Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1883-12-28
INTEREST ON RAILROAD BONDS.
The following letter was yesterday received
BY the State Treasurer:

| by the State Treasurer:
SACRAMENTO, December 81, 1883.
| Hon. VIM. A. January State Treasurer-Dear Sir
| Your communication Of the 18th instant to hand.
In 1t you STATE, Please draw your warrant in my
favor the Sinking and Interest Fund for s52 800,
TO enable TO pay interest due January l, 1854,
on Pacific Railroad bonds e per cent on 81, 500 COO
for six monthsl in accordance with an Act esttled
an Act to aid the construction OF the Central Pacific
Railroad, etc, approved April 4, 1854"
In reply, would state that the Act Of April 4,
1861 by which the State agrees to pay the interest
en- the bonds Of the Central Pacific Railroad Com
pany issued under authority of said Act, imposes
certain obligations upon the said Central Pacific
Railroad Company, the performance of which is
made condition precedent to the State paying the
aforesaid interest.
Now, believing that the Central Pacific Railroad
Company has failed TO execute its part Of the sgree
ment and carry out the provisions of said Act, the
State of California is necessarily released from its
obligations to pay said interest.
Therefore, must decline TO draw the warrant re-
quested by you.
Respectfully,
JOHN P. DUNN, State Controller
The Act under which the State guaranteed
the interest on bonds issued by the Central
Pacific Railroad was approved April 4, 1864,
and after preamble justifying the Act reads:
Section l. The Central Pacific Railroad
Company of California, corporation duly
construction of a railroad from the City Of
| Sacramento to the Eastern boundary line Of
this State" ETC., etc., the section proceeding
to specify the date and amount of the bonds
the company was empowered to issue, etc.
Sec i'm provides for the payment of the
interest for twenty years out of the Pacific
Railroad Fund"
Section provides for the keeping of the
accounts of the fund.
Section 4. The said grant to said company is made
upon the express condition and consideration that
said company shall and do at all times when re-
quired from and after the passage Of this Act trans
port and convey their said railroad all public
messengers convicts going to the State Prison, luna
tics going to the State Insane Asylum materials for
the construction of the State Capitol building, ar.
tces intended for public exhibition at the fairs Of
the State Agricultural Society, and in of war,
| invasion or instruction, as well as al all other
times also transport and convey over their said rail
road all tro)p5 and munitions of war belonging to
the State of California free OF charge and without
| auy other compensation than as herein provided,
and shall also construct and equip, in running ORDER
at the rate of not less than twenty consecutive miles
of their said railroad each year hereafter including
| that portion OF said railroad now partially com
| peted, until the same is fully completed and
! equipped, and shall also within ninety days from
the passage Of this Act, file in the office of the Sec
rotary of State contract or agreement, duly signed
| by the President and Secretary Of said company,
and sealed with the corporate seal thereof therein
and thereby agreeing to faithfully do and perform
and fully comply on the part Of said company with
all the terms and conditions set forth in this section,
and therein also releasing all claim to the warrants
provided to be islued by the Act entitled an Act to
aid the construction of the Central Pacific Railroad
in the State Of California and other matters relating
thereto approved April 25 1868, upon the filing Of
which agreement and release the said Act shall be
repealed and also agreeing therein that said com
pany SHALL within ninety days after the receipt OF
patent therefor from the United States, execute,
acknowledge and deliver to the State Of California
deed in fee simple for the conveyance Of the south
half Of section 10, in township II north, of range
7 east, Mount Diabo meridian, situated in Placer
county, on said railroad and about twenty two
miles from Sacramento, with all the granite and
granite quarries thereon, except and reserving
therefrOm, however, tract or strip OF land 400 feet
wide, and running across said half section, each
onehalf thereof living each side of the line run.
ming along the center Of the main railroad track of
said company. And in case said company shall fail
and refuse to do aud perform the said conditions
and the said agreement their part the said com
pany shall be liable to repay to the State the
amount which shall have been paid by the State
under this Act.
This is, it will be seen, the old issue as to
whether the railroad company is to perform
service under the contract over lines acquired
or operated by it subsequent TO the Act be-
| yond the terminus of the C. p. Il. r; and
the old question relative to the title to the
Rocklin granite quarries, part of which the
railroad company decided to the State so soon
as it received patent therefor, ard concern
| ing the remainder of which an action was
| brought against the company last winter by
| the Attorney. General of the State The
whole matter has been frequently discussed
and examined into by the Legislature, and il
was found that the company had kept its
| contract relative to the quarTies faithfully,