The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-10-05
HOSPITAL FUND FINANCES
Councilman BasSett Gives
Some Interesting Facts Re-
garding Them.
A Statement That They Helped to
Construct the Market Street
Cable Railway.

From the statements of those best in
formed of the methods and affairs of the
Southern Pacific Company, the ex-em-
ployes of that corporation will find it
difficult matter to lay hands on any of the
money of the railroad hospital fund or the
profits that have accrued to the financial
manipulators who have made use of this
fund.
Of the several men who were interviewed
on the sutherland all these men had held
responsible positions with the company
and were in a position to know what was
transpiring-not one but confirmed the
allegations of the American Railway
Union men who propose to begin suit for
an accounting of this fund. They said it
was a matter of common knowledge among
the men in the railroad building at the
corner of Fourth and Townsend streets
that the hospital fund was q sort of emer-
gency fund in the eyes of the Southern
Pacific fnanciers, and was used not only
to project the cable railway lines in this
City, but for construction and betterment
work and even to pay interest on money
borrowed by the Southern Pacific Com
pany to carry on its various enterprises.
]. NJ. Bassett, now a member of the Oak
land City Council, was employed in the
private Office of Leland Stanford for four
teen years and was in consequence so stu
ated as to learn many of the inner
methods and occurrences. He expressed
himself as greatly surprised at the pro-
posed action of the American Railway
Union, as it had never before occurred to
him to look upon the hospital fund as q
trust fund, such as it was described to be in
the opinion given the American Railway
Union legal committee By their attorney,
George w. Monteith. In the course of the
interview he said:
when this assessment of so cents
month was first imposed on every railroad
employee the purpose was a good one, but
the amount this raised soon far exceeded
the needs. But the deduction from each
mans pay went on without interruption,
until at one time there must have been
81, 100000 in the treasury of the hospital
fund. But it was not allowed to lie idle
long The railroad company which i'm
posed, collected and disbursed this tax
was responsible to no one, though the tax
was imposed and collected to be used for
the benefit only of those who contributed
to it.
II am afraid that these men who pro-
pose bringing the suit for an accounting
will have their trouble for nothing. For
many wears there was never allowed to be
a dollar rem aiming in the treasury of the
hospital fund, though | have little doubt
that the books will be made to show that
the money not actually paid out for the
purposes for which the fund was created
remained untouched.
81 know from having heard the matter
spoken of in my presence by the prime
schemers that the money OF this fund was
utilized to project the cable roads in San
Francisco, for construction work on the
various railroad lines of the company, and
| also heard rumors about the railroad
building that this fund was used to pay
interest on loans secured by the company
I'm regard to the building Of the cable
roads, there are facts that are of the
greatest importance, not only to the men
who claim an interest in the hospital fund
but to every resident who uses cable-car
in San Francisco.
"When they got the franchise to operate
the Market-street Cable Railway they took
the money to use in its construction from
this fund, and when it was built from the
loot of Market street to the Palace Hotel
they issued $1,000, 900 worth of stock, and
also SO, 000, 600 worth of bonds, thus capt.
alzing the road virtually for $4,000, 000
They sold 50, 600, 600 worth of the bonds to
James Flood for so cents on the dollar, or
$1,S00,o00.
they put in their pockets, and with the
proceeds of the sale to Flood they ex.
tended the road to Valencia street They
claimed at the time that they re turned the
money taken from the hospital fund, but
that remains to be seen.
1.-THE former employees will never be
able to get any satisfaction out of this suit
They may dig, but they will never strike
pay dirt. Even if they succeed in forcing
a submission and inspection of the books
it will not avail them, | am afraid, for the
expert accountants of the Southern Pa
cifc keep them in such way that they
are simply unintelligible to any one but
themselves.
at is also question whether an ex-
employe has any legal standing in this
matter, and it would certainly be more ad-
visable to have some one in the employ of
the company at present bring the suit"
Another gentleman, who had also iu
wears past been prominent in the affairs
and councils of the Southern Pacific Com
pany, states that the suit for an accounting
would stand better chance of success If
brought by one or more actual employees
of the company. He acknowledged that
there was much to account for on the part
of the company. He added that there
were always men who were on the anxious
seat, and who knew they were doomed to
decapitation, and these, he suggested,
-