PUBLIC No. 57.]-AN ACT TO ALTER AND AMEND THE ACT EN TITLED May 7, 1878. Whereas, on the first day of July, anno Domini eighteen Ante, p. 223. hundred and sixty-two, Congress passed an act entitled "An act to aid in the construction of a railroad and telegraph line from the Missouri river to the Pacific ocean, and to secure to the government the use of the same for postal, military, and other purposes ;" and Whereas afterward, on the second day of July, anno Ante, p. 227. Domini eighteen hundred and sixty-four, Congress passed an act in amendment of said first-mentioned act; and Whereas the Union Pacific Railroad Company, named in Union Pacific said acts, and under the authority thereof, undertook to construct a railway, after the passage thereof, over some part of the line mentioned in said acts; and Railroad. Central Pacific Railroad. bonds issued to Railroad. Pacific Whereas, under the authority of the said two acts, the Central Pacific Railroad Company of California, a corporation existing under the laws of the State of California, undertook to construct a railway, after the passage of said acts, over some part of the line mentioned in said acts; and Whereas the United States, upon demand of said Central United States Pacific Railroad Company, have heretofore issued, by way Central of loan and as provided in said acts, to and for the benefit of said company, in aid of the purposes named in said acts, the bonds of the United States, payable in thirty years from the date thereof, with interest at six per centum per annum, payable half yearly, to the amount of twenty-five Amount of. million eight hundred and eighty-five thousand one hundred and twenty dollars, which said bonds have been sold in the market or otherwise disposed of by said company; and Whereas the said Central Pacific Company has issued and disposed of an amount of its own bonds equal to the Pacific Railroad amount so issued by the United States, and secured the posed of. same by mortgage, and which are, if lawfully issued and disposed of, a prior and paramount lien, in the respect mentioned in said acts, to that of the United States, as stated, and secured thereby; and Whereas, after the passage of said acts, the Western Pacific Railroad Company, a corporation then existing under the laws of California, did, under the authority of Congress, become the assignee of the rights, duties and obligations of Amount of bonds of Central issued and dis Western Pacific Railroad the as signee of the Cen tral Pacific. the said Central Pacific Railroad Company, as provided in the act of Congress passed on the third of March, anno Domini eighteen hundred and sixty-five, and did, under the authority of the said act and of the acts aforesaid, construct a railroad from the city of San José to the city of SacraUnited States mento, in California, and did demand and receive from the bonds issued to Western Pacific. United States the sum of one million nine hundred and seventy thousand five hundred and sixty dollars of the bonds of the United States, of the description before mentioned as issued to the Central Pacific Company, and in the same manner and under the provisions of said acts; and upon and in respect of the bonds so issued to both said companies, the United States have paid interest to the sum of more than thirteen and a half million dollars, which has not been reimbursed; and Amount Western Pacific of Whereas said Western Pacific Railroad Company has bonds issued and issued and disposed of an amount of its own bonds equal disposed of. to the amount so issued by the United States to it, and secured the same by mortgage, which are, if lawfully issued and disposed of, a prior and paramount lien to that of the United States, as stated, and secured thereby; and Western Pacific consolidated with Whereas said Western Pacific Railroad Company has Central Pacific. since become merged in, and consolidated with, said Central Pacific Railroad Company, under the name of the Central Pacific Railroad Company, whereby the said Central Pacific Railroad Company has become liable to all the burdens, duties, and obligations before resting upon said Western Pacific Railroad Company; and divers other railroad companies have been merged in and consolidated with said Central Pacific Railroad Company; and United States bonds issued to Whereas the United States, upon the demand of the said Union Pacific. Union Pacific Railroad Company, have heretofore issued by way of loan to it and as provided in said acts, the bonds of the United States, payable in thirty years from the date thereof, with interest at six per centum per annum, payable half-yearly, the principal sums of which amount to twentyseven million two hundred and thirty-six thousand five hundred and twelve dollars; on which the United States have paid over ten million dollars interest over and above all reimbursements; which said bonds have been sold in the market or otherwise disposed of by said corporation; and Amount of bonds of Union Whereas said corporation has issued and disposed of an Pacific issued and amount of its own bonds equal to the amounts so issued to it disposed of. by the United States as aforesaid, and secured the same by mortgage, and which are, if lawfully issued and disposed of, a prior and paramount lien, in the respect mentioned in said acts, to that of the United States, as stated, and secured thereby; and of Central and Whereas the total liabilities (exclusive of interest to Liabilities accrue) to all creditors, including the United States, of the Union Pacific. said Central Pacific Company, amount in the aggregate to more than ninety-six million dollars, and those of the said Union Pacific Railroad Company to more than eightyeight million dollars; and not secure. Whereas the United States, in view of the indebtedness United States and operations of said several railroad companies respectively, and of the disposition of their respective incomes, are not and cannot, without further legislation, be secure in their interests in and concerning said respective railroads, and corporations, either as mentioned in said acts or otherwise; and the protection of and the railroad Whereas a due regard to the rights of said several com- Acts of 1862 and 1864 require panies respectively, as mentioned in said act of eighteen to be amended for hundred and sixty-two, as well as just security to the the United States United States in the premises, and in respect of all the companies. matters set forth in said act, require that the said act of eighteen hundred and sixty-two be altered and amended as hereinafter enacted; and Whereas, by reason of the premises also, as well as for other causes of public good and justice, the powers provided and reserved in said act of eighteen hundred and sixty-four for the amendment and alteration thereof ought also be exercised as hereinafter enacted: Therefore, to be ascertained, Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That Net earnings the net earnings mentioned in said act of eighteen hundred how. and sixty-two, of said railroad companies respectively, shall be ascertained by deducting from the gross amount of their earnings respectively the necessary expenses actually paid within the year in operating the same and keeping the same in a state of repair, and also the sum paid by them respectively within the year in discharge of interest on their first mortgage bonds, whose lien has priority over the lien of the United States, and excluding from consideration all sums owing or paid by said companies respectively for interest upon any other portion of their indebtedness; and the foregoing provision shall be deemed and taken as an amendment of said act of eighteen hundred and sixty-four, as well as of said act of eighteen hundred and sixty-two. This section shall take effect on the thirtieth day of June This section to next, and be applicable to all computations of net earnings 30, 1878. take effect June portation to be ted States and dation of interest on bonds. thereafter; but it shall not affect any right of the United States or of either of said railroad companies existing prior thereto. Compensation SEC. 2. That the whole amount of compensation which due by the United States for trans- may, from time to time, be due to said several railroad retained by Uni- companies respectively for services rendered for the Govapplied to liqui- ernment shall be retained by the United States, one-half thereof to be presently applied to the liquidation of the interest paid and to be paid by the United States upon the bonds so issued by it as aforesaid, to each of said corporations severally, and the other half thereof to be turned into the sinking-fund hereinafter provided, for the uses therein mentioned. Sinking-fund established. be invested in. SEC. 3. That there shall be established in the Treasury of the United States a sinking-fund, which shall be invested by the Secretary of the Treasury in bonds of the United States; and the semi-annual income thereof shall be in like manner from time to time invested, and the same shall accumulate and be disposed of as hereinafter mentioned. What bonds to And in making such investments the Secretary shall prefer the five per centum bonds of the United States, unless, for good reasons appearing to him, and which he shall report to Congress, he shall at any time deem it advisable to invest in other bonds of the United States. All the bonds belonging to said fund shall, as fast as they shall be ob tained, be so stamped as to show that they belong to said fund, and that they are not good in the hands of other holders than the Secretary of the Treasury until they shall have been indorsed by him, and publicly disposed of pursuant to this act. Credits to sink ing-fund. Ante, p. 223. SEC. 4. That there shall be carried to the credit of the said fund, on the first day of February in each year, the one half of the compensation for services herein before named, rendered for the Government by said Central Pacific Railroad Company, not applied in liquidation of interest; and, in addition thereto, the said company shall, on said day in each year, pay into the Treasury, to the credit of said sinking-fund, the sum of one million two hundred thousand dollars, or so much thereof, as shall be necessary to make the five per centum of the net earnings of its said road payable to the United States under said act of eight een hundred and sixty-two, and the whole sum earned by it as compensation for services rendered for the United States, together with the sum by this section required to be paid, amount in the aggregate to twenty five per centum of the whole net earnings of said railroad company, ascer tained and defined as herein before provided, for the year ending on the thirty-first day of December next preceding. That there shall be carried to the credit of the said fund, on the first day of February in each year, the one-half of the compensation for services hereinbefore named, rendered for the Government by said Union Pacific Railroad Company, not applied in liquidation of interest; and, in addition thereto, the said company shall, on said day in each year, pay into the Treasury, to the credit of said sinkingfund, the sum of eight hundred and fifty thousand dollars, or so much thereof as shall be necessary to make the five per centum of the net earnings of its said road payable to the United States under said act of eighteen hundred and sixty-two, and the whole sum earned by it as compensation for services rendered for the United States, together with the sum by this section required to be paid, amount in the aggregate to twenty-five per centum of the whole net earnings of said railroad company, ascertained and defined as herein before provided, for the year ending on the thirtyfirst day of December next preceding. Secretary of the Treasury authorized undercertain circumstances to the amount re into the sinking. fund. SEC. 5. That whenever it shall be made satisfactorily to appear to the Secretary of the Treasury, by either of said companies, that seventy-five per centum of its net earnings remit a portion of as herein before defined, for any current year are or were quired to be paid insufficient to pay the interest for such year upon the obligations of such company, in respect of which obligations there may exist a lien paramount to that of the United States, and that such interest has been paid out of such net earnings, said Secretary is hereby authorized, and it is made his duty, to remit for such current year so much of the twenty-five per centum of net earnings required to be paid into the sinking-fund, as aforesaid, as may have been thus applied and used in the payment of interest as aforesaid. SEC. 6. That no dividend shall be voted, made, or paid for or to any stockholder or stockholders in either of said companies respectively at any time when the said company shall be in default in respect of the payment either of the sums required as aforesaid to be paid into said sinking-fund, or in respect of the payment of the said five per centum of the net earnings, or in respect of interest upon any debt the lien of which, or of the debt on which it may accrue, is paramount to that of the United States; and any officer or person who shall vote, declare, make, or pay, and any stockholder of any of said companies who shall receive any such dividend contrary to the provisions of this act, shall be liable to the United States for the amount thereof, which, when No dividends to be voted or paid when companies are in arrears, &c. |