The provisions relating to most if not all the other roads, will be found brought together in the report of the Auditor of Railroad Accounts for the year 1879, pp. 212, 213. It will be seen from the provisions above quoted that the rights of the United States and the duties of the companies are fixed by definite provisions of law, which are, in substance, that transportation is to be furnished to the United States at reasonable rates, and not exceeding the amounts paid by private parties for the same kind of service. These provisions are, in the opinion of the committee, substantially what the common law is in relation to all common carriers. If, as it appears from some of the papers attached to this report, some persons have, on some of these roads, obtained freights at less rates than the United States and general shippers, the question whether that entitles the United States to have its freights between the same points at the same special rate, is, in the opinion of the committee, principally a judicial one, which, in case of dispute, can readily be determined according to the circumstances of each particular case by resort to the judicial tribunals. The law seems to be adequate to the protection of all the just rights of the United States. The only difficulty in a given case is the ordinary business and judicial one of applying the law to the particular circumstances. The committee is not aware that any legislation is necessary to accomplish this end. If the Executive Department of the government is of opinion that unwarranted discriminations are for any cause made against the United States, it is its duty, through the proper channels in the adjustment of the accounts of the companies for transportation, to insist upon the proper reduction, and a correction of the wrong; and, if in such a case any railroad company thinks the claim of the United States unwarranted, it has only to commence a suit in the Court of Claims for the recovery of such sums as may have been thus disallowed. In such case it will be the duty of that court, or of the Supreme Court, on appeal, to determine each case on its own merits. It will thus be seen that if any wrong of the kind mentioned in the resolution of the Senate has been or shall be committed against the interests of the United States, complete means of redress are already in possession of the Executive Department of the government. If any serious case should occur, such as is mentioned in the papers hereto attached, of a refusal by any company to transport freight for any reason not legally justifiable, the ordinary remedy of private persons in such a case, by suit at law, is open to the United States through the action of the Executive Department; and also, in a suitable case, more stringent and decisive proceedings for a forfeiture of all rights derived by such company from the United States, including its charter, if it have one, on the ground of a disregard of its charter obligations. The committee is of opinion that under the circumstances no legislative step is at present advisable touching the matter mentioned in the resolution. They therefore ask to be discharged from a further execution of the order of the Senate. Papers attached. Letter of the Secretary of War, of the 15th April, 1879, addressed to the President of the Senate, with accompanying papers, being Executive Document No. 14, Forty-sixth Congress, first session. [S. Ex. Doc. No. 14, Forty-sixth Congress, first session.] Letter from the Secretary of War, communicating, in answer to a Senate resolution of April 7, 1879, information in relation to discriminations by the Union Pacific Railroad Company in the rates of freights to private shippers as against the United States. WAR DEPARTMENT, Washington City, April 15, 1879. The Secretary of War has the honor to transmit to the United States Senate the inclosed report, dated the 12th instant, and accompanying papers, from the Quartermaster-General, in response to Senate resolution dated the 7th instant, directing copies to be furnished of any and all reports made by the Quartermaster-General about the month of October, 1878, and prior and subsequent to that date, of any discrimination made by the Union Pacific Railroad Company in favor of private shippers as against. the United States, and all correspondence relating thereto. The PRESIDENT GEO. W. MCCRARY, Of the United States Senate. WAR DEPARTMENT, QUARTERMASTER-GENERAL'S Office, Washington, D. C., April 12, 1879. SIR: I have the honor to return herewith the resolution of the United States Senate of April 7, 1879, "that the Secretary of War be directed to furnish to the Senate any and all reports made to him by the Quartermaster-General of the United States Army, about the month of October, in the year 1878, and prior and subsequent to that date, of any discrimination made by the Union Pacific Railroad Company in favor of private shippers as against the United States, and all correspondence relating thereto," and to inclose herewith copies of the report of this office, dated October 8, 1878, and accompanying papers on the subject; also copies of report of this office, dated September 17, 1878, and accompanying papers, relating to a similar charge made against the Northern Pacific Railroad Company; which I recommend for transmittal to the Senate in response to its resolution. No other report of the character stated is found of record in this office. M. C. MEIGS, The Hon. the SECRETARY OF WAR. QUARTERMASTER-GENERAL'S OFFICE, A system is in operation between railroad companies and intermediates by which transcontinental freight is transported for private shippers at prices less than the Quartermaster's Department pays for the same service. The Pacific Railroads are involved in this; their acts of incorporation require that the rates to be paid to them by the United States "shall not exceed the rates paid by private parties for the same kind of service." Private shippers pay cash to the intermediates; the Quartermaster's Department is hampered by prohibitory laws in settlements with land-grant and the Pacific Railroads, hence the difficulty and the apparent evasion of law on the part of the Pacific Railroads. Respectfully submitted to the Quartermaster-General for instructions. HENRY C. HODGES, Deputy Quartermaster-General, U. S. A. Remarks of the Quartermaster-General. We lately reported on charge by some Pacific Railroad against United States at greater rates than charged citizens, in violation of their fundamental law. Report this case in the same way. The Treasury should have full information and deduct, in settlement under the law, for all credits to the Pacific Railroads, whatever appears to be excessive and illegal charges, i. e., greater than charged to other persons. The Secretary of the Treasury is trustee for the Pacific Railroads, and has the matter and the power in his hands. The only difficulty will be to get necessary information in each case. SIR: I have the honor to submit herewith communications received at this office from the vice-president and the general manager of the Northern Pacific Railroad, admitting that that railroad company is in the habit of making cheaper rates with individuals than with the United States, notwithstanding the terms of the law of July 2, 1864 (13 Stat., 365), which seems to forbid such action. It appears to me that the railroad is in the wrong. But it is a question of great importance and should be settled only after full consideration of the law. All the accounts heretofore allowed are on record, and the case should be fully investigated, and the railroad should be charged with any illegal excess in the rates charged and allowed and paid. For this purpose these papers should be seen by the Third Auditor and Second Comptroller and by the Auditor of Railroad Accounts (Chap. 316, 45th Congress, 2d session, p. 169, Statutes of 1877-1878). The final decision for the United States, I presume, will rest with the Secretary of the Treasury, who has special duties in connection with the Pacific Railroads and land-grant railroads. Very respectfully, your obedient servant, M. C. MEIGS, Quartermaster-General, Brevet Major-General, U. S. Army. The Hon. the SECRETARY OF WAR. WAR DEPARTMENT, QUARTERMASTER-GENERAL'S OFFICE, Washington, D. C., September 3, 1878. SIR: I inclose for your examination a communication from the Subsistence Department reporting information received by that department to the effect that the Northern Pacific Railroad Company is contracting with private parties for transportation at less rates than the charges for like transportation furnished the United States. As such action on the part of the railroad company seems to be a violation of the law of July 2, 1864, providing that "the said company shall not charge the government higher rates than they do individuals for like transportation," I invite your attention to the matter, with request that you take measures to correct any infringement of the law, and to secure to the Quartermaster's Department as low rates as any that are made with private parties. Very respectfully, your obedient servant, STEWART VAN VLIET, Acting Quartermaster-General, Brevet Major-General, V. S. Ármy. Mr. C. B. WRIGHT, NEW YORK, September 4, 1878. SIR: In the absence of Mr. Charles B. Wright, president of the Northern Pacific Railroad Company, I have to acknowledge the receipt of your favor of 3d instant to him with copy of communication from Subsistence Department relative to charges on corn from Duluth to Bismarck, and suggesting a seeming violation of the law of July 2, 1864, providing that "the said company shall not charge the government higher rates than they do individuals for like transportation." The contracts of this company with Leopold and Austrian, owners of the line of steamers between Chicago and Duluth, are made at the office of our general manager at Saint Paul, and not having copies at hand for reference, I cannot now say whether or not it has been correctly stated to you that they pay us fifty cents a hundred on corn from Duluth to Bismarck, while the government is charged a higher rate. I, however, know in a general way that we have contracts in existence that open the question which you now present, and, for the purpose of a reply, I may assume that General Morgan states the case correctly. We have to say, in reply, that this matter has been carefully considered heretofore by the company, and we believe the law has not been violated. Our established rates of fare and freight are precisely the same for the government as for individuals, "for like transportation." Where business is brought to us without limitation or restrictions, except such as lie upon us under the law, all parties are treated alike, and the government pays neither more nor less than individuals. But when special contracts for transportation are asked for between competing points, the question of "like transportation" is materially affected by the conditions of such contracts. In all of the special contracts between our company and individuals that have come to my notice-and I have no doubt that of Leopold and Austrian's is similar-a provision is inserted that the individual contractor shall send over our road all of his business to the point of destination named. This is the basis and groundwork of the reduction made from regular established rates, without which the contract cannot be made. The government does not offer this inducement. It advertises for proposals to transport a given quantity of freight to Bismarck, and only assigns to us so much of it as it deems for its interest to do. It may and does assign to us a fractional part only, and sends other parts by way of the Missouri River. Hence it is not to us, in comparison with the individual business, "like transportation," and in our opinion cannot be claimed to rate at any less than regularly established public rates, unless specially contracted for, and we think cannot be compared with any individual contract, unless placed under the same condition. Respectfully, your obedient servant, True copy. GEORGE STARK, General STEWART VAN VLIET, CHAS. H. TOMPKINS, Deputy Quartermaster-General, U. S. A. Quartermaster-General, U. S. A., Washington, D. C. QUARTERMASTER-GENERAL'S OFFICE, Washington, D. C., October 8, 1878. SIR: I have the honor to submit copies of correspondence between this office and the depot quartermaster New York City, showing a system in operation by which transcontinental freight is transported for private shippers at prices less than the Quartermaster's Department is charged for the same service. The Union and Central Pacific Railroad Companies are involved in this. Their acts of incorporation require that the rates to be paid to them by the United States "shall not exceed the rates paid by private parties for the same kind of service." Private shippers pay cash to the authorized agents or intermediates of the railroad companies whose lines form the through connection to the Pacific coast. The Quartermaster's Department can only legally pay a small portion of the freight money in cash, as explained in the correspondence; hence the difficulty and the apparent evasion of law on the part of the Pacific Railroads. On September 17, 1878, I reported to the Secretary of War a charge made by the Northern Pacific Railroad Company against the United States at greater rates than charged citizens as a violation of their fundamental law, and in that case I expressed the opinion that the papers should be seen by the Third Auditor and Second Comptroller of the Treasury and by the Auditor of Railroad Accounts. (Chap. 316, Fortyfifth Congress, second session, p. 169, statutes of 1877-78.) The facts developed in the inclosed correspondence should, I think, take the same course. The Treasury should have full information, and deduct in settlement under the law for all credits to the Pacific Railroads whatever appears to be excessive and illegal charges, i. e., greater than charged to other persons. The Secretary of the Treasury is assignee of the Pacific Railroads and has the matter and the power in his hands. The only difficulty will be to get necessary information in each case. Very r. spectfully, your obedient servant, M. C. MEIGS, Quartermaster-General, Bvt. Maj. Gen., U. S. Ármy. To the Hon. the SECRETARY OF WAR. QUARTERMASTER-GENERAL'S OFFICE, COLONEL: Your attention is invited to the subject of shipments by the Quartermaster's Department from the east to the Pacific coast. Apparently some arrangement exists under which the "California Fast Freight Line" and other organizations are authorized, by corporations which operate lines of railway across the continent, to make rates for through transportation lower than the published tariffs of the same corporations. Payments by the Quartermaster's Department, directly or indirectly, for transportation over the land-grant and bonded portions of the railroads forming this through connection, are prohibited by the laws of March 3, 1873, and March 3, 1875 (published in General Orders Nos. 48, A. G. O., of 1873, and 62, A. G. O., of 1874). This prohibition of law would compel the Quartermaster's Department to make pro rata deductions from the rates offered by these intermediaries of shippers and railroad corporations. But certificates of service are issued for land-grant transportation (see par. 7 of G. O. No. 107, A. G. O., of 1875), on which legal settlements will no doubt eventually be made when the questions at issue are finally determined by competent authority. And the earnings of the bonded Pacific Railroads by military transportation are applied by the Secretary of the Treasury on the indebtedness of those railroads on account of the interest paid by the United States on bonds issued in their behalf. These land-grant and bonded roads are the beneficiaries of the United States. By section 6 of the act of July 1, 1862, incorporating the Pacific Railroad Companies, it is provided that they shall "transport mails, troops, munitions of war, supplies and public stores upon said railroad for the government whenever required to do so by any department thereof, and that the government shall at all times have the preference in the use of the same for all the purposes aforesaid (at fair and reasonable rates of compensation, not to exceed the rates paid by private parties for the same kind of service)." There is nothing in law or orders prohibiting the issue by the Quartermaster's Department of one bill of lading through from New York, Chicago, or any other point, to San Francisco, Yuma, or other point on the Pacific slope, when the interests of the United States are subserved thereby. As a convenience, and at the request of the railroad companies, separate bills of lading are issued for the service required of the Pacific Railroads, but this practice may be waived whenever desired, and a through bill, with proper notations as to mode of settlement, may be issued; certificates of service, showing the value thereof, to be given to the bonded and land-grant railroads, as provided in existing orders. How, in view of these facts, can these organizations legally refuse government freight at as low rates as they offer private shippers? You are requested to ascertain from the "California Fast Freight Line," and report to this office, whether under the mode of settlement above indicated it will refuse government freight or discriminate against the United States in shipments and charges. Very respectfully, your obedient servant. By order of the Quartermaster-General. STEWART VAN VLIET, Asst. Quartermaster-General, Brt. Maj. General, U. S. Army. Col. L. C. EASTON, [1st indorsement.] DEPOT QUARTERMASTER'S OFFICE, New York City, June 10, 1878. True copy respectfully referred to Mr. E. Hawley, general eastern agent "California Fast Freight Line," New York City. This office having been informed by him that his present instructions would not permit his signing a through bill of lading for government freight from New York City to San Francisco, Yuma, Cal., &c., Mr. Hawley is respectfully requested to take with as little delay as possible such steps as he may deem necessary to obtain the consent of the Iowa lines and connecting Pacific roads, with the view of their adopting the plan suggested by the Quartermaster-General of the Army. In a shipment New York City to San Francisco, Cal., on through bill of lading, payment in cash could be made by this office to the "California Fast Freight Line" for freight New York City to Mississippi River (New York City to Cedar Rapids, if sent over Chicago and Northwestern Railroad) immediately upon return to this office of the "original" bill of lading properly indorsed by the depot quartermaster at San Francisco, Cal., and certificates of service for the transportation furnished by the landgrant and bonded railroads would be issued separately to each road. The proper notations, giving the proportion of through rate due to each road, would appear on the bills of lading. See form inclosed herewith. |