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be appointed from And an officer not above the grade of lieutenant shall be detailed to civil lito; how de perform the duties of secretary to the Admiral or Vice-Admiral, when tailed from Navy.

R. S., $ 1556, 2a on sea service, and one not above the grade of master to perform the ed., p. 267. duties of clerk' to a rear-admiral or commander, and one not above the

grade of ensign to perform the duties of clerk to a captain, commander, or lieutenant-commander when afloat:

Provided, That the secretaries and clerks in service on the first day of July, eighteen hundred and seventy-eight, on vessels abroad, shall continue as such until such vessel shall return to the United States on the teriniuation of its cruise.

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Charts furnished

[Par. 2.] That all charts hereafter furnished to mariners or others not persons not in gor in the government service shall be paid for at the cost price of paper

to be paid for at cost, and printing paid by the government. R. S., 226, 432. 1879, ch. 68.

[May 4, 1878.]

*

CHAPTER 96.

May 7, 1878. 20 Stat. L., 26.

AN ACT TO ALTER AND AMEND THE ACT ENTITLED "AN ACT TO AID IN THE CON

STRUCTION 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”, APPROVED JULY FIRST,
EIGHTEEN HUNDRED AND SIXTY-TWO, AND ALSO TO ALTER AND AMEND THE ACT
OF CONGRESS APPROVED JULY SECOND, EIGHTEEN HUNDRED AND SIXTY-FOUR,
IN AMENDMENT OF SAID FIRST-NAMED ACT.

SECTION

SECTION
Pacific Railways.

7. Application of sinking-fund.
Preamble.

8. Priorities in application of sinking-fund. 1. Net earnings; how to be ascertained.

9. Liabi ies to United States constitutes a lien 2. Compensation due from United States to be

on property of companies. retained; how applied.

Companies not prevented from disposal of 3. Sinking-fund.

property in ordinary manner. 4. Credits to, and payments into, fund.

10. Enforcement of rights of United States. 5. Secretary of Treasury to remit into sinking. 11. Forfeiture of franchises on failure to comply fund percentage on net earnings.

with this act.
6. No dividend to be voted, &v., in case of de- 12. This and former acts subject to alteration, ro-
fault.

peal, &c.
Liability of officers to repay dividends ille. Existing remedies not affected.
gally inade.

13. This act deemed as amending former acts. Penalty on officers, &c., for voting, &c., to pay

illegal dividends. Pacific Rail. Whereas, on the first day of July, anno Domini eighteen hundred and ways.

sixty-tuco, Congress passed an act entitled An act to aid in the construction Preamble.

of a railroad and telegraph line from the Missouri River to the Pacific 1862, ch. 120 (12 Stat. L., 489).

Ocean, and to secure to the Government the use of the same for postal, mili1864, ch. 216 (13 tary, and other purposes"; and Stat. L., 356). Whereas afterward, on the second day of July, anno Domini eighteen

R, s., 96 5256- hundred and sixty-four, Congress passed an act in amendment of said first5262.

mentioned act; and

Whereas the Union Pacific Railroad Company, named in said acts, and under the authority thereof, undertook to construct a railway, after the passage thereof, orer some part of the line mentioned in said acts; and

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 Pacific Railroad Company, have heretofore issued, by way 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 million eight hundred and eightyfire 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 Pacific Railan amount of its own bonds equal to the amount so issued by the United ways.

Preamble States, and secured the same by mortgage, and which are, if lawfully issued and disposed of, a prior_and paramount licn, 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 the said Central Pacific Railroud Company, as provided in the act of Congress passed on the third of March, anno Domini eighteen 1865, ch. 88 (13 hundred and sixty-five, and did, under the authority of the said act and of Stat. L., 504). the acts aforesaid, construct a railroad from the city of San Jose to the city of Sacramento, in California, and did demand and receive from the 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

Whereas said Western Pacific Railroad Company has issued and disposed of an amount of its own bonds equal 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

Whereas said Western Pacific Railroad Company has 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

Whereas the United States, upon the demand of the said Union Pacific Railroad Company, have heretofore issued by way of loan to it and as prorided 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 twenty-seven 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 other. wise disposed of by said corporation; and

Whereas said corporation has issued and disposed of an amount of its oron bonds equal to the amounts so issued to it 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, us stated, and secured thereby; and

Whereas the total liabilities (exclusive of interest to accrue) to all creditors, including the United States, of the 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 eighty-eight million dollars; and

Whereas the United States, in view of the indebtedness 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 suid respective railroads and corpora. tions, either as mentioned in said acts or otherwise ; and

Whereas a due regard to the rights of said several companies respectively, as mentioned in said act of eighteen hundred and sixty-two, as well as just security to the United States in the premises, and in respect of all the matters set forth in said act, require that the said act of eighteen hundred and sixtytuo 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 to be exercised as hereinafter enacted: Therefore,

Be it enacted, &c. Pacific railways; (SECTION 1], That the net earnings mentioned in said act of eighteen net earnings, how hundred and sixty-two, of said railroad companies respectively, shall be to be ascertained. 1862, ch. 120 (12

ascertained by deducting from the gross amount of their earnings reStat. L., 489).

spectively the necessary expenses actually paid within the year in oper1864, ch. 216 (13 ating the same and keeping the same in a state of repair, and also the Stat. L., 356). 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. When section This section shall take effect on the thirtieth day of June next, and takes effect. be applicable to all computations of net earnings 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 may, from time due from United to time, be due to said several railroad companies respectively for serv. States to be re- ices rendered for the Government shall be retained by the United States, tained; how applied.

one-half thereof to be presently applied to the liquidation of the interest 16 Opin. Att’y- paid and to be paid by the United States upon the bonds so issued by Gen., 516.

it as aforesaid, to each of said corporations severally, and the other half 1879, March 3, thereof to be turned into the sinking.fund hereinafter provided for the ch. 183, par. 5.

uses therein mentioned. Sinking-fund. 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 hike manner from time to time invested, and the same shall accumulate and be disposed of as hereinafter mentioned. 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, be 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 obtained, 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 pub.

licly disposed of pursuant to this act. Credits to, and SEC. 4. That there shall be carried to the credit of the said fund, on payments into, the first day of February in each year, the one-half of the compensation sinking-fund.

for services bereinbefore 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 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 hereinbefore provided, for the year ending on the thirtyfirst 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 sinking.fund, 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 hereinbefore provided, for the year ending on the thirty-first day of December next preceding.

ŠEC. 5. That whenever it shall be made satisfactorily to appear to the Secretary of Secretary of the Treasury, by either of said companies, that seventy- Treasury to remit

into sinking-fund five per centum of its net earnings as hereinbefore defined, for any cur

percentage on net rent year are or were insufficient to pay the interest for such year upon earnings. 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 No dividend to stockholder or stockholders in either of said companies respectively at be voted, &c., in any time when the said company shall be in default in respect of the case of default. payment either of the sums required as aforesaid to be paid into said sipking-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 Liabilities of ofany stockholder of any of said companies who shall receive any such ficers, &c., to rodividend contrary to the provisions of this act, shall be liable to the pay dividends il

legally made. United States for the amount thereof, which, when recovered, shall be paid into said sinking-fund.

And every such officer, person, or stockholder who shall knowingly Penalty on offivote, declare, make, or pay any such dividend, contrary to the provis- cers, &c., for votions of this act, shall be deemed guilty of a misdemeanor, and, on con- ing, &c:, to pay viction thereof, shall be punished by a fine not exceeding ten thousand illegal dividends. dollars, and by imprisonment not exceeding one year.

SEC. 7. That the said sinking-fund so established and accumulated Application of shall, at the maturity of said bonds so respectively issued by the United sinking-fund. States, be applied to the payment and satisfaction thereof, according to the interest and proportion of each of said companies in said fund, and of all interest paid by the United States thereon, and not reimbursed, subject to the provisions of the next section.

SEC. 8. That said sinking-fund so established and accumulated shall, Priorities in apaccording to the interest and proportion of said companies respectively plication of sinktherein, be held for the protection, security, and benefit of the lawful ing-fund. and just holders of any mortgage or lien debts of such companies re. spectively, lawfully paramount to the rights of the United States, and for the claims of other creditors, if any, lawfully chargeable upon the funds so required to be paid into said sinking-fund, according to their respective lawful priorities, as well as for the United States, according to the principles of equity, to the end that all persons having any claim upon said sinking fund may be entitled thereto in due order;

But the provisions of this section shall not operate or be held to impair any existing legal right, except in the manner in this act provided, of any mortgage, lien, or other creditor of any of said companies respectively, nor to excuse any of said companies respectively from the duty of discharging, out of other funds, its debts to any creditor except the United States.

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Liabilities to SEC. 9. That all sums due to the United States from any of said comUnited States con- panies respectively, whether payable presently or not, and all sums stitute lien on property of com

required to be paid to the United States or into the Treasury, or into panies.

said sinking-fund under this act, or under the acts hereinbefore referred to, or otherwise, are hereby declared to be a lien upon all the property, estate, rights, and franchises of every description granted or conveyed by the United States to any of said companies respectively or jointly, and also upon all the estate and property, real, personal, and mixed, assets, and income of the said several railroad companies respectively, from whatever source derived, subject to any lawfully prior and para

mount mortgage, lien, or claim thereon. Companies not But this section shall not be construed to prevent said companies reprevented from spectively from using and disposing of any of their property or assets disposal of a prop, in the ordinary, proper and lawful course of their current business, in

good faith and for valuable consideration. Enforcement of SEC. 10. That it is hereby made the duty of the Attorney-General of rights of United the United States to enforce, by proper proceeding against the said States.

several railroad companies respectively or jointly, or against either of them, and others, all the rights of the United States under this act and under the acts hereinbefore mentioned, and under any other act of Congress or right of the United States;

And in any suit or proceeding already commenced, or that may be hereafter commenced, against any of said companies, either alone or with other parties, in respect of matters arising under this act, or under the acts or rights herein before mentioned or referred to, it shall be the duty of the court to determine the very right of the matter without regard to matters of form, joinder of parties, multifariousness, or other matters not affecting the substantial rights and duties arising out of

the matters and acts hereinbefore stated and referred to. Forfeiture of SEC. 11. That if either of said railroad companies shall fail to perfranchises on fail, form all and singular the requirements of this act and of the acts bereure to comply with this act.

inbefore mentioned, and of any other act relating to said company, to be by it performed, for the period of six months next after such performance may be due, such failure shall operate as a forfeiture of all the rights, privileges, grants, and franchises derived or obtained by it from the United States;

And it shall be the duty of the Attorney-General to cause such for

feiture to be judicially enforced. This and former SEC. 12. That nothing in this act shall be construed or taken in any acts subject to al- wise to affect or impair the right of Congress at any time hereafter teration, repeal, further to alter, amend, or repeal the said acts hereinbefore mentioned;

and this act shall be subject to alteration, amendment, or repeal, as, in

the opinion of Congress, justice or the public welfare may require. Existing reme- And nothing herein contained shall be held to deny, exclude, or imdies not affected. pair any right or remedy in the premises now existing in favor of the

United States. This act deemed SEC. 13. That each and every of the provisions in this act contained as amending for- shall severally and respectively be deemed, taken, and held as in altera

1862, ch. 120 (12 tion and amendment of said act of eighteen hundred and sixty-two and Stat. L., 489). of said act of eighteen hundred and sixty-four respectively, and of both

1864, ch. 216 (13 said acts. [May 7, 1878.] Stat. L., 356).

&c.

mer acts.

CHAPTER 106.

May 16, 1878. AN ACT TO AMEND A JOINT RESOLUTION AUTHORIZING THE SECRETARY OF WAR TO

ISSUE ARMS, APPROVED JULY THIRD, EIGHTEEN HUNDRED AND SEVENTY-SIX. 20 Stat. L., 61.

Arms to be issued to Territories without limit of former law. Arms to be in- Be it enacted, &c., That a joint resolution, approved July third, eightsued to Terr

een hundred and seventy-six, entitled “Joint resolution authorizing the

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