The sun. [volume] (New York [N.Y.]) 1833-1916, 1882-12-24
An Extraordinary Omission.


stantly exerted to protect the Central Pacific
Railroad corporation in the efforts of it's
owners to defraud the Treasury Of the dues
required under tho THURMAN act. From the
passage of that law until the present time
every obstacle that IL pcrvcrse ingenuity
could invent has been encrgetically en-
pioyvi To ncrcat Its letter and its spirit.
This company owed the United States at
the close Of the last fiscal year, according to
the statement of the public debt, us follows :
Principal in bonds 81 s556so 90
Accrued interest - 2>5 1874 81
So i+osl3 81
Under a decision OF the Supreme Court the
interest on the bonds is not payable until tho
maturity of the debt. SO that, in fact, the
Government not only advanced the money to
build the road, but has been paying the in
tcrcSt on its OVID loans, and will continue to
pay it for years to come.
The net earnings of this road last year
were reported by the company to be $9,3l7,
73.S. This large aggregate does not repre-
sent the whole truth because charges have
been added in tho Expenses to diminish
tho share OF the Government under the
THURMAN act. What Is known as the South
crn Pacific was built from the profits of the
Central Pacific, and the few owners Of the
one are the real owners of the other.
Following the example Of the Credit Mo-
bilier conspirators, these owners have en-
tered into lease with themselves for the
Southern Pacific, at high rental, by means
Of which large business Is diverted from
the Central Pacific, with the sole purpose OF
reducing the returns from the % per cent. OF
net earnings on the latter as a subsidized
road, while the other Is not in that category
They have also charged large part OF the
operating expenses Of the Southern Pacific
to the Central Pacific with the same purpose
THEoPHILuS FRENCH, late Commissioner
of Railroads, in an official letter to CARL
SCaURz, Secretary of the Interior under the
Fraudulent Administration, dated Feb. IA,
1881, wrote as follows:
I'm view OF the foregoing statement Of facts q
the additional fact that OF the payments OF 81 300 in
money by the Central Pacific Company annually under
the sinking fund law, anticipated by its trainers, but
STA AS % for the two aud half years ending Dec
1850 instead OF 81 uDOOo0 Will be required recon-
mcnded that the sinking fund law of May T. 1879 be
changed 30 far as it relates to the amount required from
the Central Pacific, that so cent OF the net
ngs OF that company be applied to the payment of
the debt instead of 20 per cent is the law now is"
Tho frauds were so fragrant that this meas
ure OF protecting the Treasury against them
was recommended. But no action was taken
upon it by Congress. Three months after
the date OF this letter FRENCH went to San
Francisco, ostensiby to examine the books
and papers Of the Central Pacific His in
tended journey was announced in advance,
with a statement that he meant to call that
corporation to rigid account, having ordered
suit to be brought in New York as q pre-
liminary step.
In few weeks this ardent defender of the
rights of the Government became the abject
slave of the corporation. He rccantcd all his
official statements, denied his own figures,
reported to LELAND STANFORD rs his owner,
withheld communication from the depart
ment. and closed his career in an Infamous
betrayal OF every trust that had been placed
in his hands. He is still at large instead OF
breaking stones in penitcntiary
JOSEPH X. MCCANNON, Assistant Attorney
General for the Interior Department, was APP
pointed temporarily To succeed the faithlcss
FRENCH. He made the report of last year,
Nov. l, 1881, wherein reference Is made to 4" u
settlement with this company for the year
ending Dec. 81, 1880, effected by the then
Commissioner FRENCH, whereby the COM
pany were shown to owe the United States
for that year a balance of 4i,4}5.74, which
has been paid into the Treasury"
In his letter to CARL SCHURZ, FRENCH said
that OF three millions due the sinking fund
on Dec. 81, 1889, but S7N,42s,22 had boon paid
Therefore there was due ON that day s2.225,-