The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-10-20

Pacific Railroad Company, which serve
that copartnership as agents or agencies.
1.-The books of the Central Pacific Rail-
road Company will show little or no profit
to anybody. and it is apparently late to
suggest the examination of the other books
for the purpose OF ascertaining what would
be correct basis of settlement.
Speaking of the 81, 100000 claim of the
Central Pacific Company, which was twice
rejected by the last Congress, he says:
6 AS to what the Government owes the
Southern Pacific Company-a corporation
entirely distinct from the Central Pacific
L have no doubt the Government will some
time pay 1t; and as most of it is now draw
Ing interest, the longer the Government
waits, of course the more it will have to
pay
''Mr. Huntington, in this matter. has
the misfortune to disagree with the opinion
OF others who are not connected with the
Southern Pacific Company or the Central
Pacific Railroad and who are in position
to know about their legal and business
relations as much as Mr.. Huntington
does.
at will be remembered that the South
ern Pacific Company was organized by the
controlling directors of the Central Pacific
Railroad Company in 1888 as a close cor
poration for the purpose of taking up
and conducting all of the business
heretofore carried on by the Central Pa
cific Railroad Company. including lease
of the Central Pacific itself That COM
pany has been continued to the present
day as a close corporation, the stock of
which has been held constantly and ex-
clusively by the original copartners and
the successors of those who are now de-
ceased.
1.-The real purpose of the organization of
that company was to prevent the Govern
ment from enforcing its rights against the
Central Pacific Company under the Thur
man act and was therefore fraudulent in
its inception as against the United
States Government. If the Central
Pacific Company had earned the
money from the Government which
is now claimed by the Southern
Pacific Company, the Government would
Thurman act and apply it to the satisfac-
ton of the Central Pacific Company s
obligation. The question was raised in
| VIC last Congress WHETHER III view or the
palpable fraud upon the Government in
volved in the organization of the Southern
Pacific Company and the leasing of the
Central Pacific Railroad to that company
for the purposes stated, Congress should
allow the fraud to succeed as against the
Government by making the payment in
question to the Southern Pacific Company.
"The Fifty-third Congress twice decided
that, so far as it was concerned, that part
OF the fraudulent purpose should not be
permitted to succeed, and therefore re-
jected the 81 100000 claim. The result of
that rejection, unless the present Congress
shall override it, will be to submit the
question as to the right of the Government
to offset that amount as against the $7O,-
100000 debt of the Central Pacific Railroad
Company.
"The question involved before Congress
was the substantial identity of the Central
Pacific Railroad and the Southern Pacific
Company with regard to the transporta-
ton OF mails, troops, etc., for the Govern
ment, and the decision of Congress was
that for those purposes the companies
were substantially identical, and at best