(3) To pay for all buildings and market-house fixtures then on the property. (4) To raise by subscription a capital stock of $1,000,000. In view of the very valuable grants contained in the charter, can it be doubted for a moment that but for these obligations which, by its acceptance of the charter, the compnay assumed, Congress would have passed the act in question? But let us see how well the Washington Market Company has complied with its charter obligations. Very soon after the organization of the company the effort to a modification of these provisions of the charter, which imposed obligations, began. To quote from the Morrill report to the Senate, made on June 13, 1874: From the records and perhaps also from the testimony hereto annexed, it will "appear that a strict compliance by the company with the conditions of the charter was never intended; and the company seems to have expected and early sought indirectly some modification by act of Congress. On December 20, 1870 (16 Stats. 589), Congress by joint resolution, created a commission which was empowered to make such alterations in the buildings and such arrangement with said company as shall be best calculated to secure the speedy erection of buildings creditable to the city and sufficiently commodious for all the wants of the public." It does not appear, however, that this commission authorized any change in the charter plans and specifications of any of the buildings. In fixing the capital stock of the company at $1,000,000 Congress had in mind the costly buildings which the company was under duty to erect and maintain. Contemporaneous estimates fixed the cost of the Pennsylvania Avenue building at from $600,000 to $700,000. This building has never been erected, and to this day only $15 per share, or $150,000 in all, have been paid on the entire capital stock of the company. Instead of investing $1,000,000 in the enterprise, as Congress contemplated would be done, the stockholders have invested only 15 per centum of that sum. By so limiting their contributions to the company, the stockholders relieved themselves of a most important charter obligation. Shortly after its organization, the company became involved in litigation with stall keepers, which continued for years, and resulted in financial embarrassment and ultimately in a receivership for the company. Throughout the early years of the company, it was apparent that the amount contributed by the stockholders was not sufficient to erect the Pennsylvania Avenue building; yet no calls were made on the stockholders to complete the payment of their subscriptions. It must be concluded that the policy of the company in this respect was the result of the attitude of its officers toward the erection of this building. Mr. N. G. Ordway, Sergeant at Arms of the House of Representatives at that time, a large stockholder and an active participant in the management of the company, said: "I had no faith that the hotel project could be anything but a disastrous failure." (Morrill report, page 32.) The market company was successful in its efforts to obtain immunity from the charter obligation of erecting the Pennsylvania Avenue building. The deficiency appropriation act of March 3, 1873 (17 Stats. 540) contained a clause authorizing the governor and Board of Public Works of the District of Columbia, "if they deem it advisable for that purpose, to make arrangements to secure sufficient land fronting on Pennsylvania Avenue and Louisiana Avenue, between Seventh and Ninth Streets: Provided, That the Government of the United States shall not be liable for any expenditures for said land, or for the purchase money therefor, or for the buildings to be erected thereon; and no land, or the use thereof, is hereby granted for the purpose of erecting any building thereon for such purpose." Relative to the understanding that Congress had of the effect of this provision, the Morrill report says: Here is apparently only an appropriation to pay the District of Columbia $75,000 for the city hall, and the governor and board of public works “ are authorized, if they deem it advisable for that purpose, to make arrangements to secure sufficient land fronting on Pennsylvania and Louisiana Avenues, between Seventh and Ninth Streets: Provided, That the Government of the United States shall not be liable for any expenditures for said land, or for the purchase money therefor, or for the buildings to be erected thereon; and no land, or the use thereof, is hereby granted for the purpose of erecting any building thereon for such purpose. It can not be supposed that many members of Congress understood this item, inserted in a deficiency bill on the last day of the session, or the 3rd of March, 1873, as having anything to do with the Washington Market Company, or most likely it might not have been accepted. Even if it gave any rights to the governor and board of public works, it gave none whatever to the Washington Market Company, which had merely a franchise for a term of years, with well-defined privileges and specific duties and obligations, including a fixed rental, which was to be paid and used solely for the support of the poor of the City of Washington and District of Columbia; and yet the Washington Market Company, under cover of an amendment in a deficiency bill, assumes authority to sell and give a quit-claim deed forever of a considerable share of the premises, to which it had only a leasehold title, bound up with its franchise, and which from necessity would be forfeited by a nonfulfillment of any of the conditions or covenants pertaining thereto. The franchise granted to the Washington Market Company is a privilege which can only be exercised by the market company, and can not be subdivided or alienated or assigned to other and different parties. The lease of real estate granted by the United States is a part of the contract, and must be accepted as an entirety. Whatever may have been the understanding of Congress, the governor and Board of Public Works of the District of Columbia proceeded, without delay, to acquire from the Washington Market Company a part of the land granted to it by the act of May 20, 1870. On March 18, 1873, the Washington Market Company, through M. G. Emery, its president, entered into the following written contract with the District governor, H. D. Cook, and the board of public works, composed of Alexander R. Shepherd, James A. Magruder, S. P. Brown, and Adolph Cluss: MEMORANDUM OF AGREEMENT. GOVERNOR AND BOARD OF PUBLIC WORKS WITH THE WASHINGTON MARKET COMPANY. In pursuance of the act of Congress of March 3, 1873, authorizing the governor and board of public works, if they deem it advisable, for the purpose of erecting thereon a suitable building for District offices, to make arrangements to secure sufficient land fronting on Pennsylvania and Louisiana avenues, between Seventh and Ninth Streets, it is hereby agreed that: 1. The Washington Market Company shall, by good and sufficient quit-claim deed, release and convey to the District of Columbia all the right, title and interest of said company acquired under act of Congress of May 20, 1870, incorporating said company, in and to so much of the land within said district described in section two of said act, and fronting Pennsylvania and Louisiana avenues, as is contained within the following limits: Beginning at the southwest corner of Seventh Street and Pennsylvania Avenue; thence westerly along the southerly side of Pennsylvania Avenue to its intersection with the southerly side of Louisiana Avenue; thence westerly along the southerly side of Louisiana Avenue to the east side of Ninth Street; thence along the east line of Ninth Street eighty-six feet; thence easterly on a line parallel with the aforesaid southerly line of Louisiana avenue to a point eight-six feet south of said intersection of the southerly lines of Pennsylvania and Louisiana Avenues; and thence on a line parallel with the aforesaid southerly side of Pennsylvania Avenue to the westerly line of Seventh Street, at a point eighty-six feet from the corner begun at; thence northerly along the west line of Seventh Street eighty-six feet, to the corner begun at. The Washington Market Company shall also, in said deed, convey to said District the right to use in common with said market company as a passage way and court-yard all the land between the lot conveyed in said deed and a line drawn westerly from Seventh to Ninth Street, ten feet north of the north walls of the present Seventh and Ninth Street buildings of said market company. 2. In consideration of the aforesaid release and conveyance by the Washington Market Company to the District of Columbia, the District will assume and fulfill all obligations imposed upon the company by section fourteen of said act of May 20, 1870, (as modified by act of the legislative assembly of the District of August 23, 1871) except as follows: The market company shall pay annually to the District of Columbia during the term, and for the purpose mentioned in said section fourteen, the sum of seven thousand five hundred dollars, payable quarterly, which sum shall, during said term, be in the place of all rental for the ground occupied by the market buildings of said company; and in case in any year the general District taxes upon said ground and market buildings shall exceed five thousand five hundred dollars, the excess above that amount shall be deducted from said rental of seven thousand five hundred dollars, so that the total annual payments for rental and taxes shall not exceed thirteen thousand dollars; the District, however, not hereby releasing, but expressly reserving, and the market company hereby confirming, the right of the District, given by section two of the act of May 20, 1870, of fixing and controlling for the protection of the market dealers and of the public, the amount of rentals of the stalls and stands in said market buildings; and it is also hereby agreed that the annual rental of stalls and stands in the other markets in the City of Washington shall not be fixed by the District authorities at a lower rate per square foot of area than seventy per cent of the rate fixed under said section for stalls and stands in the market buildings of said company; and the District shall not use the land released and conveyed as aforesaid for the purpose of a market. This agreement shall take effect April 1, 1873, and the market company shall at once settle its past rental account to that time at the rate, since August 23, 1871, fixed by the resolution of the legislative assembly of that date; and sha immediately pay the balance due to the treasurer of the District. Possession of the land conveyed shall be given the District upon the day of executing this agreement. Dated at Washington, March 18, 1873. WASHINGTON MARKET COMPANY, By M. G. EMERY, President. H. D. COOKE, Governor. Board of Public Works. The conveyance of the land on Pennsylvania and Louisiana Avenues was made by the market company to the District of Columbia on the same day as that on which the contract was executed. After this transaction was completed, there was left in the possession of the market company 106,722 square feet, which it has continued to hold until the present time. Upon this site the present Center Market building was erected and now stands. It will be seen that this contract reduced the annual rental, fixed by the charter at $25,000, from $20,000 to $7,500. In August, 1871, the rental had been reduced from $25,000 to $20,000 by Governor H. D. Cook under authority of a resolution of the District Legislative Assembly. This reduction from $25,000 to $20,000 was made without authority of law; but, as it was held by the courts that the reduction to $7,500 was valid and binding, the first reduction to $20,000 was probably validated by the contract above quoted. But the view of the committee is that while these court decisions may have settled the question of the power or authority of the District officials to make the reduction, the question of the reasonableness or propriety of their action may be inquired into by Congress when it comes to legislate either under the general reservation of the right to amend or repeal, contained in section 17, or under other provisions of the charter. It will also be seen that the contract contains a provision to the effect that, for the entire charter period of ninety-nine years, the District of Columbia should either exempt the company from the payment of all taxes in excess of $5,500 or that the rental of $7,500 should be reduced by the amount of such excess, if any should be paid. In addition, the District authorities agreed to fix the rentals of stalls in other markets at not less than seventy per centum of the amount charged by the Washington Market Company for the same space. In other words, the company undertook by this contract to have the District governor fix the minimum rent to be paid to other landlords of market space and, thereby, to prevent competition in the business of conducting a public market, except upon a basis satisfactory to the Washington Market Company. The validity of so much of this contract as reduced the rental to $7,500 having been sustained by the courts, since 1873 the Washington Market Company has paid as rental only $7,500 per year. It should, perhaps, be said here that the market company has never undertaken to enforce the clause of the contract which limited the annual outlay for rental and taxes to $13,000, nor that which undertakes to fix the price to be paid for space in other markets in the City of Washington. But as to the propriety of inserting these clauses in the contract, the Morrill report says: But this item in the deficiency bill appears to have remarkable elasticity, and "arrangements" have been made that the reduced rental of $7,500 shall go down whenever the taxes on the market company shall go up above $5,500. In other words, the Washington Market Company having paid taxes to the amount of $6,136.32 to the City of Washington in 1873, made "arrangements" that, no matter what the exigency of the city might hereafter be, it should never be called upon to pay so much again, or to pay taxes beyond the sum of $5,500 annually. If taxes remain the same as for 1873, this would reduce the rental to $6,863.78. The city is made to relinquish its highest function of taxation, so far as the market company is concerned; and even this did not appear to satisfy the company, but further arrangements were made that the "rentals of stands and stalls in the other markets of the city of Washington shall not be fixed by the District authorities at a lower rate per square foot of area than seventy per cent of the rate fixed" for equal space in the market buildings of the company. Your committee can not but regard this as bad in law and worse as an "arrangement" for the City of Washington. It might have been added that the insertion of these very objectionable provisions in the contract indicates unmistakably the attitude of the District of Columbia officials toward the subject matter which had been intrusted to them. These and other considerations suggested an investigation of the relations, if any, which existed between the District officers and the Washington Market Company. The results of this investigation are worth recording here. M. G. Emery, who executed this contract on behalf of the market company, was mayor of Washington from June, 1870, to June, 1871. He was also one of the corporators named in the charter of the company and a member of its first board of directors. He became president of the company in August, 1871, and represented it in the negotiations with the District officials. H. D. Cooke, one of the contracting parties for the District of Columbia, was governor of the District from February 28, 1871, to September 13, 1873. He was also one of the charter-named corporators of the Washington Market Company and a member of its first board of directors, acting in that capacity from November, 1870, until December, 1872. He was a stockholder and a director of the company when he was directed by the Legislative Assembly of the District of Columbia in August, 1871, "to secure a reduction" of $5,000 in the annual rental to be paid by the company. Alexander R. Shepherd, another contracting party for the District of Columbia, was also one of the original corporators of this company, a stockholder, and a member of its first board of directors. S. P. Brown, another contracting party for the District of Columbia, was a stockholder of the company as late as December, 1873. Adolph Cluss, also a contracting party for the District of Columbia, was architect for the Washington Market Company, as well as a large stockholder therein at the time he entered into the contract. Those named include four of the five officials who represented the District of Columbia in the negotiations leading up to this contract and in its execution. Mr. N. G. Ordway, Sergeant at Arms of the House, was very active in the organization of the company. Later he became superintendent of the company and one of its largest stockholders. For some reason the subscription books of the company, a private corporation, were by a rather remarkable charter provision to be opened at the Department of the Interior. Mr. Ordway went there on the day the books were opened with about $30,000 in currency, with which to make the required payment of 10 per centum on stock to be purchased for himself and others whose identity is not disclosed. (Morrill report, page 33.) As to what then occurred and as to subsequent steps taken by Mr. Ordway in the organization of the company, quotation will be made from his testimony as it appears in the Morrill report, page 33: In consequence of these suggestions, I went to the room in the Interior Department where the books were opened on the first day specified for opening the books, carrying with me some $25,000 or $30,000 in currency to pay the ten per cent. required by the charter on the amount of stock for which I intended to subscribe for myself and friends. After my arrival there suggestions were made to me that certain persons whose names were in the bill as grantees would demand of those who subscribed a large lot of free stock; and the further announcement was made that nothing but currency would be received in payment of the ten per cent., not even certified checks or drafts upon the Treasury of the United States. I did not like the looks of things, and afterward subscribed for two or three shares and left. Some months afterward, at the suggestion of Governor Cooke and others, I met a party of gentlemen from Washington in Boston, when it was stated that the grantees or first organization, having failed to commence work had forfeited their charter; that a new company had been formed under the fifteenth section of the charter, and that the grantees were ready to waive all claim or pretended claim to stock on account of having procured the charter from Congress, provided a majority of the stock could be subscribed for by eastern capitalists and the market pushed forward; and that probably a change in regard to the use of the front building would |