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with regard to a telegraph line to be built by the railroad company shall become inoperative, or the pre-existing telegraph company may, if it fails to make an arrangement with the railroad company, move its line over on to the railroad company's right of way, the opposition of the railroad company notwithstanding. Now in this decision of Judge Miller, which has just been adverted to, the court found after an extended controversy two facts; first, that such an arrangement was made, so that as regards the Kansas Pacific Division the clause of the railroad act of July 2, 1864, which required the railroad company to build a telegraph line and afterwards to operate it, became inoperative because of the fact of the telegraph company entering into an arrangement with the railroad company; and, second

The COMMISSIONER (interposing). Allow me to interrupt you. Do you claim that it became inoperative as related to the franchise of the railroad company?

Mr. SWAYNE. I am not putting in my claim, I am talking about what the court found. It also found that the Western Union Company was the successor in law of the old overland company, and upon those two facts it granted an order of injunction, now imposed but never yet enforced by any judicial action, inhibiting the Union Pacific Railroad Company from transmitting any telegraphic messages for anybody over that line. That is one state of facts. Now, as to the nineteenth section in regard to the main line of the Union Pacific Railroad, this section is in totidem verbis with the fourth section of Idaho act. In a controversy over that part of the road which was argued before Judge McCrary he made a different finding of fact as to that line of road. He found there as a matter of fact that the first part of this arrangement provided for by that act was not made; that no arrangement was made between the telegraph company and the railroad company, but that the telegraph company as to that part of the line availed itself of the second privilege given by the statute of 1862, section 19, and moved its lines onto the railroad company's right of way; that afterwards the railroad company when it came to build its telegraph line built it under a joint agreement with the telegraph company whose line was already there; that certain provisions of that agreement amounted to an alienation of the franchise in a way which was in the judgment of the court unlawful. At the same time he found that the circumstances under which the line was built, and the coutract made, and the equities arising from the large advance made by the telegraph company toward the cost of the construction of that line, had given rise to such equities in favor of the telegraph company that he felt obliged, sitting as a court, to grant the same injunction as regards that line as was granted by Mr. Justice Miller in regard to the Kansas line, and as far as I know those two orders are still standing. Now, under that state of facts, olthough Mr. Reiff seems to know more about it, although I was of counsel in the case, if the orders were ever dissolved it was without my knowledge as counsel in the case. To continue what I was about to say. Now under that state of facts those two orders of injunction existing against the railway company and in behalf of the telegraph company, the present contract was made, and it will be perceived, therefore, that the rights of the telegraph company on each of those lines rests upon a distinct basis of independent Federal legislation.

Now, here was the railway company tied up by these two orders of injunction. Here were various conflicting questions of every kind. Under those circumstances the existing contract was made. That contract provides that so long as it is complied with on both sides, it shall remain in force. Whenever it is from any cause whatever abrogated the former rights revived. So long as it continues in force the other contracts are immaterial and need not be here considered, because it expressly provides that while in force it shall supersede those contracts.

Now, if we turn to consider the contract its two or three features are salient. In the first place it expressly provides that the railroad company shall receive, the railroad shall transmit, and the railroad company shall deliver all messages which are offered at any office on its line for transmission to any other point upon its line. In the second place it expressly provides that the rates of charge for such messages are to be fixed by the railroad company and the railroad company only. In the third place the contract has relation to a state of facts arising out of the circumstances which I have just recounted.

Here is a telegraph company which as to the Kansas Pacific line is the actual proprietor of the lines, and it was so found by judicial determination, and as to the Union Pacific lines is the actual proprietor of a line of telegraph covering their whole line of road.

The COMMISSIONER. The main line only?

Mr. SWAYNE. As far as I know it covers the whole line.

The COMMISSIONER. Is it not a wire strung upon the same poles with the railroad wire?

Mr. SWAYNE. Oh, no; it was built before the railroad had any line.

The COMMISSIONER. And strung upon another pole?

Mr. SWAYNE. Oh, yes; a totally, entirely different line.

Mr. WILSON. In other words, the Union Pacific owns a line of telegraph along its

line from Omaha to Ogden and the Western Union likewise owns a telegraph line through the same territory?

Mr. SWAYNE. Yes, sir.

The COMMISSIONER. At whose instance was the injunction granted that you refer to!

Mr. SWAYNE. At the instance of the Western Union Telegraph Company.

The COMMISSIONER. What was the force and scope of that injunction?

Mr. SWAYNE. The force and scope of that injunction is best shown by the record, and I will put it before the Commissioner.

Mr. BATES. I would like to have that stated.

Mr. SWAYNE. I think that both Mr. Bates and myself have had the force and scope of that pretty well burned into us.

The COMMISSIONER. Have you a copy of the injunction?

Mr. BATES. Is it not set forth in the decision?

Mr. SWAYNE. Oh, no. I will try to find it. I have here the entire record in both of these cases, but I do not remember of having among them the orders of injunction. But I do know how hard brother Bates and I did labor in connection with this matter. The COMMISSIONER. You can doubtless state the substance of it.

Mr. SWAYNE. My recollection is that as to both, the injunction absolutely forbid the Union Pacific Railroad from transmitting any commercial messages for anybody. The COMMISSIONER (addressing Mr. Bates). What is your recollection? Mr. BATES. My recollection is entirely different from that, Mr. Commissioner. In a moment I shall ask permission that Mr. Reiff address you. He was in Saint Louis at the time these cases were argued; he knows all of the details and knows some of the earlier history of telegraphic lines on the Kansas Pacific Road better than myself, and he will make a few remarks upon that point. But I will first give my understanding of the injunction order. The Western Union Telegraphic Company asked the court to restrain the Union Pacific or Kansas Pacific Railway Company from interfering with the Western Union Company's right to add more wires to the lines on the Kansas Pacific Railroad, and to restrain the Union Pacific Company and the Kansas Pacific Company from cutting off the existing Western Union wires. These were the two points, as I remember, of that case.

The COMMISSIONER. Are both those injunctions, whatever they may be, still in force? Mr. BATES. I am sure they must be, but, as I take it, they do not go to the point that I am bearing upon as to having the railway company continue to operate its telegraph lines free to all.

The COMMISSIONER. So I understand you?

Mr. BATES. But as to preventing the railway company from interfering with the Western Union Company as it then existed or may thereafter exist.

Mr. SWAYNE. I will tell you, Mr. Commissioner, how that impression arises in Mr. Bates's mind. After this order was made I remained in Saint Louis three or four days working with Judge Usher trying to get the order modified so as to allow the Union Pacific to use one wire on the main line for the transmission of commercial messages, and finally we did carry that point temporarily, and I went down and telegraphed it at midnight to brother Bates.

The COMMISSIONER. May I ask if that temporary order still continues?

Mr. SWAYNE. I asked that they might have one wire so as to not be entirely cut off, because the Western Union was refusing to receive any messages at all. The true sig nificance of this state of facts arises not from any precise fluctuation of the state of facts itself as from the tact that there were certain rights having a basis in distinct Federal legislation, and there was a difference between the parties as to the relative significance of those rights, and a long and bitter litigation was adjusted by a contract. That is all. The consideration for the contract, without regard to the sufficiency or extent of the consideration, was that the mutual consideration of this contract was a distinct right existing in each party arising from two separate bodies of Federal legislation.

The COMMISSIONER. And the adjustment made in 1880 is the subsisting relation between the Union Pacific Railroad Company and the Western Union Telegraph Company at the present time, is it?

Mr. SWAYNE. Yes, sir.

Mr. CROSS. I want to understand your position. Is it that the contract between the Union Pacific Railway Company and the Western Union Telegraph Company provides that the Union Pacific Railway Company shall not carry commercial messages over its wires?

Mr. SWAYNE. Not at all; on the contrary I have just said distinctly that that contract specially provides that it shall.

Mr. CROSS. But the messages are carried for the Union Pacific Railway by the Western Union Telegraph Company?

Here is what it says:

Mr. SWAYNE. Oh, no, to the contrary. "The railway company further agree that its employés shall transmit over the lines owned, controlled, or operated by the parties hereto all commercial telegraph business

offered at the railway company's offices, and shall account to the telegraph company exclusively, for all of such business and the receipts thereon, as provided herein.

"No employé of the railway company shall while in its service be employed by or have any connection with any other telegraph company party hereto, and the telegraph company shall have the exclusive right to the occupancy of and connection with the railway company's depots or station-houses for commercial or public telegraph purposes as against any other telegraph company.

"Provided that if any person or party, or any officer of the Government tender a message for transmission over the railway telegraph lines between Council Bluffs and Ogden, at any railway telegraph station between those points and require that the service be rendered by the railway company, the operator to whom the same is tendered shall receive and forward the same accordingly at rates to be fixed by the railway company to the point of destination if not beyond its own lines.

"If the destination of said message be beyond said railway company's lines, the telegraph company then receiving the same at the point at which it leaves the said railway lines may demand the prepayment of tolls for the service of forwarding the message on its own lines."

Mr. BATES. May I ask a question there? The term "between those points," does that take in the terminal points as well, or only the points between?

Mr. SWAYNE. Everything. Wherever they have any offices. Whoever brings a telegram to the Union Pacific Railway Company for transmission by wire to any office of the Union Pacific Railway Company gets it transmitted by the company at the rates fixed by the company, and at rates uniform to everybody.

Mr. CROSS. And the business is done by the Western Union Company?

Mr. SWAYNE. No; I am trying to say to the contrary. We were permitted to use one line.

Mr. BATES. That was on the Kansas Pacific.

Mr. SWAYNE. Yes; and on the Kansas Pacific, in view of some circumstances which I do not now fully recall, but which no doubt Mr. Reiff will tell us all about when he speaks. Judge Usher and I succeeded in getting permission for the Union Pacific Railway Company to use one wire for the transmission of commercial messages. The COMMISSIONER. Was the injunction modified to that effect?

Mr. SWAYNE. My recollection is that it was, but that I cannot be positive about. Mr. BATES. I do not think that the injunction ever prevented, or was intended to prevent, the Union Pacific or Kansas Pacific from doing a commercial telegraph busi

ness.

The COMMISSIONER. I understand you and General Swayne to differ in your recollections of it, and I would like to see the injunction.

Mr. WILSON. Before General Swayne proceeds further, I wish to see if we understand this thing. Now, my understanding is this: This overland company, or United States Pacific Telegraph Company, built its line along the Kansas Pacific Railroad, if I am right.

Mr. REIFF. Oh, no; United States Pacific Telegraph Company was entirely different from the United States Telegraph Company.

Mr. WILSON. I do not care about that. Here is a telegraph company, I do not care by what name you call it, that acquired certain rights and to these rights the Union Pacific Railroad Company succeeded. The Western Union Telegraph Company, pursuant to the existing legislation, constructed telegraph lines along the Kansas Pacific Railroad. Now this legislation authorized other companies to come and perform this particular obligation along the line of this Kansas Pacific road, and this Western Union did construct. Now it was out of that condition of things that arose this controversy which resulted in this injunction which General Swayne refers to. Now there was a telegraph company that had lines there according to law, but when this injunction was granted the Union Pacific, or the Kansas Pacific at that time, I believe it was stipulated to get one of these wires to be used for railroad and commercial purposes. Now that was the condition of things as to that branch of the line, and thereby the railroad got the use of one wire of the Western Union Company, and so that really in practical effect was the reason of two lines of telegraph there, although probably strung on the same pole. The COMMISSIONER. That was on the Kansas Pacific?

Mr. WILSON. Yes, and now we come to the Union Pacific, which constructed its own line, which it had the right to do, as I understand. Is that right? Mr. SWAYNE. Yes, that is the line which it claims to be its own.

Mr. WILSON. Well, that is the controversy between them and the Western Union, but they claim it as their own. The Western Union Telegraph Company has a line along there. Now there are two lines from Omaha to Ogden, and for the purpose of convenience and economy in the operation of those two lines these companies have made arrangements under this contract by which they use the operators in common. Mr. SWAYNE. I was coming to that, but I wanted to take it up when we reached it in its order.

Mr. WILSON. Well, I get this idea: that the Union Pacific has its own line there, which it claims to own and assert against all comers, and now by this contract that General Swayne has read it operates that line, and if the Baltimore and Ohio Telegraph Company comes to the Union Pacific line and connects with it by wire, the Union Pacific line is there to do business with the Baltimore and Ohio Company the same as it does business for anybody else.

The COMMISSIONER. Have they any right to control the traffic of the Western Union along your line?

Mr. WILSON. No, sir.

Mr. SWAYNE. Now we come to this contract. We have two states of facts. First, we have this general proposition that here is a contract which purports or attempts to be an adjustment between two parties of certain rights claimed to arise from two distinct independent sets of Federal legislation. Now we stop there. Then we come to the question of the contract itself as it stands, and that may be looked at in either of two ways, either as an adjustment of certain pre-existing rights, and justified on that basis, or it may be looked at as a contract made, as to how it would stand if there were no such basis or justification. I want to say a word upon it, considered from that point of view. The contract has two aspects. In one it is a contract between two parties, both of whom have lines on the same road so circumstanced that the two lines can by a mutual arrangement be worked together more economically than they could be separately worked, and more efficiently. And the other aspect is that of a contract between a company which gathers messages or may receive messages for points beyond its own lines and a company which has lines extending beyond the railroad limits. These are the two aspects, as I understand the contract.

Now the contract provides under the first aspect that one set of operators shall run both lines. The railroad company shall use its wires, and when there is an overflow, when it has not wires enough for both the railroad messages and the commercial messages, then the overflow of commercial messages shall go on the Western Union Company's lines, so that the public shall at all times be fully accommodated.

Then it provides that the Western Union Telegraph Company shall furnish collateral service; that it shall furnish materials for repairs, and that it shall in various other ways lessen the expense and heighten the efficiency of the Western Union by maintaining and using its own lines, and doing the business which it has to transmit for commercial purposes from one point on its lines to any other point on its lines. At the same time it is careful under that head expressly to reserve and provide that the transmission of those messages shall be by the railway company and that the rates shall be fixed by the railway company.

The COMMISSIONER. On both lines?

Mr. SWAYNE. Yes, sir; and it makes no provision whatever for any discrimination in favor of anybody, and therefore we are to assume that no such provision or discrimination exists, and, as far as I know, it does not. Then it goes on and further provides in the second aspect of the contract on the one hand that the Union Pacific Railway Company shall have free telegraphic service to points beyond its own line to the extent of $25,000 a year, and that it shall have beyond that to any extent it desires at half rates.

The COMMISSIONER. The first $25,000 of messages are free?

Mr. SWAYNE. Yes, sir.

The COMMISSIONER. And you say all over that amount are charged for at half rates?

Mr. SWAYNE. Yes, sir; and then it goes on and further provides under that head that any telegraph messages which are gathered by it for points beyond its own line shall, on arriving at its terminus, be delivered to the Western Union Telegraph Company, and it goes on by implication, and I suppose as a fact, in the actual operation of the business, that any telegraphic messages which are received by the Western Union, coming over the Western Union Telegraph lines to stations on the road for delivery at those stations, shall be taken off the wires and sent out by the messenger boys of the railway company.

Now, each one of these many items naturally gives rise, or would unless otherwise provided for, to a complication of accounts, and the contract provides, as the method of disposing of accounts for the settlement of all those questions, that the receipts for commercial telegrams at the stations of the Union Pacific Railway Company, whether they be foreign messages that come from New York or whether they be messages that come from Omaha to Ogden, although a message may come from New York to Ogden by way of the lines of the Western Union Telegraph Company, and is simply received at Ogden at the station, and delivered, and it is further provided that the receipts from whatever source from the railway shall be equally divided with the telegraph company.

The COMMISSIONER. Would a dispatch from New York to Ogden be re-written at Omaha?

Mr. SWAYNE. No, sir; a dispatch going from New York to Ogden could go without going near any line of telegraph of the Union Pacific. It would get on the track at Ogden in the station-house, be delivered, and the railway'company would get one-half that money for the mere act of taking it off the wires and delivering it.

Mr. BATES. Provided it be paid for at Ogden ?

Mr. SWAYNE. No, sir.

The COMMISSIONER. If it was paid for at New York would the railroad have any interest in it?

Mr. SWAYNE. No interest. On the other hand, if it came to Ogden and went from there all the way to New York over the wires of the Western Union, the railroad company would get one-half of it. All the money that comes in, no matter where the service is rendered, is equally divided. Now, as I conceive, that is the only point in this inquiry. All the rest are purely of a speculative character. There is no complaint here that any message was ever offered to the Union Pacific Railroad Company and not received. Neither is there any complaint that any message was ever offered to the Union Pacific Railroad Company and received and transmitted and charged for at a higher rate than charged for to somebody else.

The COMMISSIONER. Is there anything in this contract which would prevent the Union Pacific Railway Company from making a traffic contract with the Baltimore and Ohio Telegraph Company, if so disposed?

Mr. SWAYNE. I cannot say, because the great suddenness of this call precluded my giving the attention to the matter that I should like to have, but I presume there is. But that question, if I understand it correctly, is entirely disposed of by the decision of the Supreme Court of the United States in the case of the Denver and New Orleans Railroad Company against the Atchison, Topeka and Santa Fé Railroad Company and the Atchison, Topeka and Santa Fé Railroad Company against the Denver and New Orleans Railroad Company, 110 U. S. R., 667. I will read the syllabus, which it seems to me settles the matter:

"The provision in the constitution of Colorado, that 'all individuals, associations, and corporations shall have equal rights to have persons and property transported over any railroad in this State, and no undue or unreasonable discrimination shall be made in charges or facilities for transportation of freight or passengers within the State, and no railroad company, nor any lessee, manager, or employé thereof, shall give any preference to individuals, associations, or corporations in furnishing cars or motive power' imposes no greater obligation on a railroad company than the common law would have imposed upon it. The provision in the constitution of Colorado that 'Every railroad company shall have the right with its road to intercept, connect with, or cross any other railroad,' only implies a mechanical union of the tracks of the roads, &c. A provision in a State constitution which prohibits a railroad company from discriminations in charges and facilities does not, in the absence of legislation, require a company which has made provisions with a connecting road for the transaction of joint business at an established union junction station, to make similar provisions with a rival connecting line at another near point on its line, at which the second connecting line has made a mechanical union with its road. A provision in a State constitution which forbids a railroad company to make discrimination in rates is not violated by refusing to give to the connecting road the same arrangement as to through rates which are given to another connecting line, unless the conditions as to the service are substantially alike in both cases

Now, I take that to mean that this company is not bound to make arrangements of mutual agency for the interchange of through business with one company because it makes such arrangements with another, and I take it to mean that it is not bound to credit to A because it extends credit to B, and I take it that where a telegraph company receives messages at stations on its own wires, merely making use of both facilities, that the service is not the same as where the railway company furnishes not only the depot facilities but the wires and all the machinery of transmission.

So that it seems to us that this contract is quite independent of any basis of right arising from Federal legislation.

Mr. BATES. The gentleman has quite at length stated his understanding of the various provisions of the Union Pacific and the Western Union contract, and as some of his conclusions differ materially from the opinions which I have respecting the contract, I should like to say a word right here.

Mr. SWAYNE. I wish to put in the record a letter addressed to the president of the Union Pacific Railway Company, in whose behalf I present it, by the president of the Western Union Telegraph Company. I would like to read it.

The COMMISSIONER. What is the date of that letter?

Mr. SWAYNE. February 24, 1885. I will read it.

(For letter see document No. 16.)

I would like to add right there a single suggestion as to what seems to me has been the superficial reading of this fifteenth section of the act of 1864. It has been read all the while as if the provisions of the fifteenth section with regard to the avoidance

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