THE BANK OF CALIFORNIA AGAINST THE SUTRO TUNNEL. A SIMPLE STATEMENT OF FACTS. The first section of the act of Congress, generally refer¬ red to as the Sntro Tunnel act, approved July 25, 1866, gives the right of way for the tunnel; the second section provides for the purchase of two sections of land at the mouth of the tunnel, and for such mines as may be discov¬ ered; the third section reads as follows: "Sec 3 And he U further enacted, That all persons companies or corpo¬ rations^ownine claims or mines on said Comstock Lode or any other lode drained, benefited, or developed by said tunnel, shall hold ^ r ^'^£ to the condition (which shall be expressed in any grant they may falter obtain from the United States) that they shall contribute and. pay to the c -ers of said tunnel the same rate of charges for drainage, or other benefits d rived from said tunnel or its branches, as have been or may hereafter be named in agreements between such owners and the a majority of the estimated value of said Comstock Lode at the time ol tn. passage of this act.” The amendment offered by the Hon. James S. Negley to Senate bill 16, is intended to carry out the provisions of this last section, which have heretofore been evaded, and reads as follows: "Andprovided further , That all persons, companies, ing claims or mines on said Comstock Lode shall make application for patents within six months from the date of the passage erf tins act, and mthe absence of a bona fide adverse claim during the notice make final proof£° d JS and file a receipt for such patents in the same manner as hereinafter providg, within twelve months from the date of filing such appheat on, or if already filed from the date of the passage of this act and in default thereof or - i *^default of filing with the register ot the land office at Carson Ci y, ^ patents^have already been issued, an acknowledgment ot the receipt of^ uch patent, subject to the conditions therein contained within twelv the passage of this act, such claims or mines shall be open to relocation by 2 other parties, in the same manner as if no location of the same had ever been made always subject, however, to the conditions of the Sutro Tunnel act, approved July twenty-fifth, eighteen hundred and sixty-six.” The last section of the law, it will be seen, clearly pro¬ vides that all mines on the Comstock Lode shall be held subject to the condition that they shall pay certain rates after they shall be benefited by the tunnel. The rates are not named, but are established by reference to a contract entered into by a majority of owners, precisely as they might have been established by reference to a given sched¬ ule in some book. In order to make these rates perfectly fair, Congress adopted those named in voluntary contracts previously agreed upon by the parties in interest. At the time of the passage of this act, the questions in¬ volved had been very fully canvassed, and it was held that for the protection of so gigantic a work some compulsory law was necessary in order to give the proper security for the investment of capital, in the same manner as such compulsory clauses are found in the mining codes of all civilized nations. In a debate in Congress, which arose from an attempt by the Bank of California to repeal the Sutro Tunnel act, the Hon. M. C. Kerr spoke as follows: “This tudnel idea stands upon a very common one in application to vari¬ ous other subjects throughout the country, and it is only by the name that is given to it in Nevada that the people are mislead and do not understand just what it means. The country is everywhere familiar with various sys¬ tems of ordinary sewerage and drainage in cities, towns, and the country. The obvious principles of law, of just and fair contributions for common ad¬ vantages and benefits , on which they are maintained, are well understood. There is no character of monopoly or uncommon hardship about them. “Now, Mr. Speaker, the whole of tins law consists in this simple proposi¬ tion, that here is to be constructed a sewer, if you please, a drain that will inevitably benefit every owner whose property 7, is in any way reached and drained and ven tilated by it. In the city of Washington, and in all the cities of this country, it is a common practice to require the persons who derive advant¬ age from the construction of such works to contribute to their construction originally and to their maintenance thereafter. * * * . * * * * In addition to what I have said, I desire to call attention to a further fact, that under the law which it is now desired to repeal, and under the contract which that law adopts, notone of these mining companies or individual miners is required to pay one farthing to this tunnel company in the way of royalty or anything else until the tun¬ nel shall have been constructed and they shall have begun to derive advant¬ age from it. In other words, tin* entire obligation is strictly reciprocal; its bur¬ dens and its benefits go together; they run constantly and perpetually in parallel lines. And the whole assumption, therefore, that there is oppression or in¬ justice or monopoly in this matter strikes me as being very far-fetched and purely unfounded.” The necessity of compulsory laws in cases of mining tun¬ nels is mucli stronger than it is in the case of sewers in cities; for if a mining tunnel reaches under the different mines they will derive the benefits of drainage and venti¬ lation without making fair contributions for the advantages derived, if they are not by law compelled to make such contributions. The Sutro Tunnel act is the first law on the statute books grauting a mining privilege in the United States, up to that time all miuing claims were held at mere suffer¬ ance, to which the Hon. M. C. Kerr refers as follows: “ But it is very clear, Mr. Speaker, that while gentlemen say here that these people had a possessory right in this soil before this last law was passed, they utterly destroy the value that is in that position when they also say that the mines involved in this legislation have very great value, and that out ot these mines these same miners have already extracted $100,000,000 in pre- cioup metals. Now, if that be so, it seems to me that for that shadowy, that unreal, that executory—it is not that much in law—that mere possessory claim of right, they have been most munificently paid, and ought not to come back here and ask for more. But a further answer to their position is found in the fact that, when the original application to Congress was made, these mi¬ ners themselves went to work and executed these voluntary individual con¬ tracts with this tunnel company, by which they agreed, whenever the tunnel was constructed, to contribute these several sums to aid its construction an maintenance.” The Horn Orange Ferris, referring to the same question, said: ' “ The gentleman from Nevada [Mr. Fitch] talked about the right which the owners of these mines have acquired. Up to the passage of the butro tunnel act, as it is called, the third section of which gives a royalty to the construct- ers of the tunnel in case they drain the mines—up to that time there was no law upon the statute book which gave any man in this country a rig i o one single foot of mining land, with the exception of a small quantity of , in California, the right to which was acquired under the Mexican title, s called. In all other cases every occupier of every foot of the mineral lands was merely a squatter. All the title he had was a mere license, a mere privi¬ lege granted by the Government. “Well, sir, that was the condition of things when this Sutro tunnel bill was passed. It was passed on the 2oth of July, 1866, and the day following we passed the first law that was passed by Congress giving anybody a g to acquire title to a foot of this land; so that at the time that t e i u nel law was passed, which was one day previous to the passage ot e g , eral minifig law, as' it is called, Congress held every foot ot mining laud and could impose just such conditions as it saw proper upon parties acffmnn^ttejo those mines. The Government owned the- mines, and these parties w squatters, and were occupying the lands by the allowance o t e o ment.” 4 Thus it will be seen that Congress had clearly the right to impose just such a tax; and in order that there should be no evasion of the law, the third section also provides that its conditions should be expressed in all patents. In pursuance of the statute, all patents issued by the United States for mines on the Comstock Lode contain the following provision, which is printed in all the blanks which are specially provided tor this purpose: “ That the claim hereby granted and conveyed shall be subjeet to the con¬ ditions specified in the third section of the act of Congress approved July 25,, 1866, granting the right of way and oth-er privileges to- aid in the construc¬ tion of a draining ana exploring tunnel to the Comstock lode,, in the State of Nevada, and the grantee herein shall contribute and pay to the owners of the tunnel constructed pursuant to said act, for drainage or other benefits derived from said tunnel or its branches, the same rate of charges as have been or may hereafter be named in agreement between such owners and the com¬ panies representing a majority of the estimated value of said Comstock lode at the time of the passage of said act, as provided in said third section.” This is the provision contained in all patents , from wriiich these parties want to escape , and from which they would have escaped had Senate bill 16, without amendment, be¬ come a law, and allowed them to make “ all proceedings for patents so had by such applicants void and without effect .” Nearly all the principal mining companies made their applications for patents immediately after the passage of the general mining act, over six years ago. They were then willing to accept their patents, subject to the conditions- therein contained. At that time the war by the Bank of California against the Sutro Tunnel had not yet been commenced. At that time they could see nothing but four miles of solid rock and enormous difficulties in the way. But when they found from the publications on the subject by the projector that the tunnel would also furnish a cheaper mode of trans¬ portation, and for the reduction of ores; when they had read the memorial of the Nevada Legislature, setting forth, in the most convincing argument, that this was a great na¬ tional loork of immense benefit to the whole country in a financial view, and as a contribution to science, by estab¬ lishing practically the downward continuation of mineral lodes; when they saw that Congress could hardly refuse 5 aid to this great work; they then came to the conclusion that the tunnel would be of more importance than they had at first supposed, and if Congress was to give aid, that they , the California Bank ring , should have it; and in order to accomplish this, they determined to break it up in the hands of its projectors. The war then commenced, and it has been one unprecedented in the annals of enterprises in this or any other country. These parties commenced to vilify the projector and the undertaking itself. They declared him insane, and the pro¬ ject chimerical. They made the mining companies, who had subscribed to the stock of the tunnel company to the ex¬ tent of $600,000, repudiate their subscriptions. They made the same companies contribute this identical sum to the construction of a railway from Virginia City to Carson river, which they now claim will be ruined by the comple¬ tion of the tunnel. They first robbed us, and then charged us with being poor. They next invested the money taken from us in this railroad, and now complain that the com¬ pletion of the tunnel will curtail the profits of the railroad! Congress granted no aid to our great work, owing to the machinations of the enemy. Now that we do not ash any aid, these parties want to injure us by underhanded legis¬ lation, so our credit may be destroyed.. Senate bill 16, containing a provision concocted with Satanic ingenuity, passed the Senate while these parties knew I was absent in Europe. It was intended as the assassin’s stab in the dark. Fortunately I returned in time to discover the iniquity, which was not understood by my best friends, none of whom, though able lawyers, could see the scope of that bill until it was pointed out. The Hon. James S. Negley’s amendment simply carries out the intention of the law. These parties are made to accept patents and file receipts within twelve months. The principal mining companies on the Comstock Lode number thirty. Of this number twenty-two have made applications. Of these, again, seven patents have been delivered, though the duplicate receipts have been stolen 6 from the register’s office at Carson City. Seven are now lying in the register’s office. The others are still pending in the General Land Office. The assertion that the passage of this amendment inter¬ feres with the rights of the parties in court is not based upon any fact. No suit can be commenced until a demand is made upon the mining companies, and that cannot be made until the tunnel shall be completed—a task of more than three years; and if there he any suit then, it will be brought by the Sutro Tunnel Company, upon a refusal by these parties to pay. No suit whatever has been commenced, and none can be that could be sustained. The statement that our contract with the mining compan¬ ies has been forfeited has no bearing upon the question now pending. We claim under the vested rights granted ns by a law of Congress which these parties have been striving to set aside. As far as the contract, however, is concerned, should we ever choose to make any claims under its terms, it will be a question the courts can determine; it will be one of judicial arbitrament. This matter was fully explained in the for¬ mer controversy in Congiess, in which Judge Woodward, of Pennsylvania, remarked: “Well, sir, yesterday we had an extraordinarj' spectacle on this floor, when the only Representative of the State of Nevada (Mr. Fitch, the predecessor of the Hon. Charles W. Kendall) denounced that legislation in the most violent manner as improper and dishonest. The act of 1866 looked to the comtnence- mencement of the greatest work of internal improvement that has ever been contemplated in the State of Nevada. It was legislation which was calculated to develop.her mineral resources to a greater extent than anything else that has been proposed. This legislation was yesterday denounced on this floor by the Representative of the State of Nevada as dishonest and corrupt. Now, Mr Speaker, I say that my eloquent friend from Nevada, in opposing this bill, manifestly does not represent the State of Nevada. He says that he does not represent the ‘bank ring.’ I do no not know that anybody charges him with doing so. But he does not represent the State of Nevada, or else the documents which we had before our committee for a whole year were forgeries. “They complain, through their Representative upon this floor, that Mr. Sutro did not commence his work in time. I say, when that question gets into the courts and becomes a judicial question, these other facts will bear on this question ; and the judge or chancellor will ask, if time is the essence of the contract, the other party, ‘How have you treated that question?’ It it he lound that they have thrown obstructions in the way of Mr. Sutro, prejudiced 1 the money market against him, and embarrassed him at every 7 step of his progress the equity of this special technical defense will not be very impressive. There is not much in that. If this House is going to legislate on this judicial question, I insist on it that these questions of fact which the gentleman intimates I have not stated correctly bearing on the question whether time be the essence of the contract, shall be investigated by the House; that we shall go into them in order to act intelligently on this judicial question.” Mr. Biggs, of Delaware, made the following remarks: “Mr. Speaker, as a member of the Committee on Mines and Mining I have given the bill which is now before the House some reflection, and I have come to the conclusion, with eight of my colleagues on that committee that the bill (to repeal the Sutro Tunnel act) ought not to pass. Only one member of the committee can be found to advocate its passage. It is true that the judgment of the eight members of the committee may perhaps be at fault; but I think if the House will carefully investigate the subject they will come to the con¬ clusion that the bill is an outrage upon the rights of Mr. Sutro and his com¬ pany. “One idea advanced here yesterday by the gentleman from Nevada [Mr. Fitch] I must confess struck me as rather strange, and that was that the Congress of the United States have permitted this humble individual to pass upon them an act of fraud. Sir, Mr. Sutro, in every effort which he under¬ took from the 4th day of February, 1865, until 1867, had the sanction and support of the people of the State of Nevada and its Representatives in Con¬ gress. Each and every one of them supported him in the measure, which he succeeded m by the passage of the bill of July, 1866. But it was urged yes¬ terday by the honorable gentleman from California [Mr. Sakgent] that Sutro had not lived up to his contract. Mr. Speaker, why did he not‘ v Because a most determined opposition had suddenly sprung up on the Pacific coast against Mr. Sutro and his tunnel company. His prospects for success were so flattering that the mining companies became alarmed, and publicly repu¬ diated their former subscriptions to the Sutro Tunnel Company. In July, 1867, the Savage Mining Company repudiated their subscription to the Sutro Tunnel Company, and the Bank of California, through their agents in New York city, Messrs. Lees & Waller, placarded in their office the following: ‘“That the stockholders of the Savage Company, at their annual meeting, had re- lused to ratify the subscription made by their trustees of $150,000 to the stock of the butro funnel Company, and that the same was utterly null and void.’” “Here, then, we see one of the leading mining companies repudiating a subscription which they had made in good faith, the effect of which was to throw a damper upon the whole enterprise. But this company was not alone, for on the 15th day of January, 1868, was sent to Washington the following telegram: . ‘“Virginia, Nevada, January 15,1868. Received at Willard’s Hotel, Washington, D. C., January 10 , 1808. lo Hon. William M. Stewart and James W. Nye: “‘We are opposed to the Sutro tunnel project, and desire it defeated, if possible. WILLIAM SHARON, The Agent of the Bank of California. ‘ CHARLES BONNEK, Superintendent of the Savage Company. B. F. SHERWOOD, President, of the Central Company. JOHN B. WINTERS, President of the Yellow Jacket Company. JOHN P. JONES, Superintendent of the Kentuck Company. J. W. MACKEY, Superintendent of the Bullion Company. THOMAS It. TAYLOR, President of the Alpha and Superintendent of the Crown Point and Best and Belcher Companies. F. A. TR1TLE, President of the Belcher Company. ISAAC L. REQUA, Superintendent of the Chollar Potosi Company.'" 8 “ Now we see, sir, the very superintendents of the mining companies who had subscribed, together with private individuals, the aggregate sum of $600,000 towards the construction of this tunnel telegraph to the Senators from Nevada that they are opposed to the Sutro tunnel, that they want it defeated, and that they repudiate their subscriptions. How, then, could Mr. Sutro go on with his tunnel? He was not a man possessed of great fortune. He had raised the amount of $600,000, and these very identical men who had subscribed for the purpose of constructing the tunnel turned round and tele¬ graphed to Senators Stewart and Nye— -the former of whom was actually in 1865 the president of the Sutro Tunnel Company—that they did not want the tunnel, and wished it defeated.” The contracts are not affected in the slightest manner by the passage of the pending amendment The law of Con¬ gress gives certain independent rights. In regard to this Judge Strickland said: “ The minority report now under consideration assumes that this legisla¬ tion changed contracts entered into by the mining companies on the one part and this man Sutro and his assigns on the other part. Now, sir, from this conclusion I entirely differ, as does the committee to which the subject was re¬ ferred. These contracts remain intact in every pari. They are not infringed in the least. No right secured by the contracts to the miners is infringed in any way. They are there with all the rights they ever had. They have the same privileges given to them by the terms of the contracts, just as though this legislation had never been enacted.” Should the question ever get into law, the courts will never decide that the contracts have been forfeited. The only point which can be made is that the work was com¬ menced a year too late. In the face of the fact that every possible obstacle was thrown in the way, that plea will have but little weight, when it is considered that time was not the essence of the contract. Judge Ferris, in referring to that plea, said: "By the terms of that contract Mr. Sutro has yet over twelve years, pro¬ viding the work does not cost over $3,000,000, as supposed at the time the contracts were made to complete the work. This contract requires that he shall expend $400,000 the first year, and thereafter $20o,000 a year at least. Thus, sir, if it costs $3,000,000, will give him fourteen years to build the tun¬ nel ; and it it costs $6,000,000, which is more likely, will give him twenty- eight years. Yet gentlemen talk about time being the essence of this eon- tract! The purpose ol the repeal of the Sutro tunnel act—I call it repeal because the effect of the act ‘to repeal and modify’ is practically to repeal the section indicated—is to drive this man away from the franchise granted him by law , now that he has commenced in good faith this important work. As soon as these men see that the work is going on, when they see that the work is progressing, when they see that a valuable lode may be struck by the tunnel long before it reaches the Comstock lode, when they see the prob¬ ability that capitalists will invest their money, they say to Congress that we shall'stop this work which Congress authorized at their request. The character oi this man, Sutro, has been impugned upon this floor. I respectfully sub¬ mit no.gentleman who has been so long about Congress as he has conducted bimseli with more propriety than Mr. Sutro. 9 "Repeal this law, strike out this section—they call it explanatory—and it is taking the heart out of it; it is leaving nothing but the empty carcass. Repeal it at once, and what do you find? Why, sir, the gentleman from Cal¬ ifornia has told us in his minority report that when the owners of the mines desire them to be drained they will do it, and that, too, without any law of Congress. Ah! does the gentleman suppose that they can build that tunnel and get the right of way without a law of Congress? Perhaps they may do those things over in California. Under all other circumstances, unless the power of the nation is thrown on their side, the power of corporations is so great and so overshadowing/ that poor and humble individuals have to give way before them.” The simple truth of the matter is, we have expended more money than we were compelled to expend under the contracts, had we commenced before August 1, 1868; that is to say, we should have expended by tbis time $1,400,000, while our expenditures amount already to over $2,000,000. The law of Congress, however, gives us certain rights which these parties have repeatedly attempted to take from us. General ISTegley’s amendment will stop these attempts forever, and will, at the same time, give protection to all the small claimants in the neighborhood of the Comstock Lode. The whole power of which that gigantic corporation , the Bank of California, is possessed will now be brought to bear against the amended bill. Gentlemen who have never visited the Pacific have no conception of the thraldom under which the people in that, the fairest part of the United States, are groaning, and of the power exercised by that monstrous monopoly. The Hon. Austin Blair, of Michigan, on the floor of the House of Representatives, made use of the following lan¬ guage : “The gentlemen whose name has been mentioned in this discussion, Mr. William Sharon, the agenT of the Bank of California at the Comstock Lode, took me in his buggy and carried me to his crushing mills, and showed me the line of the new railroad he was building, or rather had got the people to build for him. He took me to his mines, to the very bottom of them ; showed me all about them, and told me he was determined this Sutro Tunnel business should be stopped. “Now, sir, I will say to the gentleman that while I do not wish to arraign anybody here at all; while I received, as we all did, such courtesies from the Bank of California or its agents that it might be supposed our mouths might be pretty much shut against saying what perhaps ought to be said on this subject, yet all that occurred there did not blind our eyes to the fact that this is the most gigantic monopoly in the United States , that it dom¬ inates the whole Pacific coast, and that when it pipes in that country 2 10 the people dance. And you may rest assured that that will.be the case so long as that monopoly continues. It had power enough to thrust out vour greenback currency from the entire coast, riot a dollar ot it can be there used to-day in the ordinary business transactions of life and it is owing to the immense power of the Bank of California that the Govern¬ ment's not been able to introduce it. The agents of the Government have informed me that they have tried diligently to introduce the legal tender notes but the bank had given its customers notice that if thev undertook to deal in greenbacks they would not have the favor of the bank, the result was that they broke down everybody who undertook to do it; and to-day your currency is virtually excluded from the whole Pacific coast just because the Bank of California was determined that it should not circulate there. “Sir, this bank has waved its hand over the Comstock Lode and ordered Sutro away. ' That is the whole of this transaction, as it seems to me.” This is the overwhelming power which is used against this enterprise and the best interests of the laboring people* who pray for its completion. The Hon. Wm. D. Kelley, of Pennsylvania, feelingly referred to the workingmen in these words: * “ Gentlemen on the other side have spoken for the owners of mines. I propose to speak for the miners, the men who, with pick and shovel, extract the ore, and forty-five per cent, of whom die of miners’ consumption, which seizes them and penetrates their vitals before they are admonished of its approach, and who die in their youth, or in the vigor of their young manhood, prostrated by the heat and poisoned by the atmosphere of these mines. These indus¬ trious men are subscribing "to stock in the Sutro Tunnel Company. They swarm behind Mr. Sutro, and beg Congress to vest all the rights in him that will enable him to redeem them from the terrible doom to which the so-called miners' friends would still condemn them. “Sir, I brought with me from one of these mines a bit of blackened'ore, blackened by the smoke of a fire that smothered and burned forty-five of these men in the mine. Had there been a tunnel such as Mr Sutro is constructing, they would have been breathing pure air while at work; and though the lumber of the mine might have been burned, the miners could have dropped below the fire and escaped ” Single-handed I have for years had to contend against the power of this vast corporation. Unceasing have been its efforts to destroy the great work to which E have devoted my life, and I ask now, in behalf of the miners and labor¬ ing men of our State; I ask in behalf of all the people of the United States, who are deeply interested in the produc¬ tion of the precious metals; I ask in behalf of science, to which these explorations will give valuable contributions; I ask in behalf of the honor and good faith of the American nation, that this amendment may become the law of the land, so we may have that protection to which we are en¬ titled, and so that the completion of that great work may be secured, to which the Hon. Mr. Strickland, on the floor 11 of the House of Representatives* in his closing remarks, referred to as follows: “The undertaking is a gigantic one, I confess; it is such a tunnel as the World has never yet known. And if it shall bore that mountain for six miles two thousand feet below the surface, revealing an amount of wealth which Was never brought to light in this country before, it may well be considered a gigantic project; and it will be very unjust in my judgment—and I trust the judgment of the House will also so determine—to stop this project in its incipient stages, when it is but commenced, by giving these parties the power to destroy it.; to destroy an undertaking the most magnificent of any non in progress on this continent” Respectfully submitted. Adolph 8utro. Washington, I)* C., March 31, 1874.