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Rh In order to protect the interests of the government, it has been found necessary that the Pacific Railroad Companies keep separate accounts of the business of the subsidized and unsubsidized portions of their roads, and the Auditor has therefore required them to be so kept.

A compendium of the laws of the United States relating to the Pacific Railroad Companies has been made and appended to the report, which will be valuable for reference in all the departments of the government.

The more important decisions of the Supreme Court of the United States in cases affecting the Pacific Railroad Companies are printed in full in his report, as well as a synopsis of the decisions in all other cases relating to them.

The Atchison, Topeka and Santa Fé Railroad Company has a suit against the United States now pending in the Court of Claims, relating to the question of the amount of deduction to which the government is entitled for the use of its railroad free of toll or other charge. The Union Pacific also has a suit pending in the same court touching the right of the United States to fix the rate of compensation for carrying the mails on the Pacific Railroad. When these questions are finally determined the Auditor sees no cause for further contests before the courts, and no reason why the relations between the government and the subsidized and land-grant railroads should not be such as to secure to the government service by the railroads at the lowest rates, and to the railroad companies prompt settlement and payment for the same.

It appears that to March 3, 1871, over two hundred million acres of the public lands had been granted to States and corporations for railroad purposes, of which over forty-four million acres have been patented, and of which more than thirty-one million acres were for railroads “in whole or in part west, north, or south of the Missouri River.”

The money value of these thirty-one million acres of land, at the average price heretofore obtained, the Auditor states to be over one hundred and forty million dollars. He deems it questionable, in view of the conditions attaching to these grants, whether their proceeds can be used for any other purpose than the construction of the railroad for which the grant was made (as, for distribution among the stockholders, or in building oth er railroads), and calls attention to the further fact that the laws making such grants provide that the United States mail shall, at all times be transported at such price as Congress may by law direct.

The amount of the United States bonds issued to the Pacific Railroads is $64,623,512; the miles of railroad so subsidized is 2,495.0525; and the average of this money subsidy is $25,900.66 per mile.

The miles of railroad subsidized by land grants under the Pacific Railroad acts — the Pacific Railroad and branches — are 3,035.85; the quantity of land already patented to the companies being 6,517,075.04 acres, the money value of which at $5 per acre is $32,585,375.20, or $10,733.52 per mile.
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