The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1899-06-28

Company and Pacific Improvement Com
pany Being directors of the Central Pa
cifc Railroad Company and controlling
its boards they made contracts with
themselves in such a way that while it
cost only S36 900 600 to build the road from
Sacramento into Utah to join the Union
Pacific, they received for doing 1t under
this contract made with themselves $llS,-
760 416 Is.
A great part of this money. it is alleged,
was paid In bonds of the Central Pacific
Railroad Company large part of which
still belongs to the Pacific Improvement
Company that is. to themselves. These
bonds are part Of the bonds which Hunt
ingtOn and his associates are now seeking
to refund into other bonds. They also
built the Western Pacific, San Joaquin
valley railroad and the California and
ceiving on the Western Pacific road.
which cost S. 600, 900. 81 974 900 in bonds and
81 900 600 in stock of that road, which they
afterward consolidated into the Central
Pacific, and took stock of the Central
Pacific to that amount in payment, to-
gether with the bonds. That they also
incorporated the San Joaquin Valley Rail
road and made the same CONTRACTS with
themselves to build that road. The cost
was Si,500G00, and they collected for it
s.. 0S0 600 the contract being made with
themselves. In regard to the California
and Oregon Railroad, it was built under
similar contracts at cost not exceeding
S5 fd 6 W95' q t sa a9eS eta t9 ne
regard to other railroads show that the
aggregate cost of all of them did not ex-
coed 100000 900, and there was paid for
them 1853, 900 600. great part OF this
money is in bonds which they still hold in
their own names or in the name of the
Pacific Improvement Company The COM
plant also gives details of the death OF
Hopkins, Stanford and Croker, and
traces the ownership Of the bonds into the
present owners, who are all heirs and dis
tributes of those who are dead.
Then come the allegations in the bill in
relation to the conspiracy and the doings
of it TO accomplish the results, stating that
neither the identity Of said combination
and conspiracy originally formed has been
changed, nor has its continuity been in
terrupted. They extend the conspiracy
originally formed to defraud the Central
Pacific Railroad and its stockholders to
the other corporations and to the Central
Pacific Railroad, and have continuously
defrauded all the corporations and their
stockholders up to the present time. They
controlled and elected all the directors OF
these corporations and co-operated with
them in defrauding the stockholders. 1 e
bill alleges that Huntington has been at all
times the acting and leading member
thereof directing and personally conduct
ing it's most important business transac-
tons and as his associates were sue
cessiVely removed by death, his superior
acquaintance with its past transactions
and the railroads built or dealt with by
it, his great talents, enlarged experience
and his seniority in years and his control
Of a majority of the stock of the Southern
Pacific Company gained for him more
ity in said company. so that since the
death of Mark Hopkins he has practically
ruled it and directed its operations.
That Huntington and his associates eX-
tended their conspiracy to plan and build
a rival competing railroad to reach from
San Francisco to New Orleans, which
they did and so soon as that railroad
was completed set on foot a scheme to
sell out all their stock in the Central
Pacific Railroad, while they retained the
control and management in their own
o,o6c hot pDd is a hoy
got up a form Of certificate Of ownership
of shares of stock in the Central Pacific
Railroad Company of coupons attached
for dividends, describing the dividends by
numbers and caused it to be printed and
used, and the certificates, instead of being
made out in their own names, were made
out in the names of dummies. divided up
into parcels. Then they took back proX
les from the holders to vote on the shares
and put these stock certificates on the
market, and. still holding the proxies from
their dummies, the original holders were
able for years to vote on this stock. That
the English stockholders, being afraid of
assignment, neglected to register their
stock; that Huntington and his associates
formed a pool, sent stock over to England
where it was sold out, with the exception
Of Stanford. who retained $4,000 of his
bonds to his death
While they were selling out the stock.
and from that time on, they were building
the Southern Pacific Railroad out of the
income and assets of the Central Pacific
so that in fact the Central Pacific built
the Southern Pacific line, which was TO
compete with the Central Pacific. They
then procured a charter from the State of
Kentucky for the Southern Pacific Com
pany, which has a nominal capital of
$3.50 10000, but the liability of all the
stockholders jointly is $1,000, 900. The cap
ital stock Of that corporation was paid
up by the capital stock Of other railroad
companies at valuations they had fixed
among themselves Ihese other corpora
tons whose stock constituted the property
and capital of the Southern Pacific are
those railroads reaching from Goshen to
New Orleans. which have never paid any
dividends, never can pay any dividends
and are now bonded for very much more
than their value, so that they are prac-
tically insolvent. These are the assets of
the Southern Pacific Company
Complaint then alleges the formation of
the Banbury committee in London, repre-
senting the English stockholders who
united to investigate the affairs of the
Central Pacific and ascertain why it was
that from the time the Southern Pacific
Railroad was finished for about ten years
they received only l per cent dividends on
their stock That the business of the
Banbury committee was to investigate the
fraudulent and dishonest conduct of
Huntington and his associates, but that
they were bribed in various ways to keep
quiet in regard to what they had learned
That over 100000 has been paid out of
the treasury of the Central Pacific to this
Banbury committee under various pre-
lenses The complaint speaks OF the visit
of Sir Charles Rivers Wilson to this coun-
try states what he ascertained in regard
to these frauds and 50 reported to the Ban
bury committee; that his fee was $50. 900
and the Banbury committee allowed Mr.
Huntington to pay 1t.
The bill says that the corrupt and cor
ruptfng relations between Huntington and
the Banbury committee have been contin-
ued to the present time; they are now and
have been corresponding with him and
all his dealings with the corporations
That the directors elected in April 1898
were all under the control of Hunting
tom that they voted over 800 900 to be
paid to the Banbury committee.
The bill alleges that Speyer & Co have
been the financial agents. confidential