Q. Under what authority of law were those bridge-bonds issued?— A. Under the general authority in the charter. .Q. The act of 1864?—A. Yes, sir. Q. What section contains that general authority?-A. I think it is under the general authority; if not, it is a general law; but I think it is the charter. I cannot turn to the section. Q. The bonds purported to be secured by a mortgage, you say?-A. A mortgage or a trust-deed. I do not know just the legal term. Q. Was that mortgage or trust-deed executed and put upon record before the date of your purchase of the bonds?-A. I do not know with regard to the placing of it on record. The new one, I think, was, but I do not remember about the first one. I doubt whether it was placed on record. Q. Then those bonds were issued to this amount, and pledged as collateral for a loan in New York, and this trust-deed or mortgage, whichever it was, was provided for and stipulated for prior to the passage of the act of 1871, which you have described as the one General Dodge got through—A. Yes, sir. Q. There was no authority for it, unless it was the authority contained in the general provisions of the charter; there was no special authority, was there?-A. No; only the general grant. Q. When was it that you made the purchase of a million and a quarter of securities, I think you said, above their actual value?—A. That was in the month of January. Q. After they were deposited as collateral in New York?-A. Yes, sir; after we raised the money and spent it, I began to think how we could get it to pay again, so that these notes would not go to protest. Q. I believe you said that that contract was a distinct, well-understood, and defined contract on your part, whereby you purchased bonds that belonged to the Union Pacific Railroad Company to the amount of what sum ?-A. Two million five hundred thousand dollars in bridgebonds, two million one hundred and thirty-six thousand dollars in landgrant bonds. Q. At what price each class?—A. Eighty per cent. and accrued interest for the bridge-bonds, and 70 per cent. and accrued interest, which, at the time I made the purchase, made it 72 per cent. for the landgrant bonds. Q. What did you do with those bonds after you bought them; were they delivered to you?-A. I had already hypothecated fourteen or sixteen hundred thousand dollars of the bridge-bonds to raise money. The land-grant bonds were already hypothecated on a loan of twelve or fifteen hundred thousand dollars, probably in fifty different places, the loans running all the way from ten days to four months. My contract was to take up those bonds and pay for them as fast as the loans matured, so there would be no loss of interest. It took, I think, four months before all these bonds came into my possession. The company having paid the interest in advance on these loans, didn't wish to lose it. Q. I desire to ask one question about this memorandum. Please look at it again and see whether the 7 multiplied into 2,500, producing 17,500, and added to the 7,000, is not the way in which the 24,500 was made up that General Dodge drew ?-A. Yes. Q. Now is it not a fact that the amount that General Dodge got was arrived at by taking that 7,000, which stands with "L" opposite it, and adding it to the 17,500, which is obtained by multiplying 2,500 by 7, producing, all together, 24,500-A. Yes, sir; on that basis it would ap pear so. Q. Can you tell us how General Dodge came to be entitled to the 24,500 unless you are able to explain how the 2,500 came to be multiplied by 7?-A. Well, I do not like to testify to a thing I don't know, but my impression is, and yet I may be entirely wrong, that this is his loss on 2,500 shares of stock, Union Pacific stock. That is my memory. Q. Seven per cent. loss on 2,500 shares of Union Pacific stock ?—A. That is my impression. I think I had agreed with him to guarantee him against any loss, and he came up to me and asked me to carry out my promise. Q. Then he had suffered a loss of 7 per cent. on 2,500 shares ?—A. Yes, sir. Q. Then how do you explain the 7,000 part of it with the "L" opposite it?-A. My explanation is that he thought that little enough to pay his expenses and services in the matter. Q. (By Mr. HOAR.) Does the "L" stand for little enough?-A. Probably so. (Laughter.) Q. I see this act, which you say General Dodge was efficient in getting through, provides "that for the more perfect connection of any railroads that are or shall be constructed to the Missouri River at or near Council Bluffs, Iowa, and Omaha, Nebraska, the Union Pacific Railroad Company be, and it is hereby, authorized to issue such bonds, and to secure the same by mortgage on the bridge and the approaches and appurtenances, as it may deem needful to construct and maintain this bridge over said river, and the tracks and depots required to perfect the same, as now authorized by law of Congress." Now, you observe that this act authorizes the issuing of bonds and the giving of a mortgage. How came that provision to be put in the law in regard to bonds which you had already issued and secured by a mortgage or deed of trust? Or, in other words, how came you to issue bonds and sell them at a sacrifice, when the law which you say authorized their issuance was not in existence? I allude to the law of the 24th of February, 1871.-A. It was because that without that law they could not get fifty cents on a dollar for them. Q. The railroad, however, seems to have issued a very large amount of bonds when there was no law to authorize their issue, and then sold them to you at a very great discount, and which you say was still too high. How came that to be done before there was auy law authorizing those bonds to be issued?-A. I did not intend to say before that there was any authority to mortgage the bridge; only the common law that any company may have the right to mortgage its property, which mortgage would come in without authority of Congress behind all prior mortgages. Mr. Sidney Bartlett, of Boston, a very able lawyer, worked more or less for two years to get up a deed of trust, under which our people felt at all safe to buy these bridge-bonds. Our negotiations were long and tedious to get any one to take hold of those bonds, and no one would take hold of them, because they were represented as no better, to say the least, than the income-bonds, which were then selling in the market at 30. When I bought these bridge-bonds the income-bonds were selling at 30, and Mr. Bartlett frankly said that the trust-deed was the best thing he could do; that it might and might not hold water and hold the earnings of the bridge as against prior mortgages. He did not have any faith that I could go to Congress and get legislation, and I do not think that many of our people had much hope, either. I thought it was only right that we should have the legislation. If any of you gentlemen have been over the road, as I have time and again, you will acknowl edge that the Missouri needed a bridge the worst of any river in the world. I had my whole soul enlisted in having a bridge there. I think it is one of the ablest things I have ever done. I took those bonds at So when the income-bonds, that our people said, were just as good, were selling at 30. Q. Please state whether an additional claim made by the parties in interest to construct the road under the Oakes Ames contract, and which was based upon the rapidity with which the work was done and for other causes, was allowed and paid by the Union Pacific Railroad Company?—A. My memory is that there was. By Mr. HOAR: Q. I would like to ask you in relation to this transaction of the checks. Did Mr. Spence give you the checks to take in to Mr. Rollins for him to indorse ?—A. My memory is that it was all done at Mr. Spence's desk. Their desks were almost adjoining. Q. Whose desks?-A. Mr. Spence's desk and Mr. Williams's were close together, and Mr. Rollins's desk was two steps off into another room. Q. Then Mr. Spence and Mr. Williams had their desks in the same room, and Mr. Rollins's desk was a step or two off, but through an open door?-A. Yes, sir. Q. These checks are in the first place signed in blank by Mr. Williams, the treasurer, as I understand it, then filled up by Mr. Spence, his assistant and cashier, then indorsed by Mr. Rollins, and then indorsed by Mr. Spence. Now, did you not take these checks to Mr. Rollins for his indorsement?-A. My memory is that they were perfect when they were handed over to me-all indorsed. Q. Did you not take them from Spence to Rollins ?-A. I might have done so, but my impression is that I took them from the high desk used by Mr. Spence. There were three or four checks coming to me-the $19,000 check went to Colonel Scott and the $24,500 check to General Dodge. Q. You have no recollection, then, of Mr. Rollins receiving them after they were first filled up by Mr. Spence. How did Mr. Rollins's name get on them, as you remember the transaction?-A. As I remember the transaction the indorsements were all on when I received the cheeks. They came to me all perfect; that is my recollection. Q. Do you know whether Spence went into the Secretary's room, got them from Rollins and brought them back while you, Dodge, and Williams were waiting at his desk?-A. No; that is entirely outside of my memory. Do not understand me to say that it is not so, but simply that I have no recollection of it. Q. Then, according to your recollection, Mr. Rollins didn't deliver the checks to the parties for whom they were intended?—A. That is my recollection. Q. Do you know whether Rollins knew for whom they were intended-A. I do not. Q. Did you give Mr. Dodge the check on the day of the transaction ?-A. Yes, sir. Q. And the check to Colonel Scott?-A. Yes, sir. Q. You didn't send their checks to them by mail or express?-A. No, sir. The examination of the witness was here temporarily suspended for the purpose of recalling Mr. Spence, who was examined by Mr. Hoar as follows: Q. Where was Mr. Scott at the time of this transaction ?-A. I do not recollect Mr. Scott being in the office at that time. He had been there in the morning, but I do not think he was present when I handed these checks to Mr. Bushnell. Q. How are the checks draw by you in the usual course of business?-A. The checks are signed in blank by Mr. Williams and made payable to my order. I fill them out from time to time, when necessary, indorse them, and then send them to Mr. Rollins for his indorsement. Mr. BUSHNELL'S examination was resumed. By the CHAIRMAN: Q. Do we understand you to say that you bought the first issue of the Omaha bridge-bonds from the Union Pacific Railroad Company?-A. Yes, sir. Q. And that was before the passage of the act authorizing the bridge to be mortgaged to secure the bonds?-A. Yes, sir. Q. Did the passage of that act enhance the value of the bridgebonds?-A. It did in my estimation, very largely. Q. You received this $126,000 on the 9th of March, 1871 ?-A. Yes, sir. Q. The act authorizing the mortgage of this bridge was passed 24th of February, 1871 ?-A. I do not know the exact date. Q. Now, having procured the passage of that act, which, as you say, greatly enhanced the value of the bonds, what reason was there for the Union Pacific Railroad Company, of which you are one of the directors, giving you a bonus of $126,000 upon that occasion?-A. Well, sir, I had reduced the interest from 10 to 8 per cent. You will have, in order to appreciate my motive, to understand my object in buying those bonds, which was to pay off the floating debt. When we had secured this legislation, and the interest had been reduced from 10 to 8 per cent., thereby saving $50,000 a year to the company, it seemed then to me that it was but just and equitable that the company, being then able, should help make me good for the large sacrifice I had undertaken. Q. You were the bona-fide holder of these bridge-bonds for yourself and your associates, were you not?-A. I held them for myself. I bought them as C. S. Bushnell, agent, but I was the sole owner of them. Q. What was the amount of them?-A. Two and a half millions and over. Q. And you were sole owner of these bonds?—A. Yes, sir. Q. And you voluntarily reduced the interest to 8 per cent. ?-A. Yes, sir. Q. And in consideration of that you received $126,000 ?-A. Yes, sir; $100,000 in round numbers. I had to pay something to Dodge out of that. I have only regretted since, and I think it would have been no more than equitable, that the company did not allow me a little more. I think I ought to have had more. Q. Did you have any expenses to pay out of that $126,000 besides what you paid Dodge?—A. I had to pay to carry those bonds. I, of course, could not carry them, and I had to pay for it liberally. Q. That was interest?-A. Interest, commissions, and everything of that sort. Q. Did you pay anything to agents besides what you paid to Dodge?— A. What do you mean by agents? Q. I mean to distinguish between payments for interest and commis sions in getting these loans, and payments for any purpose in getting this legislation through?—A. No, sir; none connected with the legisla tion. I sent agents abroad to dispose of those bonds. They were all legitimate expenses that every one will find himself obliged to incur when he has to work off $4,000,000 of bonds. It cost me more than I anticipated. Q. I hand you here the record-book of the board of trustees and ask you to read the resolution I have marked so that may be incorporated in your testimony.-A. I will do so. "No. 20 NASSAU STREET, "New York, January 3, 1868. "Mr. Bushnell offered the following resolution: Resolved, That the treasurer pay over to the Credit Mobilier of America, in accordance with the provisions of the contract of Oakes Ames with the Union Pacific Railroad Company, of August 16, 1867, and the assignment to the trustees, the sum of $1,104,000, or a sufficient sum to enable them to make the stock of the Union Pacific Railroad Company held by them full-paid. Carried unanimously." Q. That is the record-book of the board of trustees, is it not?-A. It is so indorsed. Q. Will you explain what that was for?-A. My memory is that in accordance with the original contract made by the trustees with the Credit Mobilier, the Credit Mobilier guaranteed to furnish them with funds to enable them to carry out the contract for 2 per cent. commission, and it was in fulfillment of that agreement this money was appropriated. Q. What is the meaning, then, of the phraseology "or a sufficient sum to enable them to make the stock of the Union Pacific Railroad Company held by them full-paid ?"—A. I can give you that at once. I think the Credit Mobilier of America held a very large amount of stock in the Union Pacific Railroad Company on which percentages had been paid, but not fully paid up. I know one instance myself. I bought for the Credit Mobilier some $20,000 worth of stock, on which there had only been 10 or 20 per cent. paid up, and the Credit Mobilier paid the parties various prices, but generally par. I do not think it varied much from par. For instance, from S. B. Chittenden I bought his stock for the Credit Mobilier and paid him just what he had paid in. The Credit Mobilier bought all this stock where the parties did not want to take Credit Mobilier stock, but in every instance we offered them their money -just that they had paid in, and in some cases interest. I don't know but that we offered them interest in all cases; but, as a general rule, we gave them what they had paid for the stock, and had it transferred to the Credit Mobilier. And this money appropriated by the resolution was a sufficient sum to make that stock full-paid. It is a considerable time since the transaction occurred, but that is my version of it. I would like to say, now, in connection with that matter, that while I do not find fault with the committee, it seems to me that they have not made quite prominent enough-and a good deal of undeserved censure has come upon the Credit Mobilier managers in consequence-the fact that they took so much pains to get the assent of every stockholder in the Union Pacific Railroad Company, and when we could not get the assent we bought the stock from them, paying them what it has cost them. I have been connected with railroad corporations since I was a young man, and I have never known a case where so much pains was taken to get the unanimous consent of those connected with the railroad as in this instance. Q. Do you know where the document containing that assent is to be |