194 



CONGRESS. (PACIFIC RAILROAD INVESTIGATION.) 



ings ; or whether there has been a diversion of earn- 

 ings of aided roads to less productive branches, 

 through constructive mileage allowances, or average 

 mileage allowances between aided and non-aided 

 roads or parts of roads, or otherwise ; and also whether 

 such system of constructive mileage allowances is 

 fair and usual, and in practical operation has resulted 

 adversely or otherwise to the aided roads and the 

 interest of the United States ; or whether there has 

 been a diversion of earnings of aided roads to wrong- 

 ful or improper purposes, and, if so, to what extent ; 

 whether there is a discrimination of rates in favor of 

 unaided against aided roads ; whether any, and if so, 

 how much, money is due and owing to the United 

 States on account of mistaken or erroneous accounts, 

 reports or settlements made by said roads ; whether 

 any traffic or business which could or should be done 

 on the aided lines of said companies has been diverted 

 to the lines of any other company or to non-aided 

 lines, and what amounts have been deducted from 

 the gross earnings of any of said aided railroad com- 

 paniesj by their general freight and passenger agents 

 or auditors, by way of rebate, percentage of business 

 done, constructive mileage, monthly or other pay- 

 ments on any pooling or rate arrangement, contract, 

 or agreement ; and also to inquire into, ascertain, and 

 report as to the kind, character, and amount of the 

 assets of said companies, and what assets of each com- 

 pany are now subject to the lien of the Government, 

 and the value thereof; and also whether any dividends 

 have been unlawfully declared by the directors or 

 paid to the stockho ders of said companies, and, if so, 

 to what extent, and whether the amount thereof may 

 not be recovered from the directors unlawfully de- 

 claring the same or persons who have unlawfully 

 received the same ; whether the proceeds of any trust 

 funds or lands loaned, advanced, or granted have been 

 diverted from their lawful use; whether any new 

 stock or bonds have been issued or any guarantees or 

 pledges made contrary to or without authority of law ; 

 whether any of the directors, officers, or employe's of 

 said companies, respectively, have been or are now 

 directly or indirectly interested, and to what amount 

 or extent, in any other railroad, steamship, telegraph, 

 express, mining, construction, or other business com- 

 pany or corporation, and with which any agreements, 

 undertakings, or leases have been made or entered 

 into ; what amounts of money or credit have been or 

 are now loaned by any of said companies to any 

 person or corporation ; what amounts of money or 

 credit have been or arc now borrowed by any of said 

 companies, giving names of lenders and the purposes 

 for which said sums have been or are now required ; 

 what amounts of money or other valuable considera- 

 tion, such as stocks, bonds, passes, and so forth, have 

 been expended or paid out by said companies, whether 

 for lawful or unlawful purposes, but for which suf- 

 ficient and detailed vouchers have not been given or 

 filed with the records of said companies ; and, fur- 

 ther, to inquire and report whether said companies, 

 or either of them, or their officers or agents, have paid, 

 any money or other valuable consideration, or done 

 any other act or thing, for the purpose of influencing 

 legislation ; and to investigate and report all the facts 

 relating to an alleged consolidation of the Union 

 Pacific Railroad Company, the Kansas Pacific Rail- 

 way Company, and the Denver Pacific Railway and 

 Telegraph Company into an alleged corporation 

 known as the Union Pacific Railway Company. Said 

 investigation shall include the alleged sale of the 

 stock of the Kansas Pacific Railroad Company to the 

 Union Pacific Railroad Company, and all the circum- 

 stances and particulars pertaining to said alleged sale, 

 and whether any of the Pacific Railroad corporations, 

 which obtained bonds from the United States to aid 

 in the construction of their railroads have expended 

 any of their moneys or other assets in the construction, 

 or 'to aid in the construction, of other railroads, or in- 

 vested of their moneys or other assets in the stocks 

 or bonds of any manufacturing, mining, and com- 



mercial companies or corporations, or of other rail- 

 road corporations ; and if any such expenditures, or 

 investments have been made, "the extent and charac- 

 ter thereof made by each of said corporations shall 

 be inquired into, and also the present interest of any 

 of said corporations in the railroads auxiliary to their 

 respective railroads. 



And said commission shall also ascertain and 

 report the names of all the stockholders in each of 

 said companies, from its organization to the date of 

 the investigation herein provided for, as they appear 

 on the books of said companies at the date of its 

 annual meeting in each year ; the amount of stock 

 held by each ; what consideration, if any, was paid 

 by each stockholder to said company for his stock, 

 and when and in what property such payment was 

 made ; the date when each stockholder so appearing 

 on the books became such ; and whether stoclc is now 

 held or has heretofore been held in the name of any 

 person in trust or for the benefit of any other, and the 

 names of all such persons ; the total amount of the 

 stock in each company, and the dates and amount of 

 any increase of such stock, and the reason for such 

 increase ; and the amount of the annual salaries or 

 compensation that are now or at any prior time have 

 been paid to any officer or employe 1 ot said company, 

 when such salary or compensation amounts to $5,000 

 or more per anuum, and the names of the persons now 

 receiving or who have heretofore received such sala- 

 ries or compensation, and all bonuses or donations 

 which may have been given or paid to any such per- 

 son ; and all payments made under the head of legal 

 expenses, to whom made, and the amount paid to 

 each, and for what specific services such payments 

 were made. 



Said commissioners shall also consider and report 

 whether the interests of the United States require any 

 extension of the time for the performance of the obli- 

 gations to the United States of said companies, or any 

 of them, and the facts and circumstances upon which 

 said opinion is based, including the security held by 

 the United States for the performance of such obliga- 

 tions, and the value thereof, and the value of the 

 property of such companies, and either of them, not 

 included in such security, and what further security 

 it is expedient that said companies shall be required 

 to give j and if, in their opinion, such extension shall 

 be required by the interests of the United States, they 

 shall submit a scheme for such extension, which 

 shall secure to the United States full payment of all 

 debts due them from said companies, with a reason- 

 able rate of interest, in such time as the commission- 

 ers shall propose, having due regard to the financial 

 ability of said companies and the proper conduct of 

 their business in such manner as shall afford efficient 

 service to the public. 



And the saia commission shall report in full in re- 

 gard to all such matters aforesaid, and in regard to 

 any other matters which may be ascertained or come 

 to their knowledge in regard to said companies, re- 

 spectively, on or before Dec. 1, 1887, to the Presi- 

 dent of the United States, who shall forward said 

 report to Congress, with such recommendations or com- 

 ments as he may see fit to make in the premises. 



That the commissioners hereby created, or either 

 of them, shall have power to require the attendance 

 and testimony of witnesses, and the production of all 

 books, papers, contracts, agreements, and documents 

 relating to the matter under investigation, and to 

 administer oaths ; and to that end may invoke the 

 aid of any court of the United States in requiring the 

 attendance and testimony of witnesses, and the pro- 

 duction of books, papers, and documents under the 

 provisions of this section. Any of the circuit or dis- 

 trict courts of the United States within the jurisdic- 

 tion of which such inquiry is carried on may, in case 

 of contumacy or refusal to obey a subpoena issued to 

 any person, issue an order requiring any such person 

 to appear before said commissioners, or either of 

 them, as the case may be, and produce books and 



