That is, it was not intended as a repeal.

Although it directs the Secretary of the Treasury to withhold all payments to the companies on account of freights and transportation, it at the same time author. izes any company thus affected to bring suit in the Court of Claims for "such freight and transportation;" and in such suit "the right of such company to recover the same upon the law and the facts shall be determined, and also the rights of the United States upon the merits of all the points presented by it in answer thereto by them." This means nothing more or less than the remission to the judicial tribunals of the question whether this company, and others similarly situated, have the right to recover from the Government one-half of what they earned by transportation; and this question is to be determined upon its merits. That is, it is to be determined upon the law as it stood before that act was passed.

Mr. MATTHEWS. Mr. President, I am not at all responsible for the private reasons or the assigned reasons which actuated any member of Congress at that time in voting for the act of March 3, 1873. Neither was I unmindful of the terms in which the Supreme Court of the United States in the opinion I have referred to disposed of the argument raised by the Attorney-General upon that statute, for I read the whole of what was said by the court upon that point. What I assert, what I maintain, what I insist upon, is that if the reason of the Senator from Ohio, my distinguished colleague, and of the distinguished Senator from Illinois [Mr. DAVIS] in support of the bill from the Judiciary Committee is right, then the necessary implication from this decision of the Supreme Court makes it an adverse authority against them, for whatever were the unexpressed and unassigned purposes of Congress here was an act of Congress which was a law, and if it was a legitimate exercise of legislative power whatever it expressly authorized was legal and not illegal. Can that proposition be denied? The Supreme Court of the United States solemnly and not inadvertently decided two propositions; one was that the money did belong to the corporation and that it was not lawful for the Secretary of the Treasury to withhold it. How could they decide that without deciding that it was not competent for Congress to make it lawful for the Secretary of the Treasury to withhold the money?

It is not essential to an amendatory law that it should express that it is by way of amendment. In a case which I have very well reason to remember and to know, in the case of the State of Ohio on the relation of some one against the Cincinnati Gas-Light and Coke Company, reported I think in the eighteenth volume of Ohio State Reports, there was a special charter granted years and years ago to that corporation with the clause giving to the Legislature of Ohio the right to alter, amend, or repeal. Subsequently a general act was passed not referring to this charter at all, but conferring upon municipal authorities in which gas-light and coke companies were in existence the right to regulate the price of gas. It was held against argument that that general law could not be construed as an amendment to the charter that it nevertheless operated to have that effect. So here one of two things it seems to me is clear enough from the face of this statute of March 3, 1873, either Congress intended to change the terms of the acts of 1862 and 1864 or else they intended to put upon those statutes a construction; and if they had power to alter, amend, or repeal, then they had power to put an interpretation and construction on these statutes which would be conclusive as matter of law. So that the ratio decidendi of this case rests necessarily upon the postulate that in the particular named, to wit, the conferring upon the Secretary of the Treasury the authority and right to with

hold the moneys of this corporation belonging to it by virtue of the acts of 1862 and 1864, was an unlawful exercise of authority. What are the terms in which this power is reserved? The eighteenth section of the act of 1862 in the sentence in which the reservation occurs provides as follows:

And the better to acccomplish the object of this act, namely, to promote the public interest and welfare by the construction of said railroad and telegraph line and keeping the same in working order, and to secure to the Government at all times (but particularly in time of war) the use and benefits of the same for postal, military, and other purposes, Congress may, at any time, having due regard for the rights of said companies named herein, add to, alter, amend, or repeal this act.

It is said that all those words in that long sentence except the final five are without meaning, are empty and void; that it is as if they were not, and had not been used, that they are surplusage, verbiage, purposeless, without legal significance, operating neither as restraints nor conditions; and yet in the same breath it is argued that the naked words used in the act of 1864 enlarged the power. The twenty-second section, being the final section of the act of 1864, is:

That Congress may at any time alter, amend, or repeal this act.

Mr. President, I respectfully submit that according to the plain, obvious, and popular meaning of these terms, as used in the eighteenth section of the act of 1862, it was not contemplated by Congress to give notice to the private persons who were expected to invest capital in this enterprise that they held whatever they chose to invest in it at the caprice of any future National Legislature, but it was simply intended to say that this property and all the money put into it shall be dedicated forever to the uses and purposes named in the statute, and that as long as they were held faithfully to those uses, as long as they were successfully devoted to those purposes Congress would do nothing to impair the investment as to its value or weaken it as to its title; and that whatever else it might do to improve it, to enlarge it, to increase it, to render it more valuable and effective, it might do; but nothing outside of and beyond the preservation of the investment for the great public purposes for which it was created; that in all it should attempt it would never disregard the rights even of the corporations themselves.

As stated by the Supreme Court in the decision in 1 Otto, and as repeated by the learned Senator from Illinois the other day, it was found that even the liberal provisions of the act of 1862 were found not to be sufficient. As much as Congress had done and as much as Congress had promised to do under that statute still they had neither done nor promised enough, and so the act of 1864 was passed releasing rights of the Government as defined under the act of 1862 and enlarging the privileges of the corporation. It is said, and in that I agree, that the twenty-second section of the act of 1864, which contains the naked reservation of the right of alteration, amendment, or repeal, is to be construed in conjunction with and not separately from a similar reservation of the act of 1862; because the two statutes being in pari materia, relating to the same subject, must be construed as if they were the same act. That being so, the effect necessarily is to attach to the naked power in the twenty-second section of the act of 1864 the conditions and qualifications of the eighteenth section of the act of 1862; for, by that means, bringing them together in the same company, in the same statute, being powers of the same kind, the description of that power which is contained in the original act is made to apply to that power which is more summarily described in the act of 1864, intended only to amend it. Look at the provisions

of the act, look at the nature of the statute, and let us see what to a mind of ordinary comprehension would be the irresistible inference as to its meaning. It is argued as if this conferred upon Congress the absolute power to change the terms on which this corporation held its rights.

Some of them are in their very nature irrepealable or else contain limitations in the grant which are inconsistent with the existence of this unconditional right in Congress. For instance, in the very eighteenth section of the act of 1862, in which is the reservation of the right to amend. Of course that is a reservation also on the part of the company:

That whenever it appears that the net earnings of the entire road and telegraph, including the amount allowed for services rendered for the United States, after deducting all expenditures, including repairs and the furnishing, running, and managing of said road, shall exceed 10 per cent. upon its cost, exclusive of the 5 per cent. to be paid to the United States, Congress may reduce the rates of fare thereon, if unreasonable in amount, and may fix and establish the same by law.

I ask the Judiciary Committee whether, before the event has happened on which the right in Congress to make that reduction has arisen, Congress may, nevertheless, reduce it. If their argument is good for anything, it is good for that, and Congress need not wait until the net earrings of this company have arrived at the limit fixed in this grant to interpose to get them down to any amount reasonable or unreasonable that they may see fit in their discretion to establish; and yet is it possible that men have gone on under that possible construction of their rights, and Congress has gone on under that actual interpretation of its power, when it was so easy to wipe it all out, to blot out every condition, every restraint, every qualification, by a simple fiat of Congress. If they cannot reduce the rates until the time arrives and the event has happened which constitute the contingency on which expressly Congress alone reserved the right of interfering, by what authority can they take those net earnings, thus so sedulously devoted to the private and particular uses of the corporation as its own property, and impound them in the Treasury of the United States for the benefit of the creditors of the corporations? Does the greater include the less? If it does not, then the power of repeal as claimed exists; but if it does then that express declaration of a limit in that particular dissipates the entire fabric of the argument reared on the other side.

This bill goes on to define what net earnings shall be, and puts a construction on that act, although they have no more right to do that than they have to confiscate them all, for you can just as easily confiscate them by a definition as you can by an open robbery. You can say that the net earnings shall be all that is left after Congress has helped itself.

That makes it so because Congress declares it so. But in the vital point of possible profit on the private capital to be invested upon this congressional invitation that they shall be allowed a compensation for its risk and its use to earn enough in addition to the 5 per cent. to be given to the Government to put 10 per cent. into their own pockets, the Judiciary Committee comes forward now and says: "We will take 25 per cent. out for ourselves unless perchance the 75 per cent. remaining should not be sufficient to pay the interest on your other debts; and if you can establish to the satisfaction of the Secretary of the Treasury for the time being that the 75 per cent. of the net earnings after we have defined them and taken 25 per cent. away will not enable you to operate your roads and pay the interest on

your other debts, then we will reduce our exactions so that the balauce which may remain to you shall be exactly nothing." That, in the face of a statutory declaration co-existent with this alleged right of repeal, standing side by side with it, ay, having precedence over it, being the first clause of the section itself, subordinate to which, and subject to which the right of repeal is added on! There is the high authority and guarantee of the Congress of the United States that in spite of whatever else there is or may be in that statute or any act made by way of amendment the fixed and irreversible pledge to every private capitalist that he shall be allowed to operate this road until he may be able out of these net earnings to receive for his own individual use 10 per cent. net on his money. Under the guise of patriotic duty and a sensitive regard for the public interest, this right, as sacred as law itself, is struck down in the very stronghold of law itself. I will venture to say, without having been a careful student of the debates in Congress at that time, but only from a general knowledge and recollection of the character of the circumstances that surrounded this legislation and what has been done under it, that the idea that the Congress of the United States either had the right or would ever seek to exert it to modify the terms and conditions on which alone this investment could ever have been made, never entered the minds or hearts of the men who conceived and passed it. It is an after-thought. It is conceived by those who have forgotten apparently and temporarily the exigencies of the occasion, and who at least, I most respectfully submit but most earnestly protest, are oblivious, for the time being only I trust, of the essential principle on which every right of property or person, private or corporate, must rest for its integrity.

MARCH 18, 1878.

*

THE PACIFIC RAILROADS.

Mr. THURMAN. I move that all prior orders be postponed and that the Senate proceed to the consideration of the sinking-fund bill. The motion was agreed to; and the Senate, as in Committee of the Whole, resumed the consideration of the bill (S. No. 15) to alter and amend the act entitled "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 Government the use of the same for postal, military, and other purposes," approved July 1, 1862, and also to alter and amend the act of Congress approved July 2, 1864, in amendment of said first-named act.

Mr. GORDON. I ask indulgence of my friend from Michigan for one moment, if it is agreeable to him, in order that I may have a bill passed removing disabilities.

Mr. CHRISTIANCY. I would very gladly do so, but I have already lost one hour, and I think I should not be asked to yield further.

The VICE-PRESIDENT. The Senator from Michigan is entitled to the floor.

Mr. CHRISTIANCY. Mr. President, the report of the Committee on Railroads accompanying their bill waives the question of power to require these railroad companies to establish a sinking fund for secur

ing the payment to the United States of the bonds loaned to the companies: but goes upon the assumption, that the companies ought, in justice and fairness, to establish such sinking fund, though not required under the acts of 1862 and 1864 under which the bonds were issued, to do so. It professes to put the case upon the broad ground of justice and fairness to the companies and the United States. And, though it requires the assent of the companies in order to bind them, the report goes upon the assumption that the bill which they report will accomplish the object of security to the Government, and, of course, claims that the bill, if passed, will make the condition of the Government in respect to these companies and the repayment of the loan, more secure than it would be, if the rights of the parties were left to stand upon the law as it now is. Now, without going into details, let us see how this profession of bettering the condition of the Government in respect to security for repayment has been carried out by the bill which they have reported. The first and second sections provide for the payment by each of the two companies into a sinking fund, in the Treasury, of $1,000,000 annually, which shall draw interest to be credited to the company at 6 per cent. per year, compounded semi-annually; to continue to the year 1900, when the whole fund, principal and interest, is to be credited to the companies respectively, and deducted from the whole sum of principal and interest then due upon the bonds of the Government, loaned to the companies. And that the balance then due to the Government, which will be about $26,200,000 from each company, shall be paid in fifty equal semi-annual installments, with no sinking fund to secure such payments.

Now, by the present law the companies are bound to pay 5 per cent. net earnings and the half of the Government transportation, which amounts to about one-half of the whole sum which this bill proposes the companies shall pay. And this under the present law would be applied at once to stop interest on the debt to the Government. All this this bill gives up, and requires the whole sum which is to be paid by the companies to go into the sinking fund, on which the Government is to allow the companies interest at 6 per cent. compounded semi-annually. It cannot be disputed that this is liberal; but to whom?

Bearing in mind that the act is not to take effect, unless assented to by the companies, and only as to the company assenting, let us see what is the right secured to the Government for a breach of these undertakings, after the companies shall have assented to the act. What are the penalties or the new rights to be given to the United States, in case the companies fail to make the specified payments? Why, Mr. President, the ingenuity of the able men upon the Railroad Committee must have been exerted to the utmost, and their skill exhausted in contriving the formidable penalties upon the companies for the breach of their new contract: and you, Mr. President, and the whole country will stand aghast at the severity, the absolute cruelty to the companies and the extreme solicitude shown to secure the Government, at all events, against the violation by the companies of the requirement to make these payments. Let us see what these tremendous penalties are. One feels almost as if it would take his breath away to utter them. They are these: first, that if they should fail to make their payments into the sinking fund, within six months after any of them shall become due, then all the provisions requiring such payment from the companies shall thenceforth, at the option of the United States, become inoperative as to such defaulting company.