Sacramento daily record-union., 1881-06-18
AUDITOR FRENcHs LETTER.


land Stanford appears to show that the
writer has been compelled to confess the
commission of very serious blunder for
man in his position. Acting, as he now
acknowledges, upon imperfect and erro-
neous data, he caused suits to be COM
menced against the Central Pacific Rail-
road by the Attorney General, for the
cancelling of the leases of the so.called
leased lines of the former. The theory
upon which he proceeded was that the
Central Pacific managers were trying to
divert the business of the Central to the
Southern Pacific, for the purpose of de-
stroying the value of the latter, and of
reducing it's earnings so as to diminish the
annual payments to be made to the Gov
ernment Sinking Fund. 1t will be observed
that the adoption of this theory involved
the making of very serious charges against
the Central Pacific managers, but this did
not prevent Mr.. French from proceeding.
After having begun his suits he seems to
have come to the conclusion that it might
be worth while to demonstrate his case
more clearly, and so he made a journey to
this coast for the purpose of inspecting the
books and business of the company
personally. He has spent several
weeks in this investigation, and he has
| discovered that the theory upon which
he commenced his proceedings is entirely
wrong. In fact he has been obliged to
admit his error publicly, and though he
has endeavored TO soften the confession by
intimating that the facts had been mis-
represented to him by one corporation,
and not reported at all by another, the
| final conclusion is as we have stated it,
namely, that he finds it necessary to
retrace his steps, to dismiss the en-
bryO suits against the Central Pa
cific, and to announce his conviction that
it has business enough to justify it in
dividing six per cent. profit annually
among the stockholders, and at the same
AiilO ptSJ 40 HuOsS " VuO
He further finds that the Southern Pacific
is not being used to divert traffic from the
Central, but that ON the contrary it acts
as feeder to that route. In effect Mr..
French has retracted all his original ideas
on the subject, and the only cause for
regret in the business is that he should
have acted SO hastily at the outset, and
that he did not at once take the pains
to inform himself correctly, instead of
proceeding upon hearsay and erroneous
information. He suggests, among other
things, the desirability of a junction be-
tween the Central and Union Pacific roads,
and he thinks that because of the danger
to corporate interests liable to arise from
Government interference, it would be bet
ter If the subsidized lines raised the amount
of their Government Indebtedness by loans,
and placed the money in the Treasury, to
draw interest on their account until ma.
turity. Whether the corporations will see
their way to any such plan as this remains
to be seen, but it is very certain that
they are exposed to serious injury through
the inconsiderate and arbitrary interfer-
ence of Government officials who may hap
pen to have misunderstood the situation
and it would be difficult to find a more
opposite illustration of this Kind of thing
than is afforded by the recent operations of
Auditor French himself.