THE PACIFIC  RAILROAD.'
THlE RELATIONS
EXISTING BETWEEN IT AND THE
GOVERNMENT OF THE UNITED STATES.
BY
EIENRY  V. POOR.
NEW-YORK:
S. W. GREEN, PRINTER, 16 AND 18 JACOB STREET.
1871.
























THE PACIFIC RAILROAD.
THE RELATIONS
EXISTING BETWEEN IT AND THE
GOVERNMENT OF THE UNITED  STATES.
BY
HENRY V. POOR.
NEW-YORK:
S. W. GREEN, PRINTER, 16 AND 18 JACOB STREET.
1871.








THE PACIFIC RAILROAD.
THE RELATIONS
EXISTING BETWEEN IT AND THE
GOVERNMENT OF TIE UNITED STATES.
IT is impossible to discuss, intelligibly, the question of the
relations between the government of the United States and
the Pacific Railroad Companies, and of their respective legal
obligations and rights, under and by virtue of the act incorporating said companies, without a full and careful consideration of the condition of the country at the time of the passage
of the bill and the amendments thereto, as nearly all the
arguments urged in favor of or against the proposed measure
were drawn from such condition, which was one of civil war
threatening the very existence of the nation. All the mind
and strength of the people of the North were put forth for
self-preservation and the maintenance of their territorial unity.
One of the means to this end was a railroad across the continent to unite its two great slopes. It was inaugurated, on the
part of government, almost wholly as a military measure. The
appropriations made to it were regarded as fully justified on
such ground. Its construction was committed to a private
company, or companies, for the reason of their greater competency to construct and manage works that were to be commercial as well as military in their character. As the value of the
road, for whatever purposes, would be shared equally by the
nation, it was but just that its cost should, as far as necessary,
be assessed equally upon the nation.




4
All these considerations entered into and gave the peculiar
form of language to the bill that was finally passed. Strange to
say, these considerations are now almost wholly forgotten, and
by none more so than by the government which inaugurated
and supplied the means for the construction of the roads, and
which is supposed to be always connusant of its acts in the past.
But this very government now seeks to construe the law, not by
reasons and conditions existing when it was enacted, but by
those now existing, and which are wholly different. Bat the
companies need not shun a legal contest. They can be compelled
to do only what they agreed to do. Government was competent to make an outright gift of its bonds, if it chose-or to
give credit for the interest, as well as principal, for the whole
time the latter had to run. There is no privity between the
holders of the bonds of the government and the railroad companies. The attorney-general unfortunately knows nothing of
all this. lie was not in a position to know any thing of the
feeling or action of the North when the railroad bill became
a law. lie has, consequently, assumed both his law and his
facts to support his conclusions.
The railroad companies are perfectly willing to join issue
with him on all the questions he has raised. But a rigid construction of the law, while it would fully maintain their legal
positions, would now satisfy no one-not the government, as
it would still be paying, yearly, a large sum by way of interest,
without receiving what would appear to be an adequate equivalent in return. It would not now satisfy the companies,
although it would fully vindicate their rights, as it would still
leave them subject to a repetition of attacks similar to that now
made on them, and create constant distrust as to the value of
their securities, which have passed almost wholly into the hands
of innocent parties, and are scattered over the world. The reasonableness and equity of their position, consequently, must be
restated and established, as they can be, beyond controversy
or cavil. It must be shown that it was never intended that
they should pay interest on the government bonds " except in
manner provided" —to wit, ly the transportation of government mails, troops, and munitions of war; that they ought not
to pay the interest in any other manner; that the services ren



5
dered and to be rendered to the government are, what it was
anticipated they would be, a full and ample equivalent for any
and all aid extended to the road; and that the positions taken
by the attorney-general-that "it is incredible that Congress
should have intended to assume so large a liability, with so
small a provision for its reimbursement " —" that the Union
Pacific Railroad Company is substantially an act of bounty on
the part of the government "-" that the government and company are in the relations of donor and donee;" and " that, consequently, the government may lawfully claim from the company the interest on its bonds as it falls due "-are wholly
gratuitous' and unfounded assumptions, while his reasoning
from these premises is absurd and puerile to the last degree.
The controversy with the companies was not one of their
seeking. A grievous wrong has been done them, and they
should not now rest till their positions and rights are fully vindicated and accorded, not only by the action, but by the conviction, both of the government and the people.
As already stated, the arguments made use of, when the subject
of the Pacific Railroad was under discussion and the company
chartered, were drawn from the condition of the country, then
convulsed and threatened with dismemberment by civil war;
the saving that it would effect in the transportation of troops,
subsistence, and munitions, and the advantages that would result
to the nation, in opening up to settlement and cultivation of
immense areas of territory hitherto inaccessible, and by connecting by a grand highway the oceans that front the two great
slopes of the continent. The subject, however, was by no
means a new one. For ten years previous, a railroad to the
Pacific coast had been constantly urged as a military and
commercial necessity; but no progress was made toward its
construction. Elaborate examinations had been made at the
cost to the government of many millions of dollars. Several
routes were proposed, although it was felt that only one road
could or should be built. The bitterest local jealousies prevailed. The Southern States insisted upon one route, the
Middle States upon another, and the extreme North upon
another. No route proposed could command a majority in




6
Congress.  Could a majority for any particular one have
been obtained, the constitutional bugbear stood in the way of
a direct appropriation to it of money; at the same time' it
was felt that, without government aid, private capital would
not advance a dollar. The undertaking was regarded as altogether too vast for individual enterprise. There was no precedent for a work of such immense magnitude. If constructed,
no one had any confidence that it would make its current expenses, or that it could oe maintained by any hand less powerful than that of the Federal Government.  The two loftiest
mountain ranges on the continent had to be overcome.  It
was generally believed that the conditions necessary to the
maintenance of a railroad over them did not exist. While,
therefore, the importance of such a work was universally admitted, and while it was the subject of constant discussion, no
progress was made, apparently, from year to year toward its
accomplishment.
Early in 1861, the war of the rebellion broke out.  With
the civil, foreign wars were most imminent —the Trent affair
showed how imminent.  Another and similar occasion might
any day arise. Both  England  and France regarded the
country as dismembered, and the crisis as their opportunity.
With the characteristic indecision of a trading and commercial
nation, England waited till we should fall to pieces, when her
role would be that of a wrecker rather than that of an assailant.
France actually proceeded upon the assumption that we had
ceased to exist as a nation, and invaded Mexico for the purpose
of being in a position to assail our south-western frontier. But
the North, instead of sinking, rose with the emergency. It
struck for empire as well as for existence. One of the first
questions considered was the preservation of its Pacific possessions. It was seen that, cut off from communication with them
by sea, they could be retained only by means of a railroad,
which should unite them, through our own territory, with the
Eastern States. There was no longer a doubt as to the right
to appropriate money for the opening of such a communica.
tion, no more than there was in appropriating money for the
building of ships or forts, or for the raising and maintaining




7
of armies. Theparamount necessity was law. The war at the
same time put an end to all other questions which had stood
in the way of the work. The South was no longer in Congress. The North was reconciled to one route, which, commencing at the hundredth meridian, was provided with branch
lines, so as to be almost equally accessible from all portions of
the loyal States. The war, while it created the necessity of
the road, had greatly enlarged the ideas of the people as to the
wealth of the country and of their capacity for great enterprises. What were the few millions that were required for a
Pacific railroad, compared with the monthly expenditures that
were then being made for the war? All obstacles to the inauguration of this great enterprise were removed. The only
questions left for consideration were, By whom should it be
constructed and managed  and Upon what basis should the
means for its construction be supplied?
By general consent it was agreed that, for reasons already
recited, it should be committed to the charge of a private
company, but upon terms that would bring to it the largest
amount of private experience and capital. After a full consideration of the whole subject, it was agreed that government should advance its bonds, bearing six per cent interest,
and payable in thirty years, and that the road should do the
government transportation  at reasonable rates; that the
charges for this transportation, which it was supposed would
equal twice the accruing interest, should be credited to the
company; and that the whole amount of principal and interest
found to be due at the expiration of thirty years, should be a
debt against the company, to be secured by a mortgage on the
road. A final settlement, for very good reasons, was not to
be made till the bonds fell due. It could not well be made
till then. Government, one year, might be largely in debt to
the company, in the matter of transportation. In another, it
might be largely its creditor. It was felt that the utmost
indulgence should be extended on the matter of interest, if
not earned, in the mean time, by charge of transportation.
At the end of thirty years, there would be 75,000,000 of people in the United States. The commerce of the country at
the end of this period could not fail to make the road good




8
property.  The security for the loan, principal and interest,
was perfect.  The conviction, too, was universal that, unless
such indulgence were extended, not a dollar of private capital
could be secured in aid of the road.
Such is a brief sketch of the early history of this great enterprise.  That it is a truthful one, the extracts, which we give
herewith, from  the debates upon the bill in both Houses of
Congress, will fully prove. Every line of them has been carefully examined to see whetier any remarks or statements were
made at variance with the general drift of the arguments used.
On the one side, it was contended that the work was a military
necessity, and that it would prove a measure of economy in
the matter of transportation, and that the appropriations made
to it were under war-powers of the government.  None of
these positions were controverted. The bill was opposed on
the ground that the condition of the country, at the time, did
not warrant such an immense expenditure, as every dollar expended upon the road would, as far as any direct revenue was
concerned, be wholly lost.
The debate on the bill was opened in the House by the
Hon. A. A. Sargent, of California, a member of the Select
Committee on the Pacific Railroad.  It was an exhaustive
statement of the whole question, as the following extracts will
show.  (See Congressional Globe, p. 599, Part II., Session 2d,
37th Congress.)
"The position of the people of California, and of the whole Pacific coast,"
said Mr. Sargent, " is a most unenviable one. In case of foreign war, we possess neither the power nor means to successfully defend ourselves from the
assaults of our foes. The isthmus route, now available and open, will then
be closed. Our only water communication will be via Cape Horn-a journey
of over fifteen thousand miles, requiring from four to five months to make the
passage in clipper ships, assailable by the enemy's vessels its whole length.
Even supposing a vessel fortunate enough to escape the attention of the
enemy's cruisers on the Atlantic, she must then run the gauntlet of the
Pacific; and on arriving at San Francisco, how will she pass the enemy's
blockading fleet? No, sir; the first result of a foreign war will be the entire
destruction of our commerce.
"Let us see what are the inducements to acampaign for conquest. We have
there in the centre of the Pacific coast a port and harbor hardly equaled by




9
that of any other country on the globe-a noble bay, stretching away, as I
have said, forty miles to the southward, and twenty to the northward, completely land-locked, in which the navies of the world might ride in safety.
This harbor, accessible only by a narrow entrance, and forming the key which
unlocks or locks the inland navigation to a rich valley four hundred miles in
length and fifty in width-the key which holds possession of the richest mining territory of gold and Silver in the known world, whose annual yield of the
precious metals is not far short of $100,000,000-a territory which employs
a half-million of people in its development; a magnificent city of nearly one
hundred thousand inhabitants lies at its entrance, with its wharves and docks,
its custom-house and mint, its costly public buildings and private dwellings;
commanding this entrance are a system of fortifications on which millions of
dollars have been expended, and which, when fully completed under the supervision of a great power which was determined to make them such, could
be made as impregnable as the rock of Gibraltar.
" At the head of this noble bay our enemy would find to tempt him a capacious navy-yard, replete with every modern convenience and appliance necessary for his purposes; a dry-dock within which to repair his ships; an arsenal; barracks for his soldiers; in short, every thing necessary to enable him
to maintain his position, all built and ready fitted to his hand. Holding these,
he holds California; he holds the Pacific coast; he holds the gold and silver of the
mountains; he holds the commercial centre of the Pacific; the great mart of trade;
the growing, glorious empire of the West; the pride of the Union, and its earnest,
faithful adherent. Are these advantages which a grasping, powerful enemy
would scorn to possess himself of? Is n )t this a prize worthy ambition?
Will you expose your jewels to every thief, and then stupidly wonder that
they are stolen?
" Our enemy in possession of this harbor, of these fortifications, of the navyyard, dry-dock, and arsenal, and in command of the inland navigation, what
could the people of California do without cannon or ammunition, and without
the means of procuring them? How could they protect themselves?  Sir,
they would have a choice of evils-starvation, surrender to foreign domination, or an exodus across the Sierras.  I am no alarmist, nor do I
desire to add one jot or tittle to the embarrassments under which our beloved
country is now laboring. But I believe I speak the words of sober truth,
when I say that, had the late Trent imbroglio not admitted of a peaceful solution; had the views and convictions of many of my friends and associates on
this floor been sustained by a warlike answer to the demands of Great Britain,
or a refusal to deliver up the persons of the Confederate ambassadors, that today, even as we sit here, this first blow would have been struck, and the harbor of San Francisco sealed.
" To illustrate my views fully upon the financial workings of this bill, I
have prepared a table of the amount of bonds to be issued each year, until
the entire road is completed. It will be observed that no payment of these
bonds is to be made under thirty years from their date, only the interest upon
them as it accrues; and that their issuance is in fact, aside from their interest,
a mere loan of the credit of the government.
" As many of these bonds will not be issued under twelve years from this
date, to wit, $60,800,000, and the bulk of them not till after eight years, it




10
follows that they will not mature under from thirty to forty-two years from
the passage of the bill.  The actual burdens upon the treasury before maturity will
be as follows, they being for interest exclusively:
In 1865.......... $168,000    In 1871..........  $2,363,000
In 1866.......... 504,000    In 1872.......... 2,699,000
In 1867..........  804,000    In 1873.......... 3,035,000
In 1868...........1,283,000    In 1874.......... 3,371,000
In 1869...........1,787,000    In 1875.......... 3,884,000
In 1870..........2,075,000
" Thus the highest rate of interest upon a completed road will be less than four
millions of dollars, and our yearly expenses are over six millions of dollarsfor mails
and transportation.  True economy callsfor this expenditure, as well as considerations
of convenience, safety, and commercial advantage.  Are these the feaful expenditures
that frighten gentlemen when they hear this subject mentioned?  The bill further
provides that these sums shall be repaid the government in transportation of
mails, military stores, troops, etc., and that government may, in case of war,
take possession of and use the road  for its purposes.  Even if it takes ten
years to build the road, we do not wait so long for its benefits.  Every mile
that is constructed bridges the gap between the two oceans, and adds new security to our Pacific possessions, by increasing the facilities and diminishing the
cost of defending and supplying them.
" It is believed that the government business, at the expiration of ten years,
between the Atlantic States and Nebraska, Colorado, Utah, Nevada, Washington, Oregon, and California, in addition to the mails, will have increased
sufficiently to compensate for this annual interest; while the legitimate business of the road ought to be sufficient in magnitude to afford a sinking fund
for the repayment of the principal. Under such an arrangement, how can the
United States become losers? Or how can this grant operate as a burden on
the treasury?
" We have just escaped the brink of a precipice-the horrors of a war with
the most powerful nation on the earth; a war which, while it would affect the
Atlantic States disastrously, would have brought total ruin and desolation to
the inhabitants of the Pacific coast, unless they threw themselves without resistance into the arms of the foreign foe. It is the right of those pcople to ask, it
is the duty of Congress to provide, means of protection; and we believe that protection
is best afforded, can, in fact, be only afforded by the immediate construction of a railroad connecting the Atlantic States with those of the Pacific. If, we are expected
to repel invasion, we must be provided with the necessary means. We must
either have vast store-houses in which to gather grain, food, and clothing sufficient for many years; we must have an accumulation of ordnance, ammunition,
and material of war sufficient to maintain a five years' war if necessary; or we must
have a railroad over which to transport these supplies.  I believe it is conceded that
any attempt to undertake the transportation of these supplies and stores by
wagons across the territories is idle.
"If the opinion I have assumed be correct, to wit, that this work is a military necessity, it is as properly the subject of immediate legislation as are our own
forts and seaboard defenses.  It can not be commenced too soon; and the length of




11
time required to construct it should be the strongest argument in favor of immediate
action. You may on this side be able to wait ten years without feeling its
necessity. But, sir, we upon the other side will wait in silent suspense, in
fear and trembling. Why should you hesitate longer to perform this great
act of justice to your brethren of the Pacific?  Can we afford to lose California
and our Pacific possessions?  Are they not worth the cost of a railroad? How
will your money market endure the deprivation of our gold?  How your
manufactories sustain the loss of our trade, as they would with a change of
tariff to suit foreign producers?  Would not your debt be lightened by developing
your intermediate territories? If a war should come, the cost of keeping your
Pacific States, even if you succeeded in the effort, which would be impossible,
would amount to treble the cost of this road. Is the empire we have founded on
the Pacific not worth protection? If not, why was it established?"
In  another speech, (see  Congressional Globe, page  1594,
Part II., 2d Session of Thirty-seventh Congress,) he said,
" When the road is fully completed, and we are experiencing all the security and commercial advantages which it will afford, the annual interest will
be less than $4,000,000; and that sum will be but gradually reached year after
year.  The WCar Department has paid out, on an average, $5,000,000 per year, for
the past five years, for transportation to the Pacific coast, and the mails cost $1,000,000 at their present reduced rates. The saving of the government would be two millions per year on these items alone. As this road progresses west from the Mississippi,
and eastfrom California, it will be available to the government for transportation;
and I have no doubt that the services it will render will very soon absorb the interest
money to be paid under this bill.
"The interests of government are carefully protected by this bill. The issue
and delivery of the bonds to the company ipso facto creates a just lien or mortgage in favor of the United States; and in case of refusal on the part of the company to pay the bonds when due, according to the provisions of the bill, the Secretary of
the Treasury has a right to take possession of the road and franchises for the use
of the government."
Mir. Sargent's speech may be taken as an epitome of the
whole debate, which occupied hundreds of pages of the  Congressional Globe, both for the Thirty-seventh and Thirty-eighth
Congresses.
" We must have," said he, " an  accumulation of ordnance,
ammunition, and material of war sufficient to maintain  a five
years' war if necessary; or we must have a railroad ovew1uwhch
to transport these supplies.  It is the duty of Congress to provide
means of protection; and we believe protection is best affordedcan, in  fact, be afforded only by the immediate construction
of a railroad connecting the Atlantic States with those of the
Pacific.  This work is a military necessity, and is as properly




12
the subject of immediate legislation as are our own forts and sea
defenses. 
The financial argument was equally clear: " The War Department has paid out, on an average, $5,000,000 per year for
the past five years, for transportation to the Pacific  coast.
The mails cost $1,000,000 more at the present reduced rate.
The saving of the government would be two millions a year in
these items alone.  As this road  progresses west from  the
Mississippi, and east from  California, it will be available for
government transportation."  " The  only burden  upon the
government, till the end of thirty years, would be the interest
accruing on its bonds, and," said he, "I have no doubt that
the services it will render will very  soon absorb the interest
money to be paid under this bill."
Mr. Sargent was followed by Hon. James II. Campbell, oPennsylvania, Chairman  of the  House Committee  on  the
"Pacific Railroad." Hle accompanied his report of the bill
by a speech from which the following extracts are taken. (See
Congressional Globe, p. 1578, Part II., Session 2d, Thirty-seventh Congress.)
" If we would protect," said Mr. Campbell, " our vast possessions and secure
our proportion of the trade of the world, we must be enterprising, bold,
vigorous, as well as sagacious. Steam applied to transportation by land and
water has become almost universal among civilized nations. The only way
to secure economy, celerity of movement, and certainty, is to employ steam. This
new element of power has been brought into requisition in all the departments of life.  During the existing rebellion, we have been enabled, by
means of steamboats and railroads, to concentrate more decisive action on
any given point in three months, than otherwise could have been done
within one year; and this, too, at one fourth the cost.
" On the ground of economy, which all admit to be of the first moment in the
present position of public affairs, the construction of a Pacific railroad will save
the government annually a large sum, which truth I now propose to demonstrate.
"General Samuel R. Curtis, in 1860, then the very able Chairman of the
House Committee on the Pacific Railroad, estimated the annual service
required by government, and which could be better performed by a railway
to the Pacific, at $5,000,000 for army and navy transportation, and $1,500,000
for postal service, amounting together to $6,500,000. But as this estimate
was made from approximation, and not from actual expenditures, as per
returns from the various departments, the real figures show, so far as we
have been able to procure them, that it was under the actual outlay. The
following table will show the cost to the United States for the transportation




13
of troops and supplies between the Mississippi River and the Pacific coast, per
annum, for the past five years, beginning and ending with the fiscal year. It
will be observed that it is in reply to a resolution of inquiry addressed to the
Secretary of War by the House.  (See House Executive Document, No. 80.)
"WAR DEPARTMENT,
"WASHINGTON CITY, D. C., March 18, 1862.
"SIR; In compliance with the resolution of the House of Representatives
of the 19th instant, I have the honor to transmit herewith a communication
of the Quartermaster-General, covering a report'showing the cost to the
government for the transportation, per annum, for the last five years, by
steam or otherwise, for troops and supplies, between the Mississippi River and
the Pacific coast, as well as intermediate points.'
"Very respectfully, your obedient servant,    EDWIN M. STANTON,
Secretary of W  r.
"Hon. GALUSHA A. GROW,
Speaker of the House of Representatives."
FISCAL YEAR 1857: COMMENCING JULY 1, 1856, AND ENDING JUNE 30, 1857.
Clothing....................................    $47,069 33
Subsistence...............................             483,977 24
Ordnance....................................             46,810Q48
Troops and other supplies.....................  1,523,510 26
~ —-             $2,101,367 31
FISCAL YEAR 1858: COMMENCING JULY 1, 1857, AND ENDING JUNE 30, 1858.
Clothing....................................    $49,051 41
Subsistence..................................   728,234 14
Ordnance....................................    33,456 47
Troops and other supplies....................  3,151,106 38
3,961,848 40
FISCAL YEAR 1859: COMMENCING JULY 1, 1858, AND ENDING JUNE 30, 1859
Clothing........................$..........  $125,106 59
Subsistence..................................  1,682,719 49
Ordnance....................................            47,851 44
Troops and other supplies..................... 2,463,873 43
4,319,550 95
FISCAL YEAR 1860: FROM JULY 1, 1859, TO JUNE 30, 1860.
Clothing....................................   $94,397 09
Subsistence..................................    556,954 77
Ordnance....................................             29,651 47
Troops and other supplies..................... 1,479,584 94
2,160,588 27
FISCAL YEAR 1861: FROM JULY 1, 1860, TO JUNE 30, 1861.
Clothing..................................             $27,695 32
Subsistence..................................    423,603 36




14
Ordnance.....................................   $16,624  78
Troops and other supplies.................... 1,035,875 63
~- - i      $1,503,799 09
$14,047,154 02
"Showing an aggregate of $14,047,154.02 for five years, or $2,809,430.80
per annum. By reference to the note appended to the return, it will be found
that the Secretary of War adds:'Large expenditures appertaining to this statement have been made at
New-York for California, at New-Orleans for Texas, and other points in the
East for Utah and New-Mexico, the exact amount of which can not be ascertained except by reference to the vouchers in the office of the third auditor
of the treasury, and which can not be done without causing great delay.'
"The'large expenditures' referred to in this note, and which are not included in the return, may be explained by the fact that the freight contracted
to be delivered by Russell, Majors & Co., to certain posts in Utah, Nebraska,
Kansas, and New-Mexico, is not included in quartermaster's supplies, and the
amount, as the honorable secretary informs us, could not be obtained' without causing great delay.' But by referring to the parties themselves, or
those best acquainted with the figures, we have, in round numbers, the following results:
" Gross amount paid contractors for freight from the Missouri River to the
forts on the plains, and in Utah and New-Mexico, as obtained from a member
of the firm of Russell, Majors & Waddell, who were the contractors for 1858,
1859, and 1860: 1858, $4,000,000; 1859, $3,000,000; 1860, $1,500,000; 1861,
not ascertained; 1862, estimate at least six millions.
" The amount for 1858 was larger than in 1859 and 1860, because of the
Utah war, some five thousand men being then in the field. The estimate for
1862 is large because of the troops now employed in New-Mexico, being double the number of those in Utah in 1858.
"The foregoing estimates do not include.the cost of conveying troops, tents,
quartermaster's supplies, etc. These are transported by government through
its quartermasters, and not by contractors, but at an expense nearly, if not
quite, equal the sum paid contractors. Government pays at the rate of $1.30
per one hundred pounds for one hundred miles, or say, twenty-six cents per
ton per mile, from the Missouri River to the points indicated, two thirds of
which could be carried on a Pacific Railroad, on the route contemplated, at one
tenth the present cost.
" It may safely be concluded from this exhibit that the expenditures not
embraced in the secretary's statement are quite equal to, if they do not very
much exceed, those contained within it, or $3,000,000 per annum, making
army transportation to the Pacific and intermediate points cost per annum
$5,809,430.80. So much for army transportation. The postal service may be
placed at General Curtis's estimate of $1,500,000 per annum.
"The following table will show the average cost of transportation for naval
supplies from the Eastern and Gulf ports of the United States to the Pacific
coast:




15
" NAVY DEPARTMENT, March 7 1862.
" SIR: In compliance with the resolution of the House of Representatives
of the 19th ultimo, I have the honor to furnish herewith a' statement showing
the average cost of transportation for naval supplies, munitions of war, etc.,
for the last five years from the Eastern and Gulf ports of the United States to
the Pacific coast.'
"I am, very respectfully, your obedient servant,     GIDEON WELLES."
"Hon. G. A. GRow, Speaker of the House of Bepresentatives."
RECAPITULATION.
"NAVY DEPARTMENT, March 7, 1862.
Bureau of Yards and Docks.................................. $2,063 87
Bureau of Construction, etc.................................. 198,927 52
Bureau of Ordnance, etc......................................  7,283 70
Bureau of Provisions and Clothing............................. 33,221 15
Bureau of Medicine and Surgery..............................   259 20
Total for last five years................................. $241,755 44
Average per year.......................................  48,351 08
"From this statement it would appear that such cost amounts per annum
to $48,351.08; thus making, in a time of peace and under ordinary circumstances, an annual expenditure for Pacific supplies and postal service of
$7,357.781.
" The bill before us appropriates in bonds, without the Oregon Branch,
$60,880,000; with the Oregon Branch, $64,880,000. The following schedule
of appropriations will show the contemplated expenditure in detail
MILES. PER MILE.     AMOUNT.
From Sacramento to western base of Sierra Nevada.................................... 25   $16,000            $400,000
From western base of Sierra Nevada.......... 150    48,000         7,200,000
Next 890 miles, through Great Basin......... 890    32,000    28,480,000
Next 150 miles, through Rocky Mountains..... 150    48,000          7,200,000
Next 200 miles to Kansas line................ 200    16,000        3,200,000
Next 450 miles, to Missouri line.............. 450    16,000        7,200,000
Or a total of...........................1865                $53,680,000
"If to this is added the amount appropriated for eastern branches, this
will be increased as follows:
MILES. PER MILE.    AMOUNT.
Leavenworth branch....................... 100  $16,000    $1,600,000
St.Joseph branch........................... 100    16,000           1,600,000
Iowa Branch............................        250    16,000      4,000,000
$7,200,000
Or a total of.......$............................... $60,880,000
"If to this is added a branch to Oregon, or say six hundred miles, at $8000




16
-$4,800,000-the entire amount of bonds appropriated by this bill will be
$64,880,000. Total number of miles, 2915.
" The amount to several companies on main line will be as follows:
To the Kansas Company, with connections................... $7,200,000
To the Central Company....................................   31,200,000
To the Nevada Company....................................  9,360,000
To the California Company.................................  5,920,000
$53,680,000
"The bonds are to be issued'at thirty years, and to bear interest at the
rate of six per cent per annum. When all the bonds shall have been issued,
(which will necessarily be at the completion of the road,) the aggregate annual interest will amount to $3,892,080. I have shown that the army and
navy transportation, and postal service to the Pacific cost the government annually $7,357,781. Take, then, the annual interest from the annual expenditure, and we have left a sinking fund of $3,465,701; a sum more than sufficient to extinguish the bonds before they become due, or, what is the same thing
in effect, saved to the government by cheapening expenditure in that direction."
In another place in the same debate, (see page 1712,) Mr.
Campbell said,
"THE ROAD IS A NECESSITY TO THE GOVERNMENT. IT IS THE GOVERNMENT THAT IS ASKING INDIVIDUAL CAPITALISTS TO BUILD THE ROAD.
GENTLEMEN ARE UNDER THE IMPRESSION THAT IT IS A VERY GREAT BENEFIT TO THESE STOCKHOLDERS TO AID THEM TO AN EXTENT OF ABOUT
HALF THE CAPITAL REQUIRED. I BEG LEAVE TO CALL THE ATTENTION
OF GENTLEMEN TO THE FACT THAT IT IS THE GOVERNMENT WHICH IS
UNDER THE NECESSITY TO CONSTRUCT THE ROAD. IF THE CAPITALISTS
OF THE COUNTRY ARE WILLING TO COME FORWARD AND ADVANCE HALF
THE AMOUNT NECESSARY FOR THIS GREAT ENTERPRISE, THE GOVERNMENT
IS DOING BUT LITTLE IN AIDING THE COMPANY TO THE EXTENT OF THE
OTHER HALF BY WAY OF A LOAN."
Mr. Campbell, Chairman of the Select Committee which
reported the bill, and who, from his position, was the leader
of the measure in the House, must be presumed  to have
been as well informed as to its objects and provisions as the
Attorney-General. He stated the whole question in the extract from  his speech last quoted.  "The road was a necessity. It was the government that was under the necessity,
not capitalists; —not a railroad company.  No such company
then existed. The government were the moving party. " If
capitalists could be induced to come forward to the extent of
one half the cost, certainly government was doing little in




17
aiding to the extent of the other half." The government, it
was demonstrated, could lose nothing.  It could not fail to
receive a very large interest on its investment. The road was
to perform a service, costing it $7,000,000, annually; and to
be maintained, at all times, for its use. How was private capital
to receive interest on its contributions?  ~No one claimed that
the road would pay. All its opponents and many of its friends
in Congress, proclaimed, on all occasions, that every dollar put
into it would be lost, (excepting the service to be performed
for the government.) Some even argued that the road could not
be run, if built. From such arguments and admissions, on all
side, we should like to see how the Attorney-General deduces
the relationship of the government as donor to the company!
It is remarkable that the real saving which the road was
to effect for the government should have been so entirely
overlooked in the debates which accompanied the passage of
the bill. It was supposed that the armaments then maintained
would have to be kept up.  It is now found that, with.the
road, a company suffices where a regiment was previously
required.  Should the emergency arise which requires a
regiment, it can in a very few days be sent forward to any
menaced point. The cry is now, that the road is doing nothing
for government. It is doing every thing for government-far
more than was anticipated, in saving all necessity for excessive
armaments in the interior, or on the Pacific coast. If the
government had been compelled to maintain a large force on
the Pacific, or in the interior, at a cost of $20,000,000 annually,
we should never have heard a word of complaint; the value of
the railroad would then have been in every body's mouth. It
has, in fact, disbanded the army, and reduced the navy to a
minimum, and is now to be slaughtered for it. This is the logic
of every one who now attacks this great enterprise.
Mr. Campbell was followed by Hon. T. G. Phelps, member
of Congress from California. In the course of his remarks (see
Congressional Globe, Part II., Session 2d, 37th Congress,
page 1590) he said:




18
" If, then, we would avoid the hazard of losing our Pacific possessions in case
of war, we must provide the means of defending them.  This can only be
done in one of two ways.  WTe must either have a railroad across the continent by
which troops and munitions of war can be rapidly transported to that coast, or we
must maintain a sufficient force there in time of peace to meet the exigencies of war;
for it would be wholly impracticable to send a force to that coast across the continent
by the means which we now have after hostilities are declared against us by a foreign
power, and equally impossible to send such a force by sea.  To keep such a standing
army as would be necessary for its protection, on that coast, for a few years only,
would equal the entire cost of a first-class railroad from  the Mis.issippi to San
Francisco; and the policy of keeping such a force in time of peace is more
objectionable to our people, and more obnoxious to the theory and practice of
the government, than to lend its aid in constructing a work of such national
importance, and one so clearly demanded in the absence of a large standing
army, as furnishing the only means of defending this important portion of our
domain. Every one of us would repudiate with infinite scorn the idea of
relinquishing a single foot of our territory, in any part of the country, whatever may be the cost of preserving its integrity. Then we must elect between
these two alternatives, namely, a large standing army on the Pacific, or that
of supplying the means of transporting an army there in case of emergency.
Can there be a doubt as to the choice the country would make if submitted to
the people? In regard to the importance of early action in this matter, I find
in a most able letter from our consul at Paris, addressed to Mr. Seward, the
following timely suggestions:
"'The union of the Pacific and sea-board States by an iron road never
appeared so clearly a national necessity as it has since the recent threatened
rupture with England. The first and inevitable result of a war with any
great naval power would be the loss of our California possessions.
"' Whatever may have been the traditional policy of the government
heretofore, some easy, sure, and rapid communication between the Atlantic
and the Pacific is now a subject of such direct national concern that the
government must charge itself with the execution of it without much delay.'
"Never were words more true or more opportunely spoken.  No one who
has visited our western coast has failed to realize their complete isolation from
the general government and their perilous condition in case of foreign war.
But none whose interests and homes are not there can appreciate the anxiety
of the citizens of that coast on this score. Should they not have all the security from foreign invasion which the general government can reasonably extend to them? Have we passed that period when any portion of our people
can appeal in vain to the government for protection? I will not believe it.
"For what are governments formed if not to protect their citizens from
foreign invasion and wrong-to secure their happiness and promote their
general welfare? And are they restricted in the manner in which they shall
protect their citizens or promote their general welfare? If we are satisfied
that the building of this road will render us as strong for defensive operations
as would the building and manning of a hundred line-of-battle ships, may we
not assist the enterprising subjects of the government in building it by the
exercise of the same powers that we exercise every time we make an appro



19
priation for the increase of our navy? Certainly we may do all this; and I
feel there can, at this day, be no lingering doubt in the mind of any well-informed man as to the imperative military necessity of this road."
If Mr. Phelps was correct in assuming, with those who
preceded him, that "the cost of supporting an army on the
Pacific coast necessary for its protection would, in a very few
years, amount to more than the entire cost of the proposed
railroad; that, if we are satisfied that the building of this road
will render us strong for defensive operations as would the
building and manning of a hundred line-of-battle ships, might
not the nation assist citizens of the government in building
it, by  the  exercise of the  same powers that we  exercise every time we make an appropriation for the navy?"
And if no person would engage in the construction of such
work without such aid, what becomes of the attorney-general's argument that, in this matter, " the government was the
donor, and the company the donee; and that it was incredible
that government would come under obligations to pay so large
a sum as the interest on its bonds without providing for its reimbursement from the company when it fell due."  Is it not
most mortifying that any branch or department of the government should have so far forgotten, or be ignorant of the leading
facts connected with our great struggle, as to turn upon and
seek to destroy those who have accomplished a work which is
worth, annually, to the nation thrice the interest on its cost; a
work which is essential to the maintenance of our territorial
integrity, and which, from the energy and skill displayed in
its construction, as well as from its vast magnitude and value,
is yet the wonder and admiration of the world?
Mr. Phelps was followed by I-Ion. William D. Kelley, member
of Congress from  Pennsylvania, who in the course of his
remarks (see Congressional Globe, Part II., 2d Session of 37th
Congress, p. 1593,) said,
"' Nobody can disguise the fact that California and Oregon lie at the mercy
of England, should we engage in war with her. It is not for me to announce
that we could not transport men, arms, and munitions and stores for their
defense. The records of the country already proclaim the fact. The distinguished gentleman from California [Mr. Sargent] brought to our attention




20
the other day a portion of the able report of Jefferson Davis, then Secretary
of War, on that subject, in which he asserted that overland transportation of
such supplies was an utter impracticability.
" On this point I will invite attention to a brief extract from his report, as
I find it quoted by the gentleman from California, [Mr. Sargent,]
"'This territory is not more remote from the principal European states
than from those parts of our own country whence it would derive its military
supplies; and some of those States lbave colonies and possessions on the
Pacific which would greatly facilitate their operations against it. With these
advantages, and those which the attacking force always has of choice of time
and place, an enemy possessing a considerable military marine could, with
comparatively little cost to himself,' subject us to enormous expenses in giving
to our Pacific frontier that protection which it is the duty of the general
government to afford.
"' In the first years of a war with any great maritime power, the communi.
cation by sea could not be relied upon for the transportation of supplies from
the Atlantic to the Pacific States. Our naval peace establishment would not
furnish adequate convoys to the number of store-ships which it would be necessary to employ; and store-ships alone, laden with supplies, could not undertake a voyage of twenty thousand miles, passing numerous neutral ports,
where an enemy's armed vessels, even of the smallest size, might lie in wait
to intercept them.'
" The only line of communication, then, would be overland; and by this it
would be impracticable, with any means heretofore used, to furnish the
amount of supplies required for the defense of the Pacific frontier. At the
present prices over the best part of this route, the expense of land transportation alone, for the annual supplies of provisions, clothing, camp equipage, and
ammunition for such an army as it would be necessary to maintain there,
would exceed $20,000,000; and to maintain troops and carry on defensive
operations under those circumstances, the expense per man would be six
times greater than it is now; the land transportation of each field twelvepounder, with a due supply of ammunition for one year, would cost $2500;
of each twenty-four pounder and ammunition, $9000; and of a sea-coast gun
and ammunition, $12,000. The transportation of ammunition for a year for a
thousand sea-coast guns would cost $10,000,000.  But the cost of transporta.
tion would be vastly increased by a war; and at the rates that were paid on
the northern frontier during the last war with Great Britain, the above estimates would be trebled. The time required for the overland journey would
be from four to six months. In point of fact, however, supplies for such an
army could not be transported across the continent. On the arid and barren
belts to be crossed, the limited quantities of water and grass would soon be
exhausted by the numerous draught animals required for heavy trains, and
over such distances forage could not be carried for their subsistence.
"On the other hand, the enemy would send out his supplies at from one
seventh to one twentieth the above rates, and in less time - perhaps in one
fourth the time-if he could obtain command of the Isthmus route. Any reliance, therefore, upon furnishing that part of our frontier with means of defense from the Atlantic and interior States, after the commencement of hostilities, would be vain.




21
" Are the Pacific States and territories of value to us? Is it necessary that
we should maintain the integrity of the country, that our shores should continue to be laved by two oceans, and that we should remain one people? If
it is, then must we-and the sooner it is done the better-provide means by
which the one shore shall be knitted to the other, and by which the intervening spaces shall be populated. It is not the time, say some, to begin this
work. When will it be the time? It was not the time in 1850. Then attention
could hardly be concentrated on it. Yet, had the work been begun in that
year, the road would have been completed ere this, and the city of San Francisso would have been as safe as New-York or Boston."
Such were the grounds upon which the bill was supported
in the House.  "It was a military necessity;" and, as a military work, it would save annually, in the matter of transportation, twice the interest on the bonds to be issued for it.
That the interest on these bonds could, for the present, be
earned in any other manner, was not claimed or suggested by
any one.  It was hoped that, in time, the road would be
a success as a commercial enterprise. But no great prominence was given to this portion of the argument; for the reason that the conviction was almost universal in both Houses
of Congress that, commercially, the road would prove a failure, and for the additional reason that the military necessity
was enough to justify its immediate construction.
The bill was opposed, and earnestly, on the ground that
every dollar expended on its construction would be lost, that
in the distracted and impoverished state of the country, the
loss of so large a sum could not and should not be risked.
Mr. J  S. Morrill, of Vermont, took this view of the measure
in  a speech delivered by him.  (See  Congressional Globe,
p. 1708, Part II., 2d Session, 37th Congress.)
"I AM NOT TO BE DECEIVED," SAID HE, " BY ANY PROMISES THAT THIS
ROAD IS TO BE BUILT AND RUN BY ANY OTHER PARTIES THAN THE UNITED
STATES. EVERY DOLLAR THAT IT TAKES TO CONSTRUCT THE ROAD IS TO BE
CONTRIBUTED BY THE UNITED STATES. THERE IS NOT A CAPITALIST THAT
WILL INVEST A DOLLAR IN IT, IF HE IS RESPONSIBLE FOR ITS CONSTRUCTION,
FOR ANY CONSIDERABLE DISTANCE. All that you will gain by the passage
of this bill will be the building of two or three strips of road at each end.
The capitalists who will avail themselves of the privileges granted by this
bill, will do it for the purpose of seizing the lands at each end. But the gap
that will remain before any through connection can be made, will remain
unfilled as far as they are concerned. It will not be constructed in that way;




22
and if it could be constructed in that way, it could not be kept in OPERATION EXCEPT AT THE EXPENSE OF GOVERNMENT. IF THIS ROAD WERE BUILT
T(O-DAY, THEREFORE, AND GIVEN TO THE UNITED STATES, THE UNITED
STATES ARE NOT IN A CONDITION TO ACCEPT IT EVEN AS A GIFT, IF COMPELLED TO RUN IT; NOR WILL THEY BE TILL THE POPULATION HAS SO FAR
INCREASED AS TO GIVE THE ROAD SOME FREIGHT AND SOME LOCAL BUSINESS.
AS A COMMERCIAL OR ECONO-MICAL QUESTION, SUCH A ROAD IS UTTERLY DEFENSELESS."
Mr. F. A. Pike, of Maine, spoke in the same strain.  (See
Congressional Globe, Part II., 2d Session, of 37th Congress,
p. 1707.)
"I ask where is the great interest in this country or combination of interests that is to furnish $75,000,000? Can any gentleman tell me? There
is no travel from the Pacific coast to justify it. Here are 1800 miles of railroad through an uninhabited country. One hundred passengers to the mile,
per annum, gives 180,000 passengers-a very large estimate of the carriage
of passengers from one end of the road to the other. But what are 180,000
passengers annually upon a road costing $50,000 per mile? Railroad men
understand very well that the road where you can not have 2000 passengers
to the mile, is not worth considering us a mercantile enterprise."
Mr. White, of Indiana, offering an amendment to the section under discussion, said, (See Congressional Globe, 2d Session, 37th Congress, p. 1711,)
" It will be observed by reference to the section, that there is no provision
in reference to the payment of the current interest. I therefore move to
amend by adding to the section the following
"It is declared to be the true intent and meaning of this section, that the
current interest on said bonds shall be chargeable to said company, to be by
them reimbursed to the United States within one month after each semiannual payment thereof by the United States; and a default therein shall
subject the said company to the same liability and forfeiture above provided
for in case of the non-redemption of the bonds at their maturity."
"The section," said he,' as it now stands, makes no provision for the payment of the current interest as it accrues semi-annually. It may, or may not,
have been the intention of the committee that the interest should be paid by
the company. Probably it was; but if not, then this amendment, of course,
will involve a principle which the committee have not sanctioned. If it was
the intention of the committee, and it is the intention of the Committee of the
Whole, that the railroad company shall pay the current interest, then, to avoid
the difficulty and uncertainty which creditors will have, and to insure its
prompt payment by the United States, this amendment provides that the
government shall first pay it, and the company reimburse it to the Ufnited
States within one month. Of course it will be a little gain to the company




23
to the extent of the interest upon the interest. This is the only way the interest can be promptly secured to the creditors."
Mr  Campbell, Chairman  of the Railroad  Committee, in
reply said, (p. 1911,)
" It is not supposed that in thefirst instance the company will reimburse the interest
to the government; it will reimburse it in transportation, but if the transportation
does not meet the interest, then the government is to have a mortgage upon the entire
road, for the full amount of both principal and interest."
(The amendment of Mr. White was rejected.)
On  another occasion, Mr. White said, (see  Congressional
Globe, 36th Congress, p. 1891,)
"I will take this opportunity to say, that it is very true that this bill does
provide for the repayment of these advances by the government. The gentleman from California lays stress on his objection, especially upon that fact, and
for that reason he objects to providing for government directors. Now, sir, I
contend that, although this bill provides for the repayment of the money advanced by the government, it is not expected that a cent of the money will
ever be repaid. If the committee intended that it should be repaid, they
would have required it to be paid out of the gross earnings of the road, as is
done with the roads in Missouri, Iowa, and other States, and not the net earnings. There is not, perhaps, one company in a hundred, where the roads'are
most prosperous, that has any net at all. I undertake to say that not a cent of
these advances will ever be repaid, nor do I thinkit desirable that they should be repaid.
This road is to be the highway of the nation, and we ought to take care that the rates
provided should be moderate. I think, therefore, that this will turn out a mere bonus
to the Pacific Railroad, as it ought to be.
Thie government, thei, ought to be considered as having an interest in the road,
and should have a voice in the management of its affairs."
Mr. W. S. Holman, member of Congress from  Indiana, in
opposing the bill, offered the following amendment:
"And the said railroad shall forever remain a public highway for the use
of the government of the United States, free from any charge whatever upon
the transportation of any property or troops of the United States."
Mr. Campbell, Chairman of the Select Committee, replied
to Mr. Holman as follows, (p. 1712,)
" THIS ROAD NEVER SHOULD BE CONSTRUCTED ON TERMS APPLICABLE TO
OTHER ROADS. EVERY MEMBER OF THE HOUSE KNOWS THAT IT IS TO BE
CONSTRUCTED THROUGH ALMOST IMPASSABLE MOUNTAINS, DEEP RAVINES,




24
CANONS, GORGES, AND OVER SANDY PLAINS. THE GOVERNMENT MUST COME
FORWARD WITH A LIBERAL HAND, OR THE ENTERPRISE MUST BE ABANDONED FOREVER. THE NECESSITY IS.UPON US. THE QUESTION IS WHETHER
WE SHALL HOLD OUR PACIFIC POSSESSIONS, AND CONNECT THE NATIONS ON
THE PACIFIC WITH THOSE ON THE ATLANTIC SLOPES, OR WHETHER WE
SHALL ABANDON OUR PACIFIC POSSESSIONS. GENTLEMEN ARE NOT' TO
APPLY ORDINARY RULES GOVERNING ROADS IN THE WESTERN STATES TO
THIS GREAT ENTERPRISE. WE MUST BE LIBERAL AT THE SAME TIME THAT
WE ARE JUST. WE MUST AID THIS PACIFIC RAILROAD TO THE EXTENT OF
PAYING ON THE BUSINESS OF THE GOVERNMENT THE ORDINARY RATES OF
TRANSPORTATION, OR SUCH RATES AS WILL BE PAID BY INDIVIDUALS."
Mr. Holran's motion was rejected.
In the House debates, the commercial or financial value of
the road was not, as already stated, much insisted upon. In
reference to such, Mr. Phelps, in his speech already quoted,
said,
"There are, then, two good reasons why we should pass this bill, either
one of which is sufficient to justify its passage, namely, it is a military necessity; and, secondly, it is absolutely essential to our internal development. But
there is another reason, which would be sufficient of itself to induce any
European government, under similar circumstances, not only to give the aid
proposed, but to wholly construct the road in the speediest possible way; and
that is, sir, the fact that beyond its western terminus lie Japan, China, and
the East-Indies, with their more than four hundred millions of industrial inhabitants, whose commerce, the most tempting prize ever within the reach of
any country, may be secured thereby. To secure this commerce would not
only add vastly to our national wealth, but it would build up, through individual enterprise and the currents of trade opened by it, such a fleet of steam
and sail vessels, and give us such a naval predominance upon the Pacific, as
would enable us to defy the maritime powers of the world on that ocean, and
would render our Pacific possessions' safe within themselves for all time to
come. And not only would we derive the advantages of an increased trade
and national security, but we would save in the present condition of our commerce, as may be learned from facts within the reach of all, on freight, interest, and insurance on our precious metals, and on our money exchanges, an
amount every ten years equal to the entire cost of the road. As this source
of drainarge upon our national wealth does not appear to have been much
examined into, I be( the indulgence of the House for a few moments to present some facts in relation to it."
Mr. Kelley, in his speech already referred to, spoke as follows:
"The railroad operates as the river did in the olden time. We know that
population could settle only upon the river-banks. Land so remote from a




25
navigable stream that it would cost to get its product to market nearly its
market value, was worth nothing. It is no lchger so. That law of nature
would have kept our coasts apart for centuries. But the railroad is the river
produced by modern science. We can carry these streami over mountains
and across valleys, and they will be followed by towns and cities along the
plains. From this great stream rivulets will flow, so that in Nevada, Utah,
Colorado, Washington, Oregon, Nebraska, and Kansas, American civilization
will spring up, and the land teem with life. We can by this means, and this
alone, cement the two coasts of our country, and make the East anid the West
parts of a well-united nation, easily governed, easily defended by its own
people, and from any part of which to the other the government may at all
times throw the requisite force for defense, or, should God in his providence
permit a recurrence of it, the suppression of rebellion."
In closing the debate in the House, Mr. Stevens, Chairman of
the Committee of Ways and  Means, spoke as follows, (see
Congressional Globe, Part III., 2d Session of 37th Congress,
p.:)
"I have," said Mr. Stevens, "found considerable difficulty in coming to a
conclusion what course to pursue as to this bill. That difficulty did not arise
on account of the propriety of building this road. I believe few will doubt
its utility as a great national work.  We must either agree to surrender our
Pacific possessions to a separate empire or unite them to the Atlantic by a
permanent highway of this kind.  The Romans consolidated their power by
building solid roads from the capital to their provinces. Some of the most
costly and stupendous works on record were these wonderful roads, whose solid remains at this day show what they once were.
" It is especially important that we should have such a road wholly within
our own territory. In case of a war with a foreign maritime power, the transit by the Gulf and the Isthmus of Panama would be impracticable. Any
such European power could throw troops and supplies into California much
quicker than we could by the present overland route. The enormous cost of
supplying our army in Utah may teach us that the whole wealth of the nation would not enable us to supply a large army on the Pacific coast. Our
Western States must fall a prey to the enemy without a speedy way of transporting our troops. The only question in my mind was whether, in the
midst of this rebellion, it was wise to commence it. On full reflection, I have
come to the conclusion that this is as propitious a time as we shall ever find."
The bill then passed by a vote of 79 to 49.
The above extracts represent substantially and fairly the debates that took place in the House in reference to this measure,
and the grounds urged in its favor and in opposition to it. It
was carried through on the ground of an inexorable military
necessity; that an appropriation in its favor was as justifiable as
was one to build ships or forts, or to raise, equip, and pay armies;




26
and that, in connection with the military operations of government, it was a measure of the highest utility and economy.
The project was opposed as inopportune, as impracticable,
and as involving the loss of every dollar expended in it. That
the government had no other relation to it but to make a loan
to any company that might be formed for its construction, and
for which loan such company was to pay interest semi-annually,
was never so much as suggested by friend or foe. There was
not a member of Congress, probably, who believed that the
road could by any possibility prove a profitable investment for
capital. The whole region traversed by the road, as built, was
then a terra incognita.  The route upon which, in the outset,
it was supposed such road would be built-that of the South
Pass-was found to be utterly impracticable.  It was not then
known that any mineral coal existed in the Rocky Mountains.
Without the abundant supplies of such coal subsequently discovered, the construction of the road would never have been
undertaken, at least by a private company, as its maintenance
would have been impossible at any reasonable cost. When chartered, no railroad man in the country believed in it as a commercial enterprise.  Many were disposed to aid it to a moderate extent, as a measure of public utility, but with no expectation of receiving back a dollar they might put into it.
From the House the bill went to the Senate, where it was
taken up for discussion June 12th, 1862, the opealing speech
being made by Hon. AM. S. Latham, Senator from  California.
In the course of his remarks he said, (see Congressional Globe
Part III., 2d Session, 37th Congress, p. 2675,)
"Let us inquire into the proposition before us. The loan of the public
credit at six per cent for thirty years is for $65,000,000, with an absolute security by lien-with stipulations by sinking fund from profits for liquidation
of the principal. Official reports, and other authoritative data, show that the
average annual cost, even in time of peace, of transportation of troops, with
munitions of war, subsistence, and quartermaster's supplies, may be set down
in round numbers at $7,300,000. The interest on the loan of $65,000,000 of
bonds will be annually $3,900,000, leaving a net excess of $3,400,000 over the
present cost, appealing with great force to the economy of the measure, and
showing, beyond cavil or controversy, that government will not have to pay a dime
on account of its credit, nor run the risk of a dollar by the act authorizing this
great work."




27
Hon. Henry Wilson, of Massachusetts, followed in support
of the bill to the same effect. In the course of his remarks he
said, (see Congresssional Globe, p. 2257, 3d Volume, 2d Session,
37th Congress,)
"I have little confidence in the estimates made by senators or members of
the House of Representatives as to the great profits that are to be made, and
the immense business that is to be done by the road. I give no grudging
vote in giving away either money or land. I WOULD SINK $100,000,000
TO BUILD THE ROAD, AND DO IT MOST CHEERFULLY, AND THINK I HAD DONE
A GREAT THING FOR MY COUNTRY IF I COULD BRING IT ABOUT. WHAT ARE
SEVENTY-GIVE OR ONE HUNDRED MILLIONS IN OPENING A RAILROAD ACROSS
THE CENTRAL REGIONS OF THIS CONTINENT THAT SHALL CONNECT THE
PEOPLE OF THE PACIFIC AND ATLANTIC, AND BIND US TOGETHER? NOTHING. AS TO THE LANDS, I DO NOT GRUDGE THEM. We have given
lands to the States to build railroads. We have given an immense amount
of land to the State of Ililnois to build a road through that great State,
and with all the land, the stock of the road is not at par.  We have
given land to Iowa, Minnesota, Missouri, and other States to build roads.
Some of those States have not built their roads; and the people interested in the line of the St. Joseph road came here this winter and said they
had received very little from the sale of their lands. I tell you, these grants
of land to these roads are no such great things, after all. I hope they will
make money out of it. I think, however, it is but a small contribution by
this government for the great object in view.
" I am willing to give this amount or double this amount of land if it will
aid in completing this road. If any one imagines that putting money into
these roads is to bring great returns, I think they will be greatly mistaken.
Any body who has studied the railroad interests of this country, who has examined the condition of the various railroads of the country and knows how
they are situated, what their business of every kind and description has been,
and has examined the value of their stock, knows that the railroad business
as a whole in this country is no very profitable undertaking. I want to be
as liberal in money; I want the bill to be so framed and guarded in the provisions for the money we shall give; I want to give that quantity of land,
and want it all so arranged in this bill that when we have passed the bill we
shall feel that we are to have a railroad. If by the liberality of this government, either by money or land, we can induce capitalists to put in the money
necessary to complete this road, we shall have achieved something for the
country.
"The only apprehension I have is, whether, in this bill, or ih any of the
bills that have been before Congress, we have offered inducements enough,
and whether we shall so arrange what we do give as to secure the completion
of the road. The great cost to the government is to be in the central regions
of the continent. I think it is an easy thing to build the road east to the one
hundredth parallel; it is no great thing to build it west of Nevada; but between those two regions, the great portion of this expense must be incurred;
and the bill, I think, very wisely provides that wvhile it gives $16,000 in




28
money on the ends of the line, it appropriates $48,000, I think, for those portions of the road that are to go through the central part of the continent,
through the mountains and valleys."
On a subsequent occasion, when the following clause, " the
issue of said bonds and delivery to the company shall constitute a first mortgage on the whole line of railroad and telegraph," was under discussion, and the question was whether
the mortgage should cover the rolling stock, Mr. Wilson said,
"I have studied the railroad system of the country and its condition, and I
make the prediction here, to-day, and let it go upon the record, that there is
not the man in this country, nor is there born the grandfather of the man in
this country, who will ever see this nation get back this money. It is an impossibility.' The road will never be worth it. I am for a railroad; I am for
making this grant; I am for taking some security on the bed of the road.
On the rolling-stock of the road I would not take any security; and I would
go further than that, and I would provide in this bill that this road should
never be mortgaged to any body but the government of the United States.
I want the men who go into the enterprise to put their money in it. The
government puts $16,000 a mile in portions of the road, and $48,000 a mile
in other portions of the road, and gives so much land. I want the men who
go into this enterprise to put their money in it, and not to borrow money and
give mortgages on what the government of the United States does for them;
and wanting them to put their money into it, I am against driving a hard
bargain with them. I do not want to do any thing in this bill that shall prevent men putting their money into this road. On the contrary, I want to
invite the capitalists of the country to invest their money in the road and
finish it; and I do not want to bring into it railroad speculators and stockjobbers, who come in and get the government land and government money,
and mortgage the road and sell it out. I would put a provision in this bill
that the road should never be mortgaged to any body. I DO NOT EXPECT
ANY OF OUR MONEY BACK. I BELIEVE THAT NO MAN CAN EXAMINE THIS
SUBJECT AND COME TO THE CONCLUSION THAT IT WILL COME BACK IN ANY
OTHER WAY THAN IS PROVIDED FOR IN THE BILL; AND THAT PROVISION IS
FOR THE CARRYING OF THE MAILS, AND DOING CERTAIN OTHER WORK FOR
THE GOVERNMENT OF THE UNITED STATES. IN THAT WAY WE ARE TO GET
OUR. COMPENSATION, AND, IN MY JUDGMENT, IT WILL BE AMPLE AND COMPLETE; BUT THE IDEA THAT THE $16,000 OR THE $48,000 A MILE WE PUT
INTO THE ROAD IS EVER TO BE RECEIVED BACK INTO THE TREASURY OF THE
UNITED STATES, IS AS VISIONARY AS ANY THING THAT EVER ENTERED
THE BRAIN OF MAN."
In reference to this speech of Mr. Wilson, Hon. T. O. IHowe,
of Wisconsin, said, (see Congressional Globe, Vol. III., 2d Session, Thirty-seventh Congress, page 2758,)
"The senator from Massachusetts says that he believes the company, by




29
the facilities furnished by the road, will be able to render services to the government adequate to the payment of the money advanced. If that be so, it
will be because the company will be able to earn that amount of money; it
will be able to do work for the government equal to the payment of the government loan. Then the government will get back its money; but if it should
turn out that the company is not able or is not willing to render that amount of
service, then it seems to me the government should have security on the property
which is produced by its money loaned to the company."
The most significant debate in  the  Senate was had  in
reference to certain amendments offered by Mr. Jacob Collamer,
of Vermont, who moved to strike out of the fifth section the
words, "hereinafter provided."   In order to show the effect
that this motion would have had on the bill, its fifth and
sixth sections are copied entire:
" SEC. 5. And be it further enacted, THAT FOR THE PURPOSES HEREIN
MENTIONED, the Secretary of the Treasury shall, upon certificate in writing
of said commissioners, of the completion and equipment of forty consecutive
miles of said railroad and telegraph, in accordance with the provisions of this
act, issue to said company BONDS OF THE UNITED STATES of one thousand
dollars each, payable in thirty years after date, bearing six per centum per
annum interest, (said interest payable semi-annually,) which interest may be
paid in United States treasury notes or any other money or currency which
the United States have or shall declare lawful money and a legal tender, to
the amount of sixteen of said bonds per mile for such section of forty miles;
AND TO SECURE THE REPAYMENT TO THE UNITED STATES, as HEREINAFTER
PROVIDED, of the amount of said bonds so issued and delivered to said company,
TOGETHER WITI ALL INTEREST THEREON WHICH SHALL HAVE BEEN PAID
BY THE UNITED STATES, the issue of said bonds and delivery to the company
shall ipso facto constitute a first mortgage on the whole line of the railroad and
telegraph, together with the rolling stock, fixtures, and property of every
kind and description, and in consideration of which said bonds may be issued;
and on the refusal or failure of the said company to redeem said bonds, or any
part of them, when required to do so by the Secretary of the Treasury, in
accordance with the provisions of this act, the said road, with all the rights,
functions, immunities, and appurtenances thereunto belonging, and also all
lands granted to the said company by the United States, which, at the time of
said default, shall remain in the ownership of the said company, may be taken
possession of by the Secretary of the Treasury, for the use and benefit of the
United States: Provided, this section shall not apply to that part of any road
now constructed.
" SEC. 6. And be it further enacted, That the grants aforesaid are made
upon condition that said company shall pay said bonds at maturity, and shall
keep said railroad and telegraph line in repair and use, and shall at all times
transmit dispatches over said telegraph line, and transport mails, troops, and
munitions of war, supplies, and public stores upon said railroad for the gov



30
ernment, whenever required to do so by any department thereof; and that the
government shall at all times have the preference in the use of the same for
all the purposes aforesaid, (at fair and reasonable rates of compensation, not
to exceed the amounts paid by private parties for the same kind of service;)
and ALL COMPENSATION for services rendered for the government shall be
applied to the payment of said BONDS AND INTEREST until the whole amount
is fully paid. Said company may also pay the United States, wholly or in
part, in the same or other bonds, treasury notes, or other evidences of debt
against the United States, to be allowed at par: and after said road is
completed, UNTIL SAID BONDS AND INTEREST ARE PAID, at least FIVE PER
CENTUMI of the net earnings of said road shall also be ANNUALLY applied to
the payment thereof."
These are the only sections in the act of 1862 which contain
any reference to the question of the bonds.
In reference to his motion, Mr. Collamer spoke as follows,
(see Congressional Globe, Thirty-seventh Congress, page 2813,)
" This bill carries the idea, and in this section provides for the repayment
of this loan, as gentlemen call it. In a subsequent section it is provided the
payment shall be made in the carrying of mails, supplies, and military stores
for the government at fair prices, and also that five per cent of the net proceeds or gains shall be set apart for the government. That is all the provision there is in the bill for the payment. There is a security attempted to
be given in this section. It provides, beginning at the thirteenth line,' and
to secure the repayment to the United States, as hereinafter provided, of the
amount of said bonds so issued and delivered to said company, together with
all interest thereon which shall have been paid by the United States,' there
shall be a lien on the line of the road. The language is'as hereinafter provided.' THE ONLY PROVISION IS SETTING  APART FIVE PER CENT OF
THE NET PROCEEDS; SO THAT, IF YOU LEAVE IN THESE WORDS, YOU
IAVE NOTHING REALLY AS SECURITY FOR YOUR BONDS UNLESS YOU
GET YOUR PAY IN CARRYING THE MAILS, ETC.; AND IF YOU DO NOT
GET THAT SERVICE, IT GOES FOR NOTHING. THE REPAYMENT IS TO
BE'AS HEREINAFTER PROVIDED,' AND THE SUBSEQUENT PROVISION
IS FOR CARRYING TIE MAILS AND GOVERNMENT SUPPLIES.
" Then, in the next clause of the section, it is provided,'and on the refusal
or failure of said company to redeem said bonds, or any part of them, when
required so to do by the Secretary of the Treasury in accordance with the provisions of this act, the said road' shall be forfeited; that is to say, if they do
not carry the government freight and set apart the five per cent, then indeed
you may take the road when it is ascertained not to be good for any thing;
but there is no provision here that you shall have your bonds repaid, if the
road goes into successful operation. There is no provision that the government shall ever have pay in any other way than by carrying its freight and
mails, and the five per cent of the net proceeds.  Now, this should be what
it purports to be, a security for the repayment of the loan if the road shall




31
be a successful operation. I want no duplicity about it. My motion is to
strike out, in the fourteenth line of the section, the words,'as hereinafter provided,' and in the twenty-fourth, twenty-fifth, and twenty-sixth lines, the
words,'when required so to do by the Secretary of the Treasury, in accordance with the provisions of this act.'"
This amendment was at first agreed to. It was subsequently
discovered, in the course of the debate, that this amendment,
which had passed without much consideration, would be likely
to defeat all action under the bill.  Mir. Wilson  thereupon
moved a reconsideration of the amendment, upon which the
following discussion took place.  (See Congressional Globe, as
above, p. 2816.)
" I move," said Mr. Wilson, " to reconsider the vote by which the amendment
on page eleven, section five, line fourteen, striking out after the word' States'
the words,'as hereinafter provided,' and the amendment in lines twenty-four,
twenty-five, and twenty-six, of the same section, striking out the words,' when
required to do so by the Secretary of the Treasury, in accordance with the
provisions of this act,' were agreed to. I make this motion because I am in
favor of passing a bill that will build a road. I shall vote for the bill if the
reconsideration is not agreed to; but, in my judgment, this amendment will defeat the road. Instead of being a security to the, United States, it is my
opinion it is taking security away from the United States., We propose to
embark in building a Pacific railroad. It is the interest of the United States
to induce the capital of this country to go into that road. Every dollar put
into that road is so much security to the United States. Every provision of
this bill that prevents the capitalists of the country from putting money into
the road is so much against the United States. If we embark in this road
and put millions of dollars in it, we shall go through with it, if it costs tens
of millions more than you find in this bill. The great object is to make a bill
that shall bring into the road the capital of the country. and in my judgment
this amendment repels capital You PROVIDE IN THE BILL THAT THE ROAD
SIALL DO CERTAIN WORK FOR THE GOVERNMIENT BY WAY OF PAYMENTCARRY THE MAILS, MUNITIONS OF WAR, ETC. YOU HAVE A SECURITY IN
TIIE BILL THAT WHEN THE SECRETARY OF THE TREASURY GIVES NOTICE,
YOU CAN TAKE POSSESSION OF THE ROAD. NOW, YOU STRIKE OUT THESE
PROVISIONS, THESE GUARDS, AND MAKE IT ABSOLUTE THAT IF THIS ROAD
CAN NOT REDEEM THESE BONDS THE ROAD IS FORFEITED, AND THE GOVERNMENT TAKES POSSESSION. THERE IS N'OT A MAN IN AMERICA WHO
WILL PUT A DOLLAR IN THE ROAD UNDER SUCH CIRCUMSTANCES. I do not
believe there is a dollar in the United States that will go in that road with
that proviso; and if there be none, what have you got? You have got no
security, or, if there be any, but very little. I believe that it is the most fatal
amendment that could be adopted, and if it stands in that bill, the bill is not
worth the paper on which it is written. That is my judgment in regard to
the amendment, and I therefore move the reconsideration. I move it because




32
I want to make a bill that shall make a road. I want so to frame the bill
as to induce the capitalists of the country to invest their money in the road;
to induce those who have commercial interests, those who have railway interests, to see to it that this road is built. Every dollar we can bring into
the road is so much contributed toward building the road, and is so much
saved to the treasury of the United States. I hope these amendments will
be reconsidered."
Mlr. Collamer supported the amendment upon the ground
that the bonds'issued to the companies were to be regarded
throughout the bill as loans, which were to be repaid by the
companies to the government. He said, (see Globe, p.'2816,)
" Now, sir, let us look for a moment at this bill. The provision made in
the bill about the payment is in the next section, section six:
"'That the grants aforesaid are made upon condition that said company
shall keep said railroad and telegraph line in repair and use, and shall at all
times transmit dispatches over said telegraph line, and transport mails, troops
and munitions of war, supplies and public stores, upon said railroad for the
government, whenever required to do so by any department thereof, and that
the government shall at all times have the preference in the use of the same
for all the purposes aforesaid, (at fair and reasonable rates of compensation,
not to exccd the amounts paid by private parties for the same kind of
service.')
*      %      *      *      *      *      *      *      *
"Then it goes on to provide:
"' And all compensation for services rendered for the government shall be
applied to the payment of said bonds and interest until the whole amount is
fully paid.
"Further:
"' And after said road is completed, until said bonds and interest are paid,
at least five per cent of the net earnings of said road shall also be annually
applied to the payment thereof.'
" The net earnings.' All this goes on the ground that this road is going
to be a success. Very well; put it on that ground. I hope it may be so.
The parts of the bill I have read are evidently drawn, and the argument
here is, on the ground that they are to pay back these bonds and interest.
They may do all the work for the United States, and put apart that five per cent
if they ever get any net receipts, and yet not pay the debt, because it will not
come to enough. We have not work enough for them  to do, at any fair
price, to pay for these bonds and the interest. That sixth section provides for
the payment. The security is in the fifth section, which is now under consideration."
After reading the fifth section, he continued:
" That is to say, if we do carry your freight as we agree to do, whether
that pays you or not, is immaterial. But if we do not carry your freight and




33
your mail as we agree to do, then and in that case you may take possession
of the road; but if we do that, then you shall never have any security for
the payment, however successful we may be, because all the security is according to the provisions hereinafter provided. Is not that all a mere matter
of duplicity? I do not charge any body with having intended it; but is not
that the obvious intent of it? I do not say whether it will ever be paid or
not; but I do say the bill is drawn on that ground and understanding from
beginning to end. If they will strike out those oblique words'as hereinafter provided,' they leave the security which they profess to hold out to the
world. I hope the amendment will not be reconsidered."
" Mr. MCDOUGALL: I trust the amendment will be reconsidered. At the
time it was suggested, I did not see the serious objection to it that I see now.
I wish to say with regard to this obliquity the gentleman seems to perceive
in the appearance of this bill, that it was not designed that the government
should foreclose a mortgage on this road, if the road was completed in good
faith, and did the government business. As I have had occasion before to remark, the government is now paying over seven millions per annum for the
service which this road is bound to perform. That is about one hundred per
cent more than the maximum of interest upon the entire amount of bonds
that will be issued by the United States when the road is completed. The
government is to-day, on the peace establishment, without any war necessity,
paying for the same service one hundred per cent more than the entire interest on the amount of bonds called for by the bill. Besides that, it is provided that five per cent of the net proceeds shall be paid over to the federal
government every year.
" NOW, LET ME SAY, IF THIS ROAD IS TO BE BUILT NOT MERELY BY
THE MONEY ADVANCED BY THE GOVERNMENT, BUT BY MONEY OUT OF
THE POCKETS OF PRIVATE INDIVIDUALS; IF THERE ARE TO BE GREAT
SACRIFICES IN THE ACCOMPLISHMENT OF A GREAT NATIONAL PURPOSEAND THIS IS ADMITTED TO BE A GREAT NATIONAL PURPOSE, ONE
DEMANDED AS A POLITICAL NECESSITY-WHY SHOULD THE GOVERNMENT
DRAW FROM THE POCKETS OF PRIVATE CITIZENS $50,000,000, TO BE EMBARKED IN AN ENTERPRISE THAT WILL HAVE NO NET PROCEEDS; THAT
WILL PAY NO CENT OF DIVIDENDS?  Upon the hypothesis of the senator
from Vermont, this government should build the road if it cost $100,000,000,
and then spend $5,000,000 a year to run the road. A better proposition
has been advanced here in this bill. It is proposed that the government
shall advance $60,000,000, or rather their bonds at thirty years, as the road
is completed in the course of a series of years; THAT THE INTEREST AT
NO TIME CAN BE EQUAL TO THE SERVICE TO BE RENDERED BY THE
ROAD AS IT PROGRESSES; AND THAT THE GOVERNMENT REALLY REQUIRES
NO SERVICE, EXCEPT A COMPLIANCE ON THE PART OF THE COMPANY WITH
THE CONTRACT MADE. IT WAS NOT INTENDED THAT THERE SHOULD BE
A JUDGMENT OF FORECLOSURE AND A SALE OF THIS ROAD ON A FAILURE
TO PAY. I WISH IT TO BE DISTINCTLY UNDERSTOOD THAT THE BILL WAS
NOT FRAMED WITH THE INTENTION TO HAVE A FORECLOSURE."
"Mr. COLLAMER: Then what was that part of the bill providing that the
government may take possession of it put in for?"




34
"Mr. MCDOUGALL: IN CASE THEY FAILED TO PERFORM THEIR CONTRACT.
THAT IS ANOTHER THING.  THAT IS A STIPULATION; THAT IS A FORFEITURE IN TERMS OF LAW; A VERY DIFFERENT THING FROM A FORECLOSURE FOR THE NON-PAYMENT OF BONDS. THE CALCULATION CAN BE
SIMPLY MADE THAT, AT THE PRESENT AMOUNT OF TRANSPORTATION OVER
THE ROAD, SUPPOSING THE GOVERNMENT DID NO MORE BUSINESS, THAT
THAT ALONE WOULD PAY THE INTEREST AND THE PRINCIPAL OF THE
BONDS IN LESS THAN TWENTY YEARS; MAKING IT A DIRECT PIECE OF
ECONOMY IF THE GOVERNMENT HAD TO PAY THEM ALL.  However, I
am not disposed to discuss this matter I say it was not understood that
the government was to come in as a creditor and seize the road on the nonpayment of the interest. It is the business of the government to pay the
interest, because we furnish the transportation."
"By striking out these simple words,'as hereinafter provided,' we destroy
the sixth section of the bill; and then we make it imperative, without any
discretion with the Secretary of the Treasury, that if the road shall fail to
pay the bonds when they become due, he shall take possession of the road.
Now, sir, until the road is completed, we have reserved a certain percentage
for the security of the government. I think we have taken ample security
in this matter, and I think every word or idea in this bill that tends to keep
capital out of the road is so much injury to the government of the United
States.
" The senator says the bill goes upon the idea that this money that we loan
for building this road is to be repaid. I know that is the theory of the
bill; but there is not a practical railroad man in the country who expects the
government to get back its money, unless this road can so manage as to earn
money enough to pay it. When you consider the length of this road, the
mountains and the deserts that it crosses, the sparsely settled population, the
enormous cost of the road and of running the road, the nation and the world
will be satisfied if we can build it at a reasonable cost; and then if the road
can pay the government the interest, and keep on running, and do the business of the nation, and the commercial business of the country, every body
would be delighted at the idea. I must say I fear it can not do all that. I
am very confident it could not do it without the liberal aid of the government, not only in completing the road, but a liberal dealing with the road
when it is completed. I regard it as a national necessity of transcendent importance, against which seventy-five or one hundred millions do not weigh
any thing. What are seventy-five or one hundred millions to the American
people to have a railroad completed, connecting the Atlantic and Pacific
shores, and opening the interior of the continent to this nation? It is not
even as dust in the balance."
Mr. Collamer's motion was reconsidered by a unanimous
vote; the amendment offered by Mr. Clarke, of New-Hampshire, and adopted, " that the company should pay the bonds at
maturity, and keep the railroad and telegraph line in repair,"
etc., met Mr. Collamer's objections.  The character and ob



35
jects of the bill underwent, in their debate, a thorough discussion.  It was not intended, said Mr. McDougall, "that
there should be a judgment of foreclosure and a sale of this
road on failure to pay* the bill was not framed with any
intention to have a foreclosure.' There might be a forfeiture,
but the forfeiture was to receive from breach of stipulation to
construct and maintain the road, but for no other cause. The
road might be unprofitable; it was not expected that it would
be profitable.   The government transportation  was what
Congress must look to for its compensation.  This would be
ample for any outlay, After further discussion, the bill passed
the Senate by a vote of 35 to 5, Mr. Collamer voting for it.
The bill was finally passed July 1st, 1862. It named seventysix corporators, taken from nearly every loyal State and Territory in the Union. It provided that they should meet in
Chicago on the 1st day of September following, for the purpose of forming a provisional organization, by the election of
officers, who were to be charged with the duty of procuring
stock subscriptions to the enterprise to the amount of $2,000,000, whereof ten per cent was to be paid at the time of subscribing.  The corporators met in Chicago, and organized by
the choice of officers, as required. At this convention the
whole subject of the work was fully and elaborately discussed.
The sense of the convention will, perhaps, be best shown by
copying the report submitted by the " Committee on the Order
of Business," and unanimously adopted:
"1st. That the speedy completion through the territory of the United
States, from the Atlantic to the Pacific, of a railway communication affording
means of transit for persons and property, has become an urgent necessitynot only in facilitating and augmenting the commerce, and developing the
agricultural, mineral, and fiscal resources of our continental union, BUT
PRE-EMINENTLY IN PROVIDING FOR THE PUBLIC DEFENSE, AND PERPETUATING THE POLITICAL TREATY OF THE ATLANTIC AND PACIFIC PORTIONS
OF THE REPUBLIC.
"2d. That the eastern division of this great continental chain, extending
from the Atlantic Ocean to the Missouri River, having already been completed by the capital and enterprise of companies incorporated by the several
States, IT WAS EMINENTLI PROPER FOR THE UNITED STATES TO INCORPORATE A NATIONAL COMPANY FOR COMPLETING THE RESIDUE, REACHING
FROM THE MISSOURI TO THE PACIFIC, WITH SUCH AID FROM THE NATIONAL




36
TREASURY AND RESOURCES AS SEEMED TO BE NECESSARY; AND THAT TIIE
COUNTRY MAY WELL RELY ON THE CONTINUANCE OF THE SAME WISE AND
PATERNAL POLICY TO EXPEDITE THE EFFORTS OF THE COMPANY TO COMPLETE THE WORK WITH ALL PRACTICABLE DISPATCH.
"3d. THAT IT WAS PECULIARLY THE DUTY OF THE NATION WHICH HAD
ASSUMED AND EXERCISED THE RIGHT GREATLY TO EXTEND ITS ORIGINAL
LIMITS, BY ANNEXING THE BROAD CONTINENTAL AREA BETWEEN TIIE
MISSISSIPPI AND THE PACIFIC, AND THAT, TOO, FOR THE AVOWED PURPOSE OF PROTECTING THE COMMERCE AND TERRITORY OF THE UNION
FROM FOREIGN INTERFERENCE, TO EXERT ALL ITS POWERS TO SECURE
TIE COMPLETION OF A CHAIN OF COMMUNICATION SO VIRTUALLY IMPORTANT
TO BOTH.
" 4th. That the denationalizing and treasonable effort now in progress to
separate the slaveholding portion of the Union from the residue, could it be
successful, would inevitably be followed by attempts still more flagitious, not
only to detach the States on the Pacific, but even to separate the States on
the Lakes and the Missouri from those on the Atlantic, and possibly from
each other; that this audacious and abominable attempt to demolish the
fabric of our national government is secretly encouraged, if not openly approved, by at least a portion of the European world; and that the American
people are now impelled by every motive of interest, duty, pride, and honor,
and every instinct of self-respect and self-preservation, to avert from themselves and their posterity a calamity so enormous.
"5th. That the peculiar character of the pending rebellion, involving, if
successful, the utter destruction of our national organization, and the consequent reduction of our hitherto powerful republic to the fragmentary and
feeble condition of Central Europe, entailing on our continent, for centuries
to come, perpetual internal strife, if not interminable war, imperatively' requires NOT ONLY THE UTMOST EXERTION OF THE MILITARY AND NAVAL
POWER OF THE GOVERNMENT, BUT THE IMMEDIATE ADOPTION OF EVERY
MEASURE OF CIVIL ADMINISTRATION FOR STRENGTHENING THE BONDS OF
OUR EXISTING UNION; THAT NOTHING WILL CONTRIBUTE MORE PERMANENTLY AND EFFECTUALLY TO THAT OBJECT THAN THE BINDING, BY AN
ADEQUATE CHAIN OF COMMUNICATION, OUR PACIFIC COAST AND THE RICH
METALLIFEROUS REGIONS OF THE INTERIOR TO THE LARGE AND POWERFUL
GROUP OF FOOD-PRODUCING STATES ON THE ATLANTIC; and that such a
channel of intercourse, through this central portion of the continent, occupied
by a populous and homogeneous race, enjoying easy and daily access to the
two great oceans of the globe, would enable it not only to resist and defy any
further attempt, either at home or abroad, to dismember our territory, but to
exercise a commanding influence over the commerce, if not over the political
destinies of the civilized world.
"6th. That Congress has acquired a new claim to the gratitude of the people by delegating to an incorporated company the duty and responsibility of
constructing and managing this great work of national improvement, and in
aiding it by the public credit, and grants of public lands; that through this




37
instrumentality the enterprise will enjoy the benefit of a permanent and
steady direction, exempt from the uncertainty and delay of yearly appropriations, and especially from the vicissitudes of party conflicts and the demoralizing effects of party interference, permitting its directors to carry forward
the work with activity, intelligence, and honesty, on a continuous and systematic plan, undisturbed by any changes or vacillations in our public counsels,
or any fluctuations in our public affairs.
" 7th. That the commissioners are profoundly impressed with the conviction
that, under the exigencies of our present struggle for national existence, this
great channel of intercourse, with its rich and invigorating streams of national
commerce, and its unrivaled military facilities, is more than ever needed to
preserve the American Union from political dissolution; that the pressure of
the pending war, so far from affording any reason for delaying its prosecution,
shows only the more its urgent necessity; that no time should be lost in securing its speedy completion by every reasonable effort; and that, in a crisis
so grave as the present, the company and the country may properly and confidently rely on the government promptly to extend to the work any other
aid and facility which the interests involved in its vigorous prosecution so
evidently require.
*     *      *      *      *      *      *      *       *
" 10th. That a committee, consisting of one member from each State and
territory, and one from the members at large, be appointed by the president
to apply to Congress for any auxiliary legislation which may be necessary
and proper to facilitate and expedite the construction of the work which the
present board was appointed to promote."
This report of the Committee on Business shows the light in
which the proposed enterprise was regarded by the corporators.
The sentiment of the convention reflected almost exactly that
of Congress. The road was declared to be a " military necessity;" and Congress was complimented on having met this necessity so manfully, and in contributing so liberally to the construction of the road. The opinion, however, was universally
expressed that further legislation was indispensable before the
work of construction should be commenced.  Great doubts
were expressed whether, with such legislation, private capital
could be induced to come forward in aid of the enterprise. In
reference to the feeling of the convention, the following letter,
signed by its officers, and addressed to the president of the
Union Pacific Company, is annexed:
" NEw-YonK, January 25, 1871.
"OLIVER AMES, ESQ., President Union Pacific Railroad Company:'; SR: In reply to your letter of the 20th instant, making inquiries as to the
views of the Chicago convention of corporators of the Union Pacific Railroad




38
in reference to this work, and of the relations of the government to the same,
we would state that its sentiments were well expressed in the resolutions, or
report of the Business Committee. The conviction was universal that the provisions made by government for the work were wholly inadequate, and that
further legislation must be had to induce private capital to come forward in
its aid. A committee, consisting of one corporator from each loyal State
and territory, was appointed to visit Washington to solicit additional and more
favorable legislation. In the ignorance which prevailed as to cost of the
work, and the difficulties in the way of construction, no definite plan of further
aid was matured; but it was the conviction on all sides that the burden of
the enterprise rested upon the government; that it should stand by the company in any emergency that might arise."
"Immediately after the adjournment of the"convention, the officers appointed by it opened, November 5th, 1862, as directed, books of subscription
to the capital stock of the company in every loyal State and territory in the
United States, giving, through the public prints, ample notice thereof. These
books were returned with subscriptions amounting to only $2200. The officers thereupon commenced a personal canvass for the purpose of raising the
amount necessary to a permanent organization. They corresponded with the
leading corporators, visited the neighboring cities, and made every effort in
their power to induce capitalists to subscribe to the stock. Not many, however, could be found patriotic enough to risk any considerable sum in an enterprise the success of which was regarded as more than doubtful. The undersigned never urged subscriptions on any other ground but that of the public
good, sharing themselves in the conviction which almost universally prevailed. After working for more than a year, subscriptions to the amount of
$2,000,000 were at length obtained, a large amouit of them being prompted
by sentiments of patriotism or duty, and for the purpose of saving the charter,
about to be lost by lapse of time; and on the 25th of September, 1863, the
undersigned called a meeting of the subscribers, in New-York, on the 29th
day of October following, for the purpose of forming apermanent organization.
" At this meeting, the feeling in reference to the enterprise was similar to that
which prevailed at Chicago. The condition of the country, however, had much
improved. Considerable information in reference to the character of the route
had been obtained; but it was still felt that without further and important
legislation, the work of construction should not be commenced. The precise
nature of the legislation to be asked for was not specified, for the good reason
that it was not then known what might be required. Without the legislation
that was finally obtained, the undersigned do not believe that the work of
construction should or would have been commenced.
"We are, very respectfully,          WILLIAM B. OGDEN,
"President Provisional Organization.
"HENRY V. Poon,
"Secretary of Provisional Organization."
The company, immediately upon its organization, took steps
to obtain such further information as would enable it to deter



39
mine the question of route, particularly across the great barrier
of the Rocky Mountains; and also as to the existence of coal
in the interior; for, in a woodless country, such as is that which
extends all the way from the Missouri River to the Sierra Nevada range, unless coal could be found in abundant supply, the
road could never be run if built. While preparations to obtain
such information were going on, application was made to Congress, which assembled within about a month after the formation of the company, for further aid. The aid asked for was a
release from the drawback of twenty-five per cent, provided in
the first bill; an additional land grant; and that the company
might issue its own bonds, equal in amount to the government
subsidy, and that such bonds might be secured by a first mortgage on the road, taking precedence of those issued by the government.  To meet the application for further aid, bills were
reported in both Houses of Congress.  The Senate bill proposed a complete change in the existing law. It provided that
no government bonds should be issued, but that, for the purpose
of raising the money for the construction of the road, the companies, Union Pacific and Central Pacific, might issue their corporate bonds to the amount of $24,000 per mile for that portion of the road lying west of the 100th meridian, and to the
eastern base of the Rocky Mountains; for the mountain districts, they were authorized to issue bonds to the amount of
$96,000 per mile; and $48,000 per mile for the space between
the two great mountain ranges. Upon these bonds the government was to pay interest, at the rate of six per cent in gold, for
twenty years. The government did not make itself liable for
the principal —only for the interest on the bonds. Its absolute
liability by this bill equaled about $50,000,000. BUT, IN THE
CASE OF NON-PAYMENT OF INTEREST BY THE COMPANY, THERE
WAS TO BE NO FORECLOSURE, AT LEAST TILL THE END OF TWENTY
YEARS. The language of the Senate bill in reference thereto
was as follows:
" On the payment by the United States of any interest on the bonds so
guaranteed by them, the proper coupons therefor, or other evidence of such
payment, will be delivered to the Secretary of the Treasury, who shall hold
the same for the use and benefit of the United States; and such interest, and




40
the interest thereon at the rate of six per cent, shall also remain a lien on all
the property embraced in said first mortgage in favor of the United States.
As the Senate bill did not become a law, that body finally
adopting the House bill, it will not be necessary to refer to the
debates upon the former. They were full and elaborate, and of
the same character as those already referred to. Both the debates and the bill, however, show most conclusively the construction put by the Senate upon the existing one-that the
provision for the interest was to be the government transportation, and the excess of such interest over such transportation,
the five per cent of net earnings, was not to be paid till the
principal should fall due.
The House, or amended bill of 1862, was taken up in the
Iouse June 16th, 1864.  Its provisions were stated by Mr.
Stevens, Chairman of the Railroad Committee, to be as follows, (see Congressional Globe, 38th Congress, page 3154:)
"What does this bill propose? It does propose concessions of great value
to the railroad company. It proposes to make a work much greater than if
it were attempted through or over the Alps. (Referring to the Mont Cenis
tunnel, then being undertaken by the French government.) It proposes great
concessions for the road to work under; for under the old bill it could
not work at all. I admit that the committee (reporting the bill) did know
and believe, did intend by this bill, that the government should aid this company somewhat more than by the old bill, or it would be idle for us to pass
it. The original bill was passed here after a great struggle, and it was a
mere patchwork. I remember the struggle well; the bill, as passed, had
many imperfections, and the company could not work under it....
" The company now ask that we should double the number of the bonds,
and the Senate actually passed a bill guaranteeing the payment of interest
in coin for twenty years on double the amount of bonds which the United
States originally granted.  Your committee (which reported this bill)
came at once to the determination not to burden the nation, at this time, with
any further liabilit:es or obligations. They said to the company, Take the
land you choose; it is worth nothing to the government; it is not held out
for sale; it is worth nothing except it becomes populated, and as you populate it, you do us a lenefit: do not ask us for more bonds. We will take off
some of the restrictions, and make the conditions lighter, so as to enable you
to go on with the work. What then did we do? We agreed to take off the
first restriction-the one-fourth of the subsidy reserved in the old bill, until
the whole road was finished. We agreed also to double the amount of land.
* * We also allowed the company to issue its own bonds, and give a first
mortgage; but that does not take a dollar from the government now. It




41
does not weaken the government in carrying on the war and defraying its
expenses. The only doubt is, whether this road will bear two mortgages
It is very clear that, unless the second mortgage is to be got in this way, the
road will never be finished, and will never earn a dollar. I doubt not that,
when this road is finished, and the vast travel between the two oceans sets in
over it; when the business not only of this country, but the commerce of the
far East shall be brought across this continent, to the population on this side
of the Rocky Mountains, and on its way to Europe, as it will be the only short
thoroughfare, the road will be so productive as not only to pay all its liabilities, but to make its stock very valuable. Then, sir, I say, that both mortgages will be fairly paid in time, and, although the bonds of the government
may be postponed to the others, it will receive vast advantages from the very
fact that the road is finished, and pours the wealth of California into its coffers, besides keeping the Union as it now is..... If the road is built, there
must be some advantages given..   I think, under all circumstances, we
have done about as little as we could do, if any thing at all was to be done to
enable the company to build this road. I have no hesitancy in saying that
the whole question, whether it is to stop, depends altogether upon the action
of the House upon this bill."
The House bill of 1862 was taken up in that body June 16th,
1864.  Among the  amendments proposed was one by Mr.
Holman, of Indiana. (See Congressional Globe, 38th Congress,
page 3021.)
" That said road shall be a public highway, and shall transport the troops
and property of the United States; which transportation thereof shall be required free of toll or other charge."
Mr. IIolman argued, in support of his amendment, that, as
government was to  pay the interest on its bonds, the road
should be required to do its business without charge. Mr.
Stevens, who was the leader of the bill in the House, replied
as  follows, (see  Congressional Globe, 38th  Congress, page
303:)
"The original charter provides for the transportation of troops and munitions of war. The transportation was to be charged and credited on the interest that the government may pay on the bonds. The work was not to be
done free of charge. The companies were allowed to charge for it, and the
charge was to be credited on the government bonds...   I submit whether it will be fair to alter the fundamental condition on which the road was
established, so as to take away all the profits of the road from the government business. After the road is built, I have no doubt the receipts from the




42
business of the government will be very large between its eastern and western empire. It will go very far, I have no doubt, toward paying the interest
on the government bonds. I hope every facility will be given by the government for the building of this road, and least of all that it will not violate the
charter under which this company was organized.'
Mr. HIolman, in reply:
"The company can never compensate at all for our outlay, except in the
mode which I have indicated in my amendment; that is, by transporting the
property and troops free of charge. We have no other benefit at all. We all
talk of it as a military road.*
Mr. Steele:
"The gentleman (Mr. Holman) must be aware that for every dollar the
nation invests in the construction of this road it will receive a handsome
return. The advantages accruing from the construction of this road will, in
a few years, be equivalent to a thousand dollars for one."
" This is a great public work. After the bill was passed by the last Congress, the men who took an interest in it sought to obtain subscriptions to the
stock. Many were induced to subscribe without any idea of ever having a
valuable investment in it. They did it as a matter of patriotism."
After a long debate, the character of which is fully shown
by the foregoing extract, Mr. Holman's amendment was rejected.
Mr. Washburn, of Illinois, said,
"I oppose the bill on the ground that the company is not compelled, in consideration of what government does toward the building of the road, (and it
does almost every thing!) to carry troops, munitions of war, supplies, public
stores, etc., free of charge or toll, but is to be charged the same price as private companies.... We have donated, as I have already stated, millions
upon millions of acres of the public lands for this purpose. We then proposed
to give our bonds, with the interest thereon to the amount of ninety-six millions of dollars."
Mr. Price, of Iowa, said, in reply, (see Congressional Globe,
p. 3154, 38th Congress,)
"I do not believe that there is one man in five hundred who will invest his
money, and engage in the building of this road, as the law now stands; and
we must hold out inducements to them to join in the undertaking. We must
grant such facilities for going on in the construction of the road as may be
needed; that is all we have done in this bill. It does not take an additional
dollar out of the treasury of the United States."




43
After a prolonged debate of the same character as that indicated, the bill passed by a vote of seventy to twenty-eight. It
was too late in the session for the House bill to be considered
in the Senate; the latter body insisted upon its own bill. A
committee of conference was appointed, which adopted substantially the House bill, which finally became a law on the
2d of July, 1864.
Such is a brief history of the two acts of Congress for the
construction of the Pacific Railroad. There are two modes of
determining their provisions and meaning. The first is, to
take the words used in their plain and obvious sense, and to
assume them to express the object and intent of Congress.
This mode excludes all evidence not contained in the acts
themselves. The act of 1862 is entitled, "An act ta aid in
the construction of a railroad and telegraph line from the Missouri River to the Pacific Ocean; and to secure to the government the use of the same for postal, military, and other purposes." Now, postal and military functions, in this country,
belong exclusively to the federal government. No individual
or company can exercise them. The object of the railroad was
to aid the government in the performance of its legitimate and
imperative duties; the company was required to give the former
the preference in the use of the road, and to maintain the same
for the transportation at all times of mails, troops, munitions
and material of war. This obligation on the part of the company was an ample consideration for the aid extended by the
government. Congress put its own value upon the advantages
that were secured to it. The real adequacy or mutuality of the
consideration could never have been determined by a direct calculation. The rapidity and ease with which, by the use of the
railroad, large bodies of troops, with their materiel, could be
moved to distant points, might well have been regarded by
Congress as sufficient compensation for the part it undertook
to perform, even if not a soldier nor a pound of government
freight would ever be moved over the road. Our most expensive forts are never used. They are provided against contingencies that may never happen. They avert the very danger
against which they are constructed. They are none the less




44
necessary because they are never attacked. So with the Pacific Railroad. It is, like forts, a military necessity. It is an
indispensable arm of the government. It may never be used
as such, no more than are the forts that guard the harbor of
New-York, but, like those forts, it must always be maintained
and ready for use. It saves both necessity of forts and armaments. To use the language of Mr. Phelps, " Without the
road, an armament for a five years' war would have to be maintained on the Pacific coast." Congress consequently required
the company to maintain the road, constantly, for the movement of troops and material at the shortest notice. Was it not
the most reasonable thing that Congress could do, to expend its
money on a work that would render forts and armaments unnecessary. So important was this work regarded as a military
arm, that its maintenance by the company was required under
penalty of its forfeiture to the government, in order that it
might be maintained by it, to secure the object for which it
was constructed. Its maintenance by the company, therefore,
is to be taken as ample consideration for all the benefits it has
received. Adding thereto the preference to be given in the
matter of transportation, the agreement to carry at reasonable
rates the government mails, troops, etc., etc., and the payment
of a certain stipulated proportion of the net earnings, the adequacy of the consideration on the part of the company must
be admitted by every reasonable mind.
The attorney-general has wholly misconceived the question at issue. The government undertook one thing-to provide a certain amount of money in aid of the construction of
the railroad.  In consideration thereof, the company undertook another, and an entirely different thing-to build the
road, to do the government business at fair rates, to give it
the preference, and to maintain the road at all times for
government use.  The agreement on one side, in short, was
to pay money; on the other, to perform service. After the
money is advanced the services can not be omitted except under
penalty of forfeiture of the road. Their value can not be computed in money. They can not be commuted by payment of
money. Is the company to perform the stipulated services and




45
pay the interest on the bonds at-the same time? Is it to be
subjected to two penalties instead of one-to have the mortgage foreclosed for non-payment of interest, and forfeited for
non-performance of the stipulated services?  If the company
is to be credited with the cost of maintenance of the road for
government, how is the proportion of the cost chargeable to
government to be ascertained?  Where is the tribunal to
make the division?  We should like to see the attorneygeneral adjust this question of general average. The assumption that the company is to maintain the road and pay the interest, is really too ridiculous to be combatted. They carry
on their face their own refutation. There can be no solution
of such questions as these but by reference to the plain and
obvious meaning of the act.  The moment they are raised
both government and the company are wholly afloat-are
thrown into inextricable confusion. The act has adjusted and
settled all those questions plainly and equitably. There can
be no doubt as to its meaning. There never was a doubt till
it was raised by the attorney-general himself.
The second mode of construing the bill is to go outside of its
language and to gather its meaning from the arguments and declarations made use of on its passage. These were drawn from
the condition of the country at the time; the necessity of the
road as a military arm of the government; the saving that would
be effected in government transportation; the influence it
would exert in promoting the settlement of immense areas of
our wide domain; the stimulus it would give to the commerce
of the country by opening up a communication to the Pacific
coast; its social necessity; the importance of securing individual capital and enterprise in its construction, and the terms
upon which such capital and enterprise could be secured. Now
the attorney-general goes outside of the act for the evidence upon which he bases his argument; or, rather, he does
not go inside of it for any thing. He says, " When we look at
the whole matter and see how much the government does for
the company, and how little the company is required in return
to do for the government, we must conclude that the govern



46
ment and the company are substantially in relation of donor
and donee.....  I regard the Union Pacific Railroad Company as substantially an act of bounty on the part of the government,             and, consequently, that as soon as the
government pays money for the company, the company is
bound to reimburse the government."  These extracts state
his  whole  argument.   He  regards  "the  Union  Pacific
Railroad as a bounty of the government."  What are the
facts?  Upon what are his regards based   Upon the little
that the company does for the government, in comparison
with what the government does for the company  Has he
made a computation of the reciprocal doings on either side?
Where is his evidence to show  the much on the one side
and the little on the other    It must be outside the act.
Why did  he not state what the  evidence was?  The attorney-general, though basing his argument on the equities
of the case, knows nothing of the case or of its equities. His
decision is as incoherent and absurd as is his argument. Both
indicate an utter ignorance of the reasons of the act, as well as
the act itself, and both are childish and puerile to the last degree.
What is the outside evidence?  We will recapitulate it as
stated by members of Congress themselves:
Mr. Sargent, (of the House:)
" This work is a military necessity, and as properly the subject of legislation as forts and sea-board defenses. We must have an accumulation (on the
Pacific) of ordnance, ammunition, and materiel of war sufficient to maintain
a five years' war, or we must have a railroad connecting the Atlantic States
with those of the Pacific." (Page 10.) " If (foreign) war should occur, the
cost of keeping our Pacific possessions without the road would be treble the cost
of the latter." (Page 11.) " The interest on the bonds to be issued will be
less than $4,000,000; our yearly expenses for mails and transportation are
over $6,000,000 annually. The saving will be $2,000,000 annually." (Page 11.)
Mr. Campbell:
"The road is a necessity to the government." (Page 16.) " I have shown
that the army and navy transportation, and postal service to the Pacific coast,
cost the government $7,357,781 annually. The aggregate interest, when
all the bonds shall be issued, will amount to $3,892,080. Take, then, the
annual interest from the annual expenditure, and we have left a sinking fund




47
of $3,468,701-a sum more tthan sufficient to extinguish the bonds before they
come due." (Page 16.) " If capitalists will come forward and advance one
half of the amount necessary for this great enterprise, the government is doing but little in aiding the company to the extent of the other half." (Page
16.) " The bill is based on the supposition that the transportation of government supplies over the road will equal, if not greatly exceed, the interest on
the bonds from year to year." (Page 23.)
Mr. Phelps:
" We must have a railroad across the continent by which troops and munitions of war can be rapidly transported to that coast, or we must maintain a
sufficient force there in time of peace to meet the exigencies of war, To keep
a standing army on that coast necessary for its protection, for a few years
only, would equal the entire cost of a first-class railroad from the Mississippi
to San Francisco. We must elect between the alternative of a large standing
army on the Pacific, or that of supplying the means of transporting an army
there, in case of an emergency." (Page 18.)
Mr. Kelley:
"The expense of land transportation alone of the annual supplies of such
an army as it would be necessary to maintain there (on the Pacific coast) in the
event of war, and in case our communications were cut off by sea, would exceed $20,000,000 annually. In point of.fact, however, supplies for such an
army could not be transported across the continent," (without a railroad.)
(Page 20.) " Is it necessary that we should maintain the integrity of the
country? If it is, then we must provide the means of knitting it together."
(Page 20.)
Mr. White:
"This road is to be the highway of the nation. I think that this (aid)
will turn out a mere bonus to the Pacific Railroad, as it ought to be."
(Page 23.)
Mr. Stevens:
" The bill proposes concessions of great value to the company; for under
the old bill the company could not work at all. The committee reporting
the bill intended that government should aid the company somewhat more
than by the old bill, or it would be idle for us to pass this. We have done as
little as we could do, if any thing at all was to be done to enable the company
to build the road." (Page 40.)
Mr. Price:
"I do not believe there is one man in five hundred who will invest his money in building the road as it now stands. We must grant such facilities for
going on in the construction of the road as may be needed."  (Page 42.)




48
Mr. Latham, (of the Senate:)
"The annual cost in time of peace of the transportation of troops and munitions of war may be set down in round numbers at $7,300,000. The interest on the loan will be $3,900,000. The net saving will be $3,400,000 an.
nually, showing beyond controversy that the government will not have to
pay a dime on account of the work." (Page 26.)
Mr. Wilson:
" I would sink $100,000,000 to build this road, and do it most cheerfully."
(Page 26.)  "I do not Want to put any thing in the bill that shall prevent
men putting their money into this road. I do not expect any of our money
back." (Page 28.) " You provide in the bill that the road shall do certain
work for the government by way of payment-carry the mails, munitions of
war, etc. Now," (referring to Mr. Collamer's amendment,) " you strike out
these provisions," (that the government should pay for its transportation,)
" and make it absolute that, if the road can not redeem its bonds, it is to be
forfeited, and the government takes possession. There is not a man in America that will put a dollar into the road under these circumstances." (Page 31.)
Mr. McDougall:
" Let me say that if this road is to be built not merely by money advanced
by government, but by money out of the pockets of individuals, why should
government draw from the pockets of private citizens $50,000,000 to be em.
barked in an enterprise that will have no net proceeds-that will pay not a
cent of dividends? The interest on the bonds can at no time equal the services to be rendered by the road. The government really requires no service
except compliance on the part of the company with the contract made. It
was not intended that there should be a judgment for foreclosure and sale of
this road on failure to pay. The failure to perform the contract for services
was another thing. The penalty for this is forfeiture of the road. It is the
business of the government to pay the interest, because we furnish the transportation." (Page 34.)
Such were the arguments in favor of the bill. They were
repeated with equal force, over and over again, by its advocates in either house. In both, the question of payment of interest was squarely presented and met-in the House, on Mr.
White's amendment that the company should pay the interest
on the bonds as it accrued; and in the Senate, on Mr. Collamer's motion to strike out the clause providing for the payments to be made " as hereinafter provided."  In the debates
that followed both of these propositions, it was claimed that the
government, not the company, was to pay the accruing inte



49
rest, in consideration of the advantages it was to derive from
the construction of the road, and in both houses the propositions were voted down expressly on these grounds.
In opposition to the bill it was argued, not that government
was not to pay the interest, but that the appropriation was inopportune; that the road must prove unproductive, and that
the whole investment in it would be lost.
Mr. Morrill, of the House, in opposition, said:
" There is not a capitalist that will invest a dollar in it, if he is responsible
for its construction. If the road were built to-day, therefore, and given to the
United States, the United States are not in a condition to accept it, even as a
gift, if compelled to run it." (Page 21.)
Mr. Pike:
" I ask, where is the great interest in this country that is to furnish $75,000,000? Can any gentleman tell me? There is no travel to the Pacific coast to
justify it." (Page 22.)
Mr. Holman:
" The company can never compensate for our outlay, except in the mode I
have indicated in my amendment; that is, by the transportation of persons
and property. We have no other benefit at all."  (Page 41.)
Mr. Collamer:
" The only provision for payment is setting apart five per cent of the net
proceeds, and the transportation of the government troops and mails." (Page
30.)
Mr. Washburn:
" I oppose the bill on the ground that the company is not compelled, in consideration of what the government does toward building the road, to carry
troops, munitions of war, etc., free of charge or toll, but is to be charged
the same price as private companies." (Page 42.)
What was the construction put upon the act by the company, and what was its action tnder it?   It declared  the
road to be a government necessity, to be carried forward by
government aid, that the provisions made in the original act
were entirely inadequate to the undertaking. A committee
was appointed to obtain such further aid. This was granted,,




50
as Mr. Stevens said, as the only condition on which the work
could go forward. The most important of these concessions was
allowing the company to retain one half of the transportation
charges, and the preference to be given to its own mortgage.
The government throughout stood precisely in this position:
" We must have the road, cost what it may. Upon what
terms will capitalists come forward and build it?" The company named the terms, government accepted them; the work
then went forward to completion; and every one knows how
rapidly.
ITow do tie same parties now stand    Government has
the use of the road, and saves, yearly, more than twice the interest on its bonds. It is receiving at least twelve per cent,
annually, on its entire investment, What has the company got
so far? Nothing; nor is it likely to receive any thing at present. The road has cost a great deal more than was anticipated  Other securities have been issued to provide more
means. The profit to the company is in the value of its stock.
This is not;likely, according to present appearances, to be
immediately valuable. Taking, therefore, all the facts of the
case into consideration, we ask, Is it not incredible that the
company should have done so much for the government, and
the government so little for the company; and if the relation
of donor and donee exists, whether the company is not the
donor and the government the donee, and whether the exact
reverse is not true of every position taken by the attorneygeneral?
Again, the amended bill provides that the government, instead of crediting the whole amount of transportation charges
on account of the interest and principal of the bonds, was to
pay over one half of the same to the company. This was a
provision inserted in the amended bill for the benefit of the
company, Now, if it was t6 pay the interest, as it fell due, no
benefit was secured by this provision, as the company would
be compelled to pay the sum immediately back to the government, to be credited on account of interest. Is it credible that
any such a clause would have been inserted, if it were intended that the company was to pay the interest? Such kind of




51
legislation is impossible by sane minds, and such a construction of the statute would not be entertained, for a moment, in
any circumlocution office in the worla, always excepting that
of the attorney-general.
The saving to the government from the construction of the
road has been far greater than was ever anticipated. Previous
to its construction, the government transportation on a peace
footing, over the line of the proposed road, exceeded $7,000,000
annually-  The railroad has reduced this sum  to an amount
almost nominal.  The saving effected measures the value to
government of the road.  The less the charges of transportation
by it, the greater such value. Like a fort, it averts all danger or
apprehension of attack, by the ease with which, by its use,
such attack could be repelled. The road, in this way, saves
the necessity of maintaining great armaments in the interior
and on the Pacific coast —armaments that, but for the road,
would undoubtedly be now costing $10,000,000, yearly. The
cost of transportation by wagons over the plains is fifteen
times greater than by the railroad. This fact tells the whole
story.  In the matter of the transportation of mails, it was
impos-ible, -without the road, for the government to perform,
at any cost whatever, the services it now  receives.  The
mails are now  transported in four days from  the Missouri
River to the Pacific Ocean. Before the road was built, the
time required was twenty days, and only a very small amount
of matter could be taken at that.  The old overland wagon
route, too, was liable to constant interruptions from hostile
tribes of Indians, and from frequent storms in the mountains.
The saving to government by the construction and use of
the Pacific railroads measures, unfortunately, their loss. Could
they have charged government the old wagon prices, they
would have paid the government bonds —principal and interest-long before they fell due. As it is, a large amount
of interest will now have to be added to the principal, upon
the payment of the latter. The stronger, therefore, the apparent case for the government upon the smallness of the
charges against it for transportation, the stronger really the
case for the railroad companies. It is not now proposed




53
go into this matter to see what these charges amount to. It
would certainly have been a grave cause of complaint if the
railroads had not effected an immense reduction in the cost
of the government service. The reduction that has been effected shows that they have proved of far greater value than
was ever anticipated.
The commercial or economical advantages that have resulted from the construction of this great work, after all, constitute its greatest claim to favor. The commerce of the United
States is the creation of railroads. The advantage derived
from the construction of any road may, in part at least, be
easily stated. Our railroads transport, on an average, 1500
tons to the mile of line. This tonnage is worth $150 per ton.
The construction of a railroad of 100 miles in length creates
a tonnage having a value of $22,500,000. There are in round
numbers 50,000 miles of railroad in the United States. Their
annual tonnage equals 75,000,000 tons, having a value of
$11,250,000,000. At the same rate the tonnage of the Pacific
Railroad and its branches, (the total mileage being 2400 miles,)
is 3,600,000 tons, the value of which is $540,000,000. Such is
the contribution which this road makes yearly to the commerce
of the country. Such a result is a part of the advantages
which were anticipated from the construction of this road, and
was one of the inducements to its construction, and has undoubtedly compensated, five-fold, the nation for any aid it
may have extended to it.
But this statement by no means covers the whole ground.
In addition to the 2400 miles which make up the Pacific railroads, these works have been directly instrumental in the construction of 5000 miles of line which, but for the former, would
not have been built. When the Pacific Railroad was fairly conmmenced, in the latter part of 1864, there were in the States
and territories of Minnesota, Iowa, Missouri, Nebraska, Kansas, Colorado, Wyoming, Utah, Nevada, and California, 2405
miles of railroad.  On the 1st day of January, 1871, there
were 10,567 miles!
The following statement will show the population in 1860




53
and in 1870 of the States and territories lying west of the Miissouri river traversed by the Pacific Railroad or its branches;
the number of miles of railroad in these States and territories
on the first day of January, 1861; on the first day of January,
1865; and on the first day of January, 1871.
1860.    1865.    1871.
1860.        1870.      Miles of   Miles of  Miles of
Population.    Population.   Railroad.  Railroad.   Road.
Missouri........ 1,182,012    1,715,000      933      925      2140
Iowa..........  674,913       1,191,802      711      891      2550
Minnesota......   172,023      465,511..      213      972
Nebraska.......   28,841        123,000..      122       588
Kansas.........  107,206       362,871..       40      1510
Colorado........  24,277        39,706....      368
Utah........   40,273          86,786....      364
Wyoming..........               9,118....      492
Nevada.........   6,857         43,491....      593
California......  379,994      560,285        23      214       999
2,616,390     4,597,570    1,667    2,405   10,576
The increased mileage of railroad in these States and territories in ten years has been 9000 miles; in six years it has been
8171 miles.  Deducting that of the Pacific Railroad, constructed in the mean time, the increase has been 5977 miles. O1
this mileage, the construction of more than two thirds, or say
4000 miles, has been directly and wholly due to the construction of the Pacific Railroad. The moment it was seen that
these works were to be carried through, all the States west of
the Missouri immediately commenced the construction of railroads for the purpose of forming connections with them or
their branch lines. The vast system of railroads in the interior
was carried three hundred miles further west within five years
after the construction  of the Pacific road.   The  tonnage
of the roads whose construction was due to the Pacific lines,
at the average of the whole country, would equal 6,000,000
tons. Suppose their tonnage to equal, at present, only half this
average, or 3,000,000 tons, its value then would be $550,000000 annually.  But the tonnage of these roads will speedily
equal the average for the whole country. Its value will then
equal more than $1,000,000,000 annually.
But even this by no means states the whole case. The in



crease of population of the States and territories named has
within ten years been 2,000,000. MAore than one half of this
increase has been due to the construction of railroads. There
can be no doubt that the population of the United States is
fully 1,000,000 greater than it would have been, had not the
Pacific railroads been constructed. These works, with the 4000
miles which they have been instrumental in building, have attracted vast numbers to our shores.  The home population at
the same time increases, as a rule, in direct ratio to the opportunities for labor and means of subsistence that are supplied.
Now, the rate of taxes paid by our whole population averages
$10 per head. The addition to the public revenues due to the
Pacific Railroad, consequently equals $10,000,000 annually, a
sum largely exceeding the whole amount of interest on the
government bonds.
It is hardly possible to estimate, sufficiently highly, the
value of a railroad which spans the continent, opens up the
mineral wealth of the interior, and brings us face to face, and
into commercial relations, with four hundred millions of people
in the old world. We can not fully appreciate the immense
commercial advantages that the Pacific Railroad has secured to
the nation.  Suffice to say that the latter is already more than
compensated for all the advances it has made, even if not a
dollar either of principal or interest of the amount advanced
should be returned. These advantages exceed many-fold all
that the most enthusiastic advocates dared to predict or hope.
The nation has been compensated most amply for the aid it
has extended, and should now extend the most liberal policy
to the companies that have done so much for it.
The early settlements in this country necessarily followed
the lines of its navigable water-courses. Where these did not
exist, settlements were impossible, or rather where made, were
of no commercial importance. Who can estimate the value
and influence of the Great Lakes and the Mississippi River in
the progress and development of this country?  They have
changed its whole face and destiny. But what was to be done
where no such natural highways existed? One half the conti



55
nent is without them. Was it to remain forever a desert?
Was it not the duty of the government to correct the oversight of nature, and provide artificial highways where no natural ones existed? Can there be a doubt of this?  From the
Missouri River to the Bay of San Francisco, a distance of
nearly 2000 miles, the vast region, including more than one
half the breadth of the continent, is inaccessible except by
means of railroads. It has been made accessible by the Pacific roads, constructed by the aid of the government, precisely
upon the theory stated. What has been gained by such a step?
More than 400,000 square miles, heretofore inaccessible, have
been opened up to settlement and commerce. Who can estimate the future value of this vast region, for we have a right
to assume that any lack of agricultural resources will be fully
compensated by its mineral wealth.  There is already abundant evidence that such will be the case. No estimate can be
put upon its value, no more than the value of the railroads of
the West could have been estimated twenty years ago.
It is precisely in such case as the present that it is the duty of
the government to interpose. The territory in question could
not be reached over natural highways. The pioneer could not
construct artificial ones. The capitalist would not. The nation can not afford to allow vast acres of its territory to lie
waste, simply for the want of means of access to it; and when
all equally share the benefits, all should equally bear the burden. Government in fact could well have afforded to build
every mile of railroad in operation in the United States, if they
could have been constructed in no other way, even without the
expectation of the return of a single dollar in dividends. The
value of the commerce of these roads exceeds $10,000,000,000
annually. It has been relieved of this task, fortunately, by
private enterprise and capital.  But private enterprise and
capital can not go beyond a settled country. Where it can not
and will not go, there the duty of the government begins. In
the present case, the Government has only performed a dutya duty which will always rest upon it, to leave no extensive
portion of territory owned by it without the proper means
of access.