The herald., 1894-06-07
THE STANFORD ESTATE.
The Government Claim to
ALI of it.
To Be StrenuOusly Resisted by
the Widow.
Foreclosure on the Road the
Remedy.
The Claim Against tn Original Holders
OF the Central Pacific Grant
Was Presented on
May 26th.
By the Associated Press.

By the Associated Press.
SAN FRANCISCO, June 6.--The claim
for SIS 900, 900 filed against the Stanford
estate by Attorney General Olney. as a
preliminary step to enforce the govern
ment's claim against the original holders
of the Central Pacific grant, has caused
the greatest interest here. 1t is now
learned that the governments claim
was presented May Goth, but that an at-
tempt was made to keep the proceed
ings secret, in order that the financial
operations of the estate need not be
en- bsri assed.
The late Senator Stanford's estate was
recently appraised at $l7, 100000. Since
the appraisement heavy obligations have
been met. and it is stated now that the
enforcement of the governments claim
would practically wipe out the estate,
not only leaving the widow penniless
out cutting off ali the bene6claries un-
der the late senator's will, including the
endowment of $2.500,0 900 to Stanford
university. 1t is even said that the
estate, after the liquidation of it's ac-
knowledged debts, may not equal the
amount claimed by the government. In
this event Senator Stsnford's deed of
trust, under which Stanford university
was founded, would not stand, in case
the decision OF the courts should be in
favor of the government. and Stanford
university would necessarily be sacrificed
to satisfy the judgment.
Mrs. Stanford in an interview has
stated that the governments claim will
be resisted to the fullest extent of her
ability. She regards the proceedings in
the nature of test case, and was nor
surprised at the filing OF the claim.
Farther than these statements she
would not talk.
given last night by Mr.. Wilson, one OF
Mrs. Stanford's 9 attorneys. In an inter
view ne said: "rhe opinion OF the
attorney general OF the United States ia
entitled to a great deal OF consideration,
but ne is proceeding on a wrong assump-
tion. | am free 10 say that do not
think the government will ever be able
to collec. any ything from the estate OF
the late Leland Stanford. The govern
meat Issued bonds to assist in the con-
struotion of the Central Pacific railroad,
but neither Mr.. Stamford nor any Que
one else ever agreed to pay the govern
ment back. The bonds operate as a Sec
ond mortgage. 1t is not a debt, and
while the attorney general is perfectly
right that in California the members of
a corporation are personally responsible
for the debts OF the corporation, he Is
wrong in assuming that the mortgage is
q debt.
You can't compel man to pay q
mortgage. If | borrow $1,000 on piece
of property valued at $500 the Holder of
the mortgage can't compel me to pay it
when it becomes due. He can FORE
close the mortgage and take the prop
erty and that is all.
$50 in this case of the Central Pacific
Railroad company the government holds
second mortgage on the company's
property OF 1000, 900 The government
by paying the first mortgage of 60,000,-
900 can foreclose the second mortgage
and get control of the road. But it ia
not to be presumed that the United
States would care to expend $l2O,0OO,-
900 TO get control of road that could be
butt for one-third the amount"
William f. Harris, the railroad com-
pany's chief counsel, gave similar ex-
preston of opinion.
Neither of these lawyers, however, en-
ters into discussion of the allegations of
fraud which have been made by Con-
gresham Mcguire and others loudest
in the demand for prosecution of the
claims against G. P. Huntington and the
Stanford, Crocker, Searles and other es-
tates.
| Today is the last day under the law
which Mrs. Stanford has to accept or
reject the governments claim. 1t is
be ieved she will simply ignore the
CAIN, which in law amounts to rejec-
ton. II will then be in order for the
government to institute suit, either in
the United States courts or the superior
court in San Francisco. Attorney Gem
eral Olney's claim was filed in the pro-
bate court in San Francisco before Judge
Coffey, where the Stanford estate is now
undergoing settlement.