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Law authorizing issue.

Amount issued.

resolution of July 1, 1864, chapter 62; act of July 23, 1868, chapter 229, section 2; and act of July 20, 1868; and there are many acts authorizing payment therefrom.

The fund amounts to fourteen millions of dollars, for which no bonds have been issued, and of which no evidence of indebtedness exists, except what appears in the laws of Congress and the books of the Treasury Department.

It would hardly be called a debt, were it not included in the monthly debt statement of the Department; and since the passage of the act of July 23, 1868, providing that the interest on the fund shall be at the rate of three per cent. per annum, in lawful money, and applicable exclusively to the payment of navy pensions, it amounts simply to a permanent appropriation of four hundred and twenty thousand dollars a year to the payment of navy pensions.

6.

CERTIFICATES OF INDEBTEDNESS OF 1870.

The act of July 8, 1870, chapter 229, authorized the issue of certificates of indebtedness of the denomination of $1,000 each, to the amount of $678,362 41, payable in lawful money of the United States in five years, with interest semi-annually at the rate of four per cent. per annum, two-thirds to the State of Massachusetts, and one-third to the State of Maine, for the use of the European and North American Railway Company of Maine, to aid said company in constructing its line of railway; each of said States having assigned its interest therein to said railway company. These bonds were, by the act, to be in "full adjustment and payment for and on account of any matters arising from any money expended by said State of Massachusetts on account of the war with Great Britain in 1812 to 1815, or any interest thereon, or on account of any matters arising out of or accruing from the treaty with Great Britain, known as the treaty of Washington, or for or on account of any other matters which have been assigned by said States of Massachusetts and Maine to said railway company.'

There were issued 678 certificates of $1,000 each, pay

able to the Treasurer of the State of Maine or bearer, in five years from September 1, 1870, with semi-annual interest coupons of twenty dollars each attached, both payable in lawful money. The coupons are payable March 1 when payable, and September 1. These certificates are all outstanding, and will become payable September 1, 1875. For the balance, $362 11, one other certificate was issued, and has since been paid and canceled.

&c.

7.

CURRENCY SIXES;

or

PACIFIC RAILWAY BONDS.

These bonds are commonly known as "CURRENCY SIXES, because they bear six per cent. interest, and are the only bonds of the United States payable, principal and interest, in lawful money. On the public debt statement and the books of the Treasury Department they are called “PACIFIC RAILWAY BONDS," on account of their having been issued to certain Pacific railroads in the nature of a loan, under acts. of Congress to aid in the construction of their roads.

They are all registered, in denominations of $1,000,$5,000, and $10,000; are payable in lawful money on a day therein named, which is at the expiration of thirty years from the date of original issue, with interest at six per cent. per annum, payable semi-annually, on the 1st days of January and July in each year, in lawful money; and are designated with the words "[NAME OF COMPANY] RAILROAD COMPANY," “PAYABLE THIRTY YEARS FROM DATE," and "Act of July 1st, 1862, Act of July 2d, 1864."

The name of a railroad company is thus printed on the bonds merely to indicate to which company they were issued. They are the bonds of the United States, containing the absolute unconditional promise of the national Government, and the Government alone is responsible for the payment of both principal and interest. The railroad companies

Title, denominations, designations, &c.

United States alone responsible

to holder.

Bonds issued.

are under no obligations to the holders of the bonds, but only to repay the United States, in the manner set forth in the acts of Congress.

THE FOLLOWING TABLE EXHIBITS THE NAMES OF THE COMPANIES TO WHICH
THE BONDS WERE ISSUED, THE AMOUNT, DATE OF ISSUE, AND TIMES OF
BECOMING PAYABLE.

Names of companies to which
the bonds were issued.

Amount is- Date of issue.
sued.

Payable.

Grants by United
States.

Security for re

payment of

Lords.

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These bonds were issued under the act of July 1, 1862, chapter 120, and the act of July 2, 1864, chapter 216, as amended by some subsequent provisions.

A right of way and certain public lands were thereby granted to the railroad companies, and provisions made requiring the Secretary of the Treasury to issue the bonds above mentioned to said companies, upon completing sections of their road, at the rate of sixteen thousand dollars per mile, except for certain parts more difficult of construction, for which they were to be issued at the rate respectively of thirty-two thousand and forty-eight thousand dollars per mile. The security of the United States rests upon the following provisions of law:

*

ACT OF JULY 2, 1862, CHAPTER 120.

SEC. 5. * and to secure the repayment to the United States, as hereinafter provided, of the amount of said bonds so issued and delivered to said company, together with all interest thereon which shall have been paid by the United States, the issue of said bonds and delivery to the company shall ipso facto constitute a first mortgage on the Mortgage. whole line of the railroad and telegraph, together with the rolling stock, fixtures, and property of every kind and description, and in consideration of which said bonds may be issued:

And on the refusal or failure of the said company to redeem said bonds, or any part of them, when required so to do by the Secretary of the Treasury, in accordance with the provisions of this act, the said road, with all the rights, functions, immunities, and appurtenances thereunto belonging, and also all lands granted to the said company by the United States, which, at the time of said default, shall remain in the ownership of said company, may be taken possession of by the Secretary of the Treasury, for the use and benefit of the United States: Provided, This section shall not apply to that part of any road now constructed.

Road, &c., to be forfeited on fail

ure of company to redeem bonds

nies shall pay

bonds at roatu

rity.

SEC. 6. And be it further enacted, That the grants afore- Grants on condisaid are made upon condition, that said company shall pay tion that compasaid bonds at maturity, and shall keep said railroad and telegraph line in repair and use, and shall at all times transmit dispatches over said telegraph line, and transport mails, troops, and munitions of war, supplies, and public stores upon said railroad for the Government, whenever required to do so by any department thereof, and that the Government shall at all times have the preference in the use of the same for all the purposes aforesaid, (at fair and reasonable rates of compensation, not to exceed the amounts. paid by private parties for the same kind of service ;)

Compensation for services to U. S.

to be retained. Companies may pay in treasury

And all compensation for services rendered for the Government shall be applied to the payment of said bonds and interest until the whole amount is fully paid. Said company may also pay the United States, wholly or in part, in the same or other bonds, treasury notes, or other notes, bonds, &c. evidences of debt against the United States, to be allowed at par;

And after said road is completed, until said bonds and after compleinterest are paid, at least five per centum of the net earn- tion of roads 5 per ings of said road shall also be annually applied to the payings to be applied

ment thereof.

cent, of net carn

to payment of bonds.

The lien of the United States is made subordinate to a Government lien.

and mortgage to first mortgage authorized by the provisions of the act of July 2, 1864, chapter 216, as follows:

be second and

subordinate to a prior mortgage of same amount.

Only half of com

SEC. 10. And be it further enacted, That section five of said act be so modified and amended, that the Union Pacific Railroad Company, the Central Pacific Railroad Company, and any other company authorized to participate in the construction of said road, may, on the completion of each section of said road, as provided in this act and the act of which this is an amendment, issue their first mortgage bonds on their respective railroads and telegraph lines, to an amount not exceeding the amount of the bonds of the United States, and of even tenor and date, time of maturity, rate and character of interest with the bonds authorized to be issued to said railroads respectively.

And the lien of the United States bonds shall be subordinate to that of the bonds of any or either of said companies hereby authorized to be issued on their respective roads, property, and equipments, except as to the provisions of the sixth section of the act to which this act is an amendment, relating to the transmission of dispatches and the transportation of mails, troops, munitions of war, supplies, and public stores for the Government of the United States.

Section 5, chapter 216, act of July 2, 1864, provides

That only one half of the compensation for services renpensation for ser dered for the Government by said companies shall be required to be applied to the payment of the bonds issued by the Government in aid of the construction of said road.

vices to U. S. to be retained.

Balance to be paid to companies.

And the act of March 3, 1871, chapter 116

SEC. 9. That, in accordance with the fifth section of the act approved July two, eighteen hundred and sixty-four, entitled "An act to amend an act entitled 'An act to aid in the construction 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," the Secretary of the Treasury is hereby directed to pay over in money to the Pacific Railroad Companies mentioned in said act, and performing services for the United States, one-half of the compensation at the rate provided by law for such services, heretofore or hereafter rendered: Provided, That this section shall not be construed to affect the legal rights of the Government or the obligations of the companies, except as herein specifically provided.

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