vided that any railroad company required by law to pay the cost of survey, neglecting to advance such cost for the period of 90 days, shall forfeit its land grant and the Attorney General shall commence proceedings to declare the forfeiture and restore the land to the public domain; this act has been applied to the Northern Pacific since 1910, and under it the company has paid the Government $141,313.48. Altogether the company has paid the United States for public surveys $1,577,919.99.

It would indeed be a graceless act if the United States, after having imposed on the company, years after its contract was made, the cost of surveys, should charge the company with results of the Government's failure to make surveys. (d) The 4th and 6th sections of the act provided that as fast as the railroad company should complete 25-mile sections of any portion of its railroad the President of the United States should appoint three commissioners to examine the same, and if they reported that the road had been completed in a good, substantial, and workmanlike manner, and in other respects as required by the act, that surveys should be made at once and patents of lands should issue to the company confirming its title to all the lands situated opposite and coterminous with the completed section.

In passing it will be noted that this 4th section is conclusive that failure to build some part of the road was no ground of forfeiture as to the land opposite completed road.

As sections of road were turned over to operation they were examined by the President and accepted by him in the manner provided by this section, and in these acceptances as made were placed on file with the Secretary of the Interior.

In face of the admitted breaches on the part of the United States of its covenants, which might have been one of the important causes for failure to complete the road on time, Congress could not well have perpetrated such an injustice as to forfeit the grant for failure to complete on time. The nonobservance of these covenants by the United States was one of the things which doubtless induced Congress to waive the forfeiture.

The company performed a great public service of inestimable benefit to the whole country by finishing in 1883 a line from Lake Superior to the Columbia River, which at once became a transcontinental railroad through connection at Wallula with the Oregon Railroad & Navigation Co. to Portland. The company's line extended thence to Puget Sound. It was the first transconti nental line in the northern tier of States. Without it the lands of the United States in these States would not have been salable at any price and ther would have been no settlement of this country until a much later date. Thes were facts appreciated at the time.

(e) Section 11 of the act of 1864 gave the United States for postal, military naval, and all other governmental service the use of the Northern Pacific' roa in perpetuity, subject to such regulations as Congress might impose restrict ing transportation charges. July 12, 1876, prior to the construction of a larg part of this road, Congress passed an act fixing reduced rates for gover mental transportation on land-grant roads. At once after the passage of thi act the United States insisted on its contract with the Northern Pacific C for reduced rates, and for 46 years these reduced rates have been exacte annually.

But the road is not a post road or military route subject to these oblig tions to the Government unless it is the road that was built in complian with act of 1864 and the amendments thereto. Reduced rates to the Go ernment are conditional on its being a land-grant road built under the charters.

To January 1, 1924, the Government claimed and received from the Northe Pacific a rebate or reduction from public rates amounting to $13,824,162.3 When it is considered that these concessions in rates will continue in perpetui it can not be said that the land grant was a bonus.

And the Government's claim and receipt of these rate reductions from 187 a period extending over nearly half a century, is conclusive that failure complete on time was waived.

(f) The condition in the act as to time of completion must be read in c nection with the 9th section, which says:

"That the United States make the several conditional grants herein, a that the said Northern Pacific Railroad Co. accept the same upon the furti conditions that if the said company make any breach of the conditions here and allow the same to continue for upwards of one year, then, in such ca

at any time hereafter, the United States, by its Congress, may do any and all acts and things which may be needful and necessary to insure a speedy com. pletion of the said road."

This special provision shows that both parties contemplated that the company might not be able to complete in time and made a special provision as to what the result should be, namely, that after failure for upwards of one year then the United States might do everything needful to insure speedy completion. The fact that the United States never intervened to speed completion is a determination by the United States that nothing had arisen to indicate that the company could not complete to better advantage than the United States, or that the company's rights under the act should be forfeited.

This is proven by the action taken in 1882, at the first session of the Fortyseventh Congress. A bill had been introduced to forfeit the Northern Pacific grant because the road was not finished on time and was referred to the House Committee on the Judiciary. That committee saw as the record shows that the Government was faced with the following alternatives: (1) It might forfeit the grant and take charge of and complete the enterprise itself; (2) it might forfeit the rights of the Northern Pacific and turn the job over to some other corporation; (3) or it might think best to ignore the delay and allow the Northern Pacific to complete the enterprise and earn the grant. The majority of the committee was of opinion that the main purpose of Congress in passing the act of 1864, as appears throughout the act, was completion of the road; that all the limitations and conditions of the act are to that end, and that the limitation of time had that purpose only, as had also the right reserved to amend and repeal. The United States did not, the committee said, want its lands back. It wanted a railroad across the continent at the earliest moment possible. The majority of the committee concluded its report as follows: "The remaining question, therefore, for us to consider is what is needful and necessary to insure the speedy completion of the road?'

"As has already been stated, 1,180 miles of the road have been completed; 600 or less remain. Work is going on at both interior termini and on the tunnels in the heart of Montana. It appears that 150 miles were approved by President Hayes in 1880 and 325 miles by President Arthur last year. The company assert that by September, 1883, they will finish the road; that they are progressing as fast as can possibly be done. No testimony or suggestion to the contrary has been made by anyone. Your committee do not see how the transfer of the lands to another company could hasten the completion of the road, nor would it be regarded as advisable for the Government to complete the road by its own direct action. Congress would hardly regard either course as needful and necessary to insure the speedy completion of the road.

"We can conceive of no legislation which would hasten the completion of the road, and therefore recommend none." (See report of this hearing, part 3, pp. 149-150.)

On the 6th day of July, 1882, the following proceedings were had in the House of Representatives:

Mr. ROBINSON of Massachusetts. On behalf of the gentleman from Maine [Mr. Reed], the chairman of the Committee on the Judiciary, who is necessarily absent, I submit a report on the subject of land grants to the Northern Pacific Railroad. As no action is recommended by the committee, I move that the report be laid upon the table and printed.

"The motion was agreed to." (See vol. 13, Congressional Record, p. 4577.) (g) Should it be suggested that section 20 of the act reserves an express right of alteration, amendment, or repeal, we insist that such right is a very qualified one, because the section says that the addition, alteration, amendment, or repeal shall have "due regard for the rights" of the company; and moreover such right to alter, amend, or repeal was to be simply for the purpose of securing the construction of the railroad, keeping it in working order, and securing to the Government at all times-but particularly in time of war-the use and benefits of the same for postal, military, and other purposes. The section reads:

"That the better to accomplish the object of this act, namely, to promote the public interest and welfare by the construction of said railroad and telegraph line, and keeping the same in working order, and to secure to the Government at all times--but particularly in time of war-the use and benefits of the same for postal, military, and other purposes, Congress may at any time. having due regard for the rights of said Northern Pacific Railroad Co., add to, alter, amend, or repeal this act."

It should not be supposed as a matter of law that the United States, because it is a sovereign and has all a sovereign's right to legislate, can appropriate the property or property rights of a subject. That the company has a property right in its grant, that this grant is not a bonus, that it has been earned and belongs to the company as much as any other property, was held in United States v. Northern Pacific Railway Co. (256 U. S. 51, 63-64). The court there quoted with approval the Sinking Fund Cases (99 U. S. 700), where on page 718 the court on a quite similar question used the language following:

"The United States can not any more than a State interfere with private rights, except for legitimate governmental purposes. They are not included within the constitutional prohibition which prevents States from passing laws impairing the obligation of contracts, but equally with the States they are prohibited from depriving persons or corporations of property without due process of law. They can not legislate back to themselves, without making compensation, the lands they have given this corporation to aid in the construction of its railroad. Neither can they by legislation compel the corporation to discharge its obligations in respect to the subsidy bonds otherwise than according to the terms of the contract already made in that connection. The United States are as much bound by their contracts as are individuals. If they repudiate their obligations, it is as much repudiation, with all the wrong and reproach that term implies, as it would be if the repudiator had been a State or a municipality or a citizen. No change can be made in the title created by the grant of the lands, on in the contract for the subsidy bonds, without the consent of the corporation. All this is indisputable."

POINT XXII

"22. To deduct from the grant all areas of error now included therein instead of including these areas as being properly in the grant and using them as a set-off against the deficiency."

The foregoing suggestion to the Commissioner of the General Land Office is merely one of form and not of substance. In so far as it shall be found that errors have been made in crediting lands to the grant, as for example in incorrectly fixing the lateral limits in Montana discussed under Point VIII, supra, the result with respect to the ascertainment of the deficiency would be the same under either method. The total area to which the company is actually entitled may be ascertained and from this total a deduction made of the lands patented to it plus those available for patenting and the result will be the ascertained deficiency. On the other hand such total area to which the company is entitled may be ascertained and there may then be added such lands, if any, as have been erroneously included as inuring to the company under the previous practice of the Land Department and from this total may be deducted lands patented and available for patent and also an area equal to the acreage so erroneously included. The casting up of the account is, of course, a matter peculiarly within the jurisdiction of the Land Department and it will doubtless adopt the most convenient and suitable method.

CHARLES W. BUNN.
GRAFTON MASON.
JAMES B. KERR.

The CHAIRMAN. Have you any further suggestions, Judge Raker? Mr. RAKER. No; not at this time.

The CHAIRMAN. Then, Mr. McGowan, you may proceed.

Mr. DONNELLY. Mr. Chairman, the suggestion made by Mr. McGowan is in exact accord with our views as to what we should like to do and as to what in the orderly presentation of the whole situation ought to be done. I feel satisfied that I can make my statement to the committee in two or three hours.

The CHAIRMAN. Then you would like to proceed now?

Mr. DONNELLY. I should like to porceed this morning, Mr. Chairman. I may say that my engagements are such that I would like very much to get away about half past three this afternoon.