Mr. BATES. That is a matter for future consideration.

Mr. WILSON. I think the whole business is a matter for future consideration.

Mr. BATES. It appears to be up to this time, so far as the Union Pacific Railroad is concerned.

Mr. WILSON. I want to know where you have any line of your own in connection with or striking the Union Pacific Railroad Company lines.

Mr. BATES. I have already explained in my remarks to-day, and in the correspondence of President Adams, that we have meaus for handling business with the Union Pacific lines at Kansas City, and we may build lines that will reach Omaha, Saint Paul, Dallas, and other places connecting with the other land-grant roads. Mr. WILSON. But at this time you have no means of reaching any place but a point on the Kansas Pacific road?

Mr. BATES. No, sir.

Mr. WILSON. Have you ever tendered them any business?
Mr. BATES. I cannot find out where their offices are.

have an office at Kansas City.

Mr. SWAYNE. Have you ever inquired?

I do not know whether you

Mr. BATES. I inquired of President Adams, and he appears to be very ignorant of any information of that sort.

Mr. WILSON. Have you any line along the Kansas Pacific road such as the Western Union Telegraph Company has?

Mr. BATES. No, sir; and we do not wish to have. We want to have the Union Pacific operate its line in accordance with its charter and exchange business with us. Mr. WILSON. You have no line along the main branch of the Union Pacific Railroad, have you?

Mr. BATES. No, sir.

Mr. WILSON. And you are not prepared to offer facilities to the Union Pacific Railroad Company, as the Western Union Telegraph Company does?

Mr. BATES. I do not know whether we will or not until I know what they will do with regard to our present demand.

Mr. WILSON. You occupy this position: The Western Union having a line along the Union Pacific Railroad it is able to furnish the Union Pacific certain facilities for the transaction of its business, and you having no line there you are not able to furnish any facilities, and yet you want the same arrangements with the Union Pacific road as the Western Union Company has, which furnishes certain facilities. Is not that so? Mr. BATES. Having in my remarks a while ago formulated our plan, I can only refer you to that.

Mr. WILSON. Can you give us any more definite information. with respect to this matter than you have already given us, in respect to the duties of the Union Pacific Railroad Company?

Mr. BATES. I think the information already given is very definite, that the Union Pacific Railroad Company is unwilling to furnish me the list of offices or rates or conditions upon which they will accept business.

Mr. WILSON. In other words, your grievance is that the Union Pacific has not violated any of the provisions in its charter, but has not made an intelligence office of itself for the benefit of the Baltimore and Ohio Telegraph Company.

Mr. BATES. I decline to answer that in the way it is put.

Mr. WILSON. But the grievance is that they do not furnish you information?

Mr. BATES. Partly.

Mr. WILSON. Well, what else is there beyond the failure to furnish you information? Please state it so that we may meet it.

Mr. BATES. Well. I think beyond that one fact, which, of course, is the necessary starting-point for the establishment of a great telegraph business, the Union Pacific Railway Company, as will appear by the papers submitted here, has made an arrangement with the Western Union Telegraph Company which, according to my understanding of the various decisions of the United States courts up to this time, is absolutely null and void.

Mr. WILSON. Now, have you ever offered to make the same kind of arrangement with them?

Mr. BATES No, sir; because we did not think it necessary.

Mr. WILSON. Have you ever offered to make such an arrangement with them? Mr. BATES. We do not want such an arrangement.

Mr. WILSON. Well, what is the trouble?

Mr. BATES. I think this is beating around the bush. We formulated our demand here, and we formulated it in the correspondence with the president of the Union Pacific Railway Company, and it is here for the reference of Judge Wilson. The sitnation is this, that we are debarred from getting any of the benefits on account of the contract that exists between the Union Pacific and the Western Union Companies, which contract is of an exclusive character for the benefit of the Western Union.

Mr. WILSON. You say it is an exclusive contract. I want to know whether the Union Pacific ever refused to make precisely the same contract with you?

Mr. BATES. I have already answered that several times. As I said before, I think this is beating around the bush.

Mr. WILSON. It has not refused, I suppose?

Mr. BATES. We never asked them. We only asked them to do what it would be compelled to do with any other company in strict accordance with its statute of obligation.

Mr. WILSON. When has it refused, if ever, or, I may ask, when has it neglected to do so?

Mr. BATES. I have gone over the subject very particularly in the correspondence that I have spoken of, and which is here now, and I must decline to answer any further questions on that point.

Mr. WILSON. Well, if you decline to answer further, I am willing to leave it that

way.

Mr. BATES. Now, this subject of the relation subsisting between the Union Pacifie and the Kansas Pacific Railways, and the various telegraph companies now having rights upon their lines, has been very much clouded, perhaps not intentionally, but by the nature of the statements made here to-day; I should be very glad to have Mr. Reiff lay some facts before you that are better known by him than anybody else in behalf of our company.

The COMMISSIONER. I should be very glad to hear Mr. Reiff.

Mr. REIFF. I come here at the instance of Mr. Bates. I did not know of this matter until last night, and I do not care to enter into a general argument with Mr. Swayne, but I noticed a few assertions made in his remarks which I should like to speak of.

In the first place he started out with the proposition that this Idaho act was contemporaneous with the act affecting the telegraph lines in respect to the Union Pacific Railroad. That by a subsequent question was explained to be an error, because whilst he referred to the act of July 2, 1864, the railroad act, the provisions in the two acts were not identical.

Now, as a matter of fact, the Western Union Telegraph Company cannot exhibit a contract with the United States Telegraph Company. As a matter of fact, the United State Telegraph Company never built a telegraph line along the Kansas Pacific road by virtue of any contract with it. As a matter of fact, the Kansas Pacific Railway Company owns the telegraph line from Kansas City to Denver, and it is mortgaged under its mortgage in pursuance of the acts of Congress of 1862 and 1864, authorizing its construction. As a matter of fact, the Union Pacific Railroad built its entire line by virtue of act of Congress, and incorporated it in its first mortgage.

Now, the act of 1862 did provide that these telegraph lines then existing from Council Bluffs to the Pacific Ocean, including these three companies that General Swayne named, that the railroad company was permitted to make a contract with these companies for the transfer of their lines along the line of railroad. The telegraph company having insisted, as the debates in Congress will show, that the Gov. ernment ought not to go into a contest with them, and there would necessarily be a multiplication of telegraph lines. The act caused a great deal of discussion, which discussion clearly shows that the object of Congress was to provide competing telegraph lines, because they had already practically built the first overland line by a guaranteed payment of $40,000 per year for ten years. The act provided tha these telegraph companies could arrange with the railroad companies amicably, so that the railroad company might not be compelled to build their own separate lines. Nothing was said in any act of Congress that those lines should not be under the control of the railroad company for the purpose of its charter provision; but as a matter of fact no contract relation was ever made between the railroad and the telegraph companies, or any of them, prior to completion of the railroad and telegraph, and the line of telegraphy owned to-day by the Western Union Company from Omaha to Ogden (leav ing out, for the present discussion, the Central Pacific), had not transferred to the line of Union Pacific until about, or, I think, subsequent to, 1870, long after the Union Pacific Railroad was built and in operation, and its telegraph lines built.

Now, in regard to this Kansas Pacific decision that Justice Miller made, General Swayne stated, though probably he did not mean it in that way, that Judge Miller's decision preceded Judge McCrary's decision.

Mr. SWAYNE. I do not think I said so.

Mr. REIFF. The record will show it. Judge McCrary made one or two orders, and all these things came together, and were heard before Justice Miller and Justice MeCrary; and I think General Swayne will agree with me about that. The impression made on my mind was that Justice Miller, having made a decision of a certain character, that subsequently thereto there was another decision in respect to the Union Pacific Railroad, whereas the decision of Justice Miller referred to the Kansas Pacific

Railway. The decision made by Justice Miller and Justice McCrary, sitting on the bench together, and referred to in your report, Mr. Commissioner, was when we were all there together. At that time I was one of the angels operating with General Swayne. After that injunction was made there was nobody to adjudicate with practically, because almost immediately thereafter the contending parties came together, and appear to have been getting along very nicely since then. So that there was no further party to adjudicate, and I think if General Swayne will submit to you the injunction order that he referred to as issued in pursuance of Justice Miller's order, you will find something like this-you will find that those judges stated that the grant of bonds and lands to these companies had been taken under certain conditions, and that they could not put themselves in position to transfer their rights to other people and have other parties perform their duties; and furthermore that injunction order will show that the Kansas Pacific Railroad Company was specifically permitted, if not enjoined, that they should operate their wires for commercial business, but as this contract had been entered into between the Kansas Pacific Company, and the Western Union Telegraph Company had strung one or more wires, that the public interests would not be served by separating that property, and for the purpose of dissolving the matter that the merit would not be gone into.

The COMMISSIONER. Was not the injunction granted at the instance of the Western Union Telegraph Company against the Union Pacific Railway Company and issued by Judge McCrary, and was not the motion before Judge Miller to dissolve the injunetion which was issued by Judge McCrary?

Mr. REIFF. I think so.

The COMMISSIONER. Did Judge McCrary make any modification of that injunction issued by Judge Miller?

Mr. REIFF. Yes, sir; he did.

The COMMISSIONER. Do you so remember it, Mr. Swayne?

Mr. SWAYNE. My impression is that there was something of that kind, but it was after the decision. I have the language here. I hold it to be very clear that the present line can be traced to the authority of that act of 1864.

Mr. REIFF. General Swayne stated that he remained in Saint Louis two or three days after this decision and endeavored to get that injunction order modified. That was modified, and the company was enjoined from separating the connections with the Western Union or interfering in any way with their wires, but such wire capacity as the Kansas Pacific had, and about which there was no contest of ownership, that one wire could be used for commercial business, and I think the injunction order also allowed the railroad to construct another wire.

Mr. SWAYNE. Judge Miller said that in view of the calamitous condition in which we would be placed with fifty thousand miles of wire, that any capacity that the Union Pacific had to spare on that one wire after doing their own business they might transfer over the same commercial messages.

Mr. BATES. We are in the same fix now.

Mr. REIFF. There was nothing in the decision or in any of these hearings that limited the power of the Kansas Pacific Company to construct wires indefinitely so long as they did not interfere with the wires of the Western Union Telegraph Company, because the justice distinctly stated that something else might appear on the final hearing, and he would not go into it. He stated furthermore that he thought the public interest would not be subserved by granting the injunction on it. The gentlemen now controlling the Western Union Telegraph Company, at that time furnished a little piece of history. They controlled the Union Pacific Railroad Company and the Kansas Pacific Railway, aud controlled the American Union Telegraph Company, and Mr. Sidney Dillon was president of the Union Pacific Railway Company, and Mr. Gould was certainly the controlling spirit of the American Union Telegraph Company. I think that Mr. Swayne will not disagree with me that Mr. Gould was then the controlling spirit of the Western Union. When the American Union applied for facilities the view that now obtains did not obtain then, and this inquiry was submitted freely and cheerfully by Sidney Dillon to the counsel of the Union Pacific Railroad Company, the counsel being Judge John F. Dillon and Sidney Bartlett, and they decided that it was necessary for these railroad companies to fulfill their charter obligations to do the business themselves, and not to enter into arrangements with anybody else for doing it, and an order was issued, signed by Mr. Dillon, as follows: "In operating the telegraph line, the railway company will do business for all persons and corporations without any special privileges or exclusive rights to any, but equal rights to all companies and individuals. You will thus act in your relations to all telegraph companies."

Now, Mr. Sidney Dillon was the president of the Union Pacific Railroad at that time, and was acting under the advice of counsel, and they took a little broader view than placing the American Union Telegraph Company in the position of an individual offering a message, or a company with no mechanical connection. On March 1,

1880, he sent a message to J. J. Dickey, at Omaha, the superintendent of the Union Pacific Railway Telegraph, as follows:

J. J. DICKEY, Omaha:

NEW YORK, March 1, 1880.

Have just received formal notice upon the Western Union Telegraph Company (referring to the aforesaid letter of mine of February 27, 1880, to the Western Union Telegraph Company, Schedule A of answer) stating that the railway company would itself operate and use its telegraph lines, placing all companies and persons upon equal footing, giving equal rights to all and exclusive or favored privileges to none. You must see that this is carried out in letter and in spirit.

SIDNEY DILLON.

That was the position of the Union Pacific Company at that time. Mr. SWAYNE. That was my argument before Justice Miller. Mr. REIFF. There was not a thing in Justice Miller's decision to affect that. The Commissioner will remember that when the Idaho act was passed upon by the court, that no division of obligations was recognized by the Supreme Court. When the court considered this question they considered it broadly, and the history of the liti gation shows that these companies were decided not only railroad companies, but telegraph companies as well, and were intended so to be by Congress, and until a pooling arrangement was made by the Western Union, and with the Atlantic and Pacific Telegraph Company in 1877, the Cential Pacific had always maintained a separate telegraph department, and had its own share of the transcontinental business. First, they (the Central Pacific) tried to make a lease to the Western Union, and afterwards the Western Union paid them so much per annum for the privilege. My authority is Mr. C. P. Huntington. Mr. Huntington told me so within a year. Here is a letter from Mr. C. P. Huntington dated January 23, 1884, which I will read: [Office Central Pacific Railroad Company, No. 23 Broad street. C. P. Huntington, vice-president.}

NEW YORK, January 23, 1884.

DEAR SIR: I have to acknowledge the receipt of your favor of the 17th instant, requesting information as to whether the Central Pacific Railroad Company is operating its telegraph franchise, or whether such franchise has been in whole or in part transferred to any other company or corporation; and that if such transfer has been made I will furnish you the terms and conditions of such contract of transfer.

In reply thereto I have to say that the Central Pacific Railroad Company is operating its telegraph franchise, and that such franchise has not been transferred to any other company or corporation, either in whole or in part.

It may not be improper for me to say to you in this connection that, while this company is operating its telegraph franchise as before stated, the Western Union Telegraph Company, for reasons of public convenience, is permitted to transmit certain classes of telegraphic messages over the line of this company for a stipulated compensation, and that all compensation received therefor, as you are well aware, is treated as part of the earnings of the Central Pacific Railroad Company, and the Government receives its share thereof, as prescribed by law.

Very respectfully, yours,

Hon. W. H. ARMSTRONG,

C. P. HUNTINGTON,
Vice-President Central Pacific Railroad Company.

Commissioner of Railroads, Washington, D. C.

The COMMISSIONER. That was in reply to General Bingham's resolution, was it not!

Mr. REIFF. Yes, sir; and he says there was no transfer, either in whole or in part. The COMMISSIONER. I received a letter from him this morning saying the same thing.

Mr. REIFF. But he transferred his franchise by giving all his business virtually to the Western Union. Now, in respect to the statement of Mr. Wilson and General Swayne that there is nothing in this contract between the Western Union Telegraph Company and the Union Pacific Railroad Company to preclude the Baltimore and Ohio or any other telegraph company from offering a message and having it transmitted from any of the offices of the Union Pacific Railway Company, I think General Swayne will hardly say that in all these places there are separate telegraph offices. There is but one office, which is practically the Western Union office. I think at every station along the Union Pacific Railway, and the Kansas and Denver Pacific Railway you will find a little blue sign sticking out at the telegraph office with "Western Union Telegraph Office" painted upon it. I do not say it is exclusively a Western Union office, but I say it is a joint office; but there is no discrimina

tion as to the Union Pacific wire and the Western Union wire as long as this arrangement exists. I do not see that it is necessary, but they are certainly not in position to do business for other people when they are in that mixed state. It happens, however, that this contract under cover of which these things are to be insisted on does not antedate these important questions involved, but was made after an alliance brought about by the contending parties while there existed one common ownership of the railroad and telegraph systems, so that the views of the Union Pacific officers seem to have undergone a great change. They evidently consulted other spirits and concluded that they must operate these telegraph lines separately and by themselves, so that they could transact business for anybody they entered into contract with. There is no use dealing with technical terms here. This is a question that ought to be handled in a practical way. This is a practical question, Mr. Commissioner, and you struck the nail on the head when you said that you proposed to answer that resolution in its true spirit. You struck it right there. I do not take any stock in these things being done for a speculative purpose. I do not know whether Senator Gorman was in a speculative mood or not when he offered this resolution, but I think not.

Mr. SWAYNE. What I said was that the inquiry was speculative. I did not refer to speculation in a pecuniary sense.

Mr. REIFF. We are practical people, and these are practical times, and that correspondence now before the Commissioner answers all these technicalities. Here is a great corporation having been led to the conclusion that there was room for a great enterprise by the success of Gould and others in the Western Union Telegraph Company, and they were induced to build these lines all over the country, and they sought to obtain just what Mr. Gould sought to obtain, and did obtain, and that correspondence answers all these technicalities thrown in the way of this new corporation. All this talk about what the Union Pacific Railway people will do when the Baltimore and Ohio Telegraph Company makes a connection is not pertinent to this inquiry, especially when Mr. Bates has been six months trying to get a list of the offices of the Union Pacific Telegraph Company. It simply means nothing.

The COMMISSIONER. Just at that point I wish to state that there seems to be no dispute as to this, first that there are two companies which are competing for this business. There is no dispute that the Union Pacific Railway Company will receive and deliver any individual messages which they may receive at any station on their line for transmission by their wire. The point of divergence comes when the Baltimore and Ohio Company seeks to have a traffic arrangement by which there shall be a mutual exchange in the receipt, transmission and delivery of messages. Now, coming to that point, where is the law under which you claim that right of connection?

Mr. REIFF. First the law of common sense, next as indicated by the legislation affecting and creating these railroads. The same law that would impose upon them as a practical business transaction the necessity and appropriateness of making some kind of a practical connection with their connecting roads. I do not claim, I do not suppose Mr. Bates claims, that under existing circumstances the Baltimore and Ohio Telegraph Company could by an order be placed absolutely on the same terms with the Union Pacific Railway Company as the Western Union Telegraph Company enjoys. If the Western Union Telegraph Company furnished anything to the railroad company for which they get something in return, why of course that should be added to or deducted from when the time comes for considering a practical business arrangement. But what would you think if the Union Pacific Company came and said to you that they would have no business connections whatever with the Northwestern, Saint Paul, Wabash and other roads terminating at Council Bluffs? The law states that all railroads centering there at Council Bluffs shall have like privileges, especially those that were in existence and possible to be named at the time of the legislation. Now then, would you consent to a proposition on the part of the Union Pacific Railway Company that they would have no connection with these other roads, but that they might send up their package of goods like any other individual and the Union Pacific would accept it and deliver it.

Legislation means to accomplish an end, and where an interest is so important as a railroad interest, it means to be practical. I did not object at all to General Swayne reading that decision in the Denver, New Orleans and Santa Fé case. If the Baltimore and Ohio goes to the Mississippi and seeks a business arrangement with them, and the Baltimore and Ohio Telegraph Company is not solvent, they ought not to have a connection.

The COMMISSIONER. Is this your idea, that the Union Pacific Railway Company, in operating its telegraph lines, is subject to the same duties as pertain to common carriers; and that the company is compelled under its charter to make such traffic arrangements for receiving and forwarding the dispatches of another and all rival telegraph companies as would attach to it as a common carrier in the transaction of railroad business?

Mr. REIFF. Yes.