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Will Congress preserve the National Faith in its dealings 
 with the Pacific Railroad Companies? 
 
 EXTRACTS 
 
 FROM THE 
 
 DEBATES IN CONGRESS 
 
 On the passage of the Acts to secure the construction of a Railroad 
 to the Pacific, with some suggestions upon the question whether 
 the United States issued their bonds to the Pacific Rail¬ 
 way Companies to promote and protect the National 
 interests, and upon an adequate consideration; 
 or as an act of bounty. 
 
 PREPARED BY L. E. CHITTENDEN, 
 
 In behalf of the Central Pacific Railroad Company of California, and presented to the 
 
 Honorable the Judiciary Committee of the Senate 
 
 of the United States. 
 
 WASHINGTON, D.C. 
 piBSON Brothers, Printers. 
 1871. 
 
EXTRACTS 
 
 FROM TUG 
 
 DEBATES IN CONGRESS 
 
 On the passage of the acts of July i, 1862, and July 
 2, 1864, in relation to the Pacific Railroad, and con¬ 
 siderations affecting the relation of the Pacific Rail¬ 
 road Companies to the bonds issued by the United 
 States in aid of the construction of that railroad. 
 Presented to the Committee on the Judiciary of th| 
 Senate of the United States, January 18, 1871. 
 
 It is not intended in this communication to discuss the 
 general question presented by the subject before the committee, 
 except as it is incidentally involved in the special points 
 which are suggested for your consideration. The views of 
 the law already presented are adopted,^and I could not rea¬ 
 sonably expect to add to their force by attempting to present 
 them in any other form. 
 
 And the question, “ When are the Pacific Railroad Com¬ 
 panies bound to repay to the United States the amount of money 
 paid as interest on the bonds of the United States issued under 
 the acts of July 1 , 1862 , and July 2 , 1864 ?” is a legal ques¬ 
 tion, pure and simple. All the facts are admitted. A cer¬ 
 tain amount of bonds have been issued ; a certain amount of 
 interest has been paid. The liability of the companies to re¬ 
 pay this interest is admitted. The time when and the mode 
 in which it is to be repaid must depend upon the legal con¬ 
 struction of these acts of Congress, and upon these alone. The 
 liability exists, and it is a liability upon a contract. It is 
 beyond the power of either party to change it without the 
 
2 
 
 consent of the other. If the companies are liable to repay 
 the interest semi-annually, no legislation or action by Con¬ 
 gress is necessary to enforce the claim of the Government. 
 If they are not, no legislation or action by Congress can make 
 them so liable. 
 
 It is therefore suggested, with sincere respect to all the 
 officers of the Government who have been instrumental in 
 directing this inquiry into a different channel, that it belongs 
 exclusively to the judicial department of the Government. 
 If the interest money is due, an action may be brought for 
 its recovery. The facts being undisputed, it is beyond the 
 power of the companies to delay a trial or prevent a prompt 
 decision. They have no interest to do so; their interests 
 would be best served by an early decision. Long before the 
 present time the Secretary of the Treasury might have pro¬ 
 cured the adjudication of the court of last resort upon all 
 the points involved ; and whatever may be the action of the 
 Legislative Department of the Government, the probabilities 
 are that such adjudication must finally be had. It would, 
 therefore, seem that the most practical, perhaps the only cor¬ 
 rect disposition of the subject would be its reference to the 
 courts, where it appropriately belongs. 
 
 But we believe the position taken by the companies is not 
 only the legal one, but that it may be defended before this 
 and every other tribunal not already committed to a different 
 conclusion. We proceed, therefore, to discuss it, as far as 
 possible, upon the grounds assumed by the Attorney Gene¬ 
 ral of the United States in his opinion, which we have the 
 right to regard, from the official position of its author as 
 well as his high standing at the bar, as the most logical and 
 forcible presentation of the claim for a semi-annual payment 
 of this interest of which the case is susceptible. 
 
 It is not claimed by the honorable the Attorney General 
 that the acts of Congress, considered by themselves, furnish 
 any warrant for his conclusions. If they did, he would be 
 able to point to the section or clause upon which his conclu¬ 
 sion is founded, which he does not attempt to do. The only 
 S V\ 
 
 Cv^c^ 
 
 i 
 
3 
 
 effect of the statutes upon his mind is to leave it in doubt. 
 Being thus in doubt, the question arises whether a construc¬ 
 tion should be adopted favorable to the Government or to the 
 companies. He adopts the former, because he says that when 
 we. “ 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 Government and 
 the company are substantially in the relation of donor and 
 donee.’’ Because the Government is a donor, the law im¬ 
 plies a promise to repay the thing donated at the moment 
 the donation is made. 
 
 This view of the case constitutes the entire basis of the 
 Attorney General’s opinion. Granting all his premises, we 
 should feel at liberty to controvert his conclusions. When 
 a party makes a donation by a written instrument, we should 
 hold that a promise to re-deliver or repay it would at once de¬ 
 stroy its character as a donation ; and the absence of an ex¬ 
 press promise to repay, so far from furnishing the reason for 
 implying a promise, we should insist was the very reason 
 why the implication of such a promise was impossible. But 
 we are not required to go so far. If the position of the 
 Attorney General, that the issue of these bonds is “substan¬ 
 tially an act of bounty on the part of the Government,” 
 be unsound, it must follow as a logical result that the con¬ 
 clusion founded upon these premises is equally unsound, and 
 that from the silence of the contract no such implication as 
 that of semi-annual payment arises. 
 
 Before proceeding to the discussion of this question, your 
 attention is invited to two points upon which the contract is 
 not silent; upon which it speaks no doubtful words, but 
 in plain, clear and pointed language. 
 
 In the 6th section of the act of 18 G 2 , the first section in 
 which any provision for repayment of either principal or 
 interest is mentioned, (the 5 th section providing the security 
 only,) is lbund the express condition upon which these grants 
 arc made. That condition is— 
 
 *■ That said company shall pay said bonds at maturity and shall keep said 
 
4 
 
 railroad and telegraph line in repair and use, and shall at all times transmit des- 
 Iwitches 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 iu the use of the same for all the purposes aforesaid, 
 and * * * all compensation for services rendered for the Government shall 
 be applied to the payment of said bonds and interest uutil the whole amount is 
 fully paid, and * * * after said road is completed until said bonds and 
 interest are paid, at least five per centum of the net earnings of said road shall also 
 be annually applied to the payment thereof.” 
 
 Waiving, for the present, all other considerations, the 
 statute here expressly sets apart the income from two sources 
 to the payment of the interest in question ; the compensa¬ 
 tion for the Government service and five per cent, of the net 
 earnings. Assuredly these must be applied in good faith and 
 exhausted before any other obligation can be implied. If 
 they prove sufficient, no necessity for any implication exists. 
 
 Considering this as a question of construction, without 
 referring to contemporaneous history or future probabilities, 
 we insist that there is an implied contract in this language 
 that the Government shall give its transportation to the com¬ 
 panies. This transportation is under the Government’s con¬ 
 trol. All the companies can do is to furnish the means and 
 be prepared to perform the service. The Government can 
 alone give direction to it. The terms are established by the 
 act; the payment for the service is appropriated. To say 
 that the Government may direct its transportation to other 
 lines in which it has no interest and refuse to allow the com¬ 
 panies to perform this service, is to declare that the Govern¬ 
 ment may perpetrate a fraud. 
 
 Again, “five per centum of the net earnings shall be 
 annually applied to the payment (hereof” “after the road 
 is completed.” 
 
 Until the roads are completed the companies mu>t neces¬ 
 sarily be borrowers ; all their income was and must have 
 been devoted to construction ; until then they could haven't 
 income, no “net earnings,” no means to pay interest. Of 
 the first monies which could be divided among the stock¬ 
 holders, five per cent, is reserved to the national treasury. 
 
5 
 
 The amount of this five per cent, is increased by every dollar 
 of the Government service which the roads perform. In 
 this respect, also, there is an implied duty for the Govern¬ 
 ment to discharge. 
 
 Looking, then, to the statutes alone, the construction 
 which the Government has placed for more than six years 
 upon these clauses of the contract, would seem to be sup¬ 
 ported not only by the principles of law but by those of 
 common honesty. Wait until the road is completed, when, 
 for the first time, the companies will have something to pay 
 with; then give them the entire amount of Government 
 transportation to the Pacific coast and nearer points ; apply 
 one-half of the service and five per cent, of the net earnings, 
 and if these do not reimburse the Government for its semi¬ 
 annual payments of interest, it will be early enough to 
 enquire whether they should not be reimbursed from some 
 other source for which the wisdom of Congress has not pro¬ 
 vided. 
 
 The action of the Government under this section of the 
 contract, while it has delayed the payment of this interest, 
 has been productive of lasting and serious injury to the com¬ 
 panies. For more than a year the entire main line, and 
 some of the branches, have been in operation, furnished with 
 an abundance of motive power, rolling-stock, and other 
 equipments. The companies have transported with safety, 
 and to the satisfaction of the public, every passenger and all 
 the freight which has been offered. During all that time 
 the roads have been substantially completed. The interests 
 of the companies themselves have given the strongest guar¬ 
 antee possible that the roads should be brought up to the 
 highest state of efficiency, and in the shortest possible time. 
 But the Government lias not yet declared them completed. 
 It has sent out two committees at great cost to the companies 
 to report in advance what was necessary to such completion. 
 The result is, that although the roads have been in active 
 operation for more than a year, the Government has not yet 
 consented to accept them as completed, and it certainly is 
 
6 
 
 no fault of the companies that the payment of the 5 per cent, j 
 of net earnings has not ye t commenced. 
 
 In respect to the Government service, the companies have j 
 no means of determining accurately its amount or character. * 
 This has been called for by a recent resolution of inquiry ; 
 passed by the Senate of the United States, and not yet l 
 answered. It is suggested that the information called for j 
 by that resolution should form an indispensable element in 
 any present action of Congress on the subject. 1 rom the < 
 best evidence which the companies can procure, it is esti- I 
 mated about one-tenth of the Government transportation to 
 the Pacific coast goes over these roads. They carry the , 
 mails, it is true, over a thousand miles of desert, furnishing 
 no way business, and receive for this service the same sum 
 per mile paid for such transportation between New York and 
 Philadelphia, at a saving to the Government of more than 
 $3,000 per day between Omaha and San Francisco below 
 what it cost in the year 1868 to transport one-tenth of the 
 matter between the two termini of the roads, a distance of 
 834 miles, and they get this business which does not pay for 
 two reasons: first, because it would not pay to send them 
 by the Isthmus; and, secondly, because they could not be 
 transported by any other route within the requisite time. 
 
 The reasons why the other Government business does not 
 go over the roads is obvious. Other lines have had this 
 business for many years. Officers who give direction to it 
 are familiar with other routes by long acquaintance and 
 association. It is not made the duty by law or regulation 
 of these officers to give the railroad the preference. If they 
 sent their business by the ra'lroad, the whole amount of the 
 transportation would be charged against the appropriations, 
 although the Government only pays half of it. And freight, 
 where time is no object, can be transported cheaper by water 
 than by rail. So long as any sum, however small, can be 
 saved in the appropriations by giving other routes the pref¬ 
 erence, they will have the business. The companies who 
 have performed it for so long a time, and previous to the 
 
7 
 
 completion of the lailroad at such enormous profits, natu¬ 
 rally use ever effort fo retain it. They have only to keep their 
 tariff of freights a trifle below those of the railroad to secure 
 it all. The R. R. companies for the last year have made use 
 of every honorable exertion (o secure at least a fair propor¬ 
 tion of this business, which it is not only for the interest of, 
 but the Government has contracted to send over their lines. 
 They have succeeded to the extent of about one-tentli of the 
 whole Government transportation, aside from the mails. 
 
 With all these disadvantages these roads have already 
 performed this service for the Government to the amount of 
 nearly two millions and a half of dollars ($2,417,493.95) 
 before these roads are completed. The Attorney General 
 refers to this as a u small amount,” scarcely worthy of 
 computation in the interest account. Small as it is, it 
 amounts to nearly fifty per cent, of the interest paid by the 
 Government since the roads commenced running to the Pa¬ 
 cific coast. The assertion that the revenue derived fiom 
 the two sources provided in the wisdom of Congress to reim¬ 
 burse this interest have failed to do so is not true in fact. 
 The assertion that they will fail to do so and leave the com¬ 
 panies indebted to the Government at the maturity of the 
 bonds is not only wholly gratuitous, but it is opposed by 
 every probability. Congress expected that the Government 
 service would go on increasing year by year with the settle¬ 
 ment of the country, the development of its resources, the 
 population of its new Territories, the annexation of new 
 fields of enterprise, the increase and extension of its com¬ 
 merce over the Pacific and Indian oceans, China, Japan, 
 India, and the Southern Archipelago. The sum of this 
 service in 1868 is no ciiterion by which to measure its 
 amount in 1890. As well might it be said because (here 
 was no freight coming from California in 1850, therefore 
 there would be none in the present year. 
 
 It is, therefore, submitted as a suggestion worthy the 
 attention of the committee that the Government has itself a 
 duty to perform before it cm call upon the companies to 
 
repay this interest in advance of ks being earned. It must 
 first exhaust the funds expressly provided for this interest 
 before it can assume the existence of a deficiency. Let the 
 Government accept these roads as completed, or tell the 
 companies what they must do to complete them. Let the 
 companies have at least twelve months in which to demon¬ 
 strate the wisdom of that Congress which create 1 them 
 During that time let the Government perform its part of 
 the contract and give the business it promised them, and 
 (hen if one-half the service and five per cent, of the net 
 earnings shall not reach a sum which will convince all rea¬ 
 sonable men that these two sources of income will prove 
 adequate in the end to repay this interest, it will be time, 
 not to put into operation the harsh and ruinous compulsory 
 measures which have been so far used, but to make a fair 
 and reasonable effort to secure the balance. 
 
 But this view of the subject is confined to the very letter 
 of the law. It is a very narrow one—'“ quco haret in litera 
 hceret in cortice” The supposition that either the Congress 
 of 1862 or 1864 intended to bind the companies to repay this 
 interest semi-annually with moneys raised to consruct the 
 road, and before they had eirned a dollar, is one which cer¬ 
 tainly will not be made by any one acquainted with the facts 
 of his'ory or the character of the statesmen who created this 
 great enterprise and made its achievement possible. We 
 have the warrant of the Attorney General for referring to 
 these facts in this connection, for one element in his conclu¬ 
 sion is based upon the fact lliat the country was then en¬ 
 gaged in “a formidable war.” But we do not need such 
 authority. The mind of every American who is either 
 proud of, or whose material interests are benefited by, this 
 great enterprise reverts necessarily to these circumstances. 
 Within the limits of this paper we can only name a few of 
 them ; for the others, we must trust to the memories of loyal 
 and patriotic men. 
 
 For almost twenty years previous to 1862 a railroad 
 to the Pacific had been felt as one of the growing 
 
0 
 
 necessities of the American people. As early as 1844, 
 long before the discovery of the golden deposits of Cali¬ 
 fornia, Asa Whitney had brought before the legislatures 
 of many of the States the need of this American highway 
 for the commerce of the world. His prophetic words car¬ 
 ried conviction to the minds of all who heard them. Then 
 c tme the gold discoveries of the Pacific coast, and from that 
 era in the history of the republic until the completion of the 
 Pacific railroad its early construction had been demanded 
 by the American people as a national necessity. For the 
 proof of this we rely upon the records of Congress. We 
 have no occasion for going outside the record. We are con¬ 
 tent that the committee should read and construe every sec¬ 
 tion of the statutes in question by the light of contempora¬ 
 neous construction, not of a general character, but the 
 construction of the authors of these statutes and the states¬ 
 men by whom they were passed. The legal reputation of 
 some of them stood nearly as high as that of the lawyers 
 by whom their construction of their own words has been 
 assailed. 
 
 Few laws which Congress has ever passed have been made 
 the subject of more thorough examination and exhaustive 
 discussion than the Pacific railroad act of July 1, 1802. In 
 the form reported by the special committee of the Senate, it 
 was a transcript, with slight alterations, of an act which had 
 been debated in committee through both the sessions of a 
 previous Congress. In reporting the bill to the Senate, on 
 the 26th February, 1862, the chairman used the following 
 language: 
 
 “The measure, as now reported by the committee, is one that lias met the ap¬ 
 probation of the committees of both Houses, and is in substance very much the 
 measure that ha3 heretofore passed the House of Representatives.'’ 
 
 And on the 12th of May, on a motion to make the bill a 
 special order, he further remarked— 
 
 “ This bill has passed the House of Representatives bv a large majority. To 
 its being made a law, the regular Democratic party, ns well as the Republican 
 party, are solemnly pledged, and have been pledged repeatedly.’ 
 
10 
 
 On the 20th of May, the same motion pending, it was 
 urged against its adoption that the revenue law, and many 
 other acts made necessary by the existing war, should be 
 previously considered, to which the same gentleman replied : 
 
 “This subject has been before the Senate for ten years in various forms of legis¬ 
 lation. It is a measure demanded of the country, to which the country is pledged, 
 and is one of, I believe, as immediate necessity as any before Congress. 1 think 
 m 3 ’self qualified to assert and maintain that this bill, as now presented, is by far 
 the most efficient, well considered, and complete that has yet been presented for 
 the action of Congress. I trust the Senate will pardon me if I cannot engage in 
 the thousandth-time made argument on the importance of this great work to the 
 Republic and the world ; I am not intellectually large enough to contemplate it." 
 ( App. Cong. Globe , 1862, p. 307.) 
 
 In considering the principal objection to the bill, that its 
 charge upon the Treasury during our exhaustive war would be 
 unwise, he said : 
 
 “ Mr. President, it has now to be observed that no bond can issue until forty 
 miles of the road are constructed and approved. It may be safely premised that 
 no call for bonds can be made until sometime in the year 1863, and that no 
 interest can be charged against the Government until December 31, 1863. Suppose 
 at that time the enterprise has progressed up to the full terms of the bill—a sup¬ 
 position which is our hope. The Government will then have loaned her credit to 
 the enterprise to the amount of $3,600,000, upon which the sum of interest will 
 be $216,000—a sum expended every year for twenty several purposes of no great 
 or paramount importance. When the road shall have been completed, assuming 
 the bonds issued to be$62,880,000, the maximum estimate, and the entire interest 
 will be but $3,773,800 per annum. 
 
 “I understand, sir, that to some gentlemen these figures may seem large. But 
 permit me to call the attention of these gentlemen to some facts—practical business 
 facts. In I860, General Curtis, fts Chairman of the House Committee, estimated 
 the amount yearly paid by the Government for the transportation provided for 
 by this bill at some $6,000,000. The present able chairman of the House Com¬ 
 mittee look occasion to enquire directly of the Government the exact cost to the 
 Government of this service, and found it to be $7,357,000, or about one hundred 
 per cent, more than the full charge of interest against the Government when the 
 road shall have been completed. I now call the attention of Senators to this 
 consideration, or rather to this pregnant fact, not to be ignored or avoided, that 
 the difference between the interest ($3,773,800) and the present cost, ($7,357,000,) 
 with the five per cent, reserved to the Government by the bill, would necessarily 
 pay the Government bonds and interest years before the Government bonds would 
 mature. I might say much more, but I think, for the occasion, I have said 
 enough.” 
 
 After showing that the construction of the Pacific railway 
 
11 
 
 would result in a direct profit to the nation of more than 
 $50,000,000 per annum, and citing the authority of an em¬ 
 inent political economist to show that money expended di¬ 
 rectly by a nation in the construction of such works of pub¬ 
 lic utility had a direct and powerful effect to enrich the 
 country, he concluded by saying : 
 
 *• If explanation is required, I am prepared to make it. If objection exists in 
 tlic mind of any Senator, it should be presented. Further than this, I hope the 
 friends of the measure will be silent, except to vote.”— Cong. Globe App , 1SGI-2, 
 p. 307. 
 
 On the 17th June, 1862, the bill being aga : n under dis¬ 
 cussion, Mr. Wilson, of Ma c s., said : 
 
 “ We have discussed this question before the nation for many years. Nearly 
 all of us are committed to a railroad. The people are for a railroad ; not for a 
 railroad bill, but for a railroad. * * Sir, I think this is a great national 
 undertaking. It is not an undertaking for Kansas, Missouri, Nebraska or Iowa. 
 It is an undertaking for the nation ; and I think we had better cast aside, just ns 
 soon as we can, all this idea of taking care of anybody’s railroads or anybody’s 
 special interests, and settle upon a point by our votes. J want to pass a bill that 
 will make a railroad, for I believe it to be of vital importance to this nation that 
 we should commence the work. * * I believe it a commercial, and above nil, 
 a political necessity; and when I use the word political, I speak of the strength 
 and unity of this nation in the future. 
 
 “ I have little confidence in the estimates made by Senators or members of the 
 House of Representatives as to the great profits which are to be made, and the 
 immense business to be done by this road. I give no grudging vote in giving 
 uway either money or land. 1 would sink $100,000,000 lo 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-five or a hundred millions in opening a rail¬ 
 road across the central regions of this continent, that shall connect the people of 
 the Pacific and the Atlantic, and bind them together ? Nothing! As to the lands, 
 1 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 Illinois 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 these States have not built these roads. I tell you these 
 grants of lands 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 to the great object in view. 
 
 *‘I am willing to give this amount, or double this amount of land, if it will 
 aid in completing the road. * » * I want to be as liberal in money —I want 
 the bill to be so framed and guarded in the provisions for money wc shall grant— 
 I want to give that quantity of land, and want it all so arranged in this bill, that 
 when we have passed it we shall feci that we are to have a railroad. If by the lib- 
 
12 
 
 erality of this Government, either by money or land , ice can induce capitalists to put 
 in the money necessary to complete the road, ire shall have achieved something for the 
 country. * * 
 
 "The only apprehension I have, is whether in this bill, or in any of the bills 
 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.” 
 
 On the s.ime day, 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 tele¬ 
 graph,” was under discussion, and the question was whether 
 the mortgage should cover 1 lie rolling-stock, Mr. Wilson 
 stid : 
 
 <■ As to the security the United States takes on this road, I would not give the 
 paper it is written on for the whole of it. 1 do not suppose it is ever to come back 
 in any form except in doing on the road the business ice need, carrying our mails and 
 munitions of war. In my judgment we ought not to vote for the bill with the ex¬ 
 pectation or with the understanding that the money which we advance for this road 
 is ever to come back into the Treasury of the United Stales. I vote,for the bill with 
 the expectation that all we gel out of the road—and 1 think that is a great deal — 
 will be the mail carrying and the carrying of munitions of war and such things as 
 the Government need, and 1 vote for it cheerfully with that view. I do not expect any 
 of our money back. I believe no man can examine the subject and believe that it 
 will come back in any other way than is provided for in this bill, and that provision 
 is for the carrying of the mails and doing certain other work for the Government. In 
 that way we are to get our compensation, and in my judgment it will be ample 
 and complete; but the idea that the $10,000 or $48,000 a mile we put into the 
 road is ever to be received back in any other way into the Treasury of the United 
 States is as visionary as anything that ever entered the brain of man." — Globe 
 18GI-2, p. 2756. 
 
 In the same connection Mr. Howe observed : 
 
 “ The Senator from Massachusetts says he believes the company, by the facili¬ 
 ties furnished by the road, will be able to render services to the Government ade¬ 
 quate 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 com¬ 
 pany is not able or 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.”— lb., 2758. 
 
 Mr. Clark, on the same subject, remarked— 
 
 ‘•The Senator from Massachusetts may be entirely right, that the Government 
 may never receive back this money again, and it may be that we make the loan 
 
13 
 
 for the purpose of receiving the services; but it will be well to take a mortgage 
 to secure the building of 'the road through, and then, to secure the performance of these 
 services which we expect them to perform in the transmission of mails and munitions 
 of war, after the road is built. I think we had better adopt the amendment of the 
 committee. It will make it safer for the Government, and safer in this regard, 
 that we shall get the rout built and have the service performed.'’ —lb., 2758. 
 
 The amendment was then agreed to. 
 
 These Senators to whom the country is indebted for their 
 exertions toward the advancement of the work do not seem 
 to have conceived the idea that— 
 
 “just that as soon as the Government pays money for the company, the com pan v 
 should be bound to reimburse the Government!” 
 
 Mr. Clark also opposed the amendment giving the Gov¬ 
 ernment the possession if the road was not completed by July 
 1,1876, as being too rigid, and one which the Government 
 would never enforce. {Ibid, p. 2778.) 
 
 The clause authorizing Congress to alter or repeal the act 
 was opposed by the chairman of the committee, because “ no 
 company would engage in an enterprise of this kind, when, 
 by a repealing act, at any moment it might be swept out of 
 existence.” In reply to this Mr. Clark said : 
 
 “You will have do difficulty with these roads if they ktep within the line of 
 their charters. Congress can be trusted. It will never^molesl these roads so long 
 as they pursue the proper line of their charters and their duty. This company 
 may well trust the legislature of the country, when the country in fact builds 
 the roads. When we give the money and give the lands we should be trusted.” — 
 lb., p. 2778. 
 
 On tlie same subject, Mr. Morrill, of Maine, said: 
 
 “ It seems to me we had better retain the proposition as it is. I can hardly 
 conceive how corporators who are willing to take an act of incorporation from 
 Congress can distrust the justice of the nation in its future dealings with it. It 
 looks to the Government to build the road, and must look to the Government in 
 all the future for its support and maintenance. I therefore suggest to the hon¬ 
 orable chairman that he can and, I trust, will have a generous confidence in that 
 public to which he appeals for the support of his measure to allow this principle to 
 be engrafted upon the bill. Congress must always be relied upon to act justly 
 and fairly in this matter.”— lb., 2779. 
 
 Congress is relied upon with entire confidence to act fairly 
 and justly in this matter. The subject is not referred to on 
 
14 
 
 account of the existence of any distrust in this respect, but 
 because it may be possible that some officers of the Govern¬ 
 ment may not be aware of the pledge upon which these 
 charters were accepted. 
 
 Mr. Howard, a Senator whose abilities as a lawyer, or 
 whose intimate acquaintance with the subject of railway 
 legislation, are known to every one who has ever been con¬ 
 nected with it, said : 
 
 “A charter of incorporation which is not a municipal corporation, created 
 merely for political and governmental purposes, is well understood by the pro¬ 
 fession to be a contract between the Government and the corporators, and every 
 provision of it is but part and parcel of the contract. In this case, we are enter¬ 
 ing into a bargain with certain individuals who in the bill are denominated 
 stockholders, and a name is given to them in the bill which we are enacting. 
 We are entering into terms with these stockholders, and everything which we 
 agree to, which we enact on the part of the Government, becomes, when the act 
 of incorporation is accepted by the subscribers, a bargain—a co/itract. I take it, 
 sir, that this principle is just as well settled by adjudication ns any other princi¬ 
 ple about which lawyers are accustomed to talk It is a contract , a bargain , and 
 we have the right to insert in it any terms we see fit.’’— lb., p. 2780. 
 
 Our apology for referring to fetich familiar principles of 
 law as the following ; that a parol condition cannot be en¬ 
 grafted upon a written contract; that a condition cannot be 
 implied when the parties have made an express stipulation 
 covering the same subject-matter, is found in the opinion 
 of the honorable the Attorney General, whose attention they 
 would seem to have temporarily escaped. 
 
 Mr. Latham, in his appeal to the Senate not “ to shut out 
 the Pacific coast with a sea line of nine hundred and seventy 
 miles and a population which had already overcome obsta¬ 
 cles and attained results unsurpassed by any State, from the 
 vitalizing influences of a connection with the r. st of the 
 Republic by means of the railroad,” said : 
 
 ‘•The loan of llie public credit at G per cent, for thirty years for $05,000,000, 
 with absolute security by lien with stipulations by sinking fund from profits for 
 the liquidation of the principal, official reports and other authoritative data show 
 that the average annual cost, even in times of peace, in transportation of troops, 
 with munitions of war, subsistence and quartermasters’ supplies, may be set down 
 at $7,300,000. The interest upon the credit loan of $65,000,000 will be, annually 
 $3,900,000, leaving a net excess of $3,400,000 over the present cost, appealing 
 
15 
 
 with great force to the economy of the measure, and showing, beyond cavil or con. 
 troversv, that the Government will not have a dime to pay on account of its 
 credit nor risk a dollar by authorizing the construction of this great work.” 
 
 He then proceeds to urge more important considerations : 
 
 “The filling up of our agricultural and mineral regions, now imperfectly 
 developed, by industrious producing classes, requiring all the appliances of civil¬ 
 ized life—the effect to increase the value of the public domtin, filling its waste 
 places with occupation, and converting unsettled Territories into sovereign 
 States—the advance of the influence and power of the nation in its control of the 
 commerce of the East—the necessity of meeting the effect of constructing the Suez 
 Canal by opening a shorter and quicker route to that commerce—as u political 
 measure, in guarding and securing interests essential to defence from intestine 
 and foreign foes—in suppressing Indian wars and controlling hostile tribes who 
 were then ravaging our frontiers, butchering the families of emigrants and set¬ 
 tlers, and interrupting the languid existing connection with the Pacific coast— 
 and the military importance of the enterprise in N the event of foreign war’'— 
 Debate of June 12, 1862- 
 
 Are urged as considerations more powerful with states¬ 
 men than the saving of a small amount of interest on the 
 bonds. 
 
 On the 18th of June Mr. Collambr offered his amend¬ 
 ment providing for the reservation of twenty-five per cent, 
 on the mountainous portions, and fifty per cent, on the rest 
 of the railroad until its completion, and said : “We pro¬ 
 pose to give this amount, and we do it to get a road.”— 
 (P. 2786.) Upon the effect of the reservation, which was 
 •adopted in a modified form, he remarked : 
 
 “ I meant to have it understood th it the persons who build this road are not to be 
 deprived of the interest on the reserved bonds. The proposition is simply that the 
 bonds shall remain until the work is done; but the interest runs on, and when 
 the whole road is complete they receive the bonds with the interest.” 
 
 Mr. Sherman — “I look upon it in this way : The Government of the United 
 States deems it its interest to build this road, and has made up its mind that it 
 will invest in aid of the road a certain sum of money, provided it can get the 
 road, and under this bill it can be constructed.” 
 
 Mr. Collambr— “The bonds become deliverable for sections of the road forty 
 miles long. Suppose they finish a section of forty miles and bonds become due to 
 them for that section. The provision is that we reserve a certain percentage of 
 those bonds in the Treasury for them. The interest on those bonds goes on and 
 belongs to them, and when the road is finished they get it.” ; — P. 2788. 
 
 Mr. Clark —“ Whether 1 am right or not, I do not build the road because I think 
 it is to he a paying road. I build it as a political necessity, to bind the country 
 
16 
 
 together and hold itt)gethcr, and I do not care whether it is to pay or not. 
 Here is the money of the Government to build it with. I want to hold a portion 
 of the money until we yet it through, and then let them have it all."—! 1 . 2805. 
 
 “Mr. Ten Eyck. The great object of the Pacific Railroad bill is to have a 
 national means of communication across the continent. That is the idea which 
 the public have entertained for years past, and the only idea—a great national 
 measure to cement the Union—to bind with a belt of iron the Atlantic and the 
 Pacific. * * * This is the inducement which the old States have in doing 
 what they believe will be for the benefit of the common country, to the prejudice 
 of the treasury, so to speak, yet the general returns may be beneficial iu the long 
 run.”— Page 2805. 
 
 These views do not support the idea of “ set-off’ that the 
 Secretary of the Treasury should offset against the interest 
 accruing on the reserved bonds a claim for “ money paid.” 
 
 Inconsistent and irreconcilable as these debates are with 
 the theory now advanced, it may be said that they do not 
 involve the action of the Senate as a legislative body upon 
 the point now for the first time in controversy, we there¬ 
 fore proceed with the history. 
 
 The 5th section of the act of 1862 was reported by the 
 committee as it now stands : “ 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, the issue of said bonds and delivery 
 to the company shall ipso facto constitute a first mort¬ 
 gage,” &c. 
 
 The 6th section as reported, “that the grants aforesaid 
 are made upon condition,” &c., omitted the words “ shatl 
 pay said bonds at maturity , and —” 
 
 Mr. Collamer moved to strike out the words “as herein¬ 
 after provided,” and also the words which permitted the 
 Secretary of the Treasury to exercise his discretion as to 
 taking possession of the road on the failure of the company 
 to “ redeem said bonds or any part of them.” The adoption 
 of these amendments, it will be seen, would have made the 
 obligation of the company to repay both the principal and 
 interest of the bonds absolute, and would have made it (lie 
 duty of the Secretary to take possession whenever the con¬ 
 dition was broken. 
 
17 
 
 Having offered his amendment, Mr. Collamer said : 
 
 This bill carries the idea, and in this section provides for the repayment of 
 the loan, as gentlemen call it. In a subsequent section it is provided that the pay¬ 
 ment thall be made in the carrying of the mails, supplies, and military stores for the 
 Government at fair pricts, and also five per cent, of the net proceeds or sums to be set 
 apart for the Government. That is all the provision there is in the bill for re¬ 
 payment. There is a security attempted to-be given in this section. It provides, 
 beginning at the 13th line: 1 And to secure the repayment,’ &c., * * The lan¬ 
 guage is 1 as hereinafter provided.' The only provision is setting apart 5 per cent, of 
 the net earnings. So that if you leave in these words, you have really nothing as 
 a security for your bonds unless you get your pay in the carrying of the mails, 
 &c., 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 the 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 re¬ 
 quired to do 80 by the Secretary of the Treasury, in accordance with the provisions 
 of this act, the said road shall be forfeitedthat 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 anything. But there is no pro¬ 
 vision 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 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 roads are successful. My motion is to strike out the words in the 14th 
 line, ‘as hereinafter provided,' and in the 24th, 5th, and 6th lines the words, ‘ when 
 required to do so by the Secretary of the Treasury, in accordance with the pro¬ 
 visions of this act.’ ” — lb., p. 2814. 
 
 The question is here stated by Judge Collamer with a 
 degree of clearness and perspicacity equal, perhaps, to its 
 statement in the Attorney General’s opinion. The atten¬ 
 tion of the Senate was drawn directly to the point in issue, 
 and the statement made that the only provision for the re¬ 
 payment of either interest or principal of these bonds was 
 in the five per cent, and the Government transportation. 
 Without any further argument or discussion, Mr. Collamer’s 
 amendment was adopted ! 
 
 It should not be forgotten that with the adoption of this 
 amendment the obligation of the companies to pay the in¬ 
 terest and principal of the bonds, independently of the Gov¬ 
 ernment service and net earnings, would have been created. 
 In other words, the construction of the Attorney General 
 
18 
 
 would have been the legal and only construction possible. 
 Such was the expressed purpose of the amendment. And 
 without it, in the opinion, in the very words of Judge Colla- 
 mer, our construction of the section was the only legal con¬ 
 struction possible. Had the amendment stood, therefore, 
 the question never would have arisen, for there would never 
 have been a Pacific Railway Company to raise the question. 
 
 Later in the debate, though on the same day, the practi¬ 
 cal effect of the amendment made itself apparent. The sub¬ 
 sequent proceedings speak for themselves : 
 
 "Mr. Wilson, of Massachusetts. I move to reconsider the vote by which the 
 amendment on page 11, section 5, line 14, striking out after the word ‘States’ 
 the words ‘as hereinafter provided,’ and the amendment in lines 24, 25, and 26 
 of the same section, striking out the words ‘ when required to do so by the 
 Secretary of the Treasury, in accordance wiih the provisions of this act,’ wpre 
 agreed to. 
 
 “ Mr. Hale. Were those two amendments adopted in one vote? 
 
 “ Mr. Collamer. Yes, sir. 
 
 “Mr. Hale. I did not hear the last part of it. 
 
 “Mr. Wilson, of Massachusetts. 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 reconsidera¬ 
 tion is not agreed to; but, in my judgment, this amendment will de/eat (he 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 capi¬ 
 talists 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 hill that the road shall do certain work for the Government by way of payment 
 —carry the mails, munitions of war, $c. Yon have a security in the 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 cannot redeem these bonds the road is forfeited, and the Gov¬ 
 ernment takes possession. There is not 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. 1 
 believe that it is the most fatal amendment that could be adopted, atid if it stands in 
 that bill the bill is not worth (hepaper on which it is written. That is my judgment 
 in regard to the amendment, and I therefore move the reconsideration. I move 
 
19 
 
 it because I wgmt to make a bill that shall make a road. I want so to frame the 
 bill as to iuduce the capitalists of the country to invest tbeir 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 towards building the road, and is so much saved to the Treat- 
 ury of the United Slates. I hope these amendments will be reconsidered ” 
 
 Mr. Collamer supported the amendment upon the ground 
 that the bonds issued to the companies were regarded through¬ 
 out the hill as loans, which were to he repaid hy the com¬ 
 panies to the Government. He said : 
 
 “ 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 6 : 
 
 “ 1 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 despatches over said telegraph line, and transport mails, troops and 
 munitions of war, supplies, and public stores upon said railroad for the Govern¬ 
 ment, whenever required to do so by any Department thereof, and that the Gov¬ 
 ernment shall at all limes 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.’) 
 
 “Then it goes on to provide : 
 
 ‘ “And all compensation for services rendered for the Government shall be ap¬ 
 plied 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 1 have read are evidently drawn, and the argument here is, cn 
 the ground that they are to pay back these bonds and interest. They may do all 
 the work for the United States, end put apart that five per cent, if they ever yet any 
 net receipts, and yet not pay the debt because it will not come to enough. We have not 
 work enorgh 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 
 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 pay¬ 
 ment, however successful we may be, because all the security is according to the 
 
20 
 
 provisions •hereinafter provided.’ » 9 * I do notsay whether it will ever be paid 
 or not, but I do say the bill is drawn on that ground and understanding from be¬ 
 ginning to end. If they will strike out those oblique words ‘ as hereinafter pro¬ 
 vided,’ 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 appear¬ 
 ance of this bill, that it was not designed the Government should foreclose a mort¬ 
 gage on this road if the road was completed in good faith and did thk Government 
 business. As I have had occasion before to remark, the Government is now pay¬ 
 ing 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 inter¬ 
 est upon the entire amount of bonds that will be issued by the United States when 
 the road is completed. The Government is, to-day, ort 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. Be¬ 
 sides 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, it is to be built not merely by the money advanced by the Government, 
 but by money out of the pockets of private individuals. 
 
 * ' « 9 # s * » 
 
 «i 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 compli¬ 
 ance 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 
 intentiou to have a foreclosure. 
 
 “ Mr. Collamer. Then what was that part of the bill providing that the Govern¬ 
 ment may take possession of it put in for? 
 
 “ 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, sup¬ 
 posing the Government did no more business, that that alone would pay the inter¬ 
 est 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, 1 am not dis¬ 
 posed 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 NON-PAYMENT OF THE 
 interest. It is the business of the Government to pay the interest , because icefurnish 
 the transportation. 
 
 “ Mr. Wilson, of Massachusetts. I feel it my duty to specially call the attention 
 of the Senate to these amendments. I have a very decided opinion upon them, 
 and I believe them fatal to this bill. I do not entertain the shade of a doubt upon 
 t ie question. This bill provides a particular mode of repayment. That mode is 
 provided in the 6th section. Then why strike out the words ‘ as hereinafter pro- 
 
21 
 
 vided?’ Why is it necessary to change that proviso? I see no necessity for it 
 whatever. * * * The Senate says the bill goes upon the idea that this money 
 that we loan (or 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 moun¬ 
 tains and the deserts that it crosses, the sparsely settled population, the enormous 
 cost of the road and of running Ibe road, the nation and the world will be satis¬ 
 fied 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, everybody would be delighted at the 
 idea. I must say I fear it cannot 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 anything. 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.” 
 
 Aftei much farther discuss:on this amendment was recon¬ 
 sidered by unanimous consent apparently, and an amend¬ 
 ment presented by Mr. Clark was adopted, which was 
 acceptable to Mr. Collamer and Mr. Wilson. 
 
 Mr. Clark’s amendment was to insert after the word 
 “company” the words “shall pay said bonds at maturity 
 and” ; and the clause as finally adopted read (as it now 
 stands in the law :) 
 
 ‘‘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,” kc.—Globe, 2805 to 2810. 
 
 In the course of the debate the following observations 
 were made by Mr. Wade: 
 
 “There have occurred to me one or two things that I did not state when I 
 addressed the Senate on a previous occasion. I cannot be unmindful of the con¬ 
 dition in which this country is now placed, with six or seven hundred thousand 
 men in the field, with this war on our hands, which I suppose must come to a 
 conclusion within a very short period. Then these men who are so bravely de¬ 
 voting themselves to the defence of the country will come out of this war detached 
 from their old business. Thousands and tens of thousands of them will come out 
 after this patriotic struggle and the privations they have suffered and will seek 
 for new homes and new employments. I can see and I glory in the thought of, the 
 great and beneficial opening that this measure will make for these men when 
 they shall have done serving the country in the field. Under the beneficial ope- 
 
22 
 
 ration of your homestead bill they will be able to get their farms without paving 
 a single cent ; and who does not know that these men, who have nothing to 
 boast of except their patriotism, will go into that country almost entirely desti¬ 
 tute ? But if this great work is in progress how easy it will be for these men Jo 
 go and take up their farms and then support themselves by a little labor on these 
 roads while their crops are growing, so that after their first crop shall have be¬ 
 come matured they will be able to return upon an independent homestead for¬ 
 ever. When I see the great opening, the beneficial prospect that will be open to 
 the patriotic and brave men in your army to find homes, I almost wish that your 
 road was longer than it is and had more branches. 
 
 “Sir, your money will not be lost. In a pecuniary point of view , it will be a gain 
 to this Government to make these facilities for settling this wilderness. It will 
 strengthen us in a military point of view. It will strengthen this Union, which 
 is more than all. It will do more for the country than we have done for any 
 number of years past. Let us not jeopardize it, then, by this narrow policy that 
 will strike out these collateral roads, and thereby probably defeat the measure at 
 this session. For twelve long years this nation has struggled to perform that 
 which is now within our grasp, and which stands trembling in the balance 
 through the false economy of some gentlemen here. I hope, sir, it will not pre¬ 
 vail, and I trust we shall not eternally reiterate our arguments, and reiterate our 
 propositions, so that we cannot get through. I hope that now, to-day, this great 
 measure will receive the final sanction of the Senate.”— lb., p. 2835. 
 
 The bill passed the Senate by 35 yeas to 5 nays. 
 
 HOUSE OF REPRESENTATIVES. 
 
 Congressional Globe, 1861-2, p. 877. 
 
 On the 19th February, 1862 , Mr. Campbell stated : 
 
 The Committee on the Pacific Railroad have instructed me to offer the fol 
 lowing resolutions for inquiry, to which I hope there will be no objection : 
 
 1! Resolved, That the Secretary of War is hereby requested to furnish the House 
 of Representatives with a statement showing the cost to the Government for the 
 transportation per annum, for the last five years, by steam or otherwise, of troops 
 and supplies between the Mississippi river and the Pacific coast, as well as inter¬ 
 mediate points. 
 
 “ Resoh '< That the Secretary of the Navy is hereby requested to furnish the 
 House of Representatives with a statement showing the average cost of trans¬ 
 portation of naval supplies, munitions of war. &t\, for the last five rears from 
 the Eastern and Gulf ports of the United States to the Pacific coast. ' 
 
 “ The,e bein K no objection, the resolutions were received and adopted.” 
 
 On the 8th of April, 1862, Mr. Campbell, (chairman of 
 the House Committee on the Pacific Railroad,) in Commit¬ 
 tee of the Whole, remarked as follows : 
 
23 
 
 “ It >s surprising that a nation with vast resources and enterprising character¬ 
 istics should not have completed a national project of such importance long before 
 this. * * * 
 
 “The people, in conventions assembled, of all parties, have resolved that this 
 railroad shall be constructed. Executives have called attention to the subject 
 until the stereotyped item has no longer attracted public attention. Secretaries 
 have urged and recommended it in vain. Explorations and surveys have been 
 made, and reports embraced in huge volumes encumber our libraries and convert 
 Congress into a publishing house, while committees of both houses have investi¬ 
 gated and reported, time and again, on the utility aud practicability of the work 
 in question. Nay, more than this. In a recent imminent peril of collision with 
 a naval and commercial rival, one that bears us no love, we ran the risk of losing, 
 at least for a time, our golden possessions on the Pacific for want of proper land 
 transportation. And shall we still pause, while the nation, sensible of the peril 
 and the escape, calls loudly on us to organize and push on this, the greatest 
 enterprise of the age ?’’ 
 
 After showing that England had guaranteed governmental 
 aid to the railway companies of British India, at a contem¬ 
 plated cost of two hundred millions, and the action of the 
 Russian Government in the same respect, he continued: 
 
 “ 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.” 
 
 He then presented communications from the Secretary of 
 War, the Secretary of the Navy, and the Post Office De¬ 
 partment showing the annual expenditure, in a time of 
 peace, under ordinary circumstances, for Government trans¬ 
 portation to the Pacific coast, of $7,357,081.88. 
 
 In this statement, the postal service was placed at $1,- 
 500,000 per annum. He then showed that the amount of 
 bonds provided for by the hill was $64,880,000, and con¬ 
 tinued : 
 
 “ The bonds are to be issued at thirty years, and to bear an 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 u-hat is 
 the same thing in effect, saved to the Government by cheapening expenditure in that 
 direction. We have at present no means of ascertaining how much the rebellion 
 
24 
 
 has added to the cost of conveying supplies to that part of the country which 
 could be reached by the railroad connection indicated ; but that it has increased 
 the expenditure greatly no one can doubt. Thanks to the loyal people of Cali¬ 
 fornia, Oregon and Washington, we have not been called upon to quell rebellion 
 on the shores of the Pacific. Could we have held the Pacific States against any 
 general rising of the people in the absence of railway facilities ? We might with 
 immense expenditure—nay, could; for I doubt not the power of this Government 
 to sustain itself against everything ; but a railroad to the Pacific would have aided 
 us immensely. If England had committed the folly of giving material aid to the 
 rebellion, as she has given moral aid, our route by the Isthmus, as well as water 
 transit, might have been cut off for a time, and then the transportation of armies, 
 ordnance, and army supplies through the passes of the Rocky Mountains and the 
 snows of the Sierras would have been an undertaking for which history furnishes 
 no parallel. We have passed that crisis. How soon we may reach a second one 
 I cannot tell. But it will be our folly—nay, our madness—if we ever incur the 
 same great responsibility. Without detaining the House on the question of the 
 propriety of a Pacific railway ns a military want, as a commercial necessity for 
 the requirements of internal trade and foreign commerce, to secure the trade 
 of the East, as of the West, to strengthen our great nation by bringing us netrer 
 together and making us more one people; leaving all this for the present, I will 
 proceed at once to explain in practical detail the bill before the House, which I 
 had the honor to report from the special committee on the Pacific railroad. The 
 bill was reported with entire unanimity, as gentlemen will observe there has not 
 been any other measure reported from that committee.” 
 
 Congressional Globe, 1861-2, p. 1590. 
 
 On the 9th of April, Mr. Phelps, of California, said : 
 
 “ If we would, then, 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. We 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 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 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 fora few yoars only would 
 equal the entire cost of constructing a first-clas3 railroad from the Mississippi to 
 San Francisco. * * * ® * Then we must elect between these two alter¬ 
 natives—namely, a large standing army on the Pacific or that of supplying the 
 means of transporting an army there in case of emergency. 
 
 11 It may be urged by some that the expenditure will be large. True, nomi¬ 
 nally it is so ; but in fact il is most insignificant considering the great results to be 
 gained. 
 
 * **»*»* 
 
 “ So far as concerns the issue of bonds of the Government, the amount which 
 is provided may be issued as the road by sections of forty miles is fully completed 
 does not exceed one-half the cost of its construction, and the issue is only made 
 
25 
 
 on a first mortgage of the road, which is to be unincumbered by any other Hen 
 whatsoever, the mortgage stipulating that the company will pay back to the Govern¬ 
 ment , in mail and military service and in money, the principal and interest of the bonds 
 loaned, and provides for a forfeiture of the road in case of a failure on the part of the 
 company to fulfil the conditions imposed. 
 
 ******** 
 
 “The gentleman from Pennsylvania has shown us, by authentic figures, that 
 the co3t of transporting military and naval stores and the mails to the Pacific 
 coast amounts to seven millions per annum, and that of this sum an amount more 
 than large enough to pay the interest on the bonds to be issued under this bill would be 
 saved by the construction of this road." 
 
 He then showed that the advantage to the country of con¬ 
 structing this road would warrant the expenditure if no part 
 of it was ever repaid, and said : 
 
 “ The Erie canal may not have paid back in mere tolls the cost of its construc¬ 
 tion, but it has added to the aggregate wealth of the State of New York more 
 than five hundred millions, and has made her the Empire State of the Union and 
 her chief city the commercial emporium and centre of the continent.” 
 
 Mr. Kelly remarked : 
 
 “ I cannot feel that the time was ever more propitious for beginning this work 
 than now. What immediate expenditure does it require? None in the next 
 year; but in two or three years hence probably an expenditure of $180,000, in¬ 
 creasing, semi-annually, to about five millions of dollars per annum. Can there 
 be any question that our country can bear such an augmentation of its annual ex¬ 
 penditure ? or will it harm us if posterity, being blessed by this work, should per¬ 
 chance have to pay the principal of the credit invested " 
 
 Mr. Sargent remarked: 
 
 “ Gentlemen have sometimes talked as if we designed to put our hands into the 
 treasury, now that it is depleted by an expensive conflict, and abstract therefrom 
 fifty or sixty millions of dollars. We design to do nothing of the kind, and such 
 will not be the operation of this bill. In the first place, no payment of the prin¬ 
 cipal of these bonds will be required under thirty or forty years, when the country 
 will have swelled in population to a hundred millions and our wealth will be four¬ 
 fold what it now is; when this road will be twenty years in operation and have 
 created half a dozen new States where uninhabited wilds now occupy our Terri¬ 
 tories ; and when the trade of Asia poured into our lap, and a widely-extended 
 commerce, by its means, will have far repaid the expenditures, even if the com. 
 panics constructing the road shall not, before that time, have paid up the loan by 
 the means provided in the bill. And it is also an error to suppose that the inter¬ 
 est upon this amount is to be paid now or presently. The bonds will be issued 
 slowly, few at a time, as the work progresses. It will be probably two years 
 before any bonds will be issued, for surveys have to be made and preparations 
 for work and part of the road constructed before any will be due. The whole 
 
26 
 
 amount of interest to be paid up to 1866 will be but $168,000, and up to 1867 
 but $504,000 ; and 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 War 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 more at their present reduced rates. The saving of the Govern¬ 
 ment would be two millions per year on these items alone. 
 
 s * * # « * * 
 
 “ The Mormon war cost millions to the Government—probably one-third the 
 amount contemplated by this bill—and a very large proportion of that cost was 
 in the item of transportation, and much of it on account of the necessary delay in 
 military movements without railroads over such distances. That war never could 
 have occurred with a railroad across (he continent. With such a road you would 
 avoid Indian wars, which cost millions to the Government, through the Terri¬ 
 tories traversed by it. You would save the lives of citizens who now take their 
 weary way across those Territories, falling victims often to savage onslaught. 
 Sir. you can follow the emigrant trail from Missouri to California , and never lose 
 your way, for the route is broadly marked with the bones of men and beasts, of broken 
 wagons and abandoned property. 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 inter¬ 
 est, a mere loan of the credit of the Government.” 
 
 He then showed by tables the estimated cost of the road, 
 the amount of bonds to be issued—estimating them upon 
 the main line and eastern branches at §60,080,000, and con¬ 
 tinued : 
 
 “As many of these bonds will not be issued under twelve years from this date, 
 and the bulk of them not until after eight" years, it 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 1871.$2,363,000 
 
 “ 1872. 2,699,000 
 
 “ 1873. 3,035,000 
 
 “ 1874. 3,371,000 
 
 “ 1875 . 3,884,000 
 
 “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 dollars for 
 mails and transportation. True economy calls for this expenditure, as well ns 
 considerations of convenience, safety, and commercial advantage.” 
 
 In 1865. 
 
 
 In 1871. 
 
 “ 1866. 
 
 
 “ 1872. 
 
 “ 1867. 
 
 
 “ 1873. 
 
 “ 1868 . 
 
 
 “ 1874. 
 
 “ 1869. 
 
 
 “ 1875 
 
 “ 1870 . 
 
 
 
27 
 
 Congressional Globe, 1861 - 2 , p. 1891 . 
 
 On the 30th of April, Mr. White, one of the few mem¬ 
 bers of the House who opposed the bill, said : 
 
 . “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 earn¬ 
 ings. There is not, perhaps, one company in a hundred where the roads are 
 most prosperous that has any net at all. 1 undertake to say that not a cent of 
 these advances will ever be repaid, nor do 1 think it 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 shall be moderate. 1 think, therefore, that this will 
 turn out a mere bonus to the Pacific railroad, as it ought to be.” 
 
 On May 1, 1862, Mr. White said, (Cong. Globe, 1861-2, p. 
 
 1911:) 
 
 “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 cur¬ 
 rent interest on said bonds shall be chargeable to said company, to be by them 
 reimbursed to the United States within one month after each semi-annual pay¬ 
 ment 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, as it now stands, does not make any 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 has not sanctioned. If it was the intention of the 
 committee, and it is the intention of the Committee of the Whole that the rail¬ 
 road 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 United States within one month. Of course, 
 it will be a little gain to the company, 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. I suppose, of course, that the gentleman from Indiana is acting 
 in perfect good faith; but I am clearly of opinion that the gentleman has not 
 studied faithfully the provisions of this bill. It has been demonstrated to this 
 House that the cost to the Government of transportation to our forts in the Ter¬ 
 ritories is more than double the amount of the entire interest upon all the bonds 
 proposed to be issued ; and the bill is based upon the supposition that the trans¬ 
 portation of Government supplies over the road will be equal to, if not greatly 
 
28 
 
 exceed, the annual interest upon the bonds issued from year to year. It is not the 
 intention of the bill that the interest shall be paid semi-annually to tbe Govern¬ 
 ment. It is not supposed that, in the first 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 on the entire road for the full amount of principal and interest. I 
 hope, therefore, that the amendment will be voted down. 
 
 “ Mr. White’s amendment was rejected.” 
 
 Congressional Globe , 1861-62, p. 1949. 
 
 Mr. Stevens, of Pennsylvania, remarked : 
 
 11 1 have 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. * 
 
 * * In case of a war with a foreign maritime power, the transit by tbe 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. On full reflection, 1 
 have come to the conclusion that this is as propitious a time as we shall ever find. 
 
 I will give a few of the reasons which have led me to this result.” 
 
 Among the reasons given by Mr. Stevens are the fol¬ 
 lowing : 
 
 “ Fifth. For the first two or three years but few of the United States bonds will 
 be issued and bear interest, adding but little to our burdens during this war. 
 The principal falling due in thirty years will hardly be felt by the mighty empire 
 which will then be responsible for it. In the meantime, as the road progresses, 
 the population, cultivation, and manufacturing will so increase and enrich the 
 country that the added wealth will afford taxation sufficient to indemnify the 
 nation and pay the interest and principal of the bonds.” 
 
 On the 6th of May, 1862, the bill passed the House by a 
 vote of 79 yeas to 49 nays. 
 
 The act of July 2, 1864, changes the act of 1862 in several 
 important particulars. It postpones the lien of the United 
 States to a mortgage lo be executed by the company for an 
 
29 
 
 equal amount of construction bonds ; increases the quantity 
 of land granted, and provides that “only one half of the 
 compensation for services rendered for the Government shall 
 he required to be applied to the payment of the bonds issued 
 by the Government in aid of the construction of said roads " 
 It does not change in any other respect the relation of the 
 companies to the Government in respect to the bonds or the 
 interest upon them. 
 
 Two years of unremitting effort had been made by the 
 promoters of the Pacific railroad to raise the money neces¬ 
 sary for its construction, under the act of 1862. They had 
 failed because its provisions were inadequate, and under 
 them capitalists were unwilling to risk their money. Satis¬ 
 factory evidence of this fact is found in act of 1864 and the 
 debates in the first session of the 38th Congress. The two 
 Houses differed widely in the first instance as to the addi¬ 
 tional inducements to he offered. The Senate Committee on 
 the Pacific railroad reported a bill authorizing additional 
 grants of land and the issue of bonds by the companies to 
 the amount of $24,000, $48,000, and $96,000 per mile, the 
 amount varying with the character of the work—the interest 
 of which was to be guaranteed by the United States for a 
 period of twenty years. In advocating this measure in the 
 Senate, on the 19th of May, 1864, Senator Trumbull re¬ 
 marked : 
 
 “I am not for legislating upon the principle that everybody is dishonest and 
 corrupt. I suppose we want to pass a bill that the capitalists of the country will 
 be willing to take bold of and invest their capital in the construction of this road. 
 What we desire is the construction of the Pacific railroad. * * a j am 
 
 opposed to granting by Congress any privileges to this company that will extend 
 farther than is necessary to complete this road. All that Congress proposes to do 
 is to do enough and ouly enough to induce capitalists to build this Pacific rail¬ 
 way. We shall be indebted to them when they do that. We want to hold out an 
 inducement to them to take hold of this work, and not throw obstacles in the 
 way of men who have means to build the work. * * * Here is a great enter¬ 
 prise of national importance. The country has been demanding for years the 
 construction of a railroad across the continent. It is a great desideratum to ob¬ 
 tain it. All parties have been for a Pacific railroad. This bill does not propose 
 to give $90,000,000 to anybody. It holds out inducements to capitalists to build 
 this road. I will go with the Senator from Iowa in favor of giving a less induce- 
 
30 
 
 
 meat if that will accomplish the object. All we want is to obtam the construe- 
 lion of this road ; that is what is of national importance. - * ' Sir, this 
 
 i3 not an ordinary enterprise. The Senator says large inducements are held out. 
 Whv sir it is a great undertaking. It is for the building of a railroad through 
 a wilderness country and over mountains, where, unless there is some inducement, 
 capitalists will not be likely to construct the road. * * » Ins a great enter¬ 
 
 prise. It is great, certainly, in one particular; it is great in the hazards which are 
 run by those who may embark in it.” 
 
 The honorable Senator manifestly was not impressed with 
 the idea “ how much the Government does for the company, 
 and how little the company is required in return to do for 
 the Government.” 
 
 It is unnecessary to follow up the debate in the Senate 
 upon this bill, which passed by a vote of 23 to 5, because the 
 House bill No. 438 was finally substituted, and passed in its 
 place. I leave it, therefore, with the remark that there is 
 neither word nor intimation to he found in it adverse to what 
 has been supposed to he the plain meaning of the act of 
 1862, or which tends to support the novel construction 
 maintained in the opinion of the Attorney General. 
 
 The act of 1864 originated in the House of Representatives. 
 It was reported by Mr. Stevens, from the select committee, 
 on the 2d of June. June 16th, the hill being under consider¬ 
 ation as a special order, Mr. Stevens said : 
 
 “ The original charter provides for the transportation of troops and munitions 
 of war. That 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 if, and the charge was to 
 be credited on the Government bonds."— Globe, 18G4. p. 3021. 
 
 An amendment having been proposed that the Govern¬ 
 ment transportation should he done at cost, Mr. Stevens 
 said: 
 
 “I submit whether it would be fair to alter the fundamental condition upon 
 which this 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 business of the Government will be very large between its eastern and 
 its western empire. It will go very far, I have no doubt, toward paying the in¬ 
 terest on the Government bonds. I am sure it is not the intention of the gen¬ 
 tlemen from Indiana, or any other gentleman in this House, to embarrass this 
 road so as to prevent its construction. I hope every facility will be given for the 
 
31 
 
 Government for the building of this road, and that it will not violate the 
 Dal law or charter under which the company was organized.’’ 
 
 origi- 
 
 The debate on this amendment was long. In the course 
 of it Mr. Shannon said, referring to Mr. Holman, the mover 
 of the amendment: 
 
 ‘ Tbc S fntlema n « ^rtainly aware of the fact that for every dollar the nation 
 invests in the construction of this railroad it will receive a hundred in return. 
 The advantages accruing from the construction of this road will he equivalent in a few 
 years , to a (housatid dollars to one." 
 
 Mr. Holman did not respond that “ it is incredible that 
 Congress intended to assume so large a liability with so 
 small a provision for reimbursement.” He said : 
 
 “ We look u P on til's work as a national thoroughfare; a mode of uniting the 
 Pacific States with the Atlantic States. We contemplate it as a measure of union, 
 to bridge over if possible the vast chasm that lies between the Northwestern States 
 and the States of the Pacific.” 
 
 Mr. Steele stated the case thus : 
 
 “Everybody understands that the whole system of legislation with regard to 
 this great national work has been upon the supposition that it was a great 
 national necessity ; that the entire country was interested in it, and that Congress 
 was justified in making large appropriations of land and money for the purpose 
 of carrying it forward. 
 
 “ The last Congress made appropriations of money, and in order to encourage 
 the men who should undertake to build this road with the hope that they may 
 some day repay that money, or at least repay the interest, they provided that the 
 freight for carrying the property of the Government over this road should be 
 applied to the payment of the money which the Government advanced. * * • 
 Why was it that the 37th Congress was willing to give such an amount of money 
 and land for the purpose of aiding in the construction of this road ? Because it 
 was considered a great public necessity. It was considered that all they could 
 give, provided the road was built, would be rppaid in a thousand ways to this 
 great country. * * * Now it was because this was a great public work that 
 the last Congress thought it wise to give this aid. They thought that this com¬ 
 pany, if it was organized, would be able to pay back this money. And I appre¬ 
 hend that the moment this road is in operation, the business of the Government 
 may, and probably would in time of war, absorb so much of the entire working 
 stock of the road that they cannot go on and pay their expenses, except by receiv¬ 
 ing some compensation for it. And it was thought that if the transportation which 
 the Government received was credited upon advances it would be equitable and fair." 
 lb., 3022-3. 
 
 June 21, the bill being again under discussion, Mr. Pruyn 
 
 said: 
 
32 
 
 “Substantially, then, the state of the case is this: that in consideration of 
 S2,000,000 subscribed by individuals, of which ten per cent, has been paid, the 
 Government gives the right of way and makes a large land grant, and then gives 
 $100,000,000 in addition.” * * 
 
 “ 1 believe there is but one opinion—at any rate but little difference of opinion 
 —in this House as to the very great importance of this work and the importance 
 of constructing it without delay and in the very best manner. I have looked at 
 it for many years with very deep interest as the great thing to be done to bind 
 together the two extremes of our country. I wish it had been commenced years 
 ago and it would now have been near completion.” * » * 
 
 He stated that it was “admitted on all han Is that very 
 important amendments were needed to the charter.” 
 
 “ In the shape in which it now stands, it is virtually admitted by the company 
 —and I have no doubt it is true— that the company cannot go on and construct this 
 road with the grant in bonds made by the act of 1862.”— lb., p. 3149. 
 
 Mr. Washburne, of Illinois, though a friend of the Pacific 
 railroad, was opposed to its construction in the manner pro¬ 
 vided for in the pending bill. He said : 
 
 “I am the oldest friend of the measure on this floor. It has been a plank in 
 the platform of the party to which I have the honor to belong. The great work 
 of uniting the Atlantic coast with the Pacific seas, and binding the patriotic, loyal 
 and enterprising people of the western coast to us on this side, I have always con¬ 
 sidered as worthy of a great nation like ours and of the times in which we live.” 
 
 Referring to the provision that “ only one-half of the com¬ 
 pensation for services rendered for the Government by said 
 companies shall be required to be applied to the payment of 
 the bp"^ ” he said : 
 
 i the oh 
 
 “ Insorin of the compensation due the company for services rendered to the 
 Governtg the Aing applied to the payment of the bonds issued in aid of the con- 
 structiorprising railroads, onc-half only by this bill is to go in that direction, and 
 the others worth/o be paid by the Government to the comp my, a proposition I cannot 
 agree tc ,3151. 
 
 Mr.' mn OHBURNE was the only member of either House who 
 °PP°s< 10n *°s provision. In reply to Mr. Wasiiburne, Mr. 
 Price™ 8 * 1 
 
 “Now i Want to say parenthetically, Mr. Speaker, or in any other way, that 
 these amendments, fourteen in number, are (he result of the investigations of the 
 special committee of thirteen for the last six months. That committee of thirteen is 
 composed of some gentlemen who have had some experience of railroading, and 
 who know something about what it takes to build a railroad in time nnd money. 
 Six months’ labor produced these fourteen amendments. * * * 
 
33 
 
 f “The original bill was passed for the purpose of the construction of the Pacific 
 railroad. At the time of its passage, it was the impression that the amount of 
 the Government subsidy was sufficient to build that road. I need not say to the 
 members of this House that since the passage of that late the prices of labor and ma¬ 
 terials have gone up from fifty to one hundred per cent., and that an amount of Gov- 
 eminent subsidy, amply sufficient to construct the road at that time, is insufficient 
 and inadequate at this time. * # » * * 
 
 “In reference to carrying the troops of the Government, I need only say that 
 the bill contemplates, and, if I am not mistaken, specifies in terms, that the com¬ 
 pany shall carry the troops and munitions of war of the Government at all times 
 when called upon to do so, and the compensation shall be credited to the com¬ 
 pany on the loan the Government makes in these bonds. * * * 
 
 “ I will now refer to these mortgage bonds, and this part of the bill seems to 
 have particularly excited the indignation of the gentleman from Illinois. We 
 propose to repeal that portion of the original law which provides for the reserva¬ 
 tion by the Government of some of these bonds to be issued for the construction 
 of the road. What security has the Government under the original law that it 
 has not under the amendment? The Government cannot be paid back this loan 
 until the road is built. * * * 
 
 “ I do not believe there is one man in five hundred who will invest bis money 
 and engage in building this road as the law now stands, and we must therefore 
 hold out inducements for them to join in the undertaking. We must grant the 
 facilities which are needed. ***** 
 
 “ We want this road, stretching from the granite hills of New England to the 
 golden sands of California. When completed it will far outshine in grandeur 
 and usefulness the famed Appian way. It will be the greatest and most useful 
 work done by man. 
 
 “The committee of thirteen reported this bill unanimously. There was not a 
 dissenting voice. After six months’ investigation they came to the conclusion 
 that these amendments were necessary for the success of these companies and for 
 the good of the country in securing the early completion of the Pacific railroad.' 1 
 
 — Ib., pp. 3152-3-4. 
 
 In the same debate Mr. Stevens said: 
 
 “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. It proposes great concessions for the road 
 to work under, for under the old bill they could not work at all. * * * Cer¬ 
 
 tain it is, that upon the California side of the line they have gone into the work 
 with excellent zeal. They have not only completed ten and twenty miles, but 
 to-day there are fifty-two miles of the road made and in running order. 
 
 “Mr. Cole, of California. Eighty miles. 
 
 “ Mr. Stevens. The company have raised already upon that side of the moun¬ 
 tains over fifteen million dollars. They have that money to expend, and they 
 are expending it. They are building a road over the Sierra Nevada into the 
 silver mining regions at a cost of over one hundred and fifty thousand dollars a 
 mile. It was obvious to the committee that upon this side the Rocky Mountains 
 it would cost even more than that. I have no doubt that there are sections of 
 
34 
 
 the country where it will cost from three to five hundred thousand dollars a mile. 
 It would be impossible, therefore, for the companies under the old concessions to 
 make this road, and we felt that if it was to be made something more ought to be 
 done by the United States. The committee thought that nothing we could carry 
 through the House would be too much to aid in building this great thoroughfare 
 between the eastern and western populations of the country; to unite us with 
 California, whose people, whatever they may have been at the start, are admitted 
 now to be among the purest, both in politics and morals, of any in the United 
 States. What could we do? The company asked that we should double the 
 number of bonds, and the Senate actually passed a bill guaranteeing the payment 
 of interest for twenty years in coin, on double the amount of bonds which the 
 United States originally granted. * * * ® * 
 
 “ It is also charged that we allow these companies to issue their own bonds 
 and give a first mortgage. * * * 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 trade 
 between the two oceans sets in over it, when the business not only of this coun¬ 
 try, but the commerce of the far East shall be brought across this continent on 
 its way to Europe, as it will be the only short thoroughfare, the road will be so 
 productive as not only to pay its liabilities, but to make its stock very valuable.” 
 
 “ Although the bonds of the Government may be postponed to the others, the 
 Government will receive vast advantages from the very fact that the road is finished 
 and pours the wealth of California into its coffers, besides keeping together the 
 Union as it now is. That was the view that actuated the committee. The com¬ 
 mittee did aspire to look at the question in a statesmanlike point of vietc. * * . » 
 
 “ I have no hesitancy in saying that the whole question whether the work is 
 to stop altogether depends upon the action of the House on this bill. It does not 
 provide what the company want; it is not the kind of bill they asked or which 
 has been sent us from the Senate. I repeat, the committee were not willing to go 
 to the extent of the Senate bill.”— lb., p. 3155. 
 
 The action of the House of Representatives also shows the 
 value placed by Congress upon that condition of the issue 
 of bonds in the act of 1862, which gave the preference to the 
 Government transportation over all other business upon the 
 railroad. The act of 1864 not only limited the amount 
 which the Government could require to be applied to the 
 payment of the bonds to one half the compensation for ser¬ 
 vices rendered for the Government, thus excluding the five 
 percent, of net earnings, but postponed the right of the 
 Government to demand such service to the exclusion of 
 other business, to the lights of the holders of bonds to be 
 issued by the companies. The language was, “ that onliy one 
 half of the compensation,” &c., “ shall be required,’’ &c., 
 
35 
 
 ami that the ‘hen of fl, United.States bonds shall be subordi¬ 
 nate, Sec. To secure tins preference for the Government 
 erv.ce, even as aga, nst such bondholders, Mr. W,i».v moved 
 o amend by add.ng after the word « equipments," in the 
 10th section, the words : 
 
 ter-- - -.- - 
 
 He said : 
 
 “ Novv ' *"> 1 propose to reserve ll.is right of the Government tv..- ,i. , 
 
 Sion of de S p«nh«.„,l tlie Irsosportaoon of troops 8up ,,, ie8 , 8 lZuU^ 
 
 01 r r !'‘‘ "" m ay ultimitte.v fstss imdeHbeVrst 
 
 mortgage provided by this bill/’ * 1 ,e nrat 
 
 Under the operation of the previous question this amend¬ 
 ment was adopted by a vote of 78 to 15. (76., 3150 ) 
 
 This bill passed the House on the 25th of June, 1864 by 
 a vote of 70 yeas to 38 nays. In the Senate it was amended 
 by the substitution of the Senate bill of the same session 
 without extended debate. The House declined to a-ree to 
 the Senate amendment, and committees of conference bavin- 
 been appointed, finally agreed upon the House bill with 
 some changes, unimportant so far as the question of interest 
 is concerned; and their report having been agreed to the 
 bill became a law. 
 
 The construction of the main line of the Pacific railroad 
 commenced in 1863. At the time the act of 1864 was passed, 
 about eighty miles of the Western or California portion was 
 in running order, and an equal or greater portion of the 
 eastern end had also been built. The issue of bonds bad 
 already commenced. As early as January 1, 1864, a pay¬ 
 ment of interest had been made by the Government. The 
 work progressed with a degree of energy never before dis¬ 
 played in the construction of any public work in the world ; 
 but it could not keep pace with the impatience of the people! 
 To meet the public demand for its completion, no cost was 
 spared. The frosts and snows of winter were not permitted 
 
36 
 
 to delay it, and the result was that the last rail was laid 
 almost seven years before the time limited by the statute. 
 
 The issue of bonds and payment of interest went on. 
 The act was many times submitted to different Attorneys 
 General for their construction of its provisions. Government 
 began to use the road and pay one-half the compensation for 
 its transportation as required by the law, and over six 
 years elapsed without a suggestion that, in respect of the 
 interest on the bonds, the companies had not discharged 
 their whole duty to the Government. The first notice of an 
 official character to the contrary was given in September, 
 ' 1870 . 
 
 We have, then, on one side, first—the construction given 
 to this statufe by the committees of botli houses, in one of 
 which it originated, after many months of investigation, 
 during which the clauses in question were regarded as of the 
 highest importance, and received the most careful consider¬ 
 ation ; secondly—the construction of the movers of the 
 amendments, and of every member who participated in the 
 discussion in both houses ; thirdly—the construction of the 
 Senate and House of Representatives of the United States, 
 acting in their legislative capacities directly upon the ques¬ 
 tion, all concurring in the opinion that the entire obligation 
 of these companies in respect of the interest upon these bonds, 
 previous to the maturity of the principal, under the act of 
 1862, would be discharged by the performance of the Gov¬ 
 ernment service and the appropriation of five per cent, of 
 the net earnings. We have their refusal to permit amend¬ 
 ments to be made creating the obligation of semi-annual 
 payment of interest, as being opposed to the theory of the law, 
 and destructive to its value and efficiency ; fourthly—we 
 have the construction of the Treasury and judicial depart¬ 
 ments of the Government in a practical administration of 
 the law for a period of eight years, covering the time from 
 the survey of the railroad to its practical completion, on the 
 faith of which an amount of private capital was contributed 
 to the enterprise greatly exceeding the amount of the Gov- 
 
3 ' 
 
 eminent liability. There is no difference of opinion among 
 these bodies, and the individuals composing them ; none 
 whatever. They comprise men of all parties and profes¬ 
 sions ; enemies of its enterprise as well as its friends ; those 
 who believed and those who had no confidence in its practi¬ 
 cability, as well as those who believed it an experiment which 
 might or might not succeed. Upon the construction of the 
 act in this respect, all men have been hitherto agreed. 
 
 And there has been the same unanimity upon other ques¬ 
 tions, collateral, it is true, but of grave importance in their 
 bearing upon the ma : n question. They have agreed that the 
 saum<7of$T,000,000 per annum for Government transportation* 
 by the payment of half that sum in interest was a measure of 
 economy, and that so far as the Treasury was concerned, it 
 was a positive advantage to the Government to have such ex¬ 
 penses diminished by building the road instead of having the 
 road earn the money by performing the service. They have 
 agreed that the economy would be greater if the construction 
 of the railway made Indian or Mormon wars no longer pos¬ 
 sible, as experience has shown, than if the railway earned 
 $7,000,000 a year in a service which such wars rendered ne¬ 
 cessary. They have agreed that the theory of the act is, that 
 this saving, whatever form it takes, and five per cent, of the 
 net earnings, are the provisions which the United States 
 agreed to accept as the consideration for the payment of the 
 interest; that provisions which required semi-annual pay¬ 
 ments of the interest by the companies out of other funds, on 
 peril of forfeiture of the whole franchise and property, would 
 repel instead of inviting capital, without the aid of which the 
 road could not be built. In the whole discussion, thorough 
 and extended as it was, in which gentlemen of at least fair 
 reputation as lawyers participated, there was no man who 
 claimed that a provision for the reimbursement of this in¬ 
 terest in any other mode than that which the act provides 
 was either equitable, just, or desirable. When the effect of 
 the amendment offered in the Senate was shown, it was 
 withdrawn, and never pressed to a vote. The members of 
 
38 
 
 both houses were agreed that the construction now claimed 
 for the act was unwarranted, and they refused to add words 
 to it which would make such a construction possible. 
 
 The act was passed in 1862. At almost every session 
 since it has been in some form before Congress. It 
 has been debated more than any other single subject 
 of legislation. It has been added to, extended, and improved. 
 It has been translated into foreign languages, published, and 
 circulated at home and abroad. On the faith of its provis¬ 
 ions and the official construction given to them, capitalists 
 have been invited and urged to come forward and aid the 
 United States in their greatest national work, to supply their 
 greatest national necessity. The invitation has been ac¬ 
 cepted, and more than $100,000,000 contributed to the enter¬ 
 prise. The work has been done. In a national point of view, 
 it has met every reasonable expectation. Indian and Mor¬ 
 mon wars are no longer probable ; scarcely possible. The 
 line of forts across the unsettled Territories is abandoned ; 
 the standing army is no longer required ; the Atlantic and 
 Pacific coasts are united ; their inhabitants are no longer 
 strangers, but a homogeneous people, having common inter¬ 
 ests ; the commerce of Asia and the Indies is brought to our 
 markets. All the saving Avhich the most ardent friends of 
 the enterprise ever promised has commenced, and is insured 
 for all the future. The bones of emigrants no longer whiten 
 the plains, and point the traveller to the westward trail, while 
 they apprise him of its dangers. Detachments of soldiers no 
 longer guard our mails or are needed to protect the west¬ 
 ward flow of the wave of population. The wife and children 
 of the settler are safe from the rifle and the scalping-knife. 
 Men and women, adults and infants, reach our new Territo¬ 
 ries in safety and comfort. We feast upon the fruits of Cal¬ 
 ifornia. Her mountains divide the attention of the traveller 
 for pleasure with those of New Hampshire and Virginia. 
 These things, which ten years ago were wild fancies, have 
 become substantial realities. All these has the Pacific rail¬ 
 road accomplished, and is accomplishing, for the nation. 
 
39 
 
 Now, after the work has been done on the faith of the na¬ 
 tional promises, guaranteed by the endorsement which the 
 Government has given, through eight years and three Admin¬ 
 istrations, to the construction of the authors of these statutes 
 to the work of their own hands—a construction which alone 
 made the success of the Pacific railroad possible—the men 
 who have risked their fortunes in it are told that the states¬ 
 men who framed the act were all wrong ; the construction 
 given to it by the Government, by Congress, by the stockhold¬ 
 ers, the bond-holders, by everybody, whether friend or enemy, 
 is all wrong ; that the charter and every right under it have 
 been forfeited ten times over ; that the whole thing vested in 
 the Government five years ago ; that the land-grant bonds are 
 worthless, for the companies have no lands to bond ; and that 
 the Secretary of the Treasury has the legal right to enter 
 into possession of the roads and all their property at any 
 time he chooses ; and all this, because, in the words of the 
 Attorney General, “it is incredible that Congress intended 
 to assume so large a liability with so small a provision for re¬ 
 imbursement.'" 
 
 If the Congress of the United States will give its sanction 
 to such a re-construction of this statute, there will hereafter 
 be no question about the value of the national faith. Modern 
 repudiation has not been presented in a form more repulsive, 
 mischievous, or damaging to the good name and fame of the 
 nation. 
 
 A single aspect of the opinion of the Attorney General of 
 the United States remains to be noticed. As the declaration 
 of the highest judicial officer of the Executive Department, 
 “ adopted by the Secretary of the Treasury,” it is entitled to 
 command all the respect due to the high office from which it 
 emanates. It is true that some of its conclusions seem to 
 rest upon the assumption of facts which have no existence: 
 for example, his construction that the words “ shall pay 
 said bonds at maturity” mean “'shall pay the interest paid 
 by the United States semi-annually,” or before the maturity 
 of the bonds, and that is aided by the fact that “ a separate 
 
40 
 
 instrument (a coupon) is issued for each instalment of interest, 
 which may be sued upon without even producing the bond 
 to which it was originally attached; ” and other errors of 
 fact which a more intimate acquaintance with, or thorough 
 examination of, the case would probably have corrected. 
 But waiving all criticism, (if criticism were possible,) his 
 construction is reached by first assuming that, the language 
 of the act is ambiguous, or to use his words, “leaves the 
 mind in doubt,” and, therefore, “ where the transaction is 
 an act of bounty, the construction of doubtful language 
 should be in favor of the doubt ”—a proposition in support of 
 which are cited “ Fourteen opinions of Attorneys General.” 
 
 If this proposition stood alone, we should be compelled to 
 admit that we neither comprehend the principle nor its ap¬ 
 plication to the case. It is not understood how “the con¬ 
 struction of doubtful language in favor of the doubt” could 
 make the doubt any clearer. But he proceeds to say that 
 lie regards the “aid furnished” as “an act of bounty on 
 the part of the Government,” and “ that the Government 
 and the company are substantially in the relation of donor 
 and donee,” and it is to be inferred that in his opinion this 
 relation authorizes a conclusion which would not be reached 
 if the aid rested upon a valuable consideration. 
 
 His point may be more clearly stated, thus : The language 
 of the act is ambiguous ; but inasmuch as the Government 
 made a “donation ” of these bonds to the companies, and 
 there is no express promise found in the statute to pay the 
 interest before the maturity of the bonds, the law implies a 
 promise to repay the interest as soon as it is paid by the 
 Government. 
 
 We do not deny that, in an important aspect of the case, 
 these bonds were intended as a donation. Under the act of 
 18G2, we think it was the intention of Congress that if the 
 Pacific railroad ivas completed the entire obligation of repay¬ 
 ment was limited to the Government service and five per 
 cent, of the net earnings ; and, taken in connection with the 
 
41 
 
 act of 1864, if the question was involved in the present dis¬ 
 cussion, we should accept the conclusion of the Attorney 
 General that “if these are the only resources from which the 
 Government can claim payment of the principal and interest 
 before the expiration of the thirty years, they are the only 
 resources from which such payment can he obtained after the 
 expiration of the thirty years.” The chief purpose of the 
 mortgage icas to secure the completion of a great national enter¬ 
 prise. Its completion was in doubt; Congress well knew 
 that if the companies failed the Government would complete 
 it at any cost. It was therefore wisely provided that if the 
 companies failed, what they had done should be surrendered 
 to the nation ; but the fair inference from all the legislation 
 and all the debates is, that if the companies did complete 
 the railroad, the contribution of the nation would be more 
 than satisfied by the great resulting advantages—the prefer¬ 
 ence for the national business and the application through¬ 
 out the unmeasured future of one-half the Government ser¬ 
 vice to the repayment of its contribution. In this sense the 
 bonds are a donation, made upon a condition of infinitely 
 greater value in the mind of a statesman than the repayment 
 of the whole principal and interest twice over. 
 
 But we proceed to enquire into the character and attri¬ 
 butes of this donation , considered in its relation to the con¬ 
 struction of the Honorable Attorney General. In his view 
 of the case— 
 
 I. These bonds are a donation, but they are to be repaid to 
 the Government, principal and interest. The principal is to 
 be repaid just as soon as the Government pays the money. 
 The time is fixed—it is the maturity of the bonds. The in¬ 
 terest, formerly regarded as a mere incident of the principal, 
 is also to be repaid, absolutely—the only doubt being in re¬ 
 lation to the time and manner. True, the Government 
 parted with nothing in issuing its bonds. It loaned its 
 credit for thirty years, stipulating for repayment at the end 
 of that time, with the right to collect its interest in the ser¬ 
 vice of the road as fast as it was paid, and even in advance 
 of payment. 
 
42 
 
 II. By way of securing the repayment of this “ donation,” 
 the Government took a mortgage upon the entire franchise 
 of the companies and all their property—not an ordinary 
 mortgage, such as secures the bond creditors of other Ameri¬ 
 can railroads to the amount of $3,000,000,000, which it may 
 foreclose for a breach of condition, sell the property, pay its 
 claim and return the surplus to the debtor; with its equity 
 of redemption under the control of courts, which may give 
 the debtor time, or defer the sale if the interests of all 
 parties require such postponement—but a mortgage under 
 which the creditor, without notice or demand of payment, on 
 the neglect of the debtor to meet, any part even of a semi¬ 
 annual instalment of interest, may enter into possession, ex¬ 
 clude the debtor and all his other creditors therefrom, and 
 from that time forward hold and have the eutire mortgaged 
 franchise and property, the debtor being completely divested 
 of all his rights by “ forfeiture.” 
 
 III. This donation is made upon the further condition that 
 the donee “shall keep said railroad and telegraph line in 
 repair and use, and shall at all times transmit despatches 
 over said telegraph line, and transport mails, troops, muni¬ 
 tions of war, supplies and public stores whenever required to 
 do so by any department of the Government ; and that the 
 Government shall at all times have the preference in the use 
 of the same for all the purposes aforesaid.” In other words, 
 the donor’s business must be done to the exclusion of all 
 other business, and the opinion states that occasions may 
 “arisefor transportation of troops and munitions of war to 
 such an extent that the Government would for a time absorb 
 the whole business of the road.” These are the expressed 
 conditions of the donation. 
 
 IV. This donation is to be made pari passu with the con¬ 
 struction of the road in sections of twenty miles, “ ready for 
 the service contemplated by this act, * * * with all the 
 appurtenances of a first-class railroad.” The donee cannot 
 build his road according to his own standard, buying his ma¬ 
 terials where he can buy them cheapest. The donor fixes 
 
43 
 
 the standard. It must be equal to the “ Baltimore and 
 Ohio. It must be built of American iron, both rails and 
 equipment involving an increased cost of millions in this 
 item alone. 
 
 V. Before the donation is made at all, the donor appoints a 
 commission to report whether the sections are completed 
 according to the standard—all, of course, at the donee’s ex¬ 
 pense. I he width of the track is to be under governmental 
 control, which also must establish the points and fix the 
 terms of connections with all other railways. If the donee 
 fails to complete the road with reasonable speed the donor 
 may complete it at the donee’s expense, and failing to com¬ 
 plete it by a day fixed, for that cause also the franchise and 
 property is forfeited to the donor. 
 
 YI. There are other conditions to this donation, all of 
 which are burdensome to the companies, subjecting them in 
 many cases, as they have been taught by experience, to 
 heavy expenses, too numerous to be separately considered. 
 The rates of fare and freight are under the control of Con¬ 
 gress. The Government selects one-fourth the whole num¬ 
 ber of directors, with an unlimited right of visitation and 
 control. Reports to the Government must he made whenever 
 required. They protect the interests of the donor at the cost 
 and expense of the donee. Numerous commissions of engi¬ 
 neers and eminent citizens also are provided. 
 
 VII. Important and expensive as these express conditions 
 are, considered as attributes of a donation, they are trifling 
 and insignificant when compared with those which the Hon¬ 
 orable Attorney General superadds by implication. In his 
 opinion “ Congress meant to have in full force the equities 
 that prescribe the immediate payment of moneys paid for 
 one’s benefit and at his request.” Therefore the companies 
 were liable to repay the first semi-annual payment of inter¬ 
 est made by the Government eo instanti it was made, 
 although only one section of the road was completed and 
 none of it in operation. The moment the payment was 
 made, a cause of action to recover the amount from the com- 
 
44 
 
 panies existed, and upon their neglect to pay, without 
 demand or notice, their entire property became for¬ 
 feited beyond the power of restoration. At that moment 
 the law “ implied a promise for so much money 
 paid at their request.” It is of no consequence 
 in his legal point of view that both the parties to the contract 
 understood it, construed it, acted upon it, in precisely the 
 opposite sense. The same consequences have followed the 
 non-payment of the interest at each of the ten semi-annual 
 payments since. Ten times over there has been a forfeiture 
 of the railroad and all its appurtenances. Not an ordinary 
 forfeiture, from which they may be relieved by a subsequent 
 payment of the money, as in the breach of the usual condi¬ 
 tion in a mortgage, but a forfeiture which finally and irreme¬ 
 diably divests them of their entire property. They have 
 not paid the money ; they did not pay it because they did 
 not believe, and the creditor did not claim it to be due. No 
 matter for that, the law is different from what all the parties 
 supposed. Their property is gone, and they now hold it as 
 tenants at will of the United States. They held it on con¬ 
 dition that they should “ pay said bonds at maturity,” and 
 they have not complied with the condition, because they 
 have not paid the interest. 
 
 Meantime, the Government service still goes on. They 
 earn a half million per year in conveying the mails—much 
 more in transporting troops and supplies. The Government 
 may use the road to the extent of its capacity. What be¬ 
 comes of the payment for this service and the five per cent, 
 of net earnings? The Attorney General answers the ques¬ 
 tion with decisive precision: “ If such interest shall have 
 been repaid by the company, one-half of the compensation 
 for such services map he reserved and applied to the prin¬ 
 cipal of the bonds .” Another condition, then, (whether the 
 final one we are not advised,) of this donation, is that every 
 dime of it, whether principal or interest, shall be repaid to 
 the Government on peril of forfeiture of property worth thrice 
 the Government liability the moment the Government pays 
 
45 
 
 it away ; and a large portion of the principal must be, per¬ 
 haps all of it may be, repaid to the Government at periods 
 ranging from six months to thirty years in advance of its 
 payment by the “donor !” 
 
 It the range of legal history furnishes another instance of 
 such a “gift,” “ donation,” or act of bounty, it has escaped 
 our notice. The commercial transaction supposed to have 
 taken place on the Rialto, between the Venetian merchant 
 and the Jew, has been sometimes assailed for its inequity 
 and want of adequate consideration. But it was a donation 
 upon better terms than that conferred by “An act to aid in 
 the construction of a railroad and telegraph line from the 
 Missouri river to the Pacific ocean, and to secure to the Gov¬ 
 ernment the use of the same for postal, military, and other 
 purposes. Approved July 1, 1802.” 
 
 Very disastrous results to some of the companies have fol¬ 
 lowed the refusal of the Government to perform its part of 
 the contract and the manner in which that refusal was made. 
 The action of the Government in attempting to enforce the 
 collection of its claim for interest without resorting to the 
 ordinary constitutional means ; and giving the widest pub¬ 
 licity to all its proceedings, at once created the impression 
 that it had assumed an attitude of hostility toward the com¬ 
 panies. Enemies were not slow in drawing the legitimate 
 inference from the opinion of the Attorney General, that the 
 companies had forfeited their franchise and property, and 
 were consequently without means to meet their liabilities. 
 Some of their securities declined with fearful rapidity. A 
 single case is given by way of illustration. On the first of 
 November the stock of one of these companies sold in the 
 market for 23f per cent.; within fifteen days after the pub¬ 
 lication of the Attorney General’s opinion it declined to 9{- 
 per cent. Its land-grant bonds declined in the same period 
 from 73f to 52$ ; its income bonds from 72i to 30 per cent., 
 
46 
 
 and even its first mortgage bonds, having a lien prior to that 
 of the Government, from 83 to 72. The aggregate depre¬ 
 ciation iri the securities of one of these companies was nearly 
 fifteen million dollars ! The ruinous losses which followed 
 to private individuals and firms are too recent and well 
 known to require comment here. If Congress shall now be 
 of opinion that the companies were right in their construc¬ 
 tion of the law, it is hoped that something will be done to 
 restore public confidence and show to the world that the 
 companies have discharged their whole duty toward the 
 United States. 
 
 It is claimed in behalf of the companies, then— 
 
 1. That upon any possible construction of the statutes, the 
 claim of the Government to require the whole of the compen¬ 
 sation for its service upon these railroads, instead of one half, 
 is prematurely made. That it cannot be maintained until a 
 reasonable time has elapsed after the Government has ac¬ 
 cepted the road as completed, nor then, unless the Gov¬ 
 ernment gives to the railroad all its transportation of 
 mails, troops, munitions of war, and supplies, as provided 
 by the act. 
 
 2. That the intention of the Congress of 18G2, as derived 
 from the act itself, and all the evidence furnished by the 
 record, was to limit the resources from which the payment 
 of interest should be required to the compensation for such 
 services and five per cent, of the net earnings. 
 
 3. That the contract thus made was regarded by Congress 
 as highly advantageous to the United States, its considera¬ 
 tion more than adequate, and that experience has proved 
 the propriety and wisdom of the legislation. 
 
 4. That the purpose of Congress in taking the mortgage 
 was to secure nothing beyond its expressed conditions, which 
 in their view of the case are satisfactorily performed by the 
 completion of the road, insuring the Government preference 
 and service in the present and in the future. 
 
 5. That although it was not the intention or expectation 
 of Congress that either the principal or interest of the bonds 
 
47 
 
 should be repaid, except by the Government service and 
 the five per cent, of net earnings, it is a misnomer to desig¬ 
 nate the issue of the bonds or their payment, principal or 
 interest, as a gift, or act of bounty to the companies; that 
 such issue and payments were upon a consideration in great 
 part already executed, and to be executed hereafter during 
 the whole existence of the railroad. 
 
 6. That, so far, the benefits resulting from the construction 
 and operation of the railroad have enured exclusively to the 
 Government and the people, no shareholders having yet re¬ 
 ceived any dividend upon their stock in any of the Pacific 
 Railroad Companies. 
 
 All which is respectfully submitted. 
 
 L. E. CHITTENDEN, 
 
 For Central Pacific R. R. Company. 
 
 Washington, January 17, 1871. 
 

 
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