Mr. Yates, of Illinois in Sent May 2, 1866. Entitled Illinois Central Railroad. The Senate.asin ComWhole. having under consideration the bill (H.R.No. 127) making appropriations for the supportof the Army for the year endingthe30thof Jone, 1867. The ComFinance proposed to amend the bill by striking out this) following provisoat its close: molded, That no part of the mono hereby appropriate dadsh Caollmhpeaunsy effort phaeyitnrganthspeo Hline is Central troops or the the AttyGen of the U.S.: and the is hereby directed to institute a suit against the said company in the circuit court of the U.S. in the 11th circuit, without delay, to recover from the s company any moneys that did said company by any Dept been aid to {he for of the governiucut the the tr:insportation of tho troops or propertyof U.S.: and thesaid AttyGen is hereby turth er directed to appear for the U.S. in said court and prosecute its interestsin the said suit. Mr. YATES. Mr. President, as one of the Senators from the State of Illinois, in which the Central railroad is situated, and whose interests are so immediately to be affected by the amendment, I deem it my duty to give some reasons which will influence me to give my vote for the motion to strike out. I will explain to Senators, who may not have given their attention to the history of the grant of lands by the U.S. to the State of Illinois in aid of the construction of the Illinois Central railroad, that the State, instead of building the road itself, chartered a company for that nrpose, and in consideration of the grant of ands to the company reserved to the State 7%. of the annual proceeds of the road. This reservation now produces to the State a rich annuity, amounting the last year to about half u million dollars. Now, Mr. President, if this motion shall not revail, and the Central Railroad Companyshall e compelled to refund to the Government what it has received for Government transportation durin" the war, then to the extent of the amount refunded is the amount of the gross proceeds reduced, and the State would be compelled to refund to the company 7%. of that amount. For instance, if as has been alleged elsewhere the railroad has received from the Government $6,000,000 for the transportation of Government troops and property, then 7%. of that sum would be $350,000, which the State would have to refund to the railroad company. Before I can consent that the people of the State ofIllinois shall be taxed to refund this large sum, which is the effect of this amendment of the HoRep, I must be fully satisfied that she improperly received it. And, sir, the more I examine the subject the better am I satisfied, that it would be an act of gross injustice to require the railroad company to refund the amount it has received to the Government, and a gross wrong to my State to require it to refund to the company the 7%. of that amount which it has received. I shall therefore resist this pinendment with all my might from 1st to ast. But, independent of the consideration that the road is situated in the State of Illinois, and that the State derives a large annual in come from its gross earuin s, and is directly interested to the amount of several 100,000 dollars in the question at issue, and also that the prosperity of the State and that of the road are closely identified; beside such considerations as these I with great cheerfulness come to the defense of the road in its legal and equitable rights, from the consideration that from the be inning to the end of the war it has most faith ully, promptly, and energet ically discharged its whole duty to the Gorern ment. There was not on the land or on the sea during the “are more important arm of our national defense than the I line is Central railroad. Running from Dunleith, from the southern boundary of Wisconsin south to Cairo, and from Chicago south to Cairo, and being the only road running north and south in the direction of the seat of the war on the Mississippi, Tennessee, Cumberland, and the Southwest, it was the only road upon which could be, and were, transported the mighty armies, vast supplies and munitions of war, not only of the States of the Northwest bntof the large armies which were sent from the East to the Southwest and from the Southwest to the East to meet the varying exigencies of the war. I was placed in a position to know exactly, and almost all the time, how these duties were discharged; for no inconsiderable portion of this transportation was done upon orders is sued by me in pursuance of the requisitions of the War Dept. And when it is charged, as elsewhere it has been, that the road belong ed to foreign capitalists who sympathized with the rebels, I happen to know well that the stock of the Illinois Central railroad was controlled by that class of capitalists in England represented by such men as Bright and Cobden, and that at least on 2 different occasions Richard Cobden visited the State of Illinois as the representative of these ca ital ists to examine and report upon its condition and management; and I'happen to know what every Senator must in the nature of things know, that the success of the road and consequently the value of their stock and other hea interests depended upon the triumph of the nion cause and the suppression of the rebellion. Be this as it may and I freely admit that its bearing upon the question we are considering.is not direct yet do know the fact to be that the Illinois Central railroad performed its duties to the Government, and performed them well. And, sir, that it may be seen that this statement of mine is not for this occasion merely, I will trouble the Senate to read from a mes sage delivered by me during the war, while I was resisting a claim of the Central railroad against the State, which message was made to the people of Illinois and to Sens&Reps who lived on the line of the road, and who knew the truth of the facts therein stated. I read from the Governor’s message January 5, 1863: “ It is to hesaid in behalf of thiscompanythiitthey have mostprom tl, willingly, and uncomplainin‘ly responded to al the calls of the Governmentin to transportation of troops: andvery many cases have scpoomretetdo my knowledge in which they have tran our sanitary storesand nurses and money less sick and wounded without expense. So far as abuses may have occurred, in all cases I suppose they have been without the approval of thee ief officers." It is urged, that by the terms of.the grant to the State of Illinois to aid in the construction of the Illinois Central railroad, contained in section 4 of the act for that purpose, approved September 80, 1850, the railroad company were to transport the troops and property of the Government free of cost, and that, therefore, the Government should institute suit to recover from said company all moneys that have been paid to said company for such transportation. The 4th section of the act reads: “That the said lands hereby granted to the said State of Illinois shall besubjectto thodispdsaloftho Legislature thereoffor the purposeaforesaidand no other. And thesaid railroad and branches shall be and remain a public highway.for the useof the Government of the U.S. freefromtolls or other the transportation of any propertyor troopsof the U.S." Now, while I confess that from a 1st care less reading of this section it would seem that technically the company was bound to transport Government troops and property free of charge; on the other and, I contend that a careful reading will show plainly the reverse, and that the company in accepting the grant did not undertake to transport for the Government at all, but simply to keep open its road and branches for the use of the Government to do its own transportation, and that for thus keeping open the road as a highway the company was to exact no toll or other charges upon such transportation. Now, sir, let us read carefully, giving to each word its proper signification: “the said railroad and branches shall be and remain a public highway.” A highway for what? “For the use of the Government of the U.S.” It would be no ver strained construction to say that this means or the use by the Government of the U.S.; but that I will not insist u on. “ For the use of the Government of the U.S.” How? Why, of course as a public highway. “ Free from toll or other charges” for this use of it as a public high way. “ Free from toll or other charge upon the transportation of an property or troops of the U.S.” T int most clearly means that the Government shall not be liable to any toll or charges in using the road as a papalicy highway in the transportation of its troops and property. Senators must see that the distinction is broad and marked between a provision which gives to the Government the use of the road as a public highway, free from toll and charges, and a provision which would bind the company to become carriers for the Government free of cha e. If the design of this provision was that the company was to do all Government transportation, why did it not expressly say so without the circumlocution of saying that it should remain a public If highway)? it. was the design that the road should a carriers for the Government, then the words “public highway for the use of the Government” are superfluous and meaningless, and all that was necessary to have been said was that the company should transport for the government without charge. In section 6 of the same set, where congress did design that the company should actually do the transportation in fact, it says so in precise and direct langu e. The section as to carrying the mails reas as follows: “ Abife: That the U.S. mail shall at all timesbetransportedonthesaidrailroad. underthe directionsof the postofficedept. at such price asCongressmay by law direct." Thus we see that where the company was to be carrier for the Government the angunge is specific and direct that the railroad shall transport the mails. This provision as to the mails is useful by way of interpretation in another important aspect, as illustrative of the fact that where the Government required, not merely the use of the road, but actual transportation by the company as a carrier, italso provided for compensation to the company. Where the government was to have only the use of the ease ment, the right of passage, it stipulated that it was to have that casement without charge. And is it at all reasonable to suppose that the Government meant that the company should transport vast armies, with long trains of ordnance and munitions of war of every kind and vast supplies without cost, and yet almost in the next section take care to provide that for the inconsiderable service of carrying the U.S. mail it should have adequate compensation? But, sir, there are other means of arriving at the true construction of the provision contained in section four. We have both antecedent and contemporaneous construction. The term highway in the common law and the customary sense means a public road, turnpike, or thoroughfare. In the absence of statutory regulation anyone may use it free of toll or charge of any kind. And we find in the legislative acts establishing turnpikes and canals almost the identical language contained in the grant to Illinois for the construction of the Illinois Central railroad. Now, sir, look at the histo of this clause for free transportation contained in the act authorizing the building of the road see where it come from, and you will find that it was not inserted in the act because the Government had granted lands. This right to use the road by the Government was not given in consideration for the lands received, but I will prove to you, air, that the clause reserving the right of the Government. to use the road free came from and was copied from an not where no grant of lands was made. I will now give this history and will refer to a fact which in the long do hates heretofore made has been overlooked, and which will show nnanswerably that the construction which has been given the clause under consideration is entirely unwarranted. Where, then, did this clause come from? I will show you. Here is volume thrcc, U.S. Statutes at Largc, and on page 6, 29 I find the act of March 80, 1822, authorizing the State of Illinois to open a canal through the public lands to connect the Illinois river with nice Michigan. Now, sir, that act made no grant of lands whatever excet the right of way and 90 feet on each si e of the canal, but, mark the fact, that it contained this same clause reserving to the Government the use of the canal as a public highway for the transportation of Government property without charge. How, then, can it e said that the road in consideration of the grant of lands agreed to this free transportation when in the act from which the clause is copied there was no grant of lands whatever? But I proceed with the history. On the 2d of March, 1827, Congress passed an additional act in relation to the canal and donated a large body of land to aid in its construction, and in this not copied verbatim the clause contained in the act of 1822, reserving the use of the canal as a public highway to the Government free of toll or other charge. Now, sir there cannot be the slightest doubt that the late Senator Douglas, the author of the bill making the grant to the State in aid of the construction of the Illinois Central railroad, copied the clause in question from the canal grants making only the slightest verbal alterations. That there may be no mistake in this regard, I quote the clause contained in the canal grants verbatim: “ It ishereby further cnacted and declaredthat said canal whencom letedshall beand foreverremain a public highwa or the use of the Governmentof the IU.S.sfreefrom all toll or other charge whuteverfor any propertyof the U.S or persons in their servicepassingthroughthe same." The clause in the railroad rant is precisely the same in meaning and nTmost identical in language. Now, sir, that canal was to be made by the State as a great commercial thorough fare connecting the waters of the lakes with the FatherofWaters, to be open asahighway for all persons and for vessels of private individuals, and it was never contemplated that the State should put a single boat or horse or driver upon it; but the State was to have the right to collect tolls of all who used it for the purposes of transportation, and hence the Government reserve to itself the right to its use as a high way for the transportation of Government property or of persons in the service of the U.S. free of any toll or other charge. Now, sir, will anyone contend that under such a clause the State of Illinois was to construct canal boats, furnish teams, hands, conductors, and all other employees of the Government without charge ‘I On the other hand, the Governmenthas not in all the transportation it has done on the canal during the war set a any such claim against the State or company. ow, if this was the construction which was given immemorially to the provision in turnpikes and canals, and as undoubtedly aplicable to all thoroughfares, by what warrant shall we attempt to give a different construction in this instance? Would not such construction be clearly in violation of that principle of law recognized to be sound, that where an antecedent statute or provision of a previous law is carried or adopted into anew law, it carries into the new law the same interpretation and construction which was given to it in the old law? It is replied to this view of the case that the term railroad includes the rolling stock of the road. This may be the law of the case. Yet I believe there would be but few purchasers upon such a principle unless there was distinct designation of the rolling stock in the deeds of conveyance, and I know that in all the deeds and mortgages of railroads with which I am familiar, there is as much particularity in describing the rolling stock as the railway itself; and it is a sufficient answer to this objection to say that if the rolling stock is included in the term railroad it is quite clear that the officers, conductors, agents, and all the hands are not so included, and these constitute a large portion of the operative expense of the road. And yet it is absurdly contended that the Illinois Central railroad should receive no pay whatever for its immense army of employes. And even more than this, it is contended that, although itbecamenecessaryfor the road, in order to meet the increased business occasioned by the war, to purchase at great expense large additions of rolling stock in the marliet atlargc, and to draw largely and at great expense on connectin lines of roads, yet all this was to be done for the Government free of charge. This, indeed, would be a convenient way for a great Government to draw on private individ equals ad libitum et ad infinitum for material, men, and money to carry on a great war. In the debates heretofore had, it was urged that Congress could not have meant simply to give the Government the use of the raiireid, because that would suppose both the Government and company to be running their trains over the road at the same time, which, it was alleged, is impructicable, because collisions must necessarily occur. Now, sir, there never was a greater mistake. The instances are numerous in which several different companies run their I trains over the same road without any conflict whatever. All danger is averted by a simple arrangement of the time table. Not only law. but a half a dozen roads may run their Ira us over a track common to them all, by arranging the hours of departure and arrival of each, respectively, without the least fear of collision. The reservation of the use of the road by the Government was entirely consistent‘with the use at the same time by the com)any. It is also alleged that the more right to use the road by the Government was worth nothing to it, and why, therefore, provide for its sim Ie use as a highway? Sir, the best answer to this would be to suppose that there had been no railroad at all from Chica o to Cairo or from Galena to Cairo, and then as what price the Government would have given for a well laid track, a road bed complete, bridges of solid masonry, turnouts, depots, warehouses, &c., all ready for the Government, upon which to put its rolling stock for the transportation of its troops, supplies, and munitions of war. Inquire how many million dollars it would have cost the Government to have constructed the road bed of this road, so‘indispensable to the success of our military operations in the Southwest? Why, sir, it would have cost the Government ten times the sum it has paid the road for the transportation of its troops and property. The right to use the road was a sufficient consideration in itself for the grant of lands. It must not, however, I repeat, be understood that the free use of the road was the consideration the Government was to receive for the lands. This was not the case, for the Government had required this free use of roads and canals where it gave no lands at all. The object the Government had in view was to sell its lands by doubling the price of the reserved alternate sections, to build the road as a great commercial and military thoroughfare, and to promote the prosperity of the country. It would have reserved is free use of the road if it had only granted the right of way and no lands whatever to the company, as it did in the 1st canal bill. I now come to another point in this question, and that point is, that the moneys wh'ch it is proposed to recover from the Illinois Cen tral tai rond Company have been paid to them in pursuance of a contract in writin entered into between the Governmentthroug the SecyWar on the one hand, and the company by its president on the other. It was a valid contract based upon a valuable consideration, and was a wise and judicious arrange mentof the Government forits great advantage, if not. absolutely necessary under all the en‘ cumstances under which it was made. Immediately upon the breaking out of the war in April, 1861, it became necessary for the Government to commence a heavy transportation on this road, which increased from mouth to month, until the road became almost exclusively the carrier for the Government, to the exclusion of the regular customers of the road, and sometimes for months its whole capacity could not meet the demands of the Government. I am informed thatrthe Government often issued its orders to the company to do no private carrying {on certain lengths of time. Sometimes for months they were thus prohib ited from carrying for their customers. Under these circumstances, Mr. Osborn, the president, and Mr. Douglas, the attorney of the road, came to Washington to effect an ar rangement with the authorities as to the terms on which this transportation was to be made. They had interviews with the President, SecyWar, and QuarterMGen and the resident and attorney for the road contended] that under the clause in the land grant as to transportation it was not contemplated that the company should furnish rolling I stock, men, and money for transportation 0 I Government troops and property, but merely the use of the roadas a highway. To this view of the case the SecyWar assented, and the following stipulation in Writing was entered into: Wan Duran run“. 'Aumut 15.1861. SIR: Upon consultation'with the QuarterMGen.it has been decided bythis Dept that the clause in your charter, sectionfour, uivosii.clear right to the Government of the U.S. to the use of your roadway.without compensation, for the transportation of its troops and its property. As a proper compensationfor motive power.cars, and all other facilities incident to transportation, 2 cents per mile will be allowed for passengerst’ravel.subject to a discountof 33 and a 3rd%.as due to Government for charter privileges. Payment for transportation of freight.stores, munitions ofwiir and other public property, will bemadeat such reasonable ratesas may be allowed to other railroad " companies, subject. owever. to the abatementof 33 and a 3rd% asbefore specified. The foregoing basis has been arranged with the dis ti iictunderstandingthat transportationshall befurnishedby your company at such times and in such manperasthe Government of the U.S.may require and that preferences shall be given to government transportationin accordance with therequi sitIifons of this apartment and of its officers. this proposition is acceptable to your company. Notice in writing to that effect willbe expected within ten days from this date. Very respectfully.your obedientservant. SIMON CAMERON. Secretary ar. W. H. OSBOBN, PresidentIlline u CentralRailroad. NewYorkur. August17.1861. Sin: I have the honor to acknowledge your communication of the 15th containing the determination of the Governmentin relation to the useof the railroad of this company. Under present eircumstances an important part of our line is imperiled andactive cooperation with the Governmentis indispensable, and I beg to notify you that the proposition of the Governmentis accepted. The company willendeavorto forward the troops and property with the utmost promptitude, prefer enIcaemalw, aysbeinggiven asindicated. sir. very respectfully your obedient servant, W. H. OSBURN. President. Hon. Siilon CAMERONS, ecretaryof War. This arrangement was made with Mr. Cam eron, the SecyWar at that time, and the present SecyWar at the last session of Congress said to the chairman of the ComFinance that he believed it wise to continue the arrangement. He said that if the Government had refused to pay anything the effect would be to stop the running of the road, and comel the U.S. to seize and operate it on government account. The SecyWar acted wisel in not engaging in the railroad business, an in employing the company to do its work, (which all usiness men know it could do more econom ically,) at the some time reserving sufficient compensation for its right to the use of the res by requiring the company to perform the service at 1/3rd less than was paid to other roads. Was this not a valid contract? It was in the power of the Government to seize the road, and the company was ready to turn it over to the Government. Now, in all fairness, can the Government honorably go back upon its contract, especially when, but for that contract the company could have turned over the road to be operated by the Government, instead of losing the millions of dollars they have expended in transporting for the U.S.? Can it be denied that the SecyWar had a right to make such a contract? Was it not Wiser in him to employ the railroad as government carrier‘than for the Government to undertake to do its own transportation and to do it at greater cost? Was this not eminently his duty, in view of the important fact that the road did not make one dime of profit upon the transportation for the Government? This declaration may strike you, Mr. President, as strange, if fyou have never been engaged in the business 0 railroads. But, sir, it is a statis tical fact that the expenses of operating rail ioads are from 50 to 75%. of their gross earnings. So that if you deduct 1/3rd from the gross earnings of a road you have nothing let by way of profit. The other 2/3rds are absorbed in the actual expenses incurred in operating the road. Upon our western roads the operating expenses are much greater than on eastern, owmg to the Lsparsenessof our population. The amount of trade is irregular. Sometimes whole trains of cars have to be run with only half freights, which is not the case on eastern roads runnin through populous cities and a densely settle country, where the exact amount of business can be calculated and relied upon, and where trains, without any waste 0 material, are uniformly supplied to their full capacity. I hold in my hands the last report of the Illinois Central Railroad Company for the year ending 81st December, 1865, by which it appears that the earnings for the year were $7, 181, 208 37, and that, exclusive of outlays for permanent structures and for increase of equip ment, the expenses for operation alone were $4, 609, 794 83. Thus you see that the running expenses were about 65%. of the whole amount received by the read. And thus also you see the SecyWar made a profit able arrangement with the company, because the Government could not have operated the road near so cheaply. Now, Mr. President, please remember, also, that in the 1st place all the railroads in the U.S. agreed to carry for the Government at about 2/3rds the ordinary fare and freights charged to private individuals, and that the Illinois Central railroad in consideration of its charter privileges, agreed to ca for 2/3rds of what other railroads received, and you will find that the U.S. did not pay what was absolutely required for running expenses, and if the Government had taken the road and run it there can be no question that the expense to the Government would have been for greater than it was under the wise policy pursued by Mr. Lincoln, the SecyWar, and the QuarterMGen. Mr. President, there were few, if any, clearer headed lawyers in the U.S. than Mr. Lincoln; and while I do not asssert it as a fact, et I was positively assured in my own mind but he took the same view of the contract which I have taken, and that the contract was made after full conference with him upon the part of the SecyWar and QuarterMGen. While I cannot prove that he did approve of the construction of the law as given in the contract, and of the contract as it was made, yet I can and will now prove to the Senate that the whole subject was before his mind, and that it was referred by him to the SecyWar. Then, I will ask, if it is reasonable to infer that so important a contract, affectin not only the Illinois Central, but all the Ian grant railroads, and involving many million dollars, would have been entered into without. his consent and approval? I now read from a copy of a letter from Mr. Lincoln to the SecyWar, and certified by the QuarterMGen: QUARTERMGen'S Office Wasuiiic'rox. D. 0. March 31.1866. Sin: In accordancewith instructions of the SecyWar of this date I transmit herewith a co oinfthreollacttitoenr tooft PhreeIslluinleoiiist LCinecnotlrna, ldraatilerdoaMda.y 23.18%: I am. very respectfully, your obedientservant, M. C MEI ‘. BreoelMajor General U.S. Army, uni terms!" General. J. M. Douglass Es. President Illine u Gourd Railroad. lfillard's otel, Washington, I). C. Exncurivs Missios, WASHINGTON, May 23.1863. Mr Drip Sin: In order to construct the Illinois Central railroad, a large grant of land wasmade by the U.S.to the state of Illinois.whieb land wasagain givento the railroad company by the State in certain provisionsof the charter. y the U.S. rant certain privileges were attemptedto be secur from the contemplated railroad to the U.S and by the charter certain% ageof the income of the road wasto be from time to time paid to the State of Illinois: at the beginning of the present war the railroad did certain carrying for the U.S. forwhieh it claims pay: and as I understand the U.S. claims at leastpart of this the road was bound to do without pay. Though attempts have been made to settle the matter treth meainesrucnesnettatgleodto;mtchaen State. thTchroisad refuses delay is working ba ly and I understand the delay exists tbheeca U.S. bweiilnl gsneottldeeitfsine iwten decision Which the railroad or will allow theState to settle it and account to the State tor it. It‘I had the leisure which I have not, I believeI could settleit' butpnmafacic it appears to me we had better settle the account ourselves because that Wlll save us all question as to whether the State deals fairly with us in the settle mI wenisthoyfoouur accountWith a t ird party therailroad. would see Mr. Butler, lateour Statetreas urer. And see if something definite cannot be done in the case. Yours truly. A. LINCOLN. Hon. Sucnnnnv or Wan. True copyof original letter. CfiCnmilfigfi ChImT wh0 ml. BrevetMajor General U.S. March 81.1866. But to state the argument of those who favor the amendment in the strongest light possible for them, we will suppose the railroad was bound to furnish the Government not only the use of its road, but also of its rolling stock and employees in the transportation of Government troops and property free of cost, yet it will not be contended that the Government was to have any other than the some facilities with the company in its transportation of freights for its own iienefit. I mean that no one will contend that in the use of it as a highway that the Government was to have any more than equal facil ities with the company itself. What capitalist would ever be in need to invest in an enter prise in which others were to have superior privileges or preference? I believe all will admitthat the railroad would have fully discharged its whole duty to the Government when it had done all in the way of transportation which it was doing for private customers. But, sir, the Government required more of the railroad than this equal service. It re nired that the company should agree in writ mg to furnish “transportation at such times and in such manner as the Government of the U.S. may require, " and “that preference should be given to Government transportation in accordance with the regulations of this [the War] Dept and of its officers.” The company was to start its trains at whatever time, to delay its trains, which I know it often did,). at the pleasure of the officers of the Government, and it was to transport “ in such manner” as to speed, quantity, qualit of cars, &c., as the Government aired. ow, sir is not this reference a vali, a sufficient, an an independent consideration for the contract made by the SecyWar? In that contract the Government required that the railroad should not only be open and free to the Government as a public highwa, as it was to the company, but that it should have the ref erence for Government transportation. ere was a great surrender on the part of the company; for no matter if its warehouses were full of grain or produce or freights, those articles must remain without transportation, or find shipment on other roads, as long as Governmeit required the use of the road. ny military officer, any quartermaster furnishing Army supplies, could, by a simple or der, employ every car, passenger or reight, in the transportation of troops and munitions of war and applies to the exclusion of private shippers. The company, by giving this pref erence to the Government, incurred liability to private individuals. I am informed by the president of the company that large quantities of produce, which otherwise would have been ship ped on their road, went to other roads, and) that suits are now pending in the Illinois courts for losses sustained by individuals whose produce could not be shipped in time to meet the demands of the market in consequence of preference given to Government transportation. You can well imagine, sir, thatif today corn at Cairo or Chicago is worth 50 cents perbushel, and in 30 days it is only worth 35, individuals who had bought la' ely for these markets would be ruined by the ail ure of the company to ship in time for the market, and the company in having iven a reference to the Government would incur heavy liabilities to those who had sustained the losses. Why, sir, it was often the case that far a month at a time the company was prohibited by positive orders from doing any private truns portation whatever. Here, sir, we find a legal consideration for this contract which, by no construction of law, by no argument or special pleading, can be said to have failed, for the preference which the Government required the road to give in writing was more than the worst enemy of the road would contend the company was liable for. If liable to afford the Government free, or, the same thing, equal transportation, it certainly was not liable to afford it preferred transportation. Therefore such preferred transportation, reqki‘iiring the company to do what it was not lia Is to do, utting it to trouble, additional outlays, and so jccting it to heavy liabilities to private customers, beyond all doubt constituted a valuable and independent consideration. Also, if it should be decided that the SecyWar transcended his power in allowing the road remuneration for services which it was alleged the road was liable to perform without charge, yet it cannot be denied that when the SecyWar discovered that merely the use of the road and its entire equipment upon equal terms with the company did not meet the emergencies of the war, e had a right, and it was required of him, to stipulate for an additional service which could be exacted roni the road. Preference to the Government was a military necessity. The effectual prosecution of the war imperatively demanded that military should have preference over private transportation. Illinois alone sent 250,000 men to the field, togetherwith uncounted trains of supplies from her rich granaries. Nearly all these, together with the troops and supplies of the northwestern States, and also of many of the eastern and middle States, were sent over this, the mostexpeditious route to the seat of war, makiu that reference necessary. The conclusion is t cre ore irresistible, that upon this ground of pref erence, if on no other, the contract was made upon the basis of an independent and valuable legal consideration. Now, sir, as to the equity of the case. Suppose we admit that I am in error in the law, and suppose we adopt the unreasonable construction that the coman was to furnish the road bed, rolling stoclk, ands, and money, without charge, to the Government. Suppose this to be the strict legal construction, the letter of the bond. Yet all concede that when the grant was made no one dreamed that we shoe (1have such uwar, and that such immense burdens would be put upon this road. When the war began the U.S. hadan Army of 13,000 men. The provisions of the grant were made in view of peace, or of such increase of our Army force as ordinary wars, like that with Mexico, or with the Indians, or with some foreign Power, might require. N1 dreamed that we should have an Army of over one million men. No one believed that the Illinois Central railroad, throughout its entire length of 706 miles, and all its machinery, cars and employees, were to be absorbed by the Government for the greater part of 4 long years. And now, in all fairness, in all honesty, in just dealing, who will say that the Government shall require all this service for nothing? Who is the ‘hylock to demand the blood of the bond? Is there a Senator here who, if he had a contract of this kind with a neighbor, would enforce it? Could he, in honor, in equity, do it? And shall the most magnificent and most magnanimous nation'of the world enforce such a hard construction upon a company which, amid the storms of this gigantic war, sent her locomotives thundering along our prairies to the relief of our armies and the triumph of our flag? If the railroad was willing to do such service at h actual cost, at 1/3rd less than the previously reduced price of all other roads, in all conscience is that not enough? The President, Secretary ofWar, and QuarterMGen took the right view of the case. To have required of the Illinois Central road to perform a service costing them an immediate and immense outlay of millions of money without uny return from the Government, and upon the great and pressing emergencies of war, was to require of them what they could not possibly have performed, and which would have resulted in as much injury to the Government as to the company. Indeed, the delays occasioned thereby might have proved fatal to the vigor, ous prosecution of the war, left the enemy with impunity to occupy all points on the Missis sippi and expose southern Illinois to successful rebel invasion. The argument relied upon for the oppressive course proposed to be pursued toward the gentral road is that the Government has made a munificent grant of the public lands to aid in its construction, and that now it is only fair that the company should pay the Government all the moneys advanced) to it during the war. Now, in reply to this it can be shown that the Government has been paid the full value of those lands in halfa dozen different ways. In the 1st place, the U.S. granted to the Central road every alternate section and doubled the price on the reserved alternate section, charging $2 60 peracre instead of $1 25. It is a well known fact that for some of these reserved lands the Government received as high as 7 dollars peracre. How was this? Why, sir, because this much abused road made that half of the lands reserved by the Government far more valuable than the whole by bringing them nearer to market, and by attracting an industrious and energetic population to ur chase and settle them. By this grant the government was the greatest gainer, and it got early purchasers for lands which for 30 years had laid unsought and undesirable in a wilderness prairie, besides filling southern Illinois with a population which drove back the rebel hordes, preserved inviolate our soil, and sent to the war the very flower and chivalry of our great Army. And, sir, it can also be shown that the Government has already received from the Cen tral railroad, dollar for dollar, the whole value of the lands at the time they were given to the company, in the deduction of 1/3rd from the amount which would have been charged for Government transportation by this as has been charged by other roads. If you consider this as an arrangement in perpetuity, that for all time to come the Government is to have this same privilege, namely, a deduction of 1/3rd of the cost of transportation, you will find that the U.S. will realize from this source alone, not only 5 times the value of the lands, but will have a perpetual, exhaust less, unfailing annuity so large and so vast as to defy the powers of comutatipn. What, also, shall be said of the milions and 100s of millions of dollars worth of property, created through the agency of the road a on its whole extent, from which the Government raws, and will continue to draw, an ever increasing reve nue? Stately cities,1,000 prosperous villages, comfortable mansions, and ighly cultivated farms have sprun up along the line of this railroad in the wilerness rairie where before wolves howled and the run grass waved untrodden. Mr. President, a most unfair line of argument has been pursued in the debates u out is subject. It is said that the Central railroad is rich, and therefore should be compelled to refund the money she has made under the contract with the Government. Sir, that most immoral logic must be founded on the principle of robbing a man of $50,000 because e has $50,000 left. But, sir, I need not dwell upon such an argument before an American Senate. A great nation like this will do justice and will not soil its fair escutcheon by arbitrarily taking that which righteously belongs either to the rich or the poor. Rich as the Central road maybe, I am informed that during its whole existence it has never paid but 3 annual dividends. But, as further evidence of unfairness, it has been recklessly represented that the lands donated by the Government had of themselves built the road, and that the cost to the stock holders was nothing, or inconsiderable. How inexcusably reckless is this statement! At the same time Senators know that when the company received these lands, the whole of them (2, 595,053acres) would not have sold for $1,500,000. Why, sir, do not all western and many eastern men know what the value of land warrants was at the time this railroad was commenced? They were the tests of the value of these lands, and for years after this grant, and after they began‘o increase in value in pros ect of the road, many, if not most of the pubic lands sold were bought with land warrants which were hawked around the markets on sold on ’change at from 50 to 75 cents to the dollar. And yet, sir, you talk of the Government having built a road which has cost $40,000,000 with lands which were worth not to exceed in value, allowing the highest figure, $2,000,000., It is said, however, that the company has realized far more than 2 million dollars for these lands. This is true; but through whose a ency? Not that of the Government, surely. o, sir; the company by investing millions of money and by great energy and wise management opened these lands to market and settlement and made them valuable. Is the U.S., after grantin these lands, and after they are made value le to set up a claim on the road on account of the increased value? As well might it say to the pioneer, who under the homestead act goes into the wilderness, erects his cabin, and prospers until he becomes wealthy in houses, farm, ptock.s, and store; as well might the Government say to him after he has been aid an account for cattle and produce furni ed the U.S. quartermaster upon contract: “Yes, you have comlied with your contract, but you must remember that the land we gave you and which your labor and money have improved is now worth 50 dollars peracre, and in consideration of that fact we must recover from you the amount paid you upon the contract.” But, sir, to show you how unfounded and reckless are the charges made to prejudice the 2 Houses a inst the Central railroad, I will in answer to tile charge that these lands have did for the road, re a letter from Hon.Wil iam H. Osborn, the former president, a gentleman of eminently high character among the business men and capitalists of this country, whose word no man can rightfull question, showing the cost of the road an tesums already received and which will probably be received from the lands granted by the U.S. to the railroad company: Orrwi: Illinois Casi mi. RAILROADComm“. EWYORK, March 24, 1866. MY Dean SIB: The secretaryhasmadeup anexact statement of the outlays upon the Illinois Central railway from the acceptancopf its charter by the present company lin 1802w, ith interestat 6%. pechr ia:nannudmth. eadnidvu niesnddesdpuacitde.d White hinthteerinetsetrceosutpoonnss and payments at 6%. from the time at which they weremade. e has also deducted all themono lraenedesiv, edfor interest on lands and for interest 1m which reduces the sumtotal to the actualcost with 6%.interest only. The result is railway that the cost.on the 31st of Decemberlast, 847, 646, 69875. From this cost the receipts from the lands have reduced the original debt, by‘payment of the bonds, $4, 801,500l saving the cost (lesslull collections on 31stDecember)$42, 845, 18957. Against this sum the companyheld on the 3lst December 88.7850355 land notesand$38, 62a0cresof land. This land is worth today 8 dollars peracre. It would be a good sale and one which the directorswould confirmat anymoment.sa 87, 33, 960, or with the notes in hand, .995 to be deducted from $42, 845, 18957. leaves $26, 551.1972 the actual costto the shareholdersof the Illinois Central Company on the illst December last. Yours, respectfully, W. H. OSBORN. Jens M. DOUGLAS, Esq., freaiilen l Illinois Central Railroad Company. Mr. President, I desire to call your attention to a most important consideration which must be set down on ‘the credit side of the Illinois Central railroad, and it will appear strange to you when I say that the capitalists who invested so largely in this enterprise might have done for better without receiving a single acre of the public lands. I refer to the location of the road, and state that anyone at all acuainted with the geography of the country t rough which the road and branches run, and with the commercial points and lines of travel and trade, will see at a glance that the road was located for the benefit of the State and the U.S., and very much to the pecuniary prejudice of the stockholders of the company. The road was, by the charter, made to run, not between important commercial points, such as Chicago and StLouis, nor along any of the lines of trade and traffic running East and West, nor through the settled portions of the State, but North and South, through the wild and unsettled lands of the U.S.; the sale, settlement, and improvement of these lands being the chief consideration which influenced Congress to make the grant. At the date of the rant the settlements had been principally confined to the public highways or stage routes and main] to the timber lands, leaving the prairies to bIoom in their native wildness. Flourishing little vil lages and a considerably dense population had sprung up along these thoroug fares and natural channels of intercommunication, which, from the beginning, have furnished travel and traffic and most remunerative profits to the roads which have since been constructed along them. On the other hand, the Central railroad had to build up its own settlements, its own towns and farms, and to create its own trade, travel, and business. As late as 1853 I stood in the center of one of the grand prairies of Illinois, when almost the only sign of civilization I could see was the pioneer locomotive of the Illinois Central railroad and the hardy sons of the Emerald isle as they were laying the 1st rails of that great work; all else was an ocean world of wilderness land. The object of my visit there was to enter some land, with a few land war rants which I had bought at 75 cents to the dollar, but so remote did it seem to me before that vast area could be settled that it was long before I could make a selection, and get m consent to risk what then was almost my nl upon so seemingly wild aventiire. In or or to get vacant lands on each side of the track the aim of the Governmentwas to miss the settlements. So important was this consideration that I do not hesitate to say that the Central Railroad Company would have made money if it had given back to the government every acre of land it had received and constructed the road through the settled portion of the State and between the most important commercial oints. Railroad men understand this view of the case well. They will inform you that while long lines of road through unsettled regions require the same or greater outlays for construction and operation, 3/4ths of the profits or earnings of all roads proceed from the local traffic and travel, and not from the through trade and travel. But these great advantages the Cen tral company were compelled to forego, because the Government was not consulting the interest of the company but its own, and the development of the country, and seeking not for settled but for unsettled lands. Thus the location of the road throuvh an unsettled route deprived the compfln of ndvantewes greater than the value of the hands themse ves. To show the wonderful effect which the money of the stockholders of the Illinois Cen tral railroad had in bringing into market and settlement the lands of the Government, I mention, that while these lands had been in the market for 25 years, and on account of their remoteness from market and destitution of timber seemed likely to remain so for half a century more, while they came under the denomination of refuse lands, and belonged to that class which at a former session of congress were proposed to be ceded to the States in which they were situated, in order to dispense with the machinery of land offices and other expenses which cost the Government more than the revenue derived from their sale while these things were so, yet in the year 1853, while the 1st earth was being thrown up by the spade and the iron was being laid upon the fresh road bed, the Government sold of its public lands in the State of Illinoisalone 2, 807, 981 acres, and most of them in the prai ries traversed by the Central road. Sir, a few days since, when the Senfrom Maine rather humorously called to account my friendfrom Indiana [Mr. HENDRICKS] for finding but little warrant in the Constitution for voting away money, but as not having so tender a conscience in voting away lands, and the Senator replied that the policy of the government was wise, because, as a great land holder, it had adopted the most effectual means of imparting value to its lands by do nating half and doubling the price of the reserved half and at the same time, incidentally, this policy had given stimulus to production, impulse to trade, and opened new fields to enterprise, affecting in no small degree a large portion of the Union, I felt like congratulating the Senfrom Indiana (for I was with him in Congress and with him in his policy) for the triumphant vindication years has given of the wisdom of that policy. Sir, the history of the Central railroad is the history of the origin, rise, progress and glorious triumph of this policy. Sir, look at it. In 1852 the State of Illinois had just 95 miles of completed road. The mammoth system of the State (as it was called) bud burst like a bubble, and the Commonwealth was bunk rupt, her credit down, and her bonds hawked about in the market almost as worthless rags. But, sir, Congress made the grant of lands to the State; the road commenced; it brought population and wealth to Illinois; it astonished the Government and the opposers of this pol icy by lacing in the hands of the Government every ollarit asked for its land. I read from the report of the ComrGLO for the year 1865, page 32: “By an act of Congress in 1850a grantwasmadeto Illinois to aid in the construction of railroads. It conveyedfor the purpose 2.595.05a3cres, which have been valued as high as $0,000,000, resulting in an extraordinary impulse to the settlementand pros perity of the State. At the dateof t h0 granntearly alfof the public lands Within the limits of Illinois wero vacantand uhLHSDOSeodf. Now, afterthelapse of only 15 years, the U.S. have virtu ally retired asa laud holder from the State." I might say that as early as the year 1857 the U.S. had virtually retired from the State as a land holder, and that it was almost impossible to find 80 acres of land unentered which was not either swamp or bar rens; and, indeed, nearly all of these descriptions of land had been entered. In ten years the population of the State advanced from 851,740 to 1,711,951, more than doubling her population in a single decade. The construction of the road gave a new and wonderful impetus. Other roads began to be built, and the State which in 1852L had only 95 miles of road in 1860 had 3,000 miles, intersecting through all its length and breadth, and developing her immense domain until now agriculture is reapin harvests upon her prairies such as the worl never saw before. The growth of the State has not been by any ordinary regress. Setting all example at defiance, she as marched for ward with a bound to the proud position of the 4th in our “glorious empire of States.” Wealth, power, glory, and dominion be ond the possibility of recall or change are ers, and hers forever., The Senfrom Indiana was right. The policy of the land grants was right. But, sir, let us not put to shame that poli by attempting to crush out the enterprises which so far have prospered under that policy and which should have the careful and continued support of the Government and of all the people of all the States.