, 1873-07-23

| tho rohd, by causing a largo sum Of money to bo
| paid Into its treasury. Tho Union Pacific Com
pany WAS mado party defendant simply for tho
purpose OF facilitating the progress Of tho suit,
| which has boon brought solely with tho p1trrJso
| Of enforcing tho payment Of ita maturod stock.
Among tho defendants aro al tho original stock
| holders who woro known to tho Government, In
Guiding prominently tho Orodit Mobilior Of
| America It's stockholders and MI thoHc who ro-
coivod Union Pacific stock from it In tho way Of
divideuis or gratuitfes. It ia probable That in
| no case moro than 8 per cont Of tho par
| valuo Of Union Pacilo stock was paid for
it by any of tho original holders, and tho
great bulk Of it was transferred without
any consideration whatsoever. II tho
Government can compel tho full payment of all
tho stock ;asuod On partial payment or no pay
mont, tho Union Pacific Company will bo
placed On Us sound o basis as any railroad in tho
world Tho hrst~mortgago dobt can bo paid of
tho Govornmonts second morgago will then DO
amply secured along with tho interest for thirty
yoars; and tho operation Of tho road will yield
fair return on tho capital stock. Tho fact is,
| therefore, that tho Government suit aganat tho
Union pacidc. so far from being prejudicial to
the interest Of tho Company, is decidedly favor
able To it; and, while tho primary object OF tho
Government Is to ronder ita securities good,
simultaneous result Of Its SUCCESS in this dircc-
tion will be to mako tho Company solvent and
tho railroad yield fair profit on bona ,f1tle In
| yestmont.
If tho Government suit againBt the Union pa-
cilc shall hayo aHuccessfu issue, 1t will thon boin
order for tho Attorney General to institute siml-
lar proceedings against tho Central Pacific. 4
suit has recently boon commenced by tho su-
peryiBors Of placor County, Cal, which county
mado largo subscription in aid Of tho road,
against Mcssrs Stanford, Huntington, Hopkins,
Crockcr, and Marsh, who composed majority
Of the original Directors Of tho road, to rocovor
IN amount Of money out of which tho county
has boon dcfrauded along with other bona jado
stockholders. It Is charged that tho five gentle
men named obtained control Of the road in tho
first instance by subscribing for G50 Hhares Of
tho stock at 800 share, which they didn't pay
for; they thon elected themselves Dfroctora,
and from timo to tu,o issued stock to
| themselves to tho amount Of $780, 000, 900.
Tho Central Pacific had enormous sub
silics on NIL sides. In addition to tho land
grant, tho United States issued Q per cont bonds
to tho amount Of s27,000,oo0. Tho State Of
California came forward with subsidies and
guarantees, and municipal goverumonts and in
diyiduals along the limo subscribed for tho stock
in good faith. The aida and subsidies granted
in all these ways amounted, according to tho
estimate in tho Placer County suit, to
4158, ,825, ,3G0. Tho cost Of construction
eyon on tho Credit Mobilier plau, Was
only e12o, 7,01955, If tho estimate Of
subsidios DO correct, then tho ring got
full Credit Mobiler prices for their work, and
in addition thereto. The Placer County s1it
charges that, besileB tho stock which Moasrs.
Stanford, Huntington, Hopkins, Crockor, md
thoir confcderatos took, they issued to thom-
solyoa 915, ,G01, ,741.89 Of tho Hecond-mortgago
bonds boforo putting any on tho market. This,
Of itaolf, would Indicate that tho subsidies o1-
cocded oven tho Credit Moblior prico OF con-
struction; otherwise thoao bonds would have
boon sold instoad Of boing divided among thom-
ao1vos. Tho construction ring Of tho Central
Pacific WAS first known under tho firm
nano OF @. Csooker l. Co., and attcr
wnrds as "Tho Contract and Finance Com
pany." Not content with tho profits In money,
bonds, and stock, tho firing" sso charged with
having acquired somo s2,oo0,o0o worth Of real
estate for themselves, which properly belongs
to tho Central Pacific Company.
BY successful prosecution OF suits against tile
owners Of unpaid stock in tho Union pacinc and
Central Pacific Railroad Companies, compelling
tlom to pay for thoir stock or to dsgorge it, tho
United States Goyornmont can aocuro its present
lien Of s5i.000,000. and tho interest On
this amount for thirty years, MI OF whiok Ia
now in jeopardy. But It will also accom-
plish something moro than this. 1t will
establish precedent for tho prosecution of all
railroads which havo been constructed on the
Credit Mobilior plan. Az rulo, tho capital
stock and tho bonded dobt OF railroads aro about
equal. To compel the payment in mouoy for
tho stock tint has boon "gobblod !" by coustruc.
tion rings will, therefore, DO equivalent to tho
payment OF tho t1ebta which tl1oso railroads arc
carrying. TAorcault would bo that theBc railroads
would domand dividends on only about ono .half
OF their present claim, md the ratos of traus-
portatlon would DO reduced In proper
tlon The Government owos It to tho
people to follow up thv Union Pacific
suit, tllon, not only as moana
OF recovering s54 900 Of tho peoples monoy
from the two principal Pacific noals, but also "a
apublio example and warning 10 protect the poo
plo againat tho most Nagrant and most general
/
railroad abuse OF tho day.
Wc have alroady indicated many OF tho prin-
olploa of Inv applicable to tho purpose Of on