The San Francisco call., 1896-01-26

/ Finance
nelu LOT them $35 300, 900 of their property.
see Huntlngton's letter OF January 10, 1887,
anu MI. Mlller'S answer of January 27, 1887,
FOUND In the report made in 1888 to the Presl-
ueht ana the Congress of the United States by
purpose.
T. 10 make uncertainty more uncertain Mr..
Huntington and his associates not only de-
| stroyed the books of the "Contract and Finance
! company, but according to the reports made
! by those who inYes tigeted their affairs it is
Claimed they also DESTROYED part of the So
called "Record-book of Corporation Debts''
| 1wnlch oook they were required by law to
keep namely: that part from page 4S to page
LII inclusive. What these pages so destroyed
would have disclosed remains a matter of sur
mise But from birdseye view of the whole
aHalrs OF the Central Pacific Railroad Com
| pany no one can be surprised that in a few
years its railroad holdings increased from 100
lnlles 10 So35 miles; or that the incorporators
small, during the same period, or that they
are now able TO set at defiance State and
NATIONAL laws and boldly destroy the security
1or National Indebtedness.
"
| The shippers of freight and the passengers
over the Central and Southern Pacific rail
roads must, in the end, pay all the indebted
ness, principal and interest, of those roads.
HUNTINGTON IMMENSELY WEALTHY.
For this reason the people of California are
especially interested in keeping the amount of
such Indebtedness within its actual figures In
thls connection II must be remembered that
!
come immensely wealthy in handling cor
| porat1on which they now say is bankrupt. Ac-
cord1ng to 'Poor's Manual before referred to,
the assets OF the Central Pacific Railroad Com
| pany are exactly the amount OF its liabilities,
viz, $202, ,49I, ,584.
1t must be borne in mind that one fraud is
| the parent OF others. The very destruction of
these books referred to is in law prima facie
evidence OF fraud, and in any court of Justice
would be taken strongly against the parties
! who destroyed them. And in any department
OF the Government, If the amount involved
! was small, such an act would result in the i'm
mediate prosecution OF the parties committing
IT. but the taking OF $I00, 600, 900 paralyzes be-
HeI, I'd makes even honest men hesitate to
attack such bold and immense fraud.
In the report made to the President of the
! OnIleo states by the Commissioners appointed
under the act of Congress approved March 3,
1851, emitted IAN act authorizing an investi-
! CATION or the books, accounts and methods OF
railroads which have received aid from the
| United States, and for other purposes" it ap-
pears that Mr.. Huntington and his assoc iates,
HOPKINS Stanford and Crocker, received
| FI42 100000 in cash and securities through
/ the Contract and Finance Company, the West
ern Development Company, the Pacific I'M
| provement Company and the dividends of the
| central Pacific Railro ad Company, and it no.
| where appears they aver paid one dollar from
thelr own funds toward the construction OF
| said railroad.
sAPPING THE REVENUES.
! In addition to this sum of Sl42 600 600, they
also made large profits by the operation OF
other companies which were directly or re-
Paclhc. The same company also expended
$4S10,355 67, OF which the manager declined
10 give any explanation or to permit any ex-
planat tlon TO be made by others.
1t further appears from the same report that
the gross earnings of the Central Pacific Rail-
road road from 1868 to December 81, 1856, were
2|4,l3S, ,116 27, and that the operating eX-
penses were $149, 199, ,102 40, leaving the net
earnings during the period above indicated,
Sl42, ,94O,013. This amount at that. time
would have more than paid the bonded in
debtednesS of the road
The same committee page % of their report)
stated that the Central Pacific Railroad Com
pany had paid s., ,361 ,154 SO for services OF
lawyers to influence legislation.
These uncon tradlcted facts afford an insight
into the methods adopted by Mr.. Huntington
and his associates in handling the property OF
the Central Pacific Railroad Company. 1t is
settled law that a mortgagor of property can
not by his own act destroy the value OF the
property so mortgaged and thus endanger the
security; vet the ntral Pacific Railroad
Company has done this notoriously for years
VI.
In 1884 c. P. Huntington and his associates
In the Central Pacific Railroad Company incor-
porated the Southern Pacific Company in the
State OF Kentucky under the especial proYi-
slons prescribed in an act of the Legislature of
that State Incorporating said company, and
which act prescribed that said company should
never do business in the State of Kentucky.
This provision has been eliminated by subse-
extraordinary proceeding ever devised. From
beginning to end it was an open, bald, glaring
fraud
THE TERMS UBIQUITOUS.
After the incorporation of the Southern Pa
cfhc OF Kentucky mot dollar OF whose prop
erty was in that State) these same parties, viz.
Mr.. Huntington and his associates then leased
from the Central Pacific Railroad Company all
OF its roads and equipments for a period of
ninety-nine years. The terms OF this lease are
so iniquitous that any fair-minded man must
admit that e. z. Huntington and his associates
OF the Southern Pacific Company succeeded in
misleading c. P. Huntington and his associates
OF the Central Pacific Railroad Company in
making this lease.
We will not dwell upon the terms of that
lease or its effect upon governmental or other
securities, further than to say it shows fraud
on It's face. 1t is an undeniable fact that Mr.
Huntington of the Southern Pacific Railroad
Company is still running a sharp bargain
against Mr. Huntington OF the Central Pacific
Railroad Company, because most OF the freight
which was formerly transported east and west
over the Central Pacific is now diverted from
its natural channel and is transported over the
Southern Pacific road, the evident object being
TO bankrupt the Central Pacific, and this object
has been well nigh attained
When shipper does not demand that his
freight shall go by the Central (although des.
tined to Chicago or New York; twill be sent by
the Southern Pacific via New Orleans. In a
word, the Central Pacific COMPANY though a
citizen of California and existing under its
laws, is used as most potential means of de.
stroying the industries OF the State.
VII.
The people of California have other serious
7.
ington and his associates control the railroad
property on the Pacific Coast.
OWE TAXES
For fifteen years last past the Central Pacific
Railroad Company and the Southern Pacific
Company have owed taxes to the State of Cali |
tornia, always amounting to from $500. 900 TO
81, SOC, 900, and for four years of that time they
owed S400, 900 TO the school fund OF this State |
1t may be claimed that our people are to |
blame for this condition of affairs. Is this so?
Let US see.
The Southern Pacific Company was incor- |
porated in 1884 in the State of Kentucky In |
the same year, and Immediately after its ineor- |
poration, 1T leased the Central Pacific and be- |
came the arbiter and controller of all OF its |
business affairs, and by reason of the fact that |
the Southern Pacific was foreign corporation |
it has the option in all litigation TO either
bring suits or transfer suits already brought in |
the State courts to the courts of the United |
states. For instance, at this term of the Su-
preme Court of the United States there is on |
the calendar for argument case involving |
$535 900 taxes due from the Southern Pacific
and Central Pacific Railroad companies to the |
State of California, and for taxes levied and !
assessed for the year 1897, yet the litigation |
involving these taxes has but just reached the |
calendar OF the Supreme Court of our country. |
The position thus assumed by the Southern /
Pacific Company of Kentucky is in most in
q nf No