Page:U.S. Department of the Interior Annual Report 1878.djvu/20

XVIII Santa Fé Railroad Company vs. The United States, in which questions have arisen involving not only the rights of the United States under the condition attached to the land-grant, but also what constitutes “a fair deduction for the use of a railroad as a public highway by the United States free of toll or other charge,” under the recent decision of the Supreme Court.

The gathering of facts and statistics bearing upon the establishment of sinking-funds for the payment of the indebtedness of the Kansas Pacific, Sioux City and Pacific, and the Central Branch Union Pacific Companies, as well as the question of “pro-rate and continuous operation” of the Pacific Railroads, and future questions in regard to cost and other matters which are likely to arise, all of which require special and careful investigation, will be better accomplished, undoubtedly, if intrusted to this bureau, the necessity of which in such regard has been long felt.

The geographical limits named in the act include all subsidized railroads, in whole or in part, west, north, or south of the Missouri River. This construction of the act is objected to by the counsel of some of the land-grant railroad companies.

The land granted by the general government to certain States for railroad purposes was in most cases granted with the condition that the road should be and remain a public highway for the use of the United States, free from toll or other charge for the transportation of any property or troops of the United States. This condition has been decided by the court of last resort to give to the United States only the free use of the roadway, not to include that of the equipment, rolling-stock, &amp;c.; and the court awarded compensation for transportation over these roads subject to a fair deduction for the free use of the road way under the law. The value of this condition, therefore, under the decision of the court, becomes a question for special inquiry and determination, involving the cost of construction, equipment, and other matters relating to the earnings and operations of a railroad.

Some companies, again, have made answer that their books are not kept in such a way as to enable them to furnish the required information. As to this, it has been, and will be for the future, the desire of this department to cause, if possible, no additional expense or trouble to the companies, so long as the information furnished satisfies the requirements of law, and is sufficient to enable an intelligent opinion to be formed in regard to their condition and operation.

The Union Pacific Railroad Company has rendered reports to the Auditor, under a reservation explained by a letter of the president of the company, a copy of which is given in the appendix to the Auditor's report. One thousand and thirty-eight and sixty-eight one-hundredths miles of this road were subsidized by an issue of bonds, in addition to the land-grant, of which five miles are leased to the Central Pacific Railroad Company and 1,033.68 miles operated by itself. The company owns