Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-06-06
MILLIONS CLAIMED
Excitement in California Over At
torney General 0lney's Action.
IDEA OF THE PROBABLE DEFENSE.
The Governments Demand to Be
Resisted to the Utmost.
CENTRAL PACIFIC'S DEB T

SAN FRANCISCO, June 6.-The claim for
SIS, 900, 900 filed against the Stanford estate
by Attorney General Olney as preliminary
step to force the government claim against
the original holders of the Central Pacific
grant, has caused the greatest excitement
1t is now learned that the governments
claim was presented May 26. but that an
attempt was made to keep the proceedings
secret in order that the financial operations
of the estate need not be embarrassed. The
late Senator Stanford's estate was recently
appraised at s17.6O0,Oo0. Since the appraise-
ment heavy obligations have been met and
it is stated now that the enforcement of the
government claim would practically wipe
out the estate, not only leaving the widow
penniless, but cutting off all the beneficiaries
under the late Senator's will, including the
endowment of s2.5U0OOO to the Stanford
University.
1t is even said that the estate, after the
liquidation of it's acknowledged debts, may
not equal the amount of the claim of the
government. In this event Senator Stan
ford's deed of trust, under which Stanford
University was founded, would not stand
In case the decision of the court would be in
favor of the government, and the univers-
ity would necessarily be sacrificed to sat
isfy the Judgment.
Mrs Stanford, in an interview, has stated
ed to the fullest extent of her ability. She
regards the proceedings in the nature of
test case and was not surprised at the fill
ing of the claim. Further than these state
ments she would not talk.
An idea of the proba BILE defense was given
last night by Mr.. Wilson, Mrs. Stanfords
attorney. In an interview he said:
The opinion of the Attorney General of
the United States is entitled 10 a great deal
of consideration, but he is proceeding OH a
wrong assumption. ! am free TO say that |
don't think the government will ever be
able to collect anything from the estate of
the late Leland Stanford. The government
issued the bonds in the construction of the
Central Pacific railroad, but neither Mr..
Stanford nor any one else ever agreed to
pay the government back. The bonds OPP
crate on a second mortgage. Ii is not a
debt, and while the Attorney General is
perfectly right that in California the MEM
bers of corporation are personally re-
sponsibe for the debts of the corpora ton.
he is wrong in assuming that the mortgage
is a debt.
You can't compel a man to pay a mort
gage. If l borrow 1000 on piece of prop
erty valued al $500, the holder of the mort
gage can't compel me to pay ii when IL be-
comes due. He can foreclose the mortgage
and take the property. and that is all. So
in this case of the Central Pacific Railroad
Company. The government holds a second
mortgage on the company's property of
SUlOO.WO. The government, by paying the
first mortgage of $GO.OU.OOO can foreclose
the second mortgage and get control of the
road. Bat 1t Is not to be presumed that the
United States would care to eXpend sl2u,-
10000 to get control of a railroad that can
be built for one-third that amount"
VIM. r. Harris, the railroad company's
chief counsel, gave similar expression Of
opinion. Neither Of these lawyers, how
ever, enters into discussion Of the aliega-
tion offered by Congressman Mcguire and
others loudest In the demand for Drosecu-
ton or the claims against G. p. Hunting
ton and the Stanford, Croker, Seares and
other estates.
Today is the last day. under the law,
which Mrs. Stanford has to accept or re-
Ject the governments claim. 1t is believed
she Will simply ignore the claim which In
law, amounts to rejection. 1t 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 General Olney's claim was filed
in the probate court in San Francisco be-
lore Judge Concy, where the Stanford
estate Is now undergoing settlement.