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United States v. Kansas Pacific Railway Company, 99 U.S. 455 (1878)

United States v. Kansas Pacific Railway Company

99 U.S. 455


1. The bonds granted by the United States to the Kansas Pacific Railway Company are not a lien on, nor is the company liable for five percent of the net earnings of, that portion of ite road west of the one hundredth meridian.

2. The Court adheres to the rulings in Union Pacific Railroad Company v. United States, supra, p. 99 U. S. 402, as to the principle which should govern in determining the amount of net earnings. In regard to certain items claimed by the company as proper deductions from the gross receipts of the road, the following should be excluded -- money needed to place it in proper repair, but not actually expended for that purpose, the expenses of the land department, the interest on the funded debt, which has priority over the lien of the United States, and the fifty percent retained by the latter from the amount due for services rendered to it, and that the following items should be allowed, provided they were actually paid out of the earninge of the road, and not raised by bonds or stock -- the equipment account, or replacing and rebuilding rolling stock, machinery, &c.; the amounts paid for depot grounds, and the expenses of same; and the construction account, or improvements and additions to the track, &c.

The facts are stated in the opinion of the Court.

Page 99 U. S. 456

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