statute for
the purpose of showing only that full power
now rests in 5he President of the United States
and in the Secretary of the Treasury, under
direction of the President, to acquire and con-
troll any of the railroads which the Govern
ment has aided in constructing; and 10 that
end the Government would have the power to
toreclose its second mortgages, TO pay off and
discharge the first mortgages and to practically
purchase and control a continental railroad
from the Pacific Ocean to the Missouri River.
This matter was fully considered by our COM
mittee when the report signed by me was re-
Gently made. The single point now should be
to oppose and defeat refunding and then de-
mand that the law takes It's course. Very re-
spectfully. NJ. NJ. EsTEE.
San Francisco, January 27, 1896.