printed brief you will find a little sketch which shows the situation at the head of Lake Superior. By section 3 of the Northern Pacific act of July 2, 1864, it is provided that if said route of that railroad shall be found to be upon the line of any other railroad route, to aid in the construction of which lands have been heretofore granted by the United States, as far as the routes are upon the same general line, the amount of land heretofore granted shall be deducted from the amount granted by this act. There was a grant antedating the grant to the Northern Pacific, namely, one of May 5, 1864, to the State of Wisconsin, which was afterwards conferred upon the Portage, Winnebago & Superior Railroad Co. This grant was given in aid of a line of road to be constructed from Portage, Wis., which you will see on the map, thence to Ashland and thence to Superior, Wis. The line was constructed from Portage to Ashland, but was never constructed from Ashland to Bayfield, or from Bayfield to Superior. There had been an earlier grant to the State of Wisconsin for the benefit of a line running to Superior, which was conferred upon the Chicago, St. Paul, Minneapolis & Omaha Co., and because this grant, which antedated the other two, took all of the lands in the territory on the line running between Superior and Ashland, the Portage, Winnebago & Superior did not construct beyond Ashland. Our contention before the Interior Department has been that the true construction of section 3 of our act is that there should be a deduction from the Northern Pacific grant only in the event that there was a conflict between the Northern Pacific grant and a grant which actually passed to another company and that it was not sufficient that there should be merely a projected line by another company, the location of which might or might not conflict with the Northern Pacific grant, which would form a basis for such deduction. Our argument has been that Congress did not want to grant to make two grants of land for a railroad between the same points. We have argued also before the Interior Department that our constructed line, which is shown on this map from Superior to Ashland, is not on the same general route as the more circuitous route of the Portage, Winnebago & Superior. Now, all we want to say here is that the Secretary of the Interior has transmitted to you a report by the Commissioner of the General Land Office, in which the suggestion proposed by the Forestry Department with respect to this deduction has been adopted. We hope-we expect to present the matter to the Secretary of the Interior upon appeal or review from the Commissioner of the General Land Office, and there we will present the arguments against this deduction of 370,000 acres, but it is obvious that the members of this committee can not profitably determine the question of law as to the meaning of the proviso in section 3 of the Northern Pacific charter. Mr. RAKER. Why not? Unless it is the mere question of ability on account of want of comprehending the law, it seems to me that this is one of the very functions of the committee to do. Mr. KERR. Section 2 of the joint resolution says: The Secretary of the Interior is hereby directed to advise Congress of the status of the said Northern Pacific land grants, recommending such action as he believes right and proper for the further adjustment thereof. 39564-25-PT 1— 37 Now, I take it that from the beginning of the administration of railroad grants the adjustment in the first instance has been committed to the Interior Department and to the Commissioner of the General Land Office. Mr. RAKER. I know, but that is only for the information of the committee. We are not bound by anything that the Secretary of the Interior presents, nor by anything that the department-the Forest Service-presents. They can present their matter, but we are not bound in any way as to their judgment or their conclusions as to the facts nor the law. Mr. KERR. Of course, if your committee is prepared to hear argument and to reverse the decisions of the Commissioner of the General Land Office, which now stand opposed to the contentions of the Northern Pacific Railway Co., why that will be action most gratefully received. Mr. RAKER. It seems to me that is one of our duties, to find out what it is. The CHAIRMAN. We are to report to Congress our conclusions and recommendations. The resolution provides: The said committee is hereby empowered and directed to make a thorough and complete investigation of the land grants of the Northern Pacific Railroad Co. and its successor, the Northern Pacific Railway Co., under the act of July 2, 1864. Mr. RAKER. Here is what I am looking for: And any other acts of Congress supplemental thereto or connected therewith, and the facts and the law pertaining thereto and arising therefrom. Now, there is not a thing left out that we should not do. That covers the fact and the law. So I am putting this up to you, Mr. Kerr, that the reason I am trying to get straight on the law proposition is, it is our duty to make an investigation of the law governing this whole subject and report not only the facts as to the grant but to report and be able to present to the Congress what is the law controlling it. Mr. KERR. Well, I very much appreciate that suggestion. Mr. RAKER. I think you ought to on this subject. I am just one member of the committee, and I hope the committee will not think me in any wise overinsistent in getting the law covering the right of selection between Ashland and Superior. Mr. WILLIAMS. That is what I had in mind in suggesting that we not only want the law, but we want the facts. The CHAIRMAN. Gentlemen of the committee, it is now 12 o'clock. We will stand adjourned until 2 o'clock. (Whereupon, at 12.05 o'clock p. m., the committee recessed until 2 o'clock p. m. this day.) AFTER RECESS (The committee reassembled at 2 o'clock p. m., pursuant to recess.) The CHAIRMAN. The committee will come to order. You may proceed, Mr. Kerr. Mr. KERR. Mr. Chairman, Mr. Bunn finds it necessary to leave for St. Paul very shortly, and there is one matter which was covered by Mr. Donnelly which we desire Mr. Bunn to supplement, and if it is agreeable to the committee I should be very glad if he might be given that opportunity now. The CHAIRMAN. Very well, Mr. Bunn; will you be sworn? TESTIMONY OF CHARLES W. BUNN, VICE PRESIDENT AND GENERAL COUNSEL OF THE NORTHERN PACIFIC RAILWAY CO., ST. PAUL, MINN. (The witness was duly sworn by the chairman.) Mr. BUNN. My purpose, gentlemen, is to confine myself very largely to one specific inquiry which was put here yesterday, namely, about the character of the foreclosure of 1896 against the railway company. I will say in respect of that, that I had not and never had any connection with the Federal corporation, Northern Pacific Railroad Co., chartered by Congress. I commenced my services with the receivers during about the last year of their receivership. The CHAIRMAN. What year was that, Mr. Bunn? Mr. BUNN. Well, that would be from somewhere early in the summer of 1895, until the close of the receivership, which was the 1st of September, 1896. In that capacity I knew the plaintiffs in the suits, I knew the defendant in the suits, the Northern Pacific Railroad Co., and about these proceedings and decrees in that foreclosure. The suggestion was made that this was a purely formal or not a real foreclosure. I wish to say that this was as real a foreclosure as probably ever can be made of a railroad mortgage or mortgages, and instead of being a peaceable and acquiescent proceeding, it was perfectly hostile and very full of fight. To illustrate that simply by one fact, there are reported in the Federal Reporter 14 litigations growing out of this receivership. I have the volumes and pages of those litigations here, and if it is desired I can hand them to the reporter to be transcribed in the minutes. The CHAIRMAN. Yes; we would like to have that. What Federal Reporter are you reading from? Mr. BUNN. I am not reading from any. I say there were 14 litigations growing out of this receivership that were tried and are reported in various volumes of the Federal Reporter. I have reference to those volumes and pages. The CHAIRMAN. They are all referred to in what you are handing in? Mr. BUNN. They are all referred to in what I am handing in. Mr. BUNN. That receivership ran from the summer of 1893 until the 1st of September, 1896. Perhaps I might well say in respect of it, although it is not material, I think, that the suit was started in August, 1893, by creditors of the railroad company-I mean general creditors, not secured by mortgage. The mortgage was not foreclosed at that time because there was no default in it, but the company was unable to pay its floating debt. Receivers were appointed on that creditors' suit in August, 1893, and on or immediately after the 1st day of October, when the default occurred in the payment of interest on mortgage bonds, the trustees of three mortgages filed bills in the court, and those bills were consolidated with the previously commenced creditors' suits and from then on proceeded as one consolidated suit. Growing out of that in various ways were these 14 reported litigations in the Federal Reporter, the references to which I have here. (The references referred to follow :) Farmers' Loan & Trust Co. v. Northern Pacific Railroad Co.: 79 Fed. 227, 60 Fed. 803, 58 Fed. 257, 61 Fed. 546, 66 Fed. 169, 68 Fed. 36, 69 Fed. 871, 70 Fed. 423, 71 Fed. 245, 72 Fed. 26 (Field, Harlan, Brewer & Brown, January 26, 1896), 74 Fed. 431, 76 Fed. 15, 83 Fed. 249, 94 Fed. 454. The CHAIRMAN. Were any of those carried to the Supreme Court of the United States? Mr. BUNN. I don't think any of them were. I am about to refer to a case in volume 72 of the Federal Reporter, on page 26, which is the only case of its kind in the history of the country, I think, a unique proceeding, and it illustrates what I said about the hostility and real animosity between the different parties to this litigation. Shortly after 1893, when the receivership intervened, and at which time Thomas F. Oakes was the president of the Northern Pacific Railroad Co.-I mean the company chartered by Congress-Mr. Oakes was one of the receivers appointed by the court-shortly after that Mr. Brayton Ives of the city of New York was appointed president of the Northern Pacific Railroad Co. and he occupied that position during this foreclosure. Mr. Ives, in the summer of 1895, acting for the railroad company, proceeded to the district court of the United States in the district of Washington, commenced a proceeding before Circuit Judge Gilbert and District Judge Hanford, which myself and the lamented exSenator of the United States, John C. Spooner, attended and contested with Mr. Brayton Ives. His purpose in that petition was to break up and disrupt the receivership of the company which had been established theretofore, and have separate and different receivers appointed. He succeeded in that, and there was a separate and a hostile receiver appointed in the District Court of the United States in Washington, which was followed by a similar appointment in the District Court of the United States for Idaho and for Oregon. Following that, and on movement of Mr. Ives, an independent and still different receivership was established in the State of Montana, which was also in the ninth circuit. The same receivers that were appointed in Wisconsin had been confirmed in Minnesota and North Dakota, and originally had been extended through to the Pacific coast, but in the summer of 1895 that was all broken up into three independent and hostile receiverships, so that the same line of railroad had three sets of receivers, and each set accounting to different courts and being obliged in some way to divide between themselves the income arising from traffic, and to a large extent it was a grab game. In short, it became a scandal, a national scandal, and was so treated by the press of the whole country. The result of that was this unique proceeding that I speak of, The parties to the foreclosure litigation filed a petition setting forth these facts that I have roughly outlined, and asked Mr. Justice Field of the Supreme Court of the United States, and Mr. Justice Harlan and Mr. Justice Brewer and Mr. Justice Brown of the same court, to sit here in Washington as circuit justices and hear this controversy and decide what was right. That proceeding resulted in the decision of these four Supreme Court judges, one of them, as I say, being the justice allotted to each one of these four circuits-those judges agreed in an order which is printed on page 30 of the Federal Reporter, and the sum of which is that the jurisdiction in this case attached in the Circuit Court of the United States in Wisconsin, and that the other courts from there to Oregon ought to follow and appoint the same receivers and follow the decrees. Mr. DRIVER. Judge, will you give that number again? Mr. BUNN. No. 72 Federal, page 26. And the order of the court commences on page 30. I refer to that simply as an evidence of the real hostility of this proceeding. I also find the following facts which may be of interest and importance about this proceeding in the fourth volume handed to you, Judge Raker, this morning, of the court records of that foreclosure. We furnished to the committee all four volumes. They are quite large books. The CHAIRMAN. You are going to leave those volumes here, are you? Mr. BUNN. We are going to leave them here. I think previously they were furnished to you, to either the House committee or the Senate committee, and I think this is the second set we have furnished. Mr. RAKER. You mean that when once furnished you never get them back? Mr. BUNN. No; we are not asking for them back. I simply mean that I think you have got two sets accessible where you can distribute them around for your own convenience, that is all. I note the following interesting dates and possibly important facts about these proceedings. Perhaps I ought to say before stating those dates that the same bills of foreclosure and creditors' bills were filed in the circuit courts of the eastern district of Wisconsin, the western district of Wisconsin-when I say "circuit courts" I mean circuit courts of the United States-the same court for the district of Minnesota, for the district of North Dakota, for the district of Montana, for the district of Idaho, for the district of Washington, and for the district of Oregon; and the provisions to which I will call attention from the decrees are also in the decrees entered in districts from Wisconsin to Oregon, which were identically like the Wisconsin decrees. So that these judgments that I speak of are the judgments not of one Federal court but of seven or eight Federal courts composed of different judges. The decree of sale of the railroad, of the land grant, was entered in the circuit court of the eastern district of Wisconsin on the 27th day of April, 1896, and will be found at page 125 of the fourth volume of these foreclosure proceedings. On page 126 that decree says that For the purpose of raising funds with which to construct its railroad and telegraph line between Lake Superior and Puget Sound, on or about the 20th |