
    THE UNION PACIFIC RAILWAY COMPANY v. THE UNITED STATES. THE UNITED STATES v. THE UNION PACIFIC RAILWAY.
    (20 C. Cls. R., 70; 117 U. S. R., 355.)
    
      Both parties Appeal.
    
    The claimant seeks to recover for services rendered. The defendants set up a counter-claim for 5 per cent, of the net earnings prior to the Thurman Act, 1878, and for 25 per cent, since. The questions of law presented are: Whether the Government may send local passengers at through rates? At what rate the Government shall pay for passengers over the Omaha bridge? Whether the Thurman Act provides a different rule for ascertaining the net earnings of the road than that previously laid down hy the Supreme Court (99 U. S. R., 402)? How the annual payments into the sinking fund prescribed by the Thurman Act shall be ascertained and computed ?
    The court below decides—
    (1.) If the court find the fact that rates allowed for mail transportation are fair and reasonable, and not in excess of rates paid hy private parties, no question of law will arise under the Pacific Railroad Act, 1862 (12 Stat. L., § 6, p. 489), which requires the road to transport freight and passengers for the Government “ at fair and reasonable rates of compensation, not to exceed the amounts paid by private parties for the same hind of service
    
    (2.) The Government is not entitled under that provision to through rates for local passengers, i. e., to rates which the railroad receives in its division with other companies for transportation over its own and other roads.
    
      (3.) The same provision governs the fare over the Omaha bridge. The Act 24 February, 3871 (16 Stat. L., 430), under which the bridge was built, does ndt supersede or modify it.
    (4.) The words “necessary expenses of operating” in the Thurman Act, 1878 (20 Stat. L., § 1, p. 56) extend to the expenses of operating the road in accordance with the demands of the business coming to it, but limit the expenses to such as are conducive to that end and exclude those that are not. The act accords with the rule previously laid down by the Supreme Court (99 U. S. R., 402).
    (5.) The annual payment into the sinking fund prescribed by the Thurman Act (§ 4) adds to the 5 per cent, of net earnings prescribed by the act 1862 so much of $850,000 as will mate, with the 5 per cent, and with the compensation for services performed for the Government, an amount equal to 25 per cent, of the net earnings of the road and no more.
    The decision of the court below is affirmed on the ■ same grounds.
   Mr. Justice Matthews

delivered the opinion of the Supreme Court, March 29,1886.  