The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1884-08-01
UNION PACIFIC RAILROAD.
Serious Chargee of Corruption Made b!
the New York Times.

sources $142 213 more than the entire cost Of
the enterprise. Even at the extravagant prices
made by directors and contractors, the Who'll.
issue of stock and lesser bonds represented alb
solutely no investment.
In the winter of 1872 and 1878 this grea
swindle was investigated. A committee asoer
tanned these facts aud reported that the mon
eys borrowed by the corporation to meet tht
necessities of construction had been divided in
dividends, that the stock. was issued, not By
men who paid for it at par, but at not more
than 30 cents on dollar in road making, tha
OF the government directors some had neglect
ed their duties and others were interested In
these transactions; that at least one of tbs
commissioners appointed by the President had
been brlbed to be tray his trust for $50 COO; thai
the chief engineer Granville M. Dodge, now {
directory, bad been largely interested in con
tracts for its construction, and that there had
been an attempt made to influence reserve
power In Congress, by inducing influential
congressman TO become interested in the prof
its of its transactions.
The committee reported that these abuses
warranted the repeal of its charter, but recon
mended that euits bs brought to deprive thess
stockholders and others who held stock issued
at less than par of their holdings. This terrif-
ic report vas signed by j. M. Wilson of Indi
ana, s. s. Shellsbarger of Ohio, Geo. +. Hoal
of Massachusetts,, Fl. w. Sloeum of New
York, Thomas Swainn of Maryland, the en-
tire committee. The last is now dead, Mr..
Slocum is in the House, and Mr.. Hoar in the
Senate.
firm of Shellabarger & Wilson are now heavi
lv retained attorneys at Washington Of the
Union Pacific, with all their knowledge an6
experience?
By Jay Gould's connection with the road
and by his scheming, the Union Pacific was
loaded with $14000,000 of Kansas Pacific
bonds, $10000,oU0 of Kansas Pacific stock, and
$4,000,0O0 of Denver Pacific stock. The stock
of the Union Pacific was then increased from
$39, 1852. 800 to $50,762. 500 Then to complete il
Gould and his directors issued $40 237 700 more
making total of SOL ,000, 600 further in direct
defiance of the law.
Iu 1879 aud 1888 over 81, OOO, 900 Union Paci.
fc were issued and another mortgage of $15,-
900, 900 put on the Kansas Pacific, a total ,oi
$47,0000O0 of illegal Indebtedness on which
interest has been paid at the governments ex-
pense.
this case?
An inferior official of the interior depart
meut, the auditor of the railroad accounts, was
notified of the issue of new stock. He replied
that no exceptions would be taken and that
"ths additional capital must undoubtedly re-
suit in increasing the value of all the comDa-
ny's property and thus add to the security OF
all its creditors" No other officer, neither the
secretary nor the attorney general took any ac-
ton. Auditor French was then receiving a
meagre salary. Today he enjoys large in
come as regular agent of the UnioD Pacific be-
fore the government departments.
When called upon last winter to explain
why the law was broken by these issues, Dillon
answered by ignoring the Thurman act and re-
ferriDg to the laws prior to and superseded by
it.
Mr.. Edmunds went back to Washington last
winner determined to find out whether be or
Gould was the mole powerful. The investi-
cation began by the Senate last winter, re.
suited in report showing that not one cent
had been paid by the compsny into the United
States Treasury under the provisions of the
Thurman act snce July 1, 1878, while during
vided in diyiden0s This report closed With a
resolution asking the President or the Attor-
ney General to have executed the penalties
prescribed against the Union Pacific directors
for ILLEGALLY declaring those dividends, to wit
that "such officers shall be liable to the United
States for the amount thereof, aud every such
officer, person or stakeholder who shall know
ingly vote, declare or pay such dividend shall
be deemed guilty of misdemeanor and, if con.
victed Thereof, shall be punished by a fine not
exceeding $4,000 and by imprisonment not
exceeding one year" That was the resolution
of the Senate Judiciary committee and had it
ever reached the Senate that body would have
adopted it,
Gould these directors have refunded to the
sinking fund the $19,000,000 thus divided, to
directors last year we're Sidney Dillon, David
Dows, Jay Gould, Russell Sage aud A. 81
Green of New York, Fred L. Ames, Elisha
Atkins, Ezra Ell. Baker, A. G. Dexter and
Charles Francis Adams of Boston, j. A. Rum.
rill of Springfield, Mass. Hugh Riddle Of
Sharp of Salt Lake City and Greenville M
Dodge of Council Bluffs. These names ought
to be good for $19,000,000.
Mr.. Edmunds had this bombshell ready and
approved by the committee the first week in
May. He felt satisfied with his work and
looked forward with comfort to the fact that
Justice was about to be invoked for the Jay
Gould party which hal SO long defied the
Thurman act. Mr.. Edmunds intrusted his
report and resolution to Senator Hoar, who was
to bring it into the Senate; the date was fixed,
on May 9th.
These proceedings. however, though quietly
conducted, were being watched by the Union
Pacific people. They had general idea OF
what Mr.. Edmunds was doing with the closed
doors of his committee room.
On the morning that Mr.. Hoar was to make
his report, Charles Francis Adams, Jr., arrived
in Washington and speedily put in az appear.
ance at the Senate. He used to be q govern.
ment director, but in 1882 had succeeded to the
same place in the corporation, soon after he
made his memorable visit over the Union
Pacific and recommended its stock to the
people of New England IS conservative and
bAl0 luV0Sbubutj Oh WulC0 assurance ma0y
folks of moderate means in that section had
invested their savings Mr.. Adams lost nc
time. He saw Edmunds, Hoar, Ingalls, and
others. Out of respect to his urgent appeals
submission OF the report was deferred until
the following day.
What Mr.. Adams did in that twenty-iour
hours no one knows so we'll as himself. 1t
probably was the hardest days work he ever
did for the road. Mr.. Adams said he had al
ways been told that everything was all right.
and for himself he was perfectly guiltless of
any intent to violate the law by voting for a
dividend. His personal appeal was very
strong one. He represented how unenviable
a position he would occupy, having given his
Endorsement to the managers and stock, if the
road should be brought to terms He declared
that such action as Mr. Edmunds contem plat
ed would destroy the entire value of the stock,
create panic, completely discredit Jay Gould
and bring to ruin many excellent and wealthy
men who innocently had purchased the com.
pany's securities. This latter suggestion had
some weight and the storm clouds of the ap-
preaching crash in Wall street gave force to
his apprehensons of the financial effect. Mr..
Adams insisted upon stay OF proceedings un.
til the company could be heard. He thought
something could be done and that com pro-
mise could be arranged AS the result OF his
urgent entresties, further action was suspend
ed and May Goth sat down as the date on which
the company would make its statement.
The interval was industriously profited in,
by the Gould party. They resolved by almost
any means to delay, if they could not defeat,
this movement to protect the government. In
the meantime the Wall street crash gave them
a handle Hp1n which to hang an appeal for
time.
The committee hesitated and finally gave
the railroad people to understand that they did
not wish to be precipitate. If guarantees
should be given that no more dividends would
be paid, Jay Gould left out as controlling
manager and the road run first in the interest
OF the government aud second for the much
talked of innocent stockholders, the penalties
would be left in allegiance for time.
An agreement was entered into between
Senator Hoar and the Boston directors BY
which the company was granted respite upon
condition of Dillon's resignation and the pay.
ment of $718,000.
One thing is sure, 10 more dividends will bt
paid on Union Pacific 1t rex until $52 500, 00(
due the government is paid The penalties
which were not surrendered in the temporary
ompromise With Mr.. Adams may yet serve
the end for which they were inserted in thu
Thurman act Judgment is simply deferred.
The Evening Post says that in the last thre'
days the Union Pacific has been advanced si1
per cent. by manipulation alone, aud in spit
of damaging developments in regard to its pc
siton before the Congressional COMMITTEES
which render it certain that the next Congress
will feel bound to adopt some more summar,
proceedings to compel the payment of its in
debtadness to the government.
THE FLAMES.
Five Barns Burned.