gislation referred to is considered, it is astonishing that the
claim should be made that the directors of these roads owed no duty
except to themselves in their construction; that they need regard no
interests but their own, and that they were justified in contracting
with themselves and making such bargains as resulted in conveying
to their pockets all the assets of the companies. As a lienor the
Government was vitally interested in the amount of the mortgage to which
its security had been subordinated, and it had the right to insist that
none of the bonds secured by this prior mortgage should be issued
fraudulently or for the purpose of division among these stockholders
without consideration.

The doctrine of complete independence on the part of the directors of
these companies and their freedom from any obligation to care for other
interests than their own in the construction of these roads seems to
have developed the natural consequences of its application, portrayed as
follows in the majority report of the commissioners:

The result is that those who have controlled and directed the
construction and development of these companies have become possessed
of their surplus assets through issues of bonds, stocks, and payment
of dividends voted by themselves, while the great creditor, the United
States, finds itself substantially without adequate security for the
repayment of its loans.

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 fir