"Whereas the Union Pacific Railroad Company has secured the control of the Oregon Short Line, and thereby secured an outlet to the Pacific other than over the Central Pacific Railroad, and thus in that respect placed itself in opposition to the interests of the Central Pacific and

"Whereas traffic is being diverted; and

"Whereas the said Southern Pacific Company has a line of railroad under its control for a period of ninety-nine years, extending continuously from the Pacific Ocean to the Atlantic Ocean; and

"Whereas the lines of each company are doing a large local traffic, and it is important to both that the same should be conducted in harmony;

"Now, therefore,

the said Central Pacific Railroad hereby leases to the said Southern Pacific Railroad Company for the term of ninety-nine years from the first day of April, A. D. 1885, the whole of its railroad

together with all the

and all other

And the leases of railways in California and of the Southern Pacific Railroad Companies of California, Arizona, and New Mexico are assigned to the Southern Pacific Company.

On its part the Southern Pacific Company agrees to "operate, maintain, add to, and better" the property, to pay taxes, and return in good condition at the expiration of the lease. The Southern Pacific also agrees to assume and discharge all liabilities of the Central Pacific except (1) the principal of its "floating debt," (2) the principal of its "bonded indebtedness, (3) the principal of all indebtedness theretofore guaranteed by it, (4) the principal of indebtedness evidenced by United States bonds loaned it. Interest on these liabilities will be paid at maturity except on the government bonds, in which case the Southern Pacific Company "will discharge the annual obligations imposed upon said Central Pacific Railroad Company by existing acts of Congress" and will fully comply with the terms of the Thurman act.

"And the said Southern Pacific Company hereby agrees with the said Central Pacific Railroad Company that

it will

the

Central Pacific Railroad and other leased property sum of $1,200,000."

If earnings exceed all expenditures, including the said rental, the excess will be paid to the Central Pacific-not exceeding $2,400,000.

Other paragraphs provided for alteration of the contract if it came to operate to the disadvantage of either party, for arbitration of disputes, for payment for rolling stock of either party used on the lines of the other; and it was further agreed "that if any legislation or governmental action hereafter be had which, in the opinion of the said Southern Pacific Company is in hostility to the said Central Pacific Company, its rights, or the property hereby leased, the said Southern Pacific Company may, on notice to the said Central Pacific Company, terminate this agreement or may submit to arbitrators

The foregoing contract was signed by W. E. Brown, Pres., and H. C. Nash, Secy., for the Southern Pacific Company; Leland Stanford, Pres., E. H. Miller, Jr., Secy., for the Central Pacific.

C

AGREEMENT BETWEEN THE TRANSCONTINENTAL ASSOCIATION AND THE PACIFIC MAIL STEAMSHIP COMPANY, JUNE 1, 1885

1. The Transcontinental Association1 guarantees that gross earnings on through freight and passenger service between New York and San Francisco to be provided by the Association shall be $85,000 a month, for 1,200 tons of 2,000 lbs. each way. the gross earnings of the steamship company on said through traffic shall go to the Association.

2. The Steamship Company will at its own expense run two steamers per month from New York to the Isthmus of Panama,

1 Composed of the following railway companies: Southern Pacific, Atchison, Topeka and Santa Fe, Atlantic and Pacific, Burlington and Missouri River. Denver and Rio Grande, Denver and Rio Grande Western, Northern Facific. Oregon Railway and Navigation Company, Texas and Pacific, Oregon Short Line, and Union Pacific.

and two more from Panama to San Francisco; also two steamers from San Francisco to Panama and two from Aspinwall to New York, and no more. The Association shall fix the rates on all through freight and first class passenger traffic between New York and San Francisco.

3. "The understanding and intention of this agreement is that the party of the first part (the Association) shall, through agents appointed by itself, have entire and exclusive control of all the through business of the said steamship company between New York and San Francisco each way, and that no through freight or passengers shall be taken except at prices to be fixed by the party of the first part and by its consent;

4. The steamship company agrees not to carry any steerage passengers between New York and San Francisco.

5. The steamship company is to render monthly statements of the amount due, which amount shall be paid by the various railways of the Association as may be agreed among themselves; and each railway shall be liable for its own portion of the aggregate amount alone.

6. This contract goes into force June 1, 1885, and continues for four months from said date, and thereafter until thirty days after written notice by either party. But if the exclusive contract existing between the steamship company and the Panama Railroad Company so far as it refers to traffic between New York and San Francisco, is changed or broken, or if any competing line by water or rail shall be established and affect through traffic, then the Transcontinental Association may at any time terminate this agreement.

7. "The arrangements heretofore made between the Union Pacific Railway Company, the Central Pacific Railroad Company, and the Pacific Mail Steamship Company, in regard to freight and passengers received by the steamship company in San Francisco for transportation to Europe via Panama shall remain as at present, but the party of the first part agrees with the steamship company that the same shall be referred to their respective representatives at San Francisco, in order that if the same is found practicable an agreement may be arrived at be

it does

tween them on a basis permitting said steamship company to take said class of freight and passengers when . not conflict with the business of the railroad companies overland."

THE TRANSCONTINENTAL ASSOCIATION.

By L. G. Cannon, General Agent. PACIFIC MAIL STEAMSHIP COMPANY. By J. B. Houston, President.

CHAPTER X

THE NORTHERN PACIFIC

It is not the purpose of this chapter to do more than barely outline the congressional history of the railway line which occupied the northern route to the Pacific.1

Chartered on July 2, 1864, the road was opened in 1883 and was the third transcontinental route. Its charter was quite similar to that granted the Atlantic and Pacific, embracing a 400-foot right of way and an additional grant of 20 odd numbered sections per mile on each side of its line through the territories and half as much in the states, that is, 25,600 acres per mile through the territories and 12,800 acres through states. The road was to be begun within two years and completed in 1876. No mortgage or construction bonds were ever to be issued without the consent of Congress. Funds were to come from the lands granted and it was planned to raise some $100,000,000 by the people's subscription to the company's stock, the right to subscribe to which was jealously secured to "all the people of the United States," until the entire capital was taken.

As in the case of all the other Pacific charters amendments were numerous. In 1866 a bill to have the government guarantee interest on the company's securities and otherwise further assist it almost passed the Senate; and in the same year a joint resolution extended time for construction two years. Two years later a further extension of a similar period was granted; the

To do more would lead to a large measure of repetition, and the history of the road has been made the subject of an entire volume,-"History of the Northern Pacific, Smalley. This may be supplemented by the annual reports of the commissioner of railroads, Poor's Manual for 1885, and the following footnote references.

2 Cong. Globe, 1865-66, pp. 3361, 3807, 3866. 3 Statutes at Large, 14: 355.

Ibid., 15: 255,