The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1894-06-07

San Francisco June 6.-The claim for
SIS 100000 filed against the Stanford es-
tate by Attorney General Olney, as a
preliminary step to force the govern
ment claim against the original hold
ers of the Central Pacific grant, has
caused the greatest interest here. 1t
is now learned the governments claim
was filed May 6, but that an attempt
was made to keep the proceeding secret
in order that the financial operations
of the estate need not be embarrassed.
The late Senator Stanford's estate
was recently appraised at S17o0O,O0O.
Since the appraisement. heavy obliga-
lions have been met, and it is stated
now that the enforcement of the gov
-ernment's claim would practically wipe
out the estate, not only leaving the
widow penniless, but cutting off all the
beneficiaries under the late senator
will, including the endowment of ST.
5000 to the Stanford university. 1t
is even said that the estate on the Il
quidation Of it's acknowledged debts
may not equal the amount claimed by
the government. In this event, Sena-
tor Stanford's deed of trust under
which Stanford university was founded,
would not stand in case the decision
Of the courts would be in favor of the
government and the Stanford univer-
sity would necessarily be sacrificed to
save the judgment.
/ Mrs. Stanford. in an interview, has
stated that the government claim will
Ibe resisted to the full extent of her abil-
/ ity. She regards the proceedings in
the nature of a test case, and was not
surprised at the filing Of the claim. Fur
/ Their than these statements she would
not talk.
An idea of the probable defense was
given last night by Mr.. Wilson, one OF
Mrs Stanford attorneys. In an inter
view he said:
"The opinion of the attorney genera
is entitled to great deal of considera-
ton, but he is proceeding on a wrong
assumption. / am free to say that l dc
not think the government will ever be
able to collect anything from the estate
| The government issued bonds to aSsist
in the construction of the Central Pa
cific railroad, but neither Mr.. Stanford
nor any one else ever agreed to pay
the government back. The bonds OPP
crate as a second mortgage. 1t is no
a debt, and while the attorney genera
lis perfectly right that in California TIL
members of a corporation are person
ally responsible for the debts Of the cor
Iporation, he is wrong in assuming tina
the mortgage is a, debt.
! You can't compel a man to pay
mortgage. If I borrow $1,000 on a piece
of property valued at $500, the holde
of the mortgage can't compel me tt
pay it when it becomes. due. He cal
foreclose the mortgage and take tht
property, and that is all.
$50 in the case of the Central Pacif1t
railroad company; the government
holds second mortgage on the com
pany's property of sec, 900, 900. The gov
ternmant by paying the first mortgage @
$50, 900, 900. can foreclose the seconC
mortgage and get control of the road
But it is not to be presumed that tn
government of the United States woult
care to expend S120,00O,OOO to get con
troll of a road that could be built 70
one-third of the amount"
William F. Harris, the railroad com
pany's Denver counsel, gave simila
expression of opinion.
Neither of these lawyers, however
enters into discussion Of the allegation
of fraud which have been made by Con
gresham Mcclure and Others loudes
in the demand of prosecution agains
the Huntington, Stanford Croker
Searles and other estates. Today is tn
day under the law which Mrs. Stan
ford has to accept or reject the govern
ments claim. It is believed she vii
simply ignore the claim. which in lay
simply amounts to rejection. 1t wi
then be in order for the government t
institute suit either in the United State
courts or in the superior courts of Sa
claim was filed in the probate court i
San Francisco, before Judge Coffee
where the Stanford estate is now UT
dergoing settlement