New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1888-01-05

which Mr. Croker undertook
From sections ono TO eighteen that Is, from the
lcvco at tho City Of sacramento to the eigceh'n nile
post Mr. Croclcr undertook to perform INC work LOT
RfOO OCO s25O.OOO IN cash 100000 In the bonus OF
the company. and 100000 In stock
mt II IS claimed that Mr. CrOcker and the directors
OF the Central Pacific made large proh,s IN Duiu,nS
tho road over the mountains IL must DC hnx dd
that ultimately, after many years OF wating, they uu
realize some profit from the retention OF the STOCK,
which Mr.. crockcr took In part payment OF ms worn
bur T.. mako that stock OF value they had to spcnei
wears to Icvelop business the road, ana 70 Duh"
at their own cost and risk branch roads 10 pfhS
traffic tn tho main line.
Far tho 700 miles. from section 20 10 I3a. which
means from Newcastle to the Truckce River near me
State line. there was paid to Mr. CrocEer as Is shown
al tho rate Of s77Gc2 per mile and there was also
laid TO him Si4,G57 .eo6 In stock Of the COMPANY
So far as IN, stock payment was concerned IL co'
figure al the time asset for building me road
II could not be sold II could not be bartered and was
useless collateral
We have IL from the evidence Of NJ" Stanford that
when the road had been constructed TO tho state nc.
tho company had spent all rs available resources, ana
all tho securities that could be issued on mat par OIL
mcnt and In debt for obligations Incurred upon
that portion Of tho work. and the same resl, provsa
by reference to the statistics now on hie In mo
Treasury Department in relation to the construction
Of this road.
It Is very lain from the information have as
to the cost and character Of the work tho rapidly and
the consequent want OF economy with which II was
done, that the sum Of did not cover nc en-
tire outlay. The balance assumed by Charles
Crocer and the directors who to his rescue The
estimate has been made by Mr. stanford and no doubt
correctly that the cost OF tho wovk done between the
31st and I3sth miles for the reception OF the track
eqnalIed. in days work tn. whole cost OF grading
railroad from Trnckcc 10 Chicago distance Oh nearly
twenty ono hundred miles
TX.
CONTRACT AND FINANCE COMPANY.
Tho extreme financial PRESSURE under which the
work entrusted to Charles Croker d Co. was per-
formed, and the difficulty OF inducing people Of means
to become members of private partnership led to tho
formation OF the Contract and Finance Company
1t was supposed by the directors of tho Central
Pacific by granting the contract to corporation
upon liberal terms, to complete the road from tho
state line to tho connection with the Union Pacihc
the OF capital n the eastern Suc cities %g 90
and. IN this Ia Insure the completion OF the work.
Of which, at that time, the directors Of tho Central
Pacific had very grave doubts
II was NOT, Mr.. Stanford says matter OF profit
to tho promoters of the Contract and Finance Company
it plan to prevent, II possible, the utter failure
OF the enterprise.
Mr. Huntington tcsthes, that in his correspondence
with Mr. Hopkins when the latter aSEsd nun c hSw
pany they should take, he replied: Tale much as
you are forced to- and little as you must
At that time, IL It could have been DONE tho pro-
motors OF tho Central Pacific entirely willing to
yield their interest In tho work, II other or more re-
sPGSe parties Mould m asa s c
poraton and the Government 1t was with them
not fall by reason OF their financial weakness, than any
question of profit. 1t their last hope, their last
resort to invite capitalists to aid In tho work ana u
Construction Company was quite as much In tho inter
esis OF tho Government as OF It's promoters ior as Is
shown, the cash payments made to the Contract ana
Finance Company did not enable to perform Its con-
tract to construct the road from tho eastern boundary
of California to PrOmontOry by about three ana haif
millions OF dollars.
The Central Pacific Railroad Company could not
give to the Contract and Finance Company anything
moro than It had. 1t could not In any way inIuIe
or initiate against the Interests Of the Government
The Contract and Finance Company must complete
a
Pacifc could not receive the proceeds OF the Govern
ton Issue its own bonds in advance of such completion,
beyond tho terms Of the Act of 1865.
the eont to the TO Central Pacc for what paid
to It. But, notwithstanding this contract with which
owner Of Single dollar was willing to risk it as
sumlng the responsibility Of sharing Its supposed
profits.
Three of the capitalists Of California of that day
have given their views and experience, Mr.. d. "
Mills, Mr. Lloyd TcvIS and Mr. Horace W. Carpe,nthier;
they declined because they did not believe that there
M s or d they ~
assume position that would mako them liable for
stock. The feeling of capitalists to tho engaged
on this work Is expressed In homey way BY Dir A;
TO be Insane hoSg hy were
little off, Yes, sir; that IS what VIC all thought"
III, Mr. cvsn"a Ct states sd as Mr. ne ) @ s ny
Others 1t impossible to induce the capitalists of
the money centres Of the Atlantic to become interested
great demand that It's use comm ancd high rates Tho
currency Of the country was during the entire time
of the construction Of this road in a very inflated
condition.
The Government was a great borrower When
had been repulscd at Cold Harbor, and It took $3.50
Of the Government paper to buy dollar in gold and
al the end Of tho same year tho price of gold was
- Al 10 The bonds OF tho Government issued be-
fore tho War, which It sold at 22 premium, were
the passage OF the Act of 1864 81 $40 69O4S9 a.
and there was stu authority in the Secretary OF the
Tpaa nndnp hn q IA
5000 os4 1928.
Pacific had 10 raise money for the work of construction.
money was in great demand The bonds issued by
II ~ ' discount %p Of Is 10 po Fee cent '''
its labor and supplies purchased in California in gold
Il needed large amount. Money borrowed RON
had 10 be purchased ard drawn FOR rom California;
thus materially increasing the financial burdens OF
in tho minds Of The owners Of capital what they would
receive In reimbursement for their Investment
SACRIFICES OF Projectors TO ESCAPE FAILURE
Added to all this the doubt, that at this time
go generally prevailed whether, II tho road was con-
structed, 1t could be commercially opcrated-hc doubt
as to The existence OF fuel along its line 1t was
known that there not single navigabe stream
The Missouri 10 the Sacramento and for stretches
of hundreds Of miles there was some question as TO
whether water could be obtained sufficient and suit
able TO generate steam on the locomotives.
Futile as the effort OF letting the contract to
Charles Croker d Co., and TO the Contract ana RI
nance Company TO relieve tho financial pressure on
the Central Pacific IT would have been criminally
negligent the part of the directors OF that company,
II they had not resOrted 10 these devices espec ally
Is this true of the formation of the Contract and FL
nance Company
At the end of 1865. as appears I'm a report made by
the Department OF the Interior 10 the House committee
on Pacific Railroads. the Central Pacific had expended
In the construction of Its road $l2.OO0,OOO.
At that time "a miles of its road had been accepted
by the President, and 1t received bonds from tho
Treasury on
: miles a. $1,000 . $4,000
az miles at $40 900, 3,2l0OOo
1875 5000
l. amount NOV netting 3,32s 900
s6,655 900
average OF the entire issue produced a, $50 200
The bonds issued by IT, on which the State o..
Melted 100000