The ruling in
Union Pacific Railroad Company v. United
States, supra, p.
99 U. S. 402; that
the United States is not entitled to recover if, during the period
for which it claims the five percent of the net earnings of any
road, to aid in the construction of which the bonds of the United
States were granted under the Pacific Railroad acts, such earnings
were absorbed by the interest accruing on the first mortgage bonds
of the company, reaffirmed.
Page 99 U. S. 492
The facts are stated in the opinion of the Court.
MR. JUSTICE BRADLEY delivered the opinion of the Court.
This was an action brought by the United States against the
defendant in the court below to recover fire percent of its net
earnings.
The facts of the case were admitted by the parties, and, amongst
others, the following:
"5. That if the amount paid by the company as hereinbefore
stated for interest on its first mortgage bonds during said time
should, under the law, be deducted from the receipts of the company
in order to ascertain the net earnings thereof, then there were no
net earnings during said time; but if, on the other hand, the said
payments of interest should not be deducted from the earnings of
the road to ascertain the net earnings, then the net earnings of
the road during said period amounted to the sum of four hundred and
seven thousand seven hundred and ninety-nine 50/100 dollars
($407,799.50)."
It thus appears that although the company made net earnings to
the amount of $407,799.50, during the period covered by the time in
respect of which the suit was brought, yet that they were all
absorbed by the interest accruing on the first mortgage bonds.
According to the principles laid down in our decision,
Union
Pacific Railroad Co. v. United States, supra, p.
99 U. S. 402, the
government cannot claim the five percent which would otherwise be
applicable to its subsidy.
Judgment affirmed.
MR. JUSTICE STRONG and MR. JUSTICE HARLAN dissented.