History of public land law development

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382 HISTORY OF PUBLIC LAND LAW DEVELOPMENT this in the amendatory Act of 1864 by excluding coal and iron deposits from the reservation. Section 17 of the original act stated that if the two roads to be built respectively from the East and the West were not completed by 1876 all their property including lands, rolling stock, and rights-of-way, should be forfeited to the United States. Government traffic should at all times be given preference, and compensation "at fair and reasonable rates . . . not to exceed the amounts paid by private parties" should be allowed. In the Atlantic and Pacific Act of 1866, it was stated that the charges for "postal, military, naval, and all other government services" were to be established by Congress. The last of the transcontinental grants to the Texas Pacific declared that charges for all government traffic should be at "fair and reasonable rates . . . not to exceed the price paid by private parties" for the same service. Despite this relaxation from the "free from toll or other charges" provision in the grants to the transcontinentals, Congress continued to insert the words in its new grants to the states. This created the situation in Kansas whereby the Santa Fe railroad, when completed, would have to carry government traffic, except mail, free while the Kansas Pacific would be able to charge rates presumably equal to those paid by other shippers. The Civil War brought to the fore the inequities in the transportation of government traffic by land grant railroads. Of vital strategic importance was the Illinois Central Railroad with its line to Cairo and connecting elsewhere with the major east-west roads. The flow of troops, grain and meat, hay, horses, ammunition, cannon, and other supplies to which precedence was given inundated the line, causing delay and indeed some financial losses to the company and wearing out its equipment. Officials of the War Department recognized that the "free from toll" provision would mean that maintenance outlays would be cut to the bone and would bring heavy financial losses to the railroad unless some adjustment was made. Their solution was to allow the railroad a fair rate, that is the usual rate, minus 33^3 percent, for both troops and supplies.112 Few other land grant railroads were of importance except those of Missouri, and they were given special treatment by Congress. Both the Hannibal and St. Joseph and the Pacific Railroads of Missouri were seriously damaged by Confederate and Union raiders; their bridges were burned, track torn up, rolling stock destroyed or run off. Congress resolved on March 6, 1862, that the ability of the railroads to transport material of war and troops had been so impaired that, notwithstanding the "free from toll or other charges," it must allow the companies rates for services such as the War Department had established for the Illinois Central.113 Members of Congress were not satisfied with the solution the War Department had applied to the Illinois Central and had extended to the Missouri railroads. In 1874 it forbade further payments by the War Department for transportation of troops or supplies on land grant railroads. Naturally the railroads took the issue to the courts. They secured from the Supreme Court a decision based on what Haney calls illogical reasoning in which the intent of Congress was ignored. Railroads were awarded compensation for all government transportation (except for mails which had been handled differently) "subject to a fair deduction . . ."1U The court did not hold that the railroads could expect to receive the full compensation charged other shippers and a formula was needed. In 1882 Congress declared that no more than 50 percent of the 112 Haney, A Congressional History of Railways in the United States, 1850-1887 ("Bulletin of the University of Wisconsin," No. 342, Madison, Wis., 1910), pp. 34-35; Howard G. Brownson, History of the Illinois Central Railroad to 1870 ("University of Illinois Studies in the Social Sciences," Vol. XII, No. 10 (Urbana, 111., 1915), 66-67. 113 12 Stat. 614. 114 Haney, Congressional History, pp. 36-37.