The Congressional Globe: Containing the Debates and Proceedings of the Second Session Forty-Second Congress; With an Appendix, Embracing the Laws Passed at that Session Page: 3,610

                                
3610
THE CONGRESSIONAL GLOBE.
May 18,
Mr. STEWART. I have it here. It is the
ninth section of the act of March 3, 1871, the
Army appropriation bill of last year:
" Sec. 9. That, in accordance withthe fifth section
of the act approved July 2,1864, entitled ' An act to
amend an act entitled "An act to aid in the con-
struction of a railroad and telegraph line from the
Missouri river to the Pacific ocean, and to sccure to
the Government the use of tho same for postal, mili-
tary, and other purposes." approved July 1, 1862,'
the Secretary of the Treasury is hereby directed to
jiay over in money to the Pacific Railroad Companies
mentioned in said act, and performing services for
the United States, one half of the compensation at
the rate provided by law forsuch services, heretofore
or hereafter rendered : Provided, That this section
shall not be construed to affect the legal rights of
the Government or the obligations of the companies
except as herein specifically provided."
That is the act. Now 1 should like to
know from the Committee on Appropriations
whether this amendment is intended to affect
this interest question on the Pacific railroads.
If it does, 1 wish to be heard in regard to it.
But first 1 desire to know what it means.
Mr. STEVENSON. I think the amend-
ment itself is very direct. As I understand it,
the Secretary of the Treasury made a decision
that he would pay for no transportation on this
road until the obligation of the Pacific Rail-
road Company to pay the interest on its bonds
had been complied with. I understand fur-
ther, and I only state from information, that
the Senator from Nevada [Mr. Stewart]
offered an amendment to the Army appropria-
tion bill of last year overruling the decision
of the Secretary of the Treasury, and it was
the object of the amendment to this bill which
has been declared out of order to repeal that
proposition put on the appropriation bill last
year. Now wo propose that if the Pacific
Railroad Company, in the estimation of the
Secretary of the Treasury, owes us interest, wo
shall not, pay the company for transportation
until that interest is paid.
Mr. STIC WART. My friend from Kentucky
is laboring under a misapprehension with
regard to this whole question.
Mr. STEVENSON. That may be possible.
Mr. STEWART. I will state to him the his-
tory of the question, and then 1 will submit to
hun whether lie would like to raise a doubt
and enable parlies to do a lit tie speculating in
this wjiy.
At tho time the original Pacific railroad act
was passed, it was provided that the Govern-
ment of tlie United States should have a lien
upou the roads and all the propeity of the
companies for the repayment of the principal
and interest as therein provided. Then the
act went on to provide how the principal and
intei est should be paid. The sixth section pro-
vided that the bonds should he paid at matur-
ity. The whole of it is made upon condi-
tion that the bonds shall be paid at maturity.
The sixth section fun,her provides that, all the
transportation done for the Government, should
be applied on the bonds, it further provides
for ilie setting aside, after the completion of
the toad, of five per cent of the net, proceeds
to he applied also in the same way. '1 hese are
the only provisions for payment until the thirty
years are up—until the maturity of the bonds.
' 'i'hat was in 1802. In 1801 the companies
being unable to proceed with the work came
here and Congress made further provision to
enable them to goon. In the first place, they
pr -vided that each company might issue its
firs, mortgage bonds, making the bonds of the
Government a second mortgage. It also
allowed titem to issue their bonds one hundred
miles in advance of construction. It provided
further that the Government would not require
them to do all its transportation without pay,
hut, that, the Government would retain one
half of the amount due for transportation.
For six years the Government settled with the
companies on this basis, paying them half
freight.
In the fall of 1870 the Secretary of the Treas-
ury refused to pay them What had been paid
them for six years, and the Attorney General
gave it as his opinion that he ought not to pay
them, for the Attorney General said this was
an enormous subsidy, and it could not have
been the intention of Congress to do what was
plainly done by the law.
The Senator from Vermont [Mr. Edmunds]
offered a resolution to inquire into the author-
ity of the Government to withhold this com-
pensation, and it was referred to the Judiciary
Committee. The subject was reported upon
by the Judiciary Committee, and that commit-
tee heldthat it was the duty of the Secretary of
the Treasury to pay one half of this transport-
ation. I have here the elaborate report of the
committee. Upon the coming in of that report
I did offer an amendment to the appropriation
bill last year as a declaratory act, directing the
Secretary to do what the Judiciary Committee
had found it was his duty to do, and not to do
anything else, simply requiring him to obey
the law. After an elaborate discussion, which
I have here, the Senate adopted that amend-
ment in accordance with the report of the
Judiciary Committee, and the House concurred
in it.
Jt may be that these acts in relation to the
Pacific railroad were extravagant; it may be
that they were wrong ; but, notwithstanding,
they are the acts of Congress. Bonds have
been issued upon them. The credit of the
Government is pledged the same as it is to
anything else, and I do not suppose any one
wants to repudiate it. The same reason exists
for going back of any other proceeding as this.
You might as well say, and it would be no
greater act of bad faith on the part of the
Government, that you would not pay a bond
which was issued during the war for a shoddy
contract; and yet we not only pay the bonds,
but, we declare that they shall be paid in gold.
Here is a contract made between the Govern-
ment and this company, under which they have
built the Pacific railroad, and, relying on the
faith of the Government,, hundreds and thoii-
.sand of people have invested in their bonds
and stocks. Here is a contract which the
Judiciary Committee of the Senate has found
to exist, and yet the Committee on Appropria-
tions propose to interfere with that contract.
Now, I presume the Senator from Kentucky
not being here during the time this occurred
has not had an opportunity to examine the
whole subject, to examine the report of the
Judiciary Committee on this very question.
That committee held most clearly that there
was no interest due by the company until the
maturity of the bonds. If this amendment is
to be pressed, I think the first thing in order
would be to have the report of the Judiciary
Committee read as the basis of some remarks
that 1 desiie to make upon it.
Mr. SUMNER. I would ask the Senator
whether the vote could not be taken now?
Mr. STEWART. We can hardly take the
vole in so thin a Senate on so important a
proposition as this.
Mr. SUMNER. Does the Senator suppose
it will be adopted ?
Mr. STEWART. I do not think the Senate
would repudiate their contracts in the dark in
this way. I do not wish to prolong discussion.
Mr. SUMNER. I merely ventured to throw
out the suggestion whether we might not hasten
to a vote.
Mr. STEVENSON. Mr. President, I was
not here when the ninth section of the act
of March 3, 1871, was adopted, but I think
I understand it. My opinion does not differ
seriously from the statement of the Sena-
tor from Nevada of the transactions between
the Government of the United States and the
Pacific Railroad Company. I do not desire to
repudiate any debt due to this company. I do
not desire to infringe upon any right which,
under the law, the company are entitled to.
I voted in committee for the amendment
which has been ruled out of order, and the
object of my amendment now is to reach in-
directly the same purpose. I desire briefly to
state to the honorable Senator from Nevada
the reasons which prompted me to vote for
that amendment.
The construction of that contract is a judi-
cial question. When parties differ about what
is the import of and what are rights under
any contract, I deny the power of the legisla-
tive body to interfere between them and the
judicial tribunal to whom alone the power be-
long of construing that statute. Therefore,
when the Secretary of the Treasury gave what
he believed was the true construction of this
contract, which the Pacific Railroad Company
thought was unjust to them and in violation of
their rights, he had a right to call upon the
Attorney General for his opinion. That I un-
derstand the Secretary of the Treasury did.
The Attorney General coincided, as I am in-
formed, and as I believe the Senator admits,
with the construction placed upon that act by
the Secretary of the Treasury.
Mr. STEWART. The then Attorney Gen-
eral did. The present Attorney General voted
for this declaratory law.
Mr. STEVENSON. Still, the Attorney
General was the legal adviser of the Secretary
of the Treasury. Now, what was the fact?
Let the Senate understand this amendment;
let the country understand who is right; let us
see if anybody who is in favor of this amend-
ment attempts to infringe upou the rights of
the Pacific Railroad Company. I certainly do
not.
When the Secretary of the Treasury, the
fiscal agent of the Government, undertook to
put his construction upon this act, which hap-
pened to differ from that of the honorable
Senator from Nevada, and the Attorney Gen-
eral, whose business it is to advise all the offi-
cers of £he Government, sided with the Sec-
retary of the Treasury, what should have been
the result? An appeal to the courts to have
settled whether the Attorney General and the
Secretary of the Treasury were right or
Whether the Pacific Railroad Company was
right; but instead of that the honorable Sen-
ator from Nevada, to anticipate that province
of judicial tribunals to settle, and settle alone,
controversies between the Government and
other people, interposed with his amendment,
and against the Attorney General and against
the Secretary of the Treasury said, "The
court shall not decide, but I will direct by
legislative action what the Secretary shall do."
That was a legislative construction upou this
act, which Congress, in my judgment, had no
right to interpose and put as an amendment
on an appropriation bill.
I simply desire, therefore, without attempt-
ing to do the Pacific railroad any wrong, to
repeal that section. I wish to repeal it because
I think it was a species of legislation which
should not be practiced. I think when the
Secretary of the Treasury and the Pacific Rail-
road Company differ as to the construction of
the law, the courts should settle the question,
and the Legislature should not intemose bv its
construction to do that which I think the courts
alone are authorized to do. Now, if you repeal
this ninth section, as I propose, you will have'
a judicial construction of this contract, and.
when you have a judicial construction of this
contract as to what the true interpretation of
these various acts was, you have the settled
obligation of the company to the Government
and of the Government, to the company finally
adjudicated upon. That is all I desire; an A
if I am wrong in anything, I wished at least
to state the motive which prompted me in
supporting the amendment oiigmally offered
by the committee; and it was to bring the same
question indirectly before the Senate that I
have offered this amendment.
Mr. S f E W ART. I do not question the Sen-
ator's motives at all, but he is not familiar with
the history of this matter. He does me in-
justice in saying that it was I who brought this
matter before the Senate. The Senator from
Vermont offered the resolution of inquiry that