The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1873-07-23

II HIS StDtIdIly Deell uliutlSuOtu JHdJ lUt
railroad from the Mississippi to San Francis.
co cost the nation double the amount that
was actually expended in its construction, the
balar ce, as far as the Union Pacific is con-
cerned, going into the pockets of the stock
holders of the corporation known as the
Credit Mobiler of America. A statement has
recently been made respecting the managers
of the Central Pacific, or western division of
the road, which shows that in the amount of
their plumber and the audacity of its accom-
plishments, these gentlemen far surpass the
eastern associates in every respect. The
statement is the substance of the allegations
of bill in equity filed by the officers of Placer
county, California, to recover the profits on
Large amount of stock recently held by the
county. The Central Pacific received in adj
dtion to the grant of the general government
which was the same as the eastern division
received, generous grants from California and
the municipalities along the line of the road.
The allegations in the bill, briefly stated, are
that the company was organized in 1852 with
a nominal capital of $S,500,00O, only part of
which was paid in; that in 1864 when the
capital was increased to $20,000,000, less
than 81, 100000 was paid, the debt was equal
to that amount, and $1,000, 900 had been OK
pended; that in 1867, when the capital was
increased to SOL, 100000 less than one
fourth of the amount had been paid in; that
the expense of construction year by year, on
paper, showed an enormous increase, and the
last year, 1869, the sum of $s9,000,00O was
charged to that account, and the total ex-
pense of construction was set down at over
S120,0o0,o0o. This expenditure had used up
the government, state and municipal subsid-
les, the entire capital which, on paper, was
$101 ,000, 900, and created debt of $75 ,000,-
600. 1t is further alleged that the whole bust
ness was managed by five directors who,
without taking the trouble to form CORPORA
ton like the Credit Mobiier, contracted with
themselves to build the road, and in conse-
quence grew immensely rich. They virtual
Iy owned and controlled the road, and, in a
few years, by system of consolidation, had
the railroad system of the State in their
hands, .. ei4 l..
A large number of stockholders who proba-
bly, paid for the amount they took, not re-
celving dividends, became suspicious and
made combination to bring suit against
the prosperous managers and to make good
show undertook to purchase the stock owned
by Placer and Sacramento counties, but the
managing ring learning of their purpose
bought the stock themselves. The suspicious
ones, however, having about four hundred
shares, began suit to recover the profits
thereon. For reasons best known to the
managers then, and probably by all now, the
company did not allow the suit to go to trial,
but compromised by paying 100000, or at
the rate Of $1187 share! The Placer coun-
ty officials, who had sold the managers 25CO
shares, learning this fact, were indignant, and
as the result, have filed the bill in equity to
recover the profits of the shares sold on the
ground that the accrued profits did not 90
with the sale.
In addition TO what has been stated, the bill
in equity declares that the five directors never
paid for the stock they originally subscribed
for; that by fraud they secured a majority Of
the stock; that they managed the road for
their own benefit; that by fraudulent repre-
sensations as to the cost of the road they have
appropriated over s2O0,00O,OOO; that they
have stolen the dividends that should have
been paid to stockholders and have procured
favorable legislation by bribery. In view of
this the petitioners ask for an injunction
against their further management.
Ofcourse this is but one side of the story.
and when the managers come to have their
say, il may have a somewhat different look
than at present. ef