The Anderson intelligencer. [volume] (Anderson Court House, S.C.) 1860-1914, 1870-09-01
From the Mewark Daily Advertiser
CHAPTER of Railroad History.
GENERAL rREMoNTs SOUTHERN PACIFIC RAIL-
RoAD-HoW RAILROAD THREE MILES
LONG EARNED HALF a MILLION.

RoAD-now A RAILROAD THREE MILES
LONG EARNED HALF A MILLION.
We SOC by the Texas papers that the Legis-
lature of that State has granted to the Mem
phis, El paso and Pacific Railroad Company a
right of way across the public lands OF the
State. This is the company which has IN view
the construction of q road across the northern
tier of counties of Texas to connect with other
roads in Arkansas on one side and Arizona on
the other, SO as to form a through line, to be
called the Southern Pacific Railroad. 1t has
been under the control of Gen. Fremont and
his associates, and is the same company which
has recently been seeking aid from Congress.
1t has had some singular fortunes and mlstor-
tunes.
The original charter of the company was
granted by the State of Texas in 1855, with q
right to construct railroad through the north
ern tier of counties of that State. A supple
ment was passed in 1861, granting some fur
ther privileges. By the charter and supple
ment, together, the company are guaranteed
large amount of State lands on the completion
of every ten mile section of the road-we be-
lieve it is equivalent to tract OF twenty miles
in width on each side of the road. The origi-
nal -corporators and directors never effected
anything; indeed, the war prevented anything
being done. But in 1866, Gen. Fremont and
his associates took the whole enterprise upon
contract, on consideration of having control
of the entire stock and advantages of the char
ter, stipuating that the Directors should CO.
operate by passing the necessary resolutions
and executing the necessary bonds to operate
with. Under this arrangement large quanti-
ty of road bed construction bonds were issued
to the amount, we believe, of $4,000 per mile,
and ten million dollars of land grant bonds.
Five millions of the latter were secured upon
the State lands, which would be due on the
completion of the first $50 miles of the road /;
and the other five millions, upon the next 15O
miles. The bonds were placed in the hands of
the contractors, Fremont and his associates.
They had been made members of the board
and Fremont and two others were appointed
the Executive Committee, with full power to
actin place of the board.
The wonderful thing is that, without any
property except in the moon, without having
scarcely put spade in the ground, this COM
pany succeeded not only in getting their bonds
admitted to the Paris Bourse, but actually dis
posed of S5,000,000 of the land grant bonds at
sixty cents ON the dollar i'll specie-equivalent
to about eighty-four cents in currency-thus
actually realizing about S4 10000 in cash.
The means resorted to for raising this money,
and the disposition made of it after it was
raised, have been made the subject of serious
litigation, involving the possession of the
charter and what remnants remain of the cor
porate property. In February last, a suit was
commenced against General Fremont, James
NJ. Daniel (the Chief Engineer) and others in
New York city on allegations of fraudulent
conduct, and an order for their arrest was
made.
But they turned up in Washington and were
not arrested. They had an office in New
York, however, and left many securities and
considerable property behind them. John A.
G. Gray was appointed receiver and took pos
session of the assets.
Recently application has been made to JUS
tice Bradley, as Judge of the United States
Circuit Court for the Western District of Tex
as, for an injunction against the company in
its corporate capacity, and the appointment of
general receiver of all the property and as
sets in Texas and elsewhere. This application
was made by G. Parker. Esq, Of Newark, on
behalf of the Trustees of the land grant
mortgages, (who are P. S. Forbes of Paris !;
S. NJ. Swenson, of New York, and Andrew q.
Curtin, of Pcnnsylvania,) and of Emanuel
Lissignol, a Paris broker, who holds some of
the bonds, and of Fred. A. Lyon, of Illinois,
who holds some stock These plaintiffs file a
bill in equity and charge that it was a breach
of trust in the directors to place the whole
control and disposal of the corporation and its
chartered privileges in the hands of three men;
that the means resorted to by these men to
palm off the bonds in Paris were downright
fraud; and that the money raised thereby has
been squandered and embezzled by the parties
and their agents, so that the railroad corpora
tion and corporate property will derive scarcely
any benefit from it.
The fraudulent means particularly specified
were the publication of a pamphlet in Paris,
in the French language, in the summer of 1869,
in which it was represented that large por-
tion of the road was built; that the right to
State lands had become vested to the amount
of eight millions Of acres, worth Sl4 per acre !;
that connections had been secured to the Pa
cific in one direction, and to Richmond, Va,
in the other; that the Congress of the United
States had passed an act in March, 1869, guar
anteeing the payment of six per cent. interest
on the company's construction bonds to an
amount of $4,000 on each side of the road,
and the payment of the principal at maturity !;
the proceeds of which were to be expended in
building the road, and that the bonds were
good, though all the lands should revert to the
State! The bill charges that all these repre-
sentations were simply false.
As to the disposition of the proceeds of the
bonds, they allege that Fremont received 16
per cent, or about half a million of dollars
for commissions; that when interest became
due on the bonds, they paid it out of the sale
of more bonds, so as to keep up fictitious
credit; that large sums were paid to persons
of influence and position to get the bonds on
the Bourse; that Fremont's brother.in-law,
Gauldrie Boileau, Consul General of France,
in New York, received 24S bonds of 81 900
each, and returned them and was paid for them
out of the proceeds of bonds sold in Paris i;
that although about 5000 tons of iron rails
were purchased they never were used except
to lay about three miles of road in Texas, the
only portion of the road ever built; and that
the rest lie in the Custom House at New Or
leans for non-payment of freight and duties.