The condition of the present management of the Union Pacific Company has an important bearing upon its ability to comply with the terms of any settlement of its indebtedness which may be offered by the Government.

The majority of the commission are in favor of an extension of the time for the payment of the Government indebtedness of these companies, upon certain conditions; but the chairman of the commission, presenting the minority report, recommends, both upon principle and policy, the institution of proceedings for the forfeiture of the charters of the corporations and the winding up of their affairs.

I have been furnished with a statement or argument in defense of the transactions connected with the construction of the Central Pacific road and its branch lines, from which it may not be amiss to quote for the purpose of showing how some of the operations of the directors of such road, strongly condemned by the commissioners, are defended by the directors themselves.  After speaking of a contract for the construction of one of these branch lines by a corporation called the Contract and Finance Company, owned by certain directors of the Central Pacific Railroad, this language is used: 

It may be said of this contract, as of many others that were let to the different construction companies in which the directors of the Central Pacific have been stockholders, that they built the road with the moneys furnished by themselves and had the road for their outlay.  In other words, they paid to the construction company the bonds and stock of the railroad so constructed, and waited until such time as they could develop sufficient business on the road built to induce the public to buy the bonds or the stock.  If the country through which the railroad ran developed sufficient business, then the project was a success; if it did not, then the operation was a loss.  These gentlemen took all the responsibility; any loss occurring was necessarily theirs, and of right the profit belonged to them.

  But it is said that they violated a well-known rule of equity in dealing
  with themselves; that they were trustees, and that they were
  representing both sides of the contract.

The answer is that they did not find anybody else to deal with.  They could not find anyone who would take the chances of building a road through what was then an almost uninhabited country and accept the bonds and stock of the road, in payment.  And when it is said that they were trustees, if they did occupy such relation it was merely technical, for they represented only their own interests on both sides, there being no one else concerned in the transaction.  They became the incorporators of the company that was to build the road, subscribed for its stock, and were the only subscribers; therefore it is difficult to see how anyone was wronged by their action.  The rule of equity invoked, which has its origin in the injunction “No man can