The laws enacted in aid of these roads, while they illustrated a profuse
liberality and a generous surrender of the Government's advantages,
which it is hoped experience has corrected, were nevertheless passed
upon the theory that the roads should be constructed according to the
common rules of business, fairness, and duty, and that their value and
their ability to pay their debts should not be impaired by unfair
manipulations; and when the Government subordinated its lien to another
it was in the expectation that the prior lien would represent in its
amount only such bonds as should be necessarily issued by the companies
for the construction of their roads at fair prices, agreed upon in an
honest way between real and substantial parties. For the purpose of
saving or improving the security afforded by its junior lien the
Government should have the right now to purge this paramount lien of all
that is fraudulent, fictitious, or unconscionable. If the transfer to
innocent hands of bonds of this character secured by such first mortgage
prevents their cancellation, it might be well to seek a remedy against
those who issued and transferred them. If legislation is needed to
secure such a remedy, the Congress can readily supply it.
I desire to call attention also to the fact that if all that was to be
done on the part of the Government to fully vest in these companies the
grants and advantages contemplated by the acts passed in their interest
has not yet been perfected, and if the failure of such companies to
perform in good faith their part of the contract justifies such a
course, the power rests with the Congress to withhold further
performance on the part of the Government.
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