CONGRESS. (PACIFIC RAILROAD INVESTIGATION.) 



195 



papers if so ordered, and give evidence touching the 

 matter in question ; and any failure to obey such 

 order of the court may be punished by such court as 

 a contempt thereof. 



The claim that any such testimony or evidence may 

 tend to criminate the person giving such evidence 

 shall not excuse such witness from testifying ; _but 

 such evidence or testimony shall not be used against 

 such person on the trial of any criminal proceeding. 



SEC. 3. That the sum of $100,000, or so much 

 thereof as may be necessary, is hereby appropriated, 

 out of any money in the Treasury of the United 

 States not 'otherwise appropriated, for the purposes ot 

 this investigation. 



SEC. 4. That whenever, in the opinion of the Presi- 

 dent, it shall be deemed necessary, to the protection 

 of the interests and the preservation of the security of 

 the United States, in respect of its lien, mortgage, or 

 other interest in any of the property or any or all of 

 the several companies upon which a lien, mortgage, 

 or other incumbrance paramount to the right, title, or 

 interest of the United States for the same property, 

 or any part of the same, may exist and be then law- 

 fully liable to be enforced, the Secretary of the Treas- 

 ury shall, under the. direction of the President, re- 

 deem or otherwise clear off such paramount lien, 

 mortgage, or other incumbrance by paying the sums 

 lawfully due in respect thereof out of the Treasury ; 

 and the United States shall thereupon become and be 

 subrogated to all rights and securities theretofore per- 

 taining to the debt, mortgage, lien, or other incum- 

 brance in respect of which such payment shall have 

 been made. It shall be the duty of the Attorney- 

 General, under the direction of the President, to take 

 all such steps and proceedings, in the courts and other- 

 wise, as shall be needful to redeem such lien, mort- 

 gage, or other incumbrance. and to protect and defend 

 the rights and interests of the United States in respect 

 of the matters in this section mentioned, and to take 

 steps to foreclose any mortgages or liens of the United 

 States on any such railroad property. 



SEC. 5. That from and after the 1st day of July, 

 1887, there shall be charged to and collected from the 

 Central Pacific Railroad Company, the Union Pacific 

 Railway or Railroad Company, by whichever descrip- 

 tion it may be lawfully known, the Central Branch 

 Union Pacific Railway Company, the Sioux City and 

 Pacific Railroad Company, and the Kansas Pacific 

 Railway Company, as all the same are described and 

 known in the acts of Congress providing for issuing 

 bonds in aid of the same, or acts in addition thereto, 

 their successors and assigns, respectively, 40 per cent, 

 of their respective annual net earnings, to be ascer- 

 tained as provided in section 1 of the act of May 7, 

 1878, in lieu of the 25 per cent, provided for in said 

 act, so far as the same respects the companies men- 

 tioned in said act, and as to the others herein men- 

 tioned absolutely ; and to that end the said act of 

 May 7, 1878, and any and all amendments or modifi- 

 cations thereof, be and the same are hereby extended 

 to the Kansas Pacific Railway Company, to the Sioux 

 City and Pacific Railroad Company, and to the Cen- 

 tral Branch Union Pacific Railway Company ; and 

 said act, and all amendments thereto or modifications 

 thereof, shall henceforth apply to the said respective 

 corporations herein last named, as well as to the 

 corporations named in said act. 



SEC. 6. That the sinking-funds which are or may 

 be held in the Treasury for the security of the indebt- 

 edness of either or all of said railroad companies may, 

 in addition to the investments now authorized b'y 

 law, be invested in any bonds of the United States 

 heretofore issued for the benefit of either or all of said 

 companies, or in any of the first-mortgage bonds of 

 either of said companies which have been issued 

 under the authority of any law of the United States 

 and secured by mortgages of their roads and fran- 

 chises, which by any law of the United States have 

 been made prior and paramount to the mortgage, 

 lien, or other security of the United States in respect 



of its advances to either of said companies as provided 

 by law. 



February 25, the subject came up for discus- 

 sion in the Senate, and, in Committee of the 

 "Whole, on motion of Mr. McPherson, of New 

 Jersey, the fifth and sixth sections were struck 

 out by a vote of 26 yeas to 14 nays. In ex- 

 planation of the motion, he said: u Let me 

 simply state the fact that while the 40 per 

 cent, increase upon the basis of the net earn- 

 ings of the Union and the Central Pacific Rail- 

 roads for 1884 and 1885 would require the 

 Union Pacific Railroad to pay into the public 

 Treasury something over $2,600,000 annually, 

 a sum of something like $600,000 in excess of 

 the entire interest account paid by the Gov- 

 ernment, and $1,400,000 more than it now 

 pays on account of net earnings and transpor- 

 tation account into the public Treasury, it 

 would only compel the Central Pacific Rail- 

 way Company to pay $129,000 additional, or 

 a sum equal to $1,300,000 less than the Gov- 

 ernment pays annually upon its interest ac- 

 count. Hence you will see the inequality of 

 the application of the 40 per cent. There- 

 fore, as it is likely to provoke discussion, I 

 shall ask the Senate to strike out everything 

 in the shape of new legislation, and take the 

 resolution of investigation pure and simple." 



Subsequently the Senate, on considering the 

 report of the Committee of the Whole, restored 

 section 6, on motion of Mr. Edmunds, of Ver- 

 mont, by a vote of 37 to 9, but refused to re- 

 store section 5 by a vote of 15 to 26. A mo- 

 tion by Mr. McPherson to strike out section 4 

 was defeated by a vote of 19 to 27. A motion 

 was made by Mr. Riddleberger, of Virginia, to 

 strike out the following clause of section 2 : 



The claim that any such testimony or evidence may 

 tend to criminate the person giving such evidence 

 shall not excuse such witness from testifying; but 

 such evidence or testimony shall not be used against 

 such person on the trial of any criminal proceeding. 



It failed by a vote of 18 to 25. On motion 

 of Mr. Stanford, of California, the following 

 amendments were inserted in section 2 : 



The commissioners shall also ascertain the average 

 cost per annum of Government transportation in the 

 regions now traversed by the Pacific Railroads be- 

 tween the year 1850 and the completion of said roads, 

 and also the average cost per annum since such com- 

 pletion, and what additional facilities have been fur- 

 nished to the Government and the people by said 

 roads. 



Also to inquire what discount the Pacific Railroad 

 and its several branches were forced to make in dis- 

 posing of the bonds guaranteed by the Government 

 to obtain the gold coin which was the currency of 

 the country through which the greater part of said 

 roads passed. Also to ascertain the comparative cost 

 of construction of said roads as compared with what 

 they would have cost with the prices of labor and 

 commodities prevailing five years preceding or five 

 years subsequent to the completion of said roads. 



Also to inquire whether or not the Pacific Railroad 

 was completed in less time than was allowed by law, 

 and, if so, how much less time, and if the United 

 States was benefited thereby. Also to inquire if 

 either of the Pacific Railroad companies have been 

 embarrassed and the earning capacity impaired by 



