The San Francisco call., 1896-03-03
HARMON ANsWsRs QUESTIONS.
Fietcs of the Attorney General on Debts
of the Pacific Roads.

Tie,cs Of the Attorney General on Debts
of the Pacific Roads.
WASHINGTON, D. c., March 2-The
Attorney General sent to the House Com
mittee on Pacific Railroads the following
letter replying to questions submitted to
him in resolution adopted by the COM
mlttee:
First question-Whether the officers and di-
rectors OF the bond-aided Pacific railroads in
Cured any liability to the United States by
the unlawful issue OF the stock of said COM
panies.
Answer-H the officers and directors of any
company knowingly made or permitted any
unlawful ue of stock thereof they became
personally liable to the company, or to its
lawful stockholders, but not to the United
States, which was merely a creditor. The
rights of creditors could not be affected by the
improper issue OF stock, which merely repre-
sents the property of the company, but does
not dispose OF or incumber it.
Second-Whether said officers and directors
incurred any ability to their respective CON-
panies or to the United States for the profits on
contracts made with themselves or persons
representing them for the construction of said
railroads.
Auswer-If officers and directors made con-
tracts with themselves or with persons repre-
senting them, to their own profit or the detri-
ment Of the company, they became liable to it
unless such contracts were knowingly author
lied or ratified by a majority OF the directors
having TO interest therein, or by the stock
holders; but they did not become liable to the
United States.
Third-Whether the United States, as a cred
itor OF the said corporation, can maintain ac-
tiOns in its own name against said parties
for the enforcement of said liability; if it ex-
lists until all remedies to enforce payment OF
all debts owing by the said companies to the
United States have been exhausted.
Answer-It was held in the case of the United
States VS.. the Union Pacific Railway Company
known as the "Credit Mobiler' case-that
such liability was to the respective companies
only. The United States therefore could not
maintain any action thereon against the guilty
parties, but could assert the rights of the COM
pany by proper suit in equity as q creditor
Fourth-Whether, if such liability exists,
the United States will be barred in any action
which might be brought for the enforcement
thereof by the statutes of limitation, which
would bar the companies If the actions were
brought in their name and behalf. In other
words whether the United States would be
entitled to maintain action as creditor of said
corporations against its directors and officers
which the corporations themselves could not
1naiptain.
Answer As the United States would be
merely asserting the rights OF the companies
as assets to be applied TO the payment OF their
creditors, any statute of limitations which
would bar the companies would also bar the
United States
Fifth-Whether the facts found and stated
by the Pacific Railroad Commissioners of 1887
In their report to the President are supported
by evidence legally admis issible in court Of
justice.
Answer-Ifthis question means TO ask wheth.
er evidence before the Pacific Railroad Commits
sioners upon which they found the facts stated
in their report would be admissible in suit
OF action between parties in q court answer
generally tn at the statements made by
any witnesses would be admissible
against him, but not against any other
person, and that original documents would be
admissible, or copies under the usual rules re-
lating to secondary evidence. With these ex-
cepticns the evidence would De admissible.
don't understand the question to ask for my
opinion whether if the commissioners had ap-
piled legal rules of evidence the testimony
should have been admitted.