The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-07-04
FINANCIAL AND COMMERCIAL.

The market for government securities continues
somewhat dull and unsettled under the combined
effects OF the forthcoming Democratic Convention
and the bill taxing the interest bonds. Although
the bill on being reported by the Committee OF Ways
and Means to the House was accompanied by q pro-
test 1t is q popular measure and the outcry against
1t by the republican journals is uncaled for. AS
matter OF course 1t Is unpaatabe to Them for they DO
not consider 1t in accordance with republican princi
pies; but q measure tending to the equalization OF
taxation 1t has the support OF this Journal ana many
OF the bOndholders its advocates. moreover the
proposed tax is not heavy one when we CONSIDER the
high rates Of interest calculated In currency which
the bonds BEAR and the bondholders as class can
well afford to pay 1t as the people at large can
their ordinary taxes. The income derived from TINS
tax might be appropriated with advantage to the
establishment Of sinking fund for the reduction Of
the public debt IL is claimed that the bondholders
Invested In our national securities during the war to
save the life Of the nation, and that the interest
ought neither to be taxed reduced; but the fact
is that those who bought bonds In war time did 80
because they thought them a good investment and
just they would have purchased any other KIND OF
property while with respect to the reduction Of the
rate OF interest the public debt the financial his
tory OF England furnishes with several examples
and the question Is asked If England reduced the
rate OF interest on her debt why cannot
we 10 lile same IN our own caSeF Inc Olu IL oHc
which Congress should pass for the relief Of tax
payers general regardless Of the opposition which
1T has elected. The market for governments closed
steady on the street at the suboined quotations.
Registered 1881, 1l2% 113; coupon, 1881, 11SA
Il31s SOS, registered, 1882, 109 1O9a; 5-2os,
coupon 1862, 113 49,; do, 1854, 1909 11OK;
d. 1866, 1114 1112s; do, 1885, January and July,
1857 100; do, 1867, 1857 100; 1o4o's regis
tered, 1863 1O7; 1O-4O's coupon, 107 1o7n;
June 1905, 1857 1o9H; July 1905. 1857 100;
August compounds 1855, 1lSa september do. 1lS;
october do, 117H.
An important suit was commenced to-day IN the
Supreme Court Of this district against the Union
Pacific Railroad Company and the Credit Mobilier Of
America by James Fisk Jr., stakeholder,
and also subscriber for twenty thousand
shares of the company's stock, which he
failed to receive, although he rendered the
money for the same The plaintiff alleges that
the various grants rights and privileges conferred
upon the company by Congress are Of far greater
money value than the cost OF constructing and
equipping the railway and that instead Of undertake.
ing by their own officers the task OF constructing the
Iine or making reasonable contract for the work.
the directors or controlling number Of them, In
order to to themselves personally great pro-
dts and advantages, entered into arrangement by
which they established the Credit Mobilier, and
placed IN it, hands and under it's control the con.
structon Of the entire railway and telegraph line.
Thus all the greater portion Of the profits and adj
vantages Of building the road, which should have
been retained by the company, were handed over to
this Credit Mobler-a close corporation created by
the State Of Pennsylvania-and the original stock
holders of the Union Pacific Company reaped
none Of the benefits. The plaintiff further
eays he believes that by some contract or arrange
ment between the two organizations the bonds
issued to the Union Pacific Company by the govern
ment; the grants Of land made to the company BY
the government and the bonds issued by the COM
pany under acts Of Congress have been transferred
60 the Credit Mobier that the control and benefit
thereof have been vested In that corporation, In
which the directors Of the Union Pacific Company
are large stockholders, well as directors Of the
same. The divtdends and profits Of the Credit MO-
bilier, it is well known, are very large, amounting,
% the plaintiff is informed, fifty sixty per cent
on the whole capital stock for two months. the
whole of which, 1t Ia commended, ought to 60 to the
stockholders of the Union Pacific Company. 1t Is
alleged that In order the better to carry out the
programme for building the road through the
Credit Mobier, q contract was made with
brother OF one Of the directors for constructing
It, but that this arrangement was merely cover for
the resl arrangement before mentioned. This con-
tract was afterwards assigned to Of the present
therefore, asks that the establishment and manage
ment of the Credit Mober by directors Of the Union
Pacific Company be declared fraud upon the Union
Pacific Company and its stockholders, and that the
directors in question be held to have acted as
trustees for the Union Pacific Company and made
accountable for all their transactions; also that the
Union Pacific Company be restrained by Injunction
from paying delivering to the Credit Mobilier any
United States bonds or land grants from the govern
ment or bonds issued by the Union Pacific Company,
and that the Credit Mobiier be similarly restrained
from receiving them. Further, that all contracts
and arrangements made between the Union Pacific
Company and the Credit Moblier be de-
osAred fraudulent and set aside and that
the said Credit Mobilier return to the Union Pacific
Company all bonds securities and other property or
the proceeds thereof at any time received from the
Union Pacific Company, and that 1t De restrained
from paying any dividend or making any dstribu-
ton OF profits until the liabilities Of IT. directors and
stockholders to the Union Pacific Company are de-
sermined. In accordance with this complaint Judge
Barnard granted an order this morning restraining
the defendants % aforesaid, and they are to show
cause why the Injunction should not issue on the 2lst
inst The suit involves an important principle, and
| Q very strong case IL here made out against the
Credit Mobier. Moreover 1t Ii contrary to the spirit
of the acts OF Congress providing for the construction
Of the railway to the Pacific that corporation should
thus he created within corporation, and virtually the
Credit Mobfier IL the Union Pacific Railway Com
pany Hence while the stockholders in the latter
are receiving nothing, those in the former are the
recipients OF enormous dividends the pro1ts Of the
work being much greater than is generally sup
posed Indeed It Ia believed that the whole cost OF
constructing the railway has not exceeded the
amount OF the bonds issued by the government TO
the company, In addition to which 1t has been per-
mtted to issue an equal amount Of It's own first
morcare bonds The road moreover, is stated to
be badly built and the whole matter forms q subject
for Congressional inquiry, and committee should
be appointed for this purpose without delay.
ftbecame known on the street this morning that a
settlement OF all the matters In dispute between the