The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1899-03-19

! found their way into the hands of persons
| heavily interested in the Pacific railway
| companies, and that the persons who as
sisted in this recovery" were rewaide
for that important service
Mr.. Nimocks discovered in mis- investi-
cation that another issue of bonds. pUr-
porting TO be the prior and paramount
lien" upon the Pacific railroads, was in
existence. As Mr.. Nimocks puts It, The
companies. having ascertained that these
Durkee bonds were missing. having under
taken to palm off on the public an issue OF
bonds amounting TO nearly 500, OO0, go,
which was entirely different from the
bonds authorized" The fact appears to be
that the Other bonds were issued long
before this time.
The amount is very much too large, for
the sum Of these bonds could be, under
the act, no greater than that of the Sc
cond mortgage issue OF the United States
Their dates differ from the dates of the
United States issue. contrary TO the pro-
visions Of the same act Of 1862 The time
of maturity also differs.
Moreover, this issue consists OF coupon
bonds. To he of even tenor with the
United States act authorizing them these
bonds should be registered like the United
States issue.
These facts, Nimocs1s says, were well
known to Acknowledgement McKenna in
1891, during the foreclosure Of the mort
cages on the Pacific railroads al Omaha.
The Attorney General in referring TO these
bonds stated THAI there was no evidence
that they were the original prior and
that the owners OF the ''prior ana para
mount lien bonds must be ascertained
and paid off.
J. Pierpont Morgan, three years before
this had brought suit at Omaha in the
United States Court, as the holder and
owner Of a large amount of bonds of this
new issue. to Areclose their mortgage in
the Pacific roads. He was nonsulted for
the same reason advanced by the Attor-
ney-eGneraI in the latter suit; that is. that
Mr.. Morgans holdings were not the prior
and paramount lien," because th=y did not
answer the description in any way.
Other evidences against the status of
these bonds was discovered by the Trea-
sury Department itself The acts of Con-
gress requiring the Secretary of the Treas
ury TO purchase the bonds of these com
panies to be set aside for a sinking fund,
ne bought a large number Of the securi-
ties purporting to be Of the prior and
paramount lien issue. He discovered that
there had been an Overissue in the several
series Of these bonds; that their total, as
shown by the numbers on the bonds them
selves, was greater than the act author
lied. viz, $4,000 per mile of road for the
particular branches built. For instance the
issue of one branch might be 8, 600 600;
that would be two thousand $1,000 bonds
IF he got a band numbered zoos the Gee
rotary Of the Treasury held that the bond
could not be valid. When this was dis
covered the Treasury Department got out
of that part of the difficulty in peculiar
manner. If the overissussd bonds which
he held were unauthorized, they were
wothless Nevertheless the Treasury Of
fcials kept the knowledge to themselves
and sent the doubtfully Numbered bonds
back TO the Sub-Treasury in New York
with orders that they be marketed ard
sold This was done.
The Treasury Department made another
peculiar discovery about these so-called
prior and paramount bonds. In the
body or text Of the bond appeared the
words Payable in lawful money of the
United States" Stamped upon the face
with a rubber stamp appeared the words
Interest payable in gold" Just ahead of
these words principal and' had been
printed with another rubber stamp in ink
of another color and at subsequent time.
Altogether it read Principal and interest
payable in gold
on the back of the bonds. printed in an
irregular manner. was the legend, ''These
bonds are a prior and a paramount lien
TO that of the United States" This was
evidently added after the bonds were orig
inally printed. If they actually were a
prior and paramount lien, it is reasonable
to assume, in Mr.. Nimock's opinion, that
the fact would be set forth in the original
text of the bonds. If a note of hand is
altered or changed it becomes invalid, and
it IS the contention of Mr.. Nimocks that
this rule applies 10 these bonds and that
they actually are worthless and fraudu-
lent.
At all events there has been a large
quantity Of these bonds in the Treasury
of the United States, held as a sinking
fund. bought at their supposed market
value with the public money. These bonds
interest semi-annually. Other bonds to the
amount Of about $685. 0.e00-that is the
amount Of the overissue above the S6f-
G0 600 authorized by Congross-have been
in the hands Of private investors. They
were retired under recent reorganizations
They seem II have passed current for
What they are represented to be- Very
strange thing.
No Secretary of the Treasury ever
thought it expedient to request the At
to pass upon the legality
and validity of these bonds, when the
fact that they were not what the pur-
ported II ne was known and contended
by the head of the Department of Justice.
The United States Court Of Claims Will
hear and decide within a short time the
SUIT brought by J. A kay Kendall, the
supplementary administrator appointed
in Salt Lake City for she Durkse estate
after administrator Heads discharge.
The heirs hold the United States res0on-
Sible for The payment of SD ~ lr3 and
such further relief as may he proper. on
the following grounds set forth in an
amended complaint.
That Charles Durkee was during his life
time and this death the owner and hold I
err q frs mortgage bonds Of the Union
and Central Pacific railroad companies. as
SAID companies were originally organized
and chartered n the sum and aggregate
amount Of -. e2S.5l2 which were in the
year 1873. according 90 LAW. deposited in the
Treasury OF the United States TO ne held
in trust Tor the lawful owners and hold /
ers thereof. and the said bonds are now
held hy I've United States. as t;tione~ (
IS informed and believes. for me Use and /
h--e--. .. 80 as-a-o- aN-.n- y. 1870, - !