Helena weekly herald. [volume] (Helena, Mont.) 1867-1900, 1875-03-11
Minority Report ON the Central Pa
cific Railroad.

WASHINGTON, March 5.-The following is
a synopsis of report prepared last spring by
E. W. Stendeford, member of Congress from
Kentucky, to be presented to the House of
as the views of the minority
of the Pacific Railway Committee on Lut-
trell's resolution calling for an investigation
of the Central Pacific Railroad and the Con-
tract and Finance Company. AS the major
ity of the Committee have never yet made
any report to the House on this subject, STAN
deford has, of course, been debarred all op-
portunty to present his views. The termin-
alton of Congress, however, leaves him at
liberty to give them publicity. One or two
members of the committee agreed to his con-
clusion, but would have adopted somewhat
different mode of reaching it. Standeford
says
am compelled to differ with the majority
of this committee as to the necessity for an
investigation into the affairs of the Central
Pacific Railroad. The investigation asked
for is proper and imperatively demanded by
the necessity of the case This road is the
creature of subsidies and donations granted
to it by the United States; in land, amounting
to many millions of acres, and in bonds loan
ed to the amount Of $27, ,839, 100, upon which
has already been paid more than $8,698, ,036
in interest by this Government. Beside this
aid rendered by the United States, the State
of California herself, and various corpora
tions within her territory, have granted and
donated large sums in money and land to aid
in its construction; and it is asserted that the
State of Nevada and Territory of Utah have
increased these amounts by valuable grants.
The undisputed facts connected with the con-
struction of this road are
1st. 1t has been practically completed since
1869. and in running order since that time,
averaging in gross earnings nea1,y -r.;a-
lions year, increasing from $780, 1892 in
1869, to $13, ,043, ,839 in 1873. The net earn
ings for the latter year were over eight mil
lions.
I'd. The handling of these vast sums of
money, together with the subsidies and dona-
tons to the road, have been entrusted to nine
directors of the road IF whom Leland Stan
ford, Chas. Crocker, c. P. Huntington, E. B.
Crocker, Mark Hopkins, and Charles Marsh
compose the majority.
3d. The stockholders have not been paid
any dividends up to July 1, 1873.
4th. The United States has not been paid
any interest upon the bonds issued by it.
1t is alleged that the moneys and credits
coming into the hands of the directors of the
road have been misappropriated and fraudu-
lently misapplied by the directors who COM
pose the majority of the Board. 1tis also al
legged that these directors have conspired to-
gether for the purpose of defrauding the
stockholders and the United States out of the
money which they would be entitled to re-
ceiwe from the earnings of the road. 1t is
further alleged that these directors have COM
bined together to award all contracts to q
company known as the Contract and Finance
Company, of which Huntington, Hopkins,
Leland Stanford, G. Crocker, and E. B.
Crocker, the directors aforesaid, are men,
bers, and that all contracts for construction
of the road and furnishing the materials,
rolling stock, ETC., were actually made with
this company by the Board of Directors at a
cost far above what should have been paid,
and for which the work and material could
have been obtained.
If these allegations are true, these directors
should be compelled to refund the amounts
so fraudulently obtained, and it will amount
in all probability to many millions of dollars
if these charges are sustained. 1t is charged
that members of Congress united in this frau
dulent combination to defraud the creditors of
the Central Pacific Railroad out of their dues,
and that a member of Congress was able,
from his official position, to sell his stock in
the road at two ana one-balf times its par
value, when other stockholders were not able
to realize 20 per cent. of the face of their
stock, and that another member of Congress,
who is also member of the Contract and Fl
nance Company aforesaid, was able to sell its
stock at seven and one-half times its face
value.
1t is charged that the directors aforesaid,
in combination with others, have conspired
and are attempting to obtain absolute control
and possession of the road without paying its
debts and liabilities.
These charges against the management are
made by sovereigns of the State Of California
through herlegislature and come to us through
one of her Representatives in Congress.
There has been growing feeling that this
managed. The specific charges are before