The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-10-04
Said to Have Been Used to
Build the Market-Street
Railway.
THE PROBABLE DEFENDANTS.
Hundreds of the Ex-Employes of
the Southern Pacific to
Be Plaintiffs.

edge OF the American hallway Unions
legal committee which have caused it to
consider the advisability OF bringing a suit
against the Southern Pacific Company and
allits various connections and stockhold
ers that viii be farther reaching in its
effect than anything that has yet been
undertaken against those interests.
At the time the Central Pacific Railroad
was started there was hospital fund or
gained, it is claimed, for the ostensible
benefit OF injured employees. To that fund
each employee was compelled to contribute
81 a month, which sum was deducted
from his wages. Recently the monthly
assessment was reduced to so cents. This
feature has since been engrafted on every
corporation under control of the Southern
Pacific Company, with the result that to-
day 1t Is estimated there are no less than
10000 persons who are each regularly con-
tributing 80 cents per month to this hos
pital fund.
1t IS asserted that when the Market-street
cable railway was projected some fifteen
years ago the fund had reached an amount
between 81. 100000 and 81, 100000, and that
this money was taken by Huntington,
Stanford, Croker and their colleagues and
used to build the Market-street portion OF
the system.
1t is further alleged the railroad mag
mates bonded the cable road for several
times what it was worth, and used Dor
ton of the receipts from the sale of the
bonds for the purpose of making the Va
Iencia, Hayes, Haight, McAllister and
Castro street extensions.
sh ort time ago blanket mortgage, it
Is claimed, was issued for ST., 500, 600 and
the bonds thus created are now being
placed on the market. The informant Of
the American Railway Union committee.
who Is well posted on the internal affairs
OF the railway company, states that if the
railroad people. succeed in placing these
bonds they will have made a clear profit
on the street railway deals of about $I5.-
OO0.0O0 on the sales of stocks and bonds.
All of this profit, it will be shown when
the contemplated suit is brough to trial, is
the result of tn investment of the hos
pital fund.
Then, in addition to this it will be shown
that tine hospital fund has been at
different times diverted for the paw
ment OF betterm ents on the Southern
Pacific and Central Pacific lines and va
nous other purposes of the railroad cor
poration.
This information was brought by the
American Railway Union men to the at
tention of their attorney, George w. Mon
teith, to see if anything could be done
toward recovering the money they had
paid into the hospital fund while in the
employ OF the company. Attorn ey Mon
teith looked into the matter and yesterday
gave them an opinion substantially as fol-
lows:
The hospital fund is a specific trust,
and the custodians of the fund-the differ
ent railroad companies and those who
have access to it and notice of its trust
character-are IN equity trustees for the
benefit of the contributors to the fund, who
are in a sense partners in the same.
eff these funds have been used for diff
ferent purpose Jnan that for which they
were originally intended, and if such diff
ferent use was unauthoriZed-that is, with
out the knowledge and consent of the con-
tribUtors to the fund-they are certainly
entitled To all the profit that sccrues from
its investment. And If the Market-street
cable railway and the other matters that
represent the investment OF these trust
funds constitute profit derived from the
investment of the trust fund they are
really an increase or accumulation of the
trust fund. For that reason the bene-
fciaries of the fund are entitled to all the
profits derived from the investment,
wherever they may be found, within the
custody or control of those who have
notice of the trust. and any contributor to
the fund is entitled to an accounting to be
had IN the proper court.
- If suit is brought it will be in the ma
ture OF bill in equity against the differ
ent companies and corporations who have
a lad IT n IL VIII
would be considered in the light Of trus-
tees.
''Such an action would compel the rail
road people to disclose Just what was done
with these funds and to fully account for
them. When an employe of the railroad
terminates his employment he loses under
the railroads ruling all the benefit of the
hospital fund, which, of course, is arbi-
trary and illegal. He certainly ought to
pe entitled to recover the money he has
paid into the fund upon proper showing.
There Is no doubt it team be recovered on
the facts as shown TO me.
The plan of action that should be fol-
lowed is TO file bill in equity, in which as
many OF those who choose to proceed
against the trustees OF the fund NAV ioin
as plaintiffs. Then it will be necessary to
ascertain the different persons and corpo-
ratlons that have used these funds and
make them all defendants"
From an interview had with nromi-
nent member of the American Railway
Union ii is learned that such suit will
certainly be brought and that between zoo
and 800 of the men who were thrown out
of employment during the strike of Julv.
1894, will join as plaintiffs. From the
same source il is also learned that among
the defendants to be named in the suit wifi
be the Southern Pacific Company OF Ken
tucky, the. Southern Pacific Railroad.
Central Pacific Railroad, Western Pacific
Railway, California and, Oregon Railroad.
Oregon and California Railroad, Western
Development Company, Contract and FL
nance Company, Pacific Improvement
Company, all the streetcar lines controlled
by the Southern Pacific stockholders, the
Rocky Mountain Coal Company, C. P.
Huntington and the estates of Charles
Croker, Leland Stanford, Mark Hopkins
end d. G. Cotton.
What is known as the hospital fund is
supposed TO be used only for the purchase
of medicines and personal care and main
tenance of sick or injured railroad en-
ployes while in the employ of the company,
the companyproviding medical attendance.
1t Is claimed that the amount contributed
by the railroad employees is far in excess
Of ha s - i go