[515] Testimony of Mr. Huntington before the California Railroad Commission, San Francisco Examiner, May 14, 1898.

[516] Huntington Manuscript, p. 91. On the general subject of the Thurman Act, see Davis, “History of the Union Pacific Railway,” Ch. 4.

[517] United States v. Union Pacific Railroad, 91 U. S. 72, 86 (1875).

[518] United States Pacific Railway Commission, p. 2529, testimony Leland Stanford. In order that the reader may have full data concerning the issue of the Government subsidy bonds, the following table of amounts and dates of issue is presented:

United States Six Per Cent Currency Bonds Issued to Central Pacific Railroad Company

Date Issued			Maturity of Bonds			Interest Commenced			Amount
May	12,	1865	Jan.	16,	1895	Jan.	16,	1865	$1,258,000
Aug.	14,	”	”	16,	”	Aug.	14,	”	384,000
Oct.	16,	”	”	16,	”	Oct.	16,	”	256,000
Dec.	11,	”	”	16,	”	Nov.	29,	”	464,000
Mar.	6,	1866	”	1,	1896	Mar.	6,	1866	640,000
July	10,	”	”	1,	”	July	10,	”	640,000
Oct.	31,	”	”	1,	”	Oct.	29,	”	320,000
Jan.	15,	1867	”	1,	1897	Jan.	14,	1867	640,000
Oct.	25,	”	”	1,	”	Oct.	25,	”	320,000
Dec.	12,	”	”	1,	”	Dec.	11,	”	1,152,000
June	10,	1868	”	1,	1898	June	9,	1868	946,000
July	11,	”	”	1,	”	July	10,	”	320,000
Aug.	5,	”	”	1,	”	Aug.	4,	”	640,000
”	14,	”	”	1,	”	”	13,	”	1,184,000
Sep.	12,	”	”	1,	”	Sep.	11,	”	1,280,000
”	21,	”	”	1,	”	”	19,	”	1,120,000
Oct.	13,	”	”	1,	”	Oct.	12,	”	1,280,000
”	28,	”	”	1,	”	”	26,	”	640,000
Nov.	5,	”	”	1,	”	Nov.	3,	”	640,000
”	12,	”	”	1,	”	”	11,	”	640,000
Dec.	5,	”	”	1,	”	Dec.	5,	”	640,000
”	7,	”	”	1,	”	”	7,	”	640,000
”	30,	”	”	1,	”	”	29,	”	640,000
Jan.	15,	1869	”	1,	1899	Jan.	13,	1869	640,000
”	29,	”	”	1,	”	”	28,	”	640,000
Feb.	17,	”	”	1,	”	Feb.	17,	”	640,000
Mar.	2,	”	”	1,	”	”	17,	”	1,066,000
”	3,	”	”	1,	”	Mar.	2,	”	1,333,000
May	28,	”	”	1,	”	May	27,	”	1,786,000
July	15,	”	”	1,	”	”	27,	”	1,314,000
”	16,	”	”	1,	”	July	15,	”	268,000
Dec.	7,	”	”	1,	”	”	16,	”	1,510,000
Jan.	2,	1872	”	1,	1898	Nov.	28,	1868	4,120
—————
Total									$25,885,120
Jan.	24,	1867	Jan.	1,	1897	Jan.	26,	1867	320,000
Sept.	1,	1869	”	1,	1899	Sept.	3,	1869	320,000
Oct.	29,	”	”	1,	”	Oct.	28,	”	1,008,000
Jan.	27,	1870	”	1,	”	Jan.	22,	1870	322,000
”	8,	1872	”	1,	”	”	22,	1872	560
—————
Total									$1,970,560

Undoubtedly many of the bonds listed were disposed of at a considerable discount. Subsidy bonds to the amount of $4,922,000 had been issued by the government to the Central Pacific by October 25, 1866, and had been sold for $3,546,478. The subsidy bonds (currency sixes) were listed on the New York Stock Exchange, but there were few, if any, sales until 1868. Not a single transaction in these bonds was recorded for the year 1867. In 1869, however, the bonds went above par, the average sale price for the year being 108⅛. (United States Pacific Railway Commission, pp. 4682-83.)

[519] United States Pacific Railway Commission, p. 275, testimony Leland Stanford; Report, pp. 91-95.

[520] The Supreme Court later held that the Central Pacific and Union Pacific railroads were completed on the 6th of November, 1869, in the sense that the companies became liable to pay over 5 per cent of their net earnings from this date. (99 U. S. 402, 449 [1878].)

[521] The Central Pacific Railroad Company in equitable account with the United States. A review of the testimony and exhibits presented before the Pacific Railway Commission, appointed according to the Act of Congress, approved March 3, 1887, by Roscoe Conkling and William D. Shipman of Counsel for the Central Pacific R. R. Co., New York, 1887.

[522] Report of the Secretary of the Interior, 1877, p. xxviii.

[523] Report of Mr. Thurman from the Committee on the Judiciary (45th Congress, 2d Session, March 4, 1878, Senate Report No. 111, p. 8).

[524] 16 United States Statutes 225 (1871).

[525] 17 United States Statutes 485, 508 (1873).

[526] United States v. Union Pacific Railroad Company, 91 U. S. 72 (1875).

[527] Ibid., 98 U. S. 569 (1878).

[528] Union Pacific Railroad Company v. United States, 99 U. S. 402 (1878).

[529] The Congressional history of the Thurman bill is as follows: Introduced, October 16, 1877, and referred to the Senate Committee on Judiciary (45th Congress, 1st Session, Congressional Record, Vol. 6, p. 58); reported back from Committee March 4, 1878 (45th Congress, 2d Session, ibid., Vol. 7, p. 1445); debated in Senate March 12 to April 9 (ibid., pp. 1688-2384); passed by Senate April 9 (ibid., pp. 2779-90); approved by President, May 8 (ibid., p. 3257).

[530] Speech of Senator Thurman of Ohio (45th Congress, 2d Session, March 12, 1878, Congressional Record, Vol. 7, p. 1690).

[531] 20 United States Statutes 56 (1878).

[532] Report of Mr. Thurman from the Senate Committee on the Judiciary (45th Congress, 2d Session, March 4, 1878, Senate Report No. 111, Serial No. 1789).

[533] Annual Report of the Commissioner of Railroads, 1882, p. 440.

[534] Annual Report of the Commissioner of Railroads, 1883.

[535] See also the Brice Report (53d Congress, 3d Session, Senate Report No. 830, p. 17, Serial No. 3288).

[536] Annual Report of the Commissioner of Railroads, 1883.

[537] 24 United States Statutes 488 (1887).

[538] Annual Report of the Treasurer of the United States. 1887, p. 28.

Owing to the protests of the Pacific railroad companies at the low rates of interest earned by the sinking funds, considerable amounts remained uninvested between 1882 and 1886. The following table shows the cash uninvested in the Treasury to the credit of the Central Pacific Railroad Company for a series of years:

Date	Amount
June 30, 1882	$527,886.53
”—30, 1883	844,652.13
”—30, 1884	1,089,159.75
”—30, 1885	2,020,900.13
Dec. 31, 1886	2,345,984.21
”—31, 1887	76,905.49
June 30, 1889	2,766.14

No interest was earned on these uninvested balances. After 1886, with the single exception of the year 1895, the uninvested portion of the sinking fund was negligible. (Annual Reports of the Commissioner of Railroads, 1882-89.)

[539] 20 United States Statutes 56 (1878). On June 19, 1878, another act established the office of an “Auditor of Railroad Accounts” with authority to prescribe reports from subsidized railroads west, north, or south of the Missouri River, to examine books, and to furnish information to various government departments as it might be required. (20 United States Statutes 169, [1878].) Name changed to “Commissioner of Railroads” in 1881. (21 United States Statutes 381, 409 [1881].)

[540] 45th Congress, 2d Session, Congressional Record, pp. 2384, 2790. The House vote as given does not include pairs.

[541] Colton case, p. 1770-71.

[542] Ibid., p. 1802, November 9, 1877.

[543] Ibid., argument of Hall McAllister, p. 248.

[544] Colton case, argument of Hall McAllister, p. 249. Huntington never forgave Congress for having passed the Thurman bill. Years afterward he inserted the following comments in an autobiographical statement which he gave to the California historian, H. H. Bancroft:

“Senator Ransom voted for the Thurman bill. He came out and said ‘Mr. Huntington, I voted for that bill. I knew I was wrong.’ He said, ‘I ought not to have done it.’ Said I, ‘Senator Ransom, I pity you.’ Said he, ‘What do you say?’ Said I, ‘Senator Ransom, I said and I repeat it for I do really pity you.’ I turned on my heel and left him. Now there are a great many men in just that kind of a way; they don’t dare to vote according to their convictions; they are afraid of what other people think of their acts....”

———·······

“I know old Thurman well. He expected to be President of the United States by passing the Thurman Act, but he was not honored of course. I don’t believe he was in earnest. I don’t believe he thought the Act was proper. It was a false contract. There was no warrant in law or equity. He turned demagogue for political purposes; ... I think Thurman is a pretty good liar; lying was his best forte. He is an impressive speaker; he always seems to be so in earnest.” (Huntington manuscript, p. 24-25, 76-77.)

It may throw some light upon the attitude of the Huntington group toward the Thurman Act to remember that the moneys in the sinking funds which the Central Pacific established for the retirement of its own mortgage securities were, at least in part, loaned to the Western Development Company, and used by this company in railroad building in southern California. This was, of course, an ideal arrangement from the point of view of Huntington and his friends.

[545] Sinking Fund Cases, 99 U. S. 700 (1878).

[546] Report of the Auditor of Railroad Accounts, 1881 (46th Congress, 3d Session, Exec. Doc. No. 87, Serial No. 1978). The same recommendation is contained in the Report of Commissioner of Railroads, 1894, p. 93.

[547] United States v. Central Pacific Railroad Company, 118 U. S. 235 (1886).

[548] 56th Congress, 2d Session, Senate Document No. 227, Serial No. 4043.

[549] United States v. Central Pacific Railroad Company, 138 U. S. 84 (1891). See also Annual Report of the Commissioner of Railroads, 1883, p. 428 ff.

[550] 54th Congress, 2nd Session, January 11, 1897, Senate Document No. 52, Serial No. 3469.

[551] Annual Report of the Commissioner of Railroads, 1897.

[552] Annual Report of the Commissioner of Railroads, 1882, p. 440.

[553] United States Pacific Railway Commission Report, December 1, 1887 (50th Congress, 1st Session, Senate Executive Documents No. 51, Serial No. 2505).

[554] Frye-Davis Report (51st Congress, 1st Session, February 17, 1890. Senate Report No. 293, Serial No. 2703). See also speech by Senator Frye, ibid., Congressional Record, p. 1377 ff.

[555] Reilly Report (53d Congress, 2d Session, July 21, 1894. House Report No. 1290, Serial No. 3272).

[556] Powers Report (54th Congress, 1st Session, April 25, 1896. H. R. Report No. 1497. Serial No. 3462). The Powers bill also required the consent of the Southern Pacific to the appropriation for payment of Central Pacific indebtedness, of the sum of $2,409,818.20, which stood credited on the books of the United States Treasury to the Central Pacific for services on non-aided lines. The consent of the Southern Pacific was necessary for this appropriation because a considerable portion of the amount in question had been adjudged by the Court of Claims to be due to the Southern Pacific for the reason that the services for which the sums mentioned were credited had been in large part performed by that company.

[557] The Powers bill was finally defeated—yeas, 103; nays, 168; not voting, 84. (54th Congress, 2d Session, Congressional Record, p. 689.)

[558] Gear Report, 1896 (54th Congress, 1st Session, May 1, 1896, Senate Report No. 778, Serial No. 3365; The House bill was numbered H. R. 8189; the Senate bill S. 2894).

[559] United States Pacific Railway Commission, pp. 3589-90, letter from A. N. Towne.

[560] Frye-Davis Report (51st Congress, 1st Session, February 17, 1890, Senate Report No. 293, p. 76, Serial No. 2703).

[561] San Francisco Examiner, February 18 and March 15, 1890.

[562] Memorial of the committee of fifty appointed at the San Francisco mass meeting of December 7, 1895.

[563] San Francisco Examiner, September 21, 1894.

[564] Laws of California, 1897, p. 581. Joint Resolution, adopted January 8, 1897.

[565] 54th Congress, 2d Session, January 7, 1897, Congressional Record, p. 559.

[566] United States v. Stanford, 161 U. S. 412 (1896). The United States sued the Stanford estate in this case for $15,237,000.

[567] See Annual Report of the Commissioner of Railroads, 1892, p. 141.

[568] 12 United States Statutes 489 (1862).

[569] 13 United States Statutes 356 (1864).

[570] United States v. Kansas Pacific Railway Company, 99 U. S. 455 (1878). See also United States v. Denver Pacific Railway Company, 99 U. S. 460 (1878).

[571] 20 United States Statutes 56 (1878).

[572] 45th Congress, 2d Session, April 3, 1878, Congressional Record, p. 2229.

[573] Sinking Fund Cases, 99 U. S. 700, 721.

[574] United States v. Union Pacific Railway Company and Western Union Telegraph Company, 160 U. S. 1 (1895).

[575] Menotti v. Dillon, 167 U. S. 703 (1897).

[576] Union Pacific Railroad Company v. Mason City and Fort Dodge Railroad Company, 199 U. S. 160 (1905).

[577] United States v. Central Pacific Railroad Company, 118 U. S. 235 (1886).

[578] Gear Report, 1897, 55th Congress, 1st Session. April 8, 1897 (Senate Report No. 20, Serial No. 3569).

[579] Commercial and Financial Chronicle, Vol. 63, p. 1114.

[580] United States v. Southern Pacific Company, pp. 1200-1201, testimony James Speyer.

[581] United States v. Southern Pacific Company, p. 1201, testimony James Speyer.

[582] Ibid., p. 993, testimony John W. Griggs.

[583] United States v. Southern Pacific Company, p. 998, testimony John W. Griggs.

[584] 30 United States Statutes 652, 659 (1898).

[585] United States v. Southern Pacific Company, p. 994, testimony John W. Griggs.

[586] See Report of Attorney-General, 1897, pp. vi-vii; 1898, p. xv. The legislation described was inserted in the Deficiency Appropriation bill on motion of Mr. Gear. The provision requiring full payment within ten years was added on motion of Mr. White, of California. (55th Congress, 2d Session, June 29, 1898, Congressional Record, pp. 6464-65.)

[587] United States v. Southern Pacific Company, p. 1199, testimony James Speyer.

[588] The exact amount of 4 per cent bonds to be deposited as security was $58,820,000.

[589] United States v. Southern Pacific Company, p. 1000, testimony Griggs.

[590] 30 United States Statutes 1214, 1245 (1899).

[591] At his death in August, 1900, Huntington owned 37½ per cent of the stock of the Southern Pacific Company.

[592] Full information with respect to the Union Pacific-Southern Pacific merger case is to be found in the record and briefs submitted to the Supreme Court. The testimony and exhibits in this case fill thirteen volumes, and constitute an important addition to the source material on railroad transportation. The case is discussed in detail in Daggett, “The Decision on the Union Pacific Merger,” in Quarterly Journal of Economics, February, 1913, and in another article by the same author, entitled “Later Developments in the Union Pacific Merger Case” (ibid., August, 1914).

[593] This question of the diversion of business from the central route has been discussed in Chapter XX.

[594] United States v. Union Pacific Railroad Company, 226 U. S. 61, 470 (1912, 1913).

[595] Preferential subscription rights were given to Union Pacific and Oregon Short Line Railroad Company stockholders, on condition that these last-named individuals divest themselves of their ownership of Union Pacific and Oregon Short Line shares before actually receiving their Southern Pacific certificates. See Daggett, “Later Developments in the Union Pacific Merger Case,” sup. cit.

[596] This was the second suit of the same nature. In July, 1894, Richard Olney, United States Attorney-General, filed a bill in the United States District Court at Los Angeles to dissolve the Southern Pacific combination. In 1894, as in 1915, it was charged that the consolidation of the Southern Pacific and the Central Pacific companies was illegal under the Sherman law. The Olney suit was later withdrawn.

[597] United States of America v. Southern Pacific Company. The record and briefs in the case of the United States v. the Southern Pacific are as extensive as those submitted in the Union Pacific merger case. No attempt will be made to give detailed references to accompany the summary account presented in the remainder of this chapter.

[598] United States v. Southern Pacific Company, 239 Fed. 998 (1917).

[599] Including the output of the Associated Oil Company.

[600] Third Annual Report of the State Oil and Gas Supervisor of California, 1917-18.

[601] For a full discussion of this and kindred subjects, see Lindley on Mines, ed. 3.

[602] Burke v. Southern Pacific, 234 U. S. 669 (1914).

[603] Ibid., pp. 691-92. See also Roberts v. Southern Pacific Company, 186 Fed. 934 (1911).

[604] Southern Pacific v. United States, in the United States Circuit Court of Appeals for the Ninth Circuit (Brief of United States, Appellee, pp. 364-65).

[605] Ibid., p. 363.

[606] United States v. Southern Pacific Company, 251 U. S. 1 (1919). The decision of the Circuit Court of Appeals, which was favorable to the railroad, is reported in 249 Fed. 785 (1918).

[607] United States v. Southern Pacific, 260 Fed. 511 (1919). See also ibid., 225 Fed. 197 (1915).

[608] The annual report of the Southern Pacific Company for the year ending December 31, 1920, contained the statement that Southern Pacific Company stockholders or their assigns had purchased an aggregate of 3,414,604 shares of Pacific Oil Company stock, thus leaving 85,395 shares still in possession of the company.

[609] 14 United States Statutes 239 (1866).

[610] 16 United States Statutes 47 (1869).

[611] See Joint Resolution No. 18, 35 United States Statutes 571 (1908), instructing the Attorney-General to institute certain suits.

[612] United States v. Oregon and California Railroad Company, 186 Fed. 861 (1911).

[613] Oregon and California Railroad Company v. United States, 238 U. S. 393 (1915).

[614] 39 United States Statutes 218, Ch. 137 (1916).

[615] Oregon and California Railroad Company v. United States, 243 U. S. 549 (1917). Suit was brought by the United States in 1917, in accordance with the law, seeking to offset against the compensation of $2.50 per acre due the company for the unsold lands, moneys received by the company, in excess of $2.50 per acre, by reason of past sales, leases, and otherwise, as well as taxes levied since the forfeiture decision and voluntarily paid by the federal government to the state of Oregon. This case was ready for trial in 1921 and will probably be soon heard and decided.