The morning call., 1895-01-17
THE DEBT FALLS DUE.
Central Pacific Bonds Reach
Maturity.
A GIGANTIC INDEBTEDNESS.
No Suit Brought Against Stanford's
Rich Estate.
0LNEY ONLY PRESENTED THE CLAIM.
Denial Of the Statement That Garter
Has Been Retained to Press
the Big Claim.
OLNEY ONLY PRESENTED THE CLAIM.

Tomorrow, January IS, 1895, the first
portion OF the indebtedness OF the Central
Pacific Railroad Company to the United
States Government will become due by the
maturity of a portion of the second-mort-
gage bonds. But comparatively small
portion, when the magnitude of the debt is
considered, will become due tomorrow.
The rest of the Indebtedness will accrue in
several successive years thereafter.
The falling due of the first portion of the
debt is of the greatest interest, as it gives
rise to the question, What are the inten-
tons of the Government as regards hold
ing the Stanford estate for its portion of
the Indebtedness, amounting to SIS, 10000
Does it intend to bring suit? If so, when,
and in what shape?
There is considerable haze in the minds
of many regarding the proceedings already
taken by the Government and their effects
on the estate as controlled by the eXecu-
trix, Mrs. Stanford Many imagine that
the estate is already all tied up, Such is
not the fact. The only drawback at pres
ent to the executrix is that the estate is
not distributed. All the Government has
done was during the term of the late
United States District Attorney of this cir
cult, Charles Garter, to present its claim
for $15,000,000. The executrix considered
the claim and rejected it.
Attorney General Olney has taken no
further steps than this, at least as far as
his subordinates have received official
knowledge. Acting United States District
Attorney Knight so asserts. There has
been no suit brought to either establish the
validity of the claim or to sue for the
money due the Government. All the eff
feet of the presentation and rejection of
10, IL. %tN14+
blllty of future suits hangs over the es-
tate, thereby producing that uncertainty
and confusion which anticipated litigation
may cause. The Governments action thus
far has produced no other effect than this
A telegram was received a few days ago
stating that ex-United States District At
torney Garter had been appointed special
counsel for the Federal Government to
prosecute certain claims for the Govern
ment. The statement got abroad that his
services had been secured by Attorney
General Olney to prosecute the claim
against the Stanford estate after the matur
ity of the first bonds. Acting United States
District Attorney Knight when questioned
in regard to this subject yesterday, said
81 know positively that Mr.. Garter has
not been employed in the Stanford matter
by the Government He was selected as
special counsel to attend to certain cases
in the United States Circuit Court of APP
peals in which the Government is inter
ested. These cases are outside the north
ern district of California, and take in cases
in Oregon and Alaska. He was appointed
to represent the Government in this mat
ter chiefly on account of his familiarity
with certain phases of these suits.
"Have you received any instructions
from the Acknowledgement recently in re-
gard to the Stanford estate?" was asked.
81 have not.
"Have you ever been requested to draw
up papers for a suit to press the Govern
ment's claim against the estate?"
81 have never received any such instruc-
tons"
'sDo you think suit will be brought?"
"Officially l have no information that
such action will be brought"
When closely pressed Mr.. Knight init
mated that it was his opinion that some
such a suit would be brought but assto its
"The mere falling due of portion of
the debt on the 18th of January does not
necessitate the immediate bringing of a
suit. The whole matter is in the Attorney
Generals hands. Undoubtedly he has
determined on some course of action, but
what that course will be l am not officially
advised.
II have not been advised whether the
Government, if it brings suit, will bring an
action for the whole amount, or for por-
ton, or whether it will bring suit first to
establish the validity of the entire claim.
''Some time ago proposition was made
for stipulation to the effect that all the
testimony introduced in a suit for the first
portion of the debt due should be admitted
in all future actions for debts accruing
when other bonds than the first matured.
The proposition was to bring suit when the
first bonds matured as sort of test case,
and have the testimony introduced therein
affect all subsequent actions. This stlpu-
lation has not as yet been agreed to. That
no stipulation has been entered into rela-
tive to using the testimony taken in one OF
the cases so that it could be introduced in
any other similar case that might be
brought, | am certain.
81 know the Stanford people are anxious
to have the matter determined as soon as
possible. Until | receive instructions from
Acknowledgement Olney [ will take no
steps in the matter, as the case is wholly IN
his hands,"
So Mr.. Knight does not know whether an
action will be brought against the Stanford
estate or not.
From other sources it was learned that
the claim will be made that no liability at
present can hold against the Stanford
estate until all assets of the Central Pacific
have been forsclosed and applled to the
satisfaction of the debt. 1t is held that the
laws of California SO apply to stockholders
liability.
Such is the status of the case. In the
meanwhile the executrix, Mrs. Stanford,
has paid every other claim but two others
amounting to 100000 against the estate,
which now awaits distribution. The dis
tribution would take place were it not for
the uncertainty and confusion produced
by this hanging over the estate OF the pos
sibility of these suits by the Government.
1t can be seen how anxious Mrs; Stan
has planned many large operations at
Palo Alto, and We're the estate distributed