Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1888-03-31

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| Senator Davis-was that an extension of the
road down the San Joaquin river?
| Mr.. Haymond-Yes, sir. We ran out of San
Francisco over the Central Pacific line for zoo
| and odd miles. We never had made the other
connection because all our resources were spent
| IN this road. We soon got down to Yuma OF
course we had to cross the reservation and of
course, Mr.. Scott did not want US to cross be- !
cause ne was trying at that time to get an Act of
Congress passed TO extend moneyed aid TO him
| also.
WHAT WAS DONE
Senator Butler-They first built the road and
then came and asked permission.
Mr.. Haymond-We got across the reservation
| first and then begged your pardon. Then we
| stretched that road under the control of the
southern Pacific Of Arizona across the Territory
OF Arizona, and then across the Territory of
| New Mexico under separate CORPORATION
making three corporations-the Southern Pa
enc OF California. the Southern Pacific of Ari-
IONA and the Southern Pacific of New Mexico
| Thus we reached FL Paso in Texas
Then we built a line down in Texas to Hous-
ton under the charter of the Texas road, gather
ing in the roads already completed-the Calves
ton and Harrisburg and San Antonio roads. We
ran on and nearly reached the boundary line of
| Louisiana.
ACQUIRING THE MORGAN SYSTEM
Then Mr.. Morgan, who had early seen the ad-
vantages of well-built railroad and well-built
steamers running from New Orleans had &C
CURED great property there. both in terminal
| already had. He had built line of road west
| out through the swamps. We acquired this by
purchase, 1t being known as the Morgan system.
Inc directors of this road bought it themselves
and paid very large sum of money for it, And
that was the road, a through line from the city
OF New orleans to the city Of San Francisco
one part of it under the control of the Central
Pacific down to Goshen; another part under the |
control of the California corporation; another
| part under the control of the New Mexico cor
| poratlon, and the other part under the control
! OF THESE various Texas roads.
THE TEXAS PACIFIC LAND GRANT
| Senator Davis-Meanwhile what became of
! the grant to this Scott system?
MI. Haymond-We saved that for the United |
states 10 day the savings are estimated very
largely. But think if you gentlemen saw that |
| land you would think although it had been |
saved 1t was not very valuable. 1t was double |
the grant that was made to the Central Pacific. |
In the future we cannot tell what its value will
be, because these lands are fertile and if water
can be got on them anything in the world will |
grow there The Texas Pacific was never built, |
but 1t did come very near getting our road after
we had built it. 1t was built upon the right of
way OF the Texas Pacific road, and they asked
that they be placed in possession.
| There was considerable litigation and finally !
compromise. so that we not only built that |
road but we paid the Texas Pacific a very large
sum tor the right of way and for their interest |
IN 1t rather than risk our case. The case looked
pretty bad when you come to consider that there
was grant OF land in the present and grant
10 the right OF way, and that we had built |
upon it.
| CONSOLIDATING THE SEVERAL LINES.
Another difficulty grew out of the fact that
| the lines were in separate ownership While |
the present Directors of the Central Pacific line
! controlled the Central Pacific, they, of course |
| could control all these lines, but something
might occur after their death by which the ART |
iona corporation would get out of the system. |
| ana make such terms as it pleased. So we asked |
| Congress to consolidate all these lines of road
| IN one company, like our consolidated roads |
That was right in the midst of the anti-railroad
excitement in California, and the Legislature of
California. by majority vote of one in the Sem
| ale, passed resolution asking Congress not to
90 that thing, Then we went into the State of
Kentucky and got special charter, chartering
| the Southern Pacific Company, not the railroad
company, with very large capital stock. The
| roads took that stock and became, in fact that
corporation. That corporation did not buy
these roads, but it purchased all the stock in
the Southern Pacific.
| 4 GENERAL COMMISSION.
Senator Dawes-The Legislature of Kentucky
authorized you to do business wherever you
pleased?
Mr.. Haymond-wherever we pleased. be.
| lieve that charter authorized US to do every
thing in the world except to build railroad in
Kentucky. do not know of anything else we
could not do under it.
| Then we went to work to make in fact this
consolidation We bought all the stock of the
Southern Pacific and all the stock of the Arizona
companies The corporation laws of Arizona
and the corporation laws of California are the
same. and the owners of the stock are the bene-
hclal owners of the property and can control it.
A California corporation. as such, holds merely
the naked legal title to the property, so that we
are virtually the owners.
explain this to you instead of saying we are
the owners, because there might be criticism
of that form of expression. We had acquired
all the stock in all that property clear through
to New Orleans, except a few shares in one or
two of the Texas companies, which amount to
nothing and which we will purchase SO that
| virtually the Southern Pacific Company now
owns the line OF road running from New Or
leans through to San Francisco, with the excep-
ton of a gap of one hundred and odd miles, and
hot into
tions, because we run over the Central Pacific
into the city.
SEEKING INFORMATION
Senator Dsvis-Do the Texas corporations, the
corporation still exist?
Mr.. Haymond-They still exist but we are the
owners of all the stock.
Senator Dayis-Who makes the guarantee of
interest of the Central Pacific?
Mr.. Raymond The Southern; that is just the
point am coming to-
Senator Davis-Which Southern?
Mr.. Haymond-The Southern Pacific of Ken
tucky-this great corporation which owns all
these roads.
Senator Dawes-It is mere stakeholder?
Mr.. Haymond-Exactly; it holds all the stock
for all practical purposes.
Senator DaweS-It owns all the roads until
you get to the Morgan system?
Mr.. Haymond-And it owns the Morgan sys-
TEN also
Senator pawes-The corporation; not the in
dividuals?
Mr.. Haymond-Yes, sir.
THE KENTUCKY CORPORATION
Senator Dawes-If this Kentucky company
should dispose of all that stock not having the
legal right to it, what would the guarantee be
worth?
Mr.. Haymond-It has an immense deal of
other property.
Senator Dawes-Nothing that you could con-
troll?
Mr.. Haymond-I am coming to that in a mo-
ment.
Senator Dawes-Excuse me for interrupting
| wantpd w
there was any real estate in state of actual
ownership by the Kentucky corporation.
Mr.. Haymond-There is not, except that we
bridge The difficulty over. We had to go in a
| circuitous way to do it, because we were not at
all consolidated. We bridged that over and
brought the property right in also The South
ern Pacific ompany had the right, under the
laws of California, to lease railroads in Califor-
mia; so, in addition to that, the Southern Pacific
Railroad Company has leased for ninety nine
years to the Southern Pacific Company its line
of road, and SO made it virtually the owner.
THE LEASE OF THE SOUTHERN PACIFIC.
Senator Dawes-The Central Pacific Railroad
Company leased to the Kentucky corporation?
! Mr.. Haymond-Yes sir, aud made it virtually
the owner The same process was gone through
with clear to New Orleans, so that the Southern
Pacific not only owns the stock of these roads
ana corporation, the beneficial owner of the
property, but it also owns leasehold interest
for ninety-nine years. l am glad you asked
those questions and brought this matter up
plainly. There is much to be said and it is
| difficult for me to cover all the ground.
Senator Butler-The Southern Pacific road we
will assume for the purposes of what am going
TO say. is single corporation extending from
New Orleans to San Francisco 1t had no Gov
eminent subsidy had it?
Mr.. Haymond-No sir; except there was
land subsidy to the southern Pacific in Cali
fornia.
Senator ButIer-Do you recall what liens there
are upon that road?
Mr.. Haymond-No; but it is very far below
its prospective value. In my judgment, so far
below that it amounts to nothing.
Senator Butler-It pays its fixed charges right
along?
Mr.. Hamond-oh, yes, sir and its prospects
are very good.
OWNERSHIP OF THE STOCK.
Senator Butler-As l understand you, the Ken
lucky company owned majority of all the
stock in all of the lines of the road !?
Mr.. Haymond-Yes, sif they own all of the
stock virtually
Senator Butler-Then they are practically the
owners of the property, are they?
/ Mr.. Haymond-That is true.
The Chairman They not only own the stock,
but they have l00-year lease2
Mr.. Haymond-Yes, sir, of the whole line for
/ all practical purposes, they are the owners, and
might have used that form of expression in
addressing you as lawyer
Senator Hiscock--Where is that broken link
of 100 miles?
Mr.. Haymond-It is from this point (indicat-