IN THE Supreme Court of the United States, October Term, 1895. THE UNITED STATES OF AMERICA, v. JANE L. STANFORD, Executrix of the Defendant and Appellee. No. 783. Brief and argument for the defendant and appellee. Statement. Analysis of the Bill. The bill alleges the incorporation of the Central Pacific Railroad Company of California, June 28, 1861, by the filing of articles of incorporation, as prescribed by the law of that State, to build a railroad from the city of Sacramento to the eastern boundary of the State, a distance of one hundred and fifteen miles. The amount of capital stock, as declared in the articles, is eight million five hundred thousand dollars, in shares of one hundred dollars each, of which there appear to have been subscribed at the time of the filing of the articles eleven hundred and fifty shares, and ten per cent. thereof or $11,500 only paid in, in cash, as required by the statute. The bill alleges that shortly afterwards the company was "set going as a railroad corporation by the directors thereof; that books were opened to receive subscriptions to its capital stock, and some of the stock was subscribed for and other acts done." (Record, p. 2. This is all that appears to have been done by the company prior to the passage of the Act of Congress of 1562, providing for the subsidy bonds, for the bH further states that the company commenced the construction of its road and other works at Sacramento on the 11th day of January, 1863. The bill further alleges the increase of the capital in October, 1864, to twenty million dollars, but it appears that up to the 16th day of January, 1865, when the first subsidy bonds were issued, only six thousand three hundred and ninety-two shares of the capital had been subscribed for, of which six hundred and eighty shares were held by the defendant's testator (p. 3). The bill alleges that in the progress of the construction of the road, up to its completion in 1869, the defendant's testator acquired stock, in all amounting to one hundred and thirty thousand shares and upwards (p. 8). In July, 1868, by a further amendment of the articles of association, the capital stock was increased to one hundred million dollars, of which, however, only a little more than one-half was issued at the time of the completion of the road in December, 1869 (p. 9). The Western Pacific Railroad Company was likewise organized under the laws of the State on the 11th day of December, 1862, to construct a railroad from San José, at a point connecting with the San Francisco and San José Railroad, to Sacramento, there to connect with the Central Pacific Railroad Company of California, so that, when completed, there should be a continuous line of railroad from the city of San Francisco to the eastern boundary of said State. The length of the proposed railroad was to be one hundred and twenty miles, and its capital stock five million four hundred thousand dollars. Of this amount one hundred and forty-four thousand dollars was subscribed and fourteen thousand four hundred paid in, at the time of the filing of the articles. The bill expressly alleges that the "Western Pacific Railroad was intended to be, and in fact was, a part of the road which Congress authorized and desired should be constructed from the Missouri River to the Pacific Ocean under the Act of July 1, 1862, and the acts amendatory thereof." It further alleges that "by an agreement between the Central Pacific Railroad Company of California and said Western Pacific Railroad Company, and with the consent and approval of Congress, the said Western Pacific Railroad Company became entitled to be aided, and in fact was aided," by the United States in the construction of its road and other works; and that prior to the 8th of June, 1867, it had procured subscriptions for four thousand eight hundred and eleven shares of its stock, had entered upon the construction of its road, and partly constructed the same. The bill further alleges that on the day last named the defendant's testator acquired a portion of its capital stock, and with his associates, Huntington, Hopkins and the Crockers, who made simiilar purchases, acquired the possession and other property of the railroad, and proceeded to complete the same, in the course of which they acquired large quantities of its stock, of which the defendant's testator had thirteen thousand five hundred shares (p. 11). The bill further states the consolidation of the Central Pacific Railroad Company of California and the Western Pacific Railroad Company, on the 22d day of June, 1870, by the filing of articles which are annexed to the bill as Exhibit No. 4 (Record, p. 40). The articles recite the original organization of the company, and declare that by means of the provisions of the Act of Congress of July 1, 1862, and the acts amendatory thereof, approved July 2, 1864, and March 3, 1865, the Central Pacific Railroad Company of California were authorized to locate and construct their railroad on their established route, and to locate, construct and continue the same eastward in a continuous completed line, until it should meet and connect with the Union Pacific. The articles also recite that certain rights, powers, donations, grants, rights of way, privileges and franchises were given and granted to them to aid in the construction of their said railroad, and further recite the increase of its capital stock, as alleged in the bill, and the original organization of the Western Pacific Railroad Company, and its previous consolidation with the Sacramento Bay R. R. Company, under its name of the Western Pacific Railroad Company. The articles also state that the boards of directors of the two companies have agreed to amalgamate and consolidate the interests of the companies, upon the terms contained in the articles of consolidation, under the name of the Central Pacific Railroad Company; the object of the consolidation being stated to be to form a continuous line of railroad and telegraph from Ogden, in the Territory of Utah, to San José, in California, and to the waters of the bay of San Francisco; the capital stock to be one hundred million dollars, a portion of which, share for share, was to be delivered in exchange for the stock of the two constituent companies outstanding. The consolidated company ac quired all the property of every nature and description of the constituent companies, "subject, however, to all conditions, obligations, stipulations, con tracts, agreements, liens, mortgages, incumbrances, claims and charges thereon or in any way affecting the same." The new consolidated company was to be liable for, and was to fulfill, perform, do and pay all and each of the contracts and agreements, covenants, duties, obligations, liabilities, debts, dues and demands of the constituent companies. The bill then alleges the passage of the Acts of Congress of July 1, 1862, July 2, 1864, and March 3, 1865, commonly known as the Pacific Railroad Acts, and the acceptance of the conditions of said several acts by the Central Pacific Railroad Company of California and the Western Pacific Railroad Company within the time required by the provisions of said acts. It also alleges that by the acceptance of the conditions of the Act of July, 1, 1862, by the Central Pacific Railroad Company of California, (which, in accordance with the terms of the act, was within six months of its passage), a contract was entered into between the Government on the one part and the company and its stockholders on the other part, for the performance by the parties respectively of the obligations and conditions imposed upon them by the act. The bill goes on to state that the subsidy bonds were issued as the work of construction proceeded, payable thirty years after date of issue, the interest payable semi-annually; such bonds amounting in the aggregate, between January 16, 1865, and December 31, 1869, to over twenty-five million dollars. It is alleged that the Government has paid the semi-annual interest upon these bonds, and that it will continue so to do until the maturity of each bond, and that it has also paid the first four instalments of said bonds, amounting to two millions three hundred and sixty-two thousand dollars of principal, which matured and became due on the 16th of January, 1895 (p. 14). Similar allegations are made with respect to the issue of bonds to the Western Pacific Railroad Company (p. 17). The aggregate amount of the principal and inter |