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The COMMISSIONER. And you think the term as applied to another telegraph company is analogous to another railroad company?

Mr. REIFF. Undoubtedly.

The COMMISSIONER. That is your position then, as I understand it?

Mr. BATES. Yes, sir; that is our position.

Mr. REIFF. Now, General Swayne, read that decision in the Santa Fé case, and while I do not know anything about law, yet I think the construction I put upon the acts creating and affecting these laud grant railroads is common sense. We are dealing with practical matter now, and not technicalities.

Mr. BATES. This is not a judicial inquiry, and we come here simply to talk common

sense.

Mr. SWAYNE. The decision was to this effect, first, that every common carrier is bound to receive from every other carrier as on the same terms from any other individual; second, that they shall not unduly or unreasonably operate their road to the exclusion of another company, but may make favorable arrangements with another company; and, third, that the fact that a corporation has made a favorable arrangement with one individual or corporation that it does not make the same arrangement with another. Those are the propositions defined in that decision.

Mr. WILSON. This case does not depend at all upon the solvency or insolvency of a competing company.

Mr. REIFF. I understand that as a matter of law. I understand the facts of the case as they were brought out, because I was interested myself. That adjudication was upon a State statute, and the Supreme Court held that there was a great distinction between a mechanical connection and a positive business connection, but the conditions under which these railroads exist are essentially different. I do not think that any fair-minded man would compel this company to go into a business arrangement with an insolvent company. A forced connection with the Denver and New Orleans by the Atchison, Topeka and Santa Fé would not have brought any increased business to the Santa Fé, but would have taken business from one of its connections, and that makes a different case entirely. Now, in the want of a connection with the Baltimore and Ohio, no business would be taken from the Union Pacific, but business would be brought to it. The arrangement might, and I think would, take something from the Western Union Company that does not legitimately belong to it.

Mr. SWAYNE. Is not the whole question, may I ask right there, one as to whether mandamus would lie to the Union Pacific Railway Company to perform its duty under this statute, and whether the Congress will undertake to substitute legislation for the decision on mandamus?

Mr. REIFF. My answer to that is, first, that this is a practical question. And I apprehend that if a message was offered by the Baltimore and Ohio to the Union Pacific to-day, and the determination of the question as to whether that message should be transmitted by the Union Pacific, we would have to wait months for a decisiou of law and so the thing would go on indefinitely. No man knows better than Judge Wilson there the temper of this corporation. He signed the most awful document I ever saw presented to a body of that kind. I refer to the Credit Mobilier report. No such document has ever been reported to Congress.

Mr. WILSON. What has that got to do with this matter?

Mr. REIFF. Well, General Swayne asks if this is not a case wherein to mandamus the Union Pacific Railway Company. Now, I want to say that these laws were made to accomplish something, and there is some nearer way of getting at it than by going up to the Supreme Court every year or two for a decision.

Mr. WILSON. What do you want the Union Pacific Railway Company to do?

Mr. REIFF. To build, operate, and maintain its telegraph, furnishing the public with the same telegraphic facilities in the same proportion as business grows, the same as they furnish railway facilities as traffic grows.

Mr. WILSON. Have not they done it?

Mr. REIFF. No, sir.

Mr. WILSON. Why?

Mr. REIFF. Simply because they sold their telegraph business when they made their contract with the Western Union Telegraph Company.

Mr. WILSON. Have they ever refused to accept a telegram from your company?
Mr. REIFF. That is not a practical question. The correspondence between the
Baltimore and Ohio and the Union Pacific shows the spirit in which this inquiry is
made.

The COMMISSIONER. What acts do you rely upon to support your position?
Mr. REIFF. The acts of July 1, 1862, and July 2, 1864.

The COMMISSIONER. You rely upon these two acts then, I understand you?

Mr. REIFF. Yes, sir; and the act of 1874 has something to do with it, and all acts amendatory of the original acts.

The COMMISSIONER. What bearing has that act in respect to the corporate duty of the Union Pacific Railway Company to this telegraph company?

Mr. REIFF. The Kansas Pacific Railway Company claimed under the acts of 1862 and 1864 that they were entitled to a pro rata with the Union Pacific. The act provided, first, that they should start at Kansas City, thence go by way of Fort Riley and join the Union Pacific main line about Fort Kearney, and there they were to have equal rights with the Union Pacific, as was provided for the Central Pacific on the west, and for the connecting lines at Omaha or Council Bluffs on the east. In 1866 Congress passed an act amending that portion affecting the Kansas Pacific and allowed them, as you well know, to connect with the Union Pacific at a point not more than 50 miles west of the meridian of Denver, which took the Kansas Pacific to Denver, and subsequently by a later act, in 1869, the Denver Pacific was allowed to contract with the Kansas Pacific for the construction of a line from Denver to Cheyenne, so that it should be the equivalent of the Kansas Pacific as if directly constructed by it under the original provision. At that point, therefore, they were to have the same rights as if they had completed the road to Fort Kearney, saving that they should not have any more bonds or land than that mileage would have credited them with had they stopped at Fort Kearney.

Now, when they got to Cheyenne and the Union Pacific Road was completed, they sought a business arrangement. The Central Pacific people had no conflict of interest at all, notified the Kansas Pacific that their business at Ogden, or the point of connection between the two roads, that they should be treated as anybody else would be. The Union Pacific refused to make running arrangements, and continued to refuse. There were many efforts towards making an amicabie arrangement through the various presidencies of the road, but all efforts failed, and several attempts were made in Congress to get legislation to compel an interchange of business between the Kansas Pacific and the Union Pacific, so that they might practically be operated as a continuous line. Congress failed to pass any act, although legislation got frequently well advanced. Finally the Union Pacific said to the Kansas Pacific people that there was no use carrying on a fight here, and that they had better come to some arrangement, and the Kansas Pacific people being at a disadvantage, consented to get together and talk the matter over, and in this way a spirit of compromise arose. It was about the middle of a session when these parties met here, and, after coming together they went away from Washington, Congress adjourned, and the matter would continue as before. Sidney Dillon admitted to me that it was better than a circus to him, the way they played it on the other corporation. They would come down here with the ostensible purpose of seeking remedial legislation at the hands of Congress, but really it was only done for the purpose of evading their statutory obligations, because the bill was never passed, and Congress adjourned without doing anything, leaving the Kansas Pacific people in the same position they had been, and so this thing went on from session to session. As I said before, Sidney Dillon admitted to me that it was as good as a circus the way they worked this thing before Congress. The Kansas Pacific consented to make a very large discrimination against itself in regard to rates for the purpose of a compromise, because the Union Pacific claimed that the west end of the line west of Cheyenne cost more to operate. After the passage of this act of June 20, 1874, making it punishable by fine and imprisonment for the agents of the Union Pacific to refuse to receive the traffic, it was thought that the trouble was ended, but it amounted to nothing. Judge Usher, who was then counsel for the Kansas Pacific, did not press the matter vigorously, and the Union Pacific soon discovered a means of evading the law, but the Kansas Pacific Railway people afterwards brought suit against the Union Pacific. It was heard before Judge Dillon, but was not ended by him, because two weeks after the case was heard he saw a light; he discovered that he was the nephew of Sidney Dillon, and that it would not be proper for him to decide that case, and if it was taken to the Supreme Court, it would cause great delay. It was because of these circumstances that the Kansas Pacific was bankrupted, and Gould got possession of it, and hence this fraudulent consolidation of 1850.

The position of the Kansas Pacific was exactly parallel with the proposition now made by the Baltimore and Ohio Telegraph Company. That is what I insist upon. The United States had enough interest in these questions and contributed enough to the creation of these corporations to have some other interest to be consulted than the interests of the Gould corporation, the Union Pacific. They are not at all possessed of the ordinary powers of corporations. These land-grant railroads were created for a specific purpose, and with very limited power, save what they got by additional legislation by Congress. Congress might well have granted them all the power and rights they wanted, but they did not do it. Now, since they have bankrupted the Kansas Pacific Railway Company by refusing to obey the law in relation to traffic, what is the use of the Baltimore and Ohio Telegraph Company seeking to expend money for the purpose of making a mechanical connection with the Union Pacific in face of these facts? Anybody who looks at that correspondence must know that the position of the Union Pacific towards the Baltimore and Ohio Telegraph Company is exactly similar to the attitude of that company towards the Kansas Pa

cific. The correspondence there shows the actual condition of affairs, and we are looking at this thing from a common-sense standpoint.

The COMMISSIONER. The common sense and fair dealing branch of this controversy is a thing to be addressed to the companies on either side, but so far as my duties in the matter extend it is to report the facts to Congress. In other words, I deal only with the facts as they arise under the law.

Mr. REIFF. All we ask is that the Union Pacific Railway Company shall perform to the letter its charter obligations. There are, no doubt, large equities on the part of the Western Union Telegraph Company and the Union Pacific Railway Company that are entitled to be considered, and whilst I do not read much law I read a decision sometime ago of the Supreme Court where it says, in the West Jersey case, that because a corporation commits a wrong, or the stockholders or directors make a mistake and fail to exercise their duty, it does not exempt them from complying with the law.

This thing of piling up wrongful acts does not give the people any better standing before the Supreme Court of the United States, and this piling of acts has been attempted by both of these corporations to be a bar against complaint. They have said so all along. That reminds me of what Mr. Hoar said. He said we cannot talk about things twenty years ago; let us start afresh. The trouble is that is not a fair divide.

Mr. BATES. The same parties that practically control the Western Union Telegraph Company to-day control the Union Pacific Railway Company, and we cannot get fair dealing from them. I use that word "fair" in its business sense.

Mr. REIFF. And I affirm Mr. Bates's statement as to the ownership.

Mr. SWAYNE. Now, that being the case, as these gentlemen state, how do they propose to remedy it; by taking the property from one for the other?

Mr. REIFF. I do not think the Baltimore and Ohio Telegraph Company asked for an instant to enjoy any property of the Union Pacific Railway Company or the Western Union Telegraph Company. What they want to enjoy is that authorized to be created by act of Congress; the property that was mortgaged in their first mortgage, and which was intended to be operated and developed just as their railroad system. Mr. WILSON. Where has that been refused to the Baltimore and Ohio Telegraph Company?

Mr. REIFF. That is not a fair way to put it. It is no use getting us around the corner; that correspondence speaks for itself. Mr. Bates, in his correspondence with the president of the Union Pacific Railway Company, offered in good faith what is equivalent to the tender of a message. If this question ever gets before Congress I promise you that they will say so too, and if Judge Wilson was not the attorney of the Union Pacific Railway Company he would say so too. He is too fair-minded a man to disagree with me upon this point.

Mr. WILSON. If anything of that kind occurs, you industrious gentlemen will have to answer these questions, although you do not seem to do so to-day.

Mr. REIFF. I do not think it is necessary to load the Commissioner up with ontside or unnecessary matter. What I read to you in the telegram of Sidney Dillon in reference to the case before Justice Miller was an indication of what the Western Union and the Union Pacific ran against on the other side.

Mr. CROSS. We have asked the Union Pacific, Where are your offices? We cannot send telegrams until you tell us. It is idle to repeat here this question of whether any message was tendered, and that message refused. I understand that this resolution of the Senate of the United States calls for information from the Secretary of the Interior as to whether this fifteenth section of the act of July 1, 1862, has been observed. I take it that it means the act of July 2, 1864, and I understand you so to take it, Mr. Commissioner.

The COMMISSIONER. Yes, I so understand it.

Mr. CROSS. Now, sirs, that section of July, 1864, which I have seen for the first time this morning, strikes me as a plain provision of an act of Congress, and as plain a provision as cau come to the attention of any gentleman, either layman or professional, and I take it that the several companies authorized to construct the aforesaid roads means one of them the Union Pacific Railway Company, and that it is required to operate its railroad and telegraph lines, both of them, as continuous systems, and that it can no more dispose of its telegraph line than it could dispose of its railroad line to another corporation, and it cannot go out of the business.

Its business is to be done without discrimination of any kind either as to railroad or telegraph. This fifteenth section provides that they shall not refuse to receive traffic, &c., under certain pains and penalties.

Now, sir, when we ask this corporation, Will you let us know where your offices are? we are six months waiting for that information, and they are either too busy, they are in litigation, they are fishing, or they are in some other place, and for some reason or other this simple inquiry, which is a condition precedent to any business arrange

ment, has been either neglected or they refuse an answer, and it remains to this day unanswered.

I do not think a reference either to Poor's Manual or to Appleton's Railway Guide, or to the stations of the Western Union Telegraph Company, will give the information songht by the Baltimore aud Ohio Telegraph Company. Neither the counsel on the other side nor the president of the Union Pacific Railway Company will answer this polite business inquiry. I regard the statements made in reply to our inquiries as an evasion of the corporate duty of the president of this subsidized company. He was asked where these offices were, and he was further asked some other matter, and he said that this company would not make any contract in respect to a general interchange of business, involving the keeping of accounts of business so exchanged, but that they will simply take a message and forward it the same as they would take a message from any individual.

When we ask that they shall obey the letter and spirit of the law, we come to them as a company doing business for the public. They ask that they will not treat us as they do another company which is doing business for the public, but that they will treat us as they would a man who brought them a message. They say if you offer us a message we will transmit it, but before we send it we require its prepayment. That means that they will not do the business, because this business is not done in that way. Now, Mr. Bates, if he wished to send a dispatch from New York, not in his official capacity and using a frank, but in the capacity of a corn merchant doing business at the produce exchange, and two companies had their telegraph offices adjoining the exchange, one company sending it through either paid or collect, and the other company requiring that the rates should be prepaid, of course he would naturally send his dispatch by the company that would book him through and not break him up in the middle of the route for prepayment when it got to the intermediate point. This, of course, means business for one company, and no business for the other, and it is well understood by the two companies. The Baltimore and Ohio Telegraph Company understand that the rival company does not desire their business acquaintance. They might desire our personal acquaintance, but in a business point of view they regard us as the Jews regarded the Samaritans, or vice versa.

The question here is one concerning the provisions of a Federal statute, and the avoidance of those provisions by a company subject to these provisions. Now I am not here to criticise this company, but I am speaking for the Baltimore and Ohio Telegraph Company, which considers itself to be entitled to compete for the commercial business of the country, and which is going to do it. It is going to do it with the railroad companies, who have the right to transact telegraph business just on the same terms as those companies, who are forbidden to discriminate, do it with the Western Union Telegraph Company. I take the common law view of this question. There shall not be any discrimination between equals, and in the business point of view we consider ourselves the equal of the Western Union Telegraph Company. The COMMISSIONER. I understand you that all the rights which you claim are within the corporate duties of the railway company under the Federal statutes. Mr. CROSS. Yes.

The COMMISSIONER. If that is so, is there any reason why the courts are not competent to adjudicate upon these complaints?

Mr. CROSS. They should, but this is a legislative question. Here is a corporation that has farmed its business out to another, contrary to law.

The COMMISSIONER. Then would not that be, in your judgment, a legal question on the construction of a Federal statute?

Mr. CROSS. Yes, sir; rather it is a legislative question. This, however, is not a court, and the question which you are hearing is for information alone; you are here for the purpose of collecting information and transmitting it to Congress.

The COMMISSIONER. I do not make the inquiry in reference to any views I might or might not entertain, but as to the right of the company you represent to enforce by judicial process all the rights which you claimed exist under the statute.

Mr. Cross. I think we have a remedy at law. I think we have a cause of complaint before the grand inquest of the United States. We say that we can either bring mandamus or injunction and require them to comply with their corporate duties, or sue them for damages if they take a message of ours and lose it, or delay it unduly, or we may go to the legislature and ask whether they are complying with their statutory obligations, and it is the duty of the legislature in legislating for the public good to see that the public business is conducted efficiently and economically.

Now, Mr. Commissioner, we cannot carry on a business in court. If trouble should arise in reference to the transmission of a message offered by our company we could not afford to litigate it. The message might be worth only 50 cents, and the profit on it would not defray a litigation in either the circuit court of the United States, or in a State court that I am familiar with, and we could not carry on our business through the courts, and we desire that it should be plainly understood that we request the Union Pacific Railway Company simply to discharge its corporate duty as a public

carrier, both as to the railroad and the telegraph. When we seek for information they tell us that they neither know us nor do they wish our acquaintance. They say you are a company engaged in collecting business similar to a company that we are affiliated with in that same line of business; we will not take your messages on a business basis, but we will take them as we would from an individual; we will neither pro rate, nor keep accounts, nor will we trust you. In short, they say that they will neither take nor give. Now I take it that this examination shows that the Union Pacific Railway Company is not operated as one continuous line.

The COMMISSIONER. In what sense do you consider that word "continuous" is used? Does it mean a continuous line from the eastern terminus of the Union Pacific to the western terminus of the Central Pacific?

Mr. CROSS. I think they are an affiliated system.

Mr. REIFF. Wherever there is a subsidized road, and it has connections, it is considered continuous. The Union Pacific Railway Company was intended to be a part of a great system.

Mr. CROSS. To illustrate it, here are three separate papers in a line. Each paper represents a different road, but the three together form a continuous system, and I think the law requires them to remain in that position, and if the intermediate road turns its back on its neighbor at either end it hereby violates the law, and the same if it should sell or practically give over its telegraph lines to another corporation.

The COMMISSIONER. Do you mean to say that they cannot refuse to make business connections with whoever desires to make an arrangement?

Mr. CROSS. I do not know that a road not subsidized could be, but we are talking about these land-grant roads.

Mr. REIFF. When the Chicago, Burlington and Quincy, the Northwestern and the Rock Island roads got to Council Bluffs the contest arose at once as to the freight traffic to and from the Union Pacific, and it resulted in the creation of what was known as the Iowa pool, putting these three roads in a position to divide the bustness centering at Omaha. Afterwards the Wabash Company constructed a line to Omaha, and they commenced to squeal, and asked for a division of freights. This Iowa pool said, we have got this between three of us, and we don't see what business you have got here. The Wabash people said that they had a right to go there and they demanded some of the business. They said it was not necessary that they should be named in the act, because those roads not named in the act were embraced within its provisions, as Congress intended that the public should be afforded every facility. This road was a part of this great system, and they demanded a pro rata division of the freight. The Milwaukee and Saint Paul Road then came in and then there was another contest.

The COMMISSIONER. Was that a voluntary adjustment of rival interests, or was it a connection based upon the requirements of the Federal statutes?

Mr. REIFF. Here is the difference. When the three roads that first got there made an agreement it was an arrangement of rival interests. When the Wabash got there, it was an arrangement of rival interests between four roads instead of three. When the Milwaukee and St. Paul got there they could not come to an arrangement as between them and their rivals, and then they undertook to bring the Union Pacific into a combination with them. The result was the tripartite arrangement, and the Union Pacific undertook practically, in a business sense, to extend its charter rights to Chicago.

What

Mr. SWAYNE. It seems to me this last debate clears up this whole matter. these gentlemen want cannot be better explained than that what they demand, that their lines and the lines of the Western Union Telegraph Company shall be operated as one continuous line.

Mr. CROSS. In some aspects.

Mr. SWAYNE. In every aspect. Now, the fifteenth section of the act of Congress is very specific on that point. It says that the several companies are authorized to construct the aforesaid roads, and required to operate and use said roads and telegraph for all purposes of communication, travel, and transportation, so far as the public and the Government are concerned, as one continuous line.

Now, when we get to an illustration of that, we get it admirably in this connection of the Pacific road in Missouri. There was a case of connection not by continuity, but a mechanical connection. The act does not extend to the kind of continuity spoken of by the gentleman here. If Congress undertook to settle a question of rights of two individuals under a law, why, of course, we have no more to say. We will have to try that subsequently in the courts. I think Congress would hardly convert itself, as has been suggested here to-day, into a grand inquest.

Mr. CROSS. Do you mean to say to us that you would not take any traffic from us unless compelled to do so upon a mandamus?

Mr. SWAYNE. We say, and we have said all the while, we will take your messages precisely on the same terms and receive messages for you on precisely the same terms as we receive messages from or deliver messages to any individual. If you want

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