The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1894-06-07
STANFORD'S MILLIONS
REQUESTS AND ALL MAY BE TAKEN,
LEAVING THE WIDOW PENNILEss.
Acknowledgement OIney Puts In a
Claim for s15,OOO,OOO on Account
of the Central Pacific Debt.

--
SAN FRANCISCO, June 1.-THE claim
for SIS. 10000 filed against the Stanford es-
tate by Encouragement Olney as a pre-
liminary step to force the government
claim against the original holders of the
Central Pacific grant has caused the great
est excitement. 1t is now learned that the
governments claim was presented May 26.
but that an attempt was made to keep the
proceeding secret in order that the financial
operations of the estate need not be en-
barrassed- The late Senator Stanford's
estate was recently appraised at ST., 100000.
Since the appraisement heavy obligations
have been met. and 1t is stated now that
the enforcement of the governments claim
would practically wipe out the estate. not
only leaving the widow penniless. but cut
ting off all the benefciaries under the late
Senator's will, including the endowment of
81. 5000 o TO the Stanford University. 1t is
even said that the estate. after the liquida-
ton OF its acknowledged debts, may not
equal the amount of the governments
claim. In this event. Senator Stanfori's
deed Of trust. under which Stanford Uni
versity was founded, would not stand in
case the decision OF the courts Should be
in favor of the government, and the uni
versity would necessarily be sacrificed to
satisfy the judgment.
Mrs. Stanford, in an interview, has stated
that the governments claim will be resist
ed TO the full extent OF her ability. She
regards the proceedings in the nature of a
filing of the claim. Further than these
statements she would not talk .
An idea of the probable defense was
given last night by Mr.. Wilson, Mrs. STAN
ford's attorney. In an interview he said:
The opinion of the At-torney-general of
the United States is entitled TO a great deal
Of consideration, but he Is proceeding on a
wrong assumption. 1 am free to say that
/ do not think the government will ever
be able to collect anything from the estate of
issued the bonds to aid in the construc-
ton of the Central Pacific road, but neither
Mr., Stanford nor any one else ever agreed
10 pay the government back. The bonds
operate on a second mortgage. 1t is not a
debt, and while the Encouragement is
perfectly right that in California the MEM
sponsible for the debts of the corporation,
he is wrong in assuming that the mortgage
Is a debt. You cannot compel a man to
pay a mortgage. If / borrow $1,000 on a
piece OF property valued at $500 the holder
of the mortgage cannot compel me to pay
it. He can foreclose the mortgage and take
the property, and that is all. So in this
case of the Central Pacic railroad. The
government holds a second mortgage on the
company's property of sec, 600. 600. The gov
eminent. by paying the first mortgage of
$4,000, 600, can foreclose the second mort
gage and get control of the road. But ii
Is not to be presumed that the United
states would care to expend $120, 900, 000 to
get control of a railroad that could be
built for one-third mat amount"
William f. Harris, the railroad company's
chief counsel, gave a similar expression of
opinion. Neither of these LAWYERS, how
ever, enters into discussion of the allega-
tons offered by Congressman Mcclure and
others loudest In the demand for prosecu-
ton OF the claims against G.. p. Hunting
ton and the Stanford, Croker. Searles and
other estates. To-day is the last day under
the law which Mrs. Stanford has to accept
or reject the governments claim. 1t is be-
lieved she will simply ignore the claim,
which, in law, amounts to rejection. 1t
VIII tnen be In order for the government
TO institute suit, either in the United States
courts or the Superior Court in San Fran
cisco. Encouragement Olney's claim was
filed in the Probate Court in San Fran
cisco before Judge Coffee. where the Stan
ford estate is now undergoing settlement.
Owned by a Syndicate.
WASHINGTON. June 6.--The question of
the liquidation of the debt due to the gov
eminent by the Central Pacific Railroad
Company is receiving the close attention
Of the Department of Justice. Under the
laws of the State of California each indi-
vidual holder Of stock is made liable for
the debts of the company contracted while
he was a stakeholder, proportionately to
thO vi lis SlO-h- OTlBludly the
entire issue of the Central Pacific stock,
1t is said, belonged to the Crocker, Hop
kins. Stanford and Huntington syndicate,
though not perhaps standing in their
names. and Notwithstanding the fact that
no part of the debt is due yet. in order
that the claim of the government against
the STANFORD estate might not be barred
by the statute of Limitation in the State
of California the NEUTRALITY-SUSPICIOUS. ohofrf
ten days ago instructed the United States
attorney at San Francisco to formally pre-
sent to the executrix of the estate the gov
ernment's claim for SIS, Co0.O0O. This is one
fourth of the amount of the whole debr
of s60,0Oo.0OO which will mature at differ
ent dates between Jan. Is. 1895, and Jan.
1. 1888. During the last few years Crocker
and Hopkins have died and their estates
nave been settled, thus rendering IL doubt
ful how far their individual estates can
now be made liable, II is assumed that
Mrs. Stanford. as the executrix OF the
Senator's estate. will refuse to pay the
claim, and without some congressional
action is had by which the claims of the
governments is otherwise disposed of, action
will no doubt be Instituted at the proper
time In the United States courts TO re-
cover. Action against Mr.. Huntington. OF
course, cannot be begun until default in
the payment Of the debt has been made.
The California congressional delegation
II tdhluS a SICdl lnlcTcS IN the HItS6n-
million-dollar claim. Representative Ma
guire argues that the Hopkins. Crocker and
Coulter estates would escape under the
stockholders liability act OF California IL
that statute alone be depended on TO secure
the governments claim. Under the theory,
however. that the trustees and holders of
the estates are trustees OF a diverted fund
he holds that the government claims can
be recovered by proceedings OF equity.
Such proceedings would place all the es-
tates on the same basis. 1t is doubtful
IL the Attorney-general will adopt the
plan OF reliance upon equity proceedings
II Is known that he doubts the suficiency
OF the evidence, as Representative Mcguire
would have IL presented, 10 sustain a re-
sort 10 equity. Mr.. Mcguire thinks the
government claim OF $75.0 1000 should be
secured from the big estates. the first
mortgage bonds being secured by the road
itself. His views will be presented 20 the
House committee on Pacific roads at an
early day. Representative Geary. Of Cali
fornia, thinks the government should take
possession OF the Central Pacific property
and control the road, and will address the
committee on the subject next Monday.
President c. p Huntington is i'm the city
watching the trend OF congressional senti-
ment. To-day he conferred with a number