The herald., 1896-02-19
DESTRUCTION OF RECORDS
Seems Serious Matter to the Com.
mittee Members
But Is Explained by the Magnste as Occurring
In the Ordinary Course OF
Housecleaning
As,ociated Press speclal Wire.

continued his inquiries concerning the de
struction OF papers of the Finance anC
| Contract company. The examination re
suited in sharp passages between Morgan
and Huntington. Morgan intimated tina,
he believed the papers were burned for the
purpose OF destroying the proof of the in
divdual liability of the stockholders.
Huntington insisted that they had been
destroyed in cleaning out room because
| the business for which the company had
been organized was closed. He said he
suggested to Mark Hopkins that the books
be destroyed, but did not remember that
there had been any reference in his con.
| versation with Hopkins to the clause in the
California constitution regarding personal
liability of stockholders. Such a matter
| would. ne said, have been referred to the
legal department OF the road.
Senator Morgan-Did any lawyer advise
you to destroy these papers?
Huntington-I think not. 1t was a mere
casual matter. We did not regard it as
serious.
Morxan-lt becomes serious here. l
should like very much to have the books
here now.
Huntington-I should like very much for
that they are not in existence | don't see
how in the world you are going to get
them.
Reference being made to the California
memorial, Huntington said it emanate1
from Sutro meeting, but he declared it
was not half as earnest as was Sutro when
le (Sutro) told him (Huutington) he would
fight him if he did not build a road out to
his (Sutro's) place, where he had a saloon
and gambling house. He said these people
who were fighting him in California were
| "abcut as uncanny crowd as a farmer
ever found in his hen roost."
The examination was then turned into
an inquiry as to the payment of the Con-
tract and Finance company in construction
of the Central Pacific and of the organiza-
ton and operation of the Western Devel-
opment company, composed largely of
Central Pacific men, engaged in building
other roads in California. At one time
during this branch of the inquiry Morgan
sought to contine Huntingtons replies to
definite lines.
Frye interfered, saying the witness
should be allowed to answer in his own
way.
IL want him to answer" replied Morgan;
''that is what am trying to get him to do,
but am going to conduct this examination
exactly to my taste until the committee
stops me-
Questioning in this connection developed
that the Central Pacific organizers had
built three other roads IN California con-
nected with the Central Pacific and bought
twelve which had failed. Huntington said
the roads built cost about $4,000 a mile.
The construction companies had been paid
| with bonds which were issued by the Cen
| trail Pacific company.
When the afternoon session began Sen
ator Morgan was the only member of the
committee present, though others came in
Iok4 NJ hs
alton of Mr.. un'ington as to the conuec-
ton of the Central Pacific with its branch
lines in California.
Taking up the question of the govern.
ment indebtedness. Senator Morgan asked
Mr.. Huntington if he considered the inter-
ests which had been paid by the govern
ment on the guaranty bonds a part of the
Central Pacific debt to the government.
Mr.. Huntington replied he did, that his
proposition was to calculate the entire
amount up to the maturity of the
bonds, including interests as well as prin-
cipal and count it all as interest. He did
not, however, understand that he was to be
expected to pay interest on interest. He
did not think the company could pay more
than = per cent on this extension.
Replying to an assertion made at a mass
meeting in San Francisco that he, Stanford,
Hopkins and Crocker had accumulated
combined fortune of $780, 100000, be said
it was "a lie,'. as was the statement that
they had received from city, county, state
and national property of four times the
amount of the cost of building the roads.
To the charge of eXtortionate freight
rates Mr.. Huntington said the people in
New Jersey and Delaware were complain
ing of the competition of California friit
because of the low rates made by his
| roads. He thought that was sufficient
! refutation of the charge. Senator Morgan
asked Mr.. Huntington how much money
| he had put into these roads which he had
not made in railroading. This did not
| bring out direct answer, but Mr.. Hunting
] ton told. in this connection, how he made
| a great deal OF money in the Chesapeake
| and Ohio, Big Sandy and various roads in
Virginia and Tennessee, all Of which he
had taken when they had been abandoned
| and which he had built up SO as to make
| large sums of money. He had put all
theae profits into California and the west,
| into stocks, none of which paid him any
! dividends. He thought he must have been
worth million dollars when he began his
| railroad career. but he was poorer when
| the Pacific work was completed than when
| he began because of the immense debts
| which had Been accumulated.
| Mr.. Huntington stated that the Southern
| Pacific company had agreed to pay ST ,3u0,-
| 900 per year for the lease of the Central
| Pacific, but that the earnings in some
| years OH this line had not been equal to
the rental, and the contract was changed
| so as to provide that the amount paid was
| not to exceed the earnings.
| Senator Morgan tried to show IN this
| connection that the railroad business which
would naturally have gone over the Cen
trail Pacific was diverted, through the
| means of this contract, to tho Southern
| Pacific. SO as to diTulnish the Central Pa
citic earnings. MIR. Huntington said COM
petition was very close. He stated, how
| ever, that the business of the two roads
| was managed by one man, Mr.. Stubbs,
| who WAS the freight agent for both roads,
| but while this was true, shippers were al
lowed to select the road over which they
should ship.
Senator Morgan then asked if it was not
his ambition to throw all the business he
| could over to the Southern Pacific.
Mr.. Huntington replied he had tried
especially to build up q business between
California and Europe and he had directed
his efforts to that end. The senator also
tried to develop the fact that Mr.. bunting
ton, being more largely interested in the
Southern Pacific than in the Central Pacific
| would naturally have required the joint
officials of the two roads 10 exercise their
offices in behalf of the Southern Pacific
line, but Mr.. Huntington parried the
thrusts and did not admit this to ba true.
"Have you ever really expected the Cen
trail Pacific could be prosperous when 1t:
builder and guardian was so largely in'er
ested in and the chief executive officer o.
it's principal rival?' asked Mr.. Morgan.
II believe" replied Mr.. Huntington
''that the Central Pacific has Jared as vel
in my hands as it could have Jared in tn,