Year: 1874

,uK cOvERNMENT-THE LEGAL POINTS AT ISSUE


p1Gurs OF THE GOVERNMENT IN RELATION TO


Tgw STOCKHOLDERS AND PROPERTY OF ihA


RAILROAD.


- Edffor Of The Trtbuns.


SIN. Great misapprehension exists in many quar-
- :, ,ogard 10 the relation of the Union Pacihc
p.lroad 70 the Government the legislation of last
Winter in relation thereto. and the grounds ana oo-
;.,t. Of the suit lately heard in Connecticut under
de act of Congress of 1873, which is about TO be
carried TO the Supreme Court of the United states
on appeal from the decision of Judge Hunt.


II ia commonly thought that the United States are
In some way undertaking TO recover Tor the railroad
certain sums which are its due from various per-
sons and to bring vast number OF controversies
betwesn the road and different individuals dwelling
In different parts of the country into one multifar
ous suit in violation alike of the practice IN Ike
cases and of the Constitution itself


Tbe public attention, excited by the exposures OF
indiyidual misconduct which were made by Judge
Pol,nd's Committee, was turned away from the no
less important investigation whchrelated solely to
the peouniary interests of the Government and OF
the people which was made by the other Commit
tee of which Mr. Wilson of Indiana was chairman.
IL may be well to attempt brief and clear state
ment of the legislation of Congress IN regard to the
Pacific Railroad and the ground and objects OF the
suit which has been instituted against it, For the
pnrpose of this statement the statutes of 1862 and
1854 will be considered act. BY these statntes
tho United States created corporation, granted lta
iight ot way across the continent for more thah
thousand miles through the public lands bestowed
upln II every alternate section of public land Tor
snlce of - miles each side Of its track lent 1t the
sum of 900 in godbearing bonds for 80 years,
and authorized il TO mortgage its property, the whole
of which had been bestowed upon it by the Govern
tnent 10 raise like sum.


Tbe Government stipulated that the road should
be built and equipped by the Company; that its
clpitil stock not TO exceed Sl0O0OO0OO or the cost
of the road should be paid in in full by the corpora
tors m money; that ten directors should be chosen
from among the corporatOrs actually owning speci-
fed number of shares of stock, and that the other
tive of the directors should be appointed by the
Presdent of the United States, who should be pro
hiblt.d from owning stock and that one Oh the
Government directors should be member OF every
general and special committee. The object of all
those gifts and Of all this careful legislation was, IN
the language of the act of incorporatiOn "to pro-
mote the public interest and welfare by the con-
siruction of said railroad and telegraph line, and
L,epng The same in working order. and to secure TO
the Government at all times but especially In time
of war the use and benefit of the same for postal,
military and other purposes"


The q Government meant to secure not merely the
building of a road, but the endowment of a corpora
tion which should perform great public functions IN
war and pcace-in which the entire people OF the
continent had deep interest. 1t meant to endoW
an institution which should stand among the great
routea of travel of the countrypOwerful, independ
ent. neutral as New-York harbor or the Mississippi
Riyor. or the lakes 1t did not purpose to intrust
tho management of this great institution to incom-
petent or irresponsible hands, it required that Its
stDckhalders and directors should themselves have
contributed to its capital stock millions of their own
property; and reserved TO itself, by means Of the
Government directors opportunity for constant
supervision aud care.


For the security of the great debt it provided that
unehalf of the amounts due from the Government
for transportation of mails troops, military, Indian
and other supplies, might be retained toward can
ceiling the debt and that after the completion OF
the road five per cent of its net earnings should be
further paid over to the Government, and that in
of failure TO pay the debt at maturity tho
United States should at succeed to the entire
property of the road


II appeared on investigation that the stockholders
had not complied with the provision requiring the
payment of the capital stock in full in cash. but un
der the guise of pretended contracts made with
Themselves through the medium of q sham corpora
ton called the Credit Mobiler, had built the road
solely from the resources obtained from the Gov
erumont and from the proceeds of the first mortgage
bonds; aud that they had. in addition, instead of
leaving the endowment of the road a capital for
is future business pledged its property and future
resources and earnings by of land grant bonds
and income bonds TO the amount of S20,00OOOO, and
had divided among themselves the proceeds of those
bonds leaving the institution poor weak, helpless
kept from bankruptcy only by the assistance of IN
dvdual directors and stockholders, and the prey
wear of Scott the next year of Vanderbilt according
to the dexterity which either manifested in manip
ulating the stock operations in Wall-st. The pur-
pose Of the suit now pending in the Connecticut Cir
cult is to enforce by bill in equity, in which the
railroad and all the individual cOnspratOrs made
parties defendant the return Of the property of the
road 50 illegally scattered and divided to its treas
ury there to be held and applied to the public pur-
DOSES for which the institution created, and the
performance of the obligation resting upon the
stockholders to pay in the capital stock Of the road
in full In money according to the terms Of the act
and the obligation of their subscription, which obl
CATION has never yet been performed.


Three objections have been made to the manten-
snce Of this suit,


/. That the United States has no interest in the
subject the questions at issue being solely between
the corporation and the individual stockholders.


g That the act providing for the suit is unconsti-
tutionsl because it is special legislation for in
dvidual case thereby violating the constitutional
provision that no mans property shall be taken
from hun without due process of law-which means
without process under general laws applicable to all
like cases. And


3. Which is perhaps more properly corollary
from the second, that it is unconstitutional for Con-
gress TO enact that in a special case defendants
siding all over the United States may be summoned
IN single district and that cases separate in their