Los Angeles herald., 1908-09-02
FARISH TELLS HOW S.P. RAILROAD
FASTENED GRIP ON CALIFORNIA
FORMER STATE SENATOR DESCRIBES CORPORATIONS Po-
LITICAL WORK IN THIS STATE
Delivers First Addresses Before League
Weekly Luncheon-Deves Deep Into Past History Trans
portation and Politics. and Exposes Methods of Early
Day Financiers and Lobbyists

monwealth, made the first of three ad-
dresses before the Democratic league
OF Los Angeles yesterday.
Members of the league and delegates
to the Stockton convention formed the
audience which gathered at the weekly
monday meeting of the organization at
the Westminster hotel.
Mr.. Parish spoke of the early history
of the big corporation, showing how
the group of early day financiers and
lobbyists got their grip on California
and how San Francisco was saved from
losing most of Its water front by a
Democratic victory.
Mr.. Parish said:
THE Central Pacific Railroad COM
| pany was incorporated for $8,000,000
under the laws of this state, to build a
railroad across the Sierras east, in
June or July, 1861.
! Leland Stanford, Judge e. B. Crock
er, who sold out to his partners before
the road was completed, and his broth
er, Charles. Crocker, c. p. Huntington
and Mark Hopkins were the incorpo-
rators. Stanford was elected governor
the following fall.
1T is not too much to say that at
that time their combined capital did
not exceed $250,000.
1T was a daring experiment. and as
| the sequel proved the promoteds
thought not unwisely that the people
of California and the nation would fur
nish the money for its building and
leave them the full and sole owners of
the legislative plum, to be used as their
appetites dictated.
"The road was to be built east from
the city Of Sacramento to join the I'M
| ion Pacific, corporation organized by
Oakes Ames to build west across the
Rocky mountains from Omaha.
| CONGRESS Was Plastic
"The Pacific coast, as we have seen,
was eager to welcome anything that
would bind them with bands of steel
stretching over the Sierras and Rockies
to the distant centers Of population and
industrial prosperity.
Congress was in a plastic mood. so
all the promoters had to do was ask
and receive.
stanford and his associates saw
their opportunity and embraced it; and
permit me to say they and their sue
cessors have never for moment al
lowed their policy Of asking and receiv-
ing to fall into fnnocuous desuetude.'
| In 1923 the Central Pacific received
bonds from the counties of Sacramento
Placer and Eldorado. Congress passed
an act in aid of its construction, agree
| ing to exchange bonds of the United
States for railroad bonds to the extent
of $12,000,000 to the Central Pacific, and
alternate sections of land for ten miles
on each side of the road, the bonds to
be delivered or exchanged on the COM
pletion of each forty miles of road, and
its acceptance by the government, Sc
cured by first mortgage.
More Ieeorporations
| about this time there were filed arti-
cles of Incorporation for the Western
Pacific railroad, and also for the Cali
fornia Northern, the first to build south
from Stockton to San Jose; the other
north from San Francisco to Marys-
vile, or the first of these corporations
received bonds and land subsidies from
the government the same as the Cen
tral Pacific, and We're probably created
In the interest of the Central Pacific
! at all events, they became a part of
the Central Pacific or Southern Pacific
system, and it is reasonable to suppose
| that in this case it was the hand of
| ESau and the voice of Jacob
December. 1863, Stanford was sue
ceeded by Low as governor, and In
January, 1864, the state donated to the
Central Pacific $1,500,000 of per cent
gold bonds to aid the construction.
Lands and Bonds
"San Francisco was authorized to is
sue bonds for 100000 in aid of the Gen.
trail Pacific and 100000 in aid of the
Western, in exchange for stock of the
respective corporations; and, as 1 re-
member 1t, the Central Pacific went
before congress and had the bill passed
at the previous Session amended so the
company was capitalized for $1O0, ,OOO, 900
and received alternate sections of land
for twenty miles on each side of the
road and bonds from the government
secured by second mortgages and to
issue bonds secured by first mortgage
for an amount equal to the government
hnf tcyn4T 90 Co.. u. .4xrkxR
years and to bear interest at 6 per
cent, to be issuen upon the completion
of every twenty-five miles of road and
its acceptance by the government Of
Plain lands, $4,000 per mile;
Hill lands, $4,000 per mile:
Mountainous, $4,000 per mile;
''Sierras, $4S,000 per mile.
''The constitution of the state pro-
hibited debt of more than $500, 900,
% it became necessary to validate the
state bonds issued by the state, and
for this purpose a suit was brought by
the attorney general of the state to de-
clare them void.
The bill authorizing them was ap-
proved January 4 1864, at time when
Grant was hammering Lee around
Richmond and Sherman was driving
before him the Confederates under
Johnson to ultimate and sure defeat.
"The decision in 81 California Re-
ports is a very labored one handed
down early in 1866, and is based upon
the assumption that the legislature Of
California believed that the state was
threatened by a foreign foe, invasion,
| domestic strife and other dangerous
and disagreeable things and therefore
was justified In hiring the c. P. to
help them out.
Fearful of San Francisco
"The c. p. managers were perhaps
| fearful that to allow San Francisco
to own 100000 of their capital stock
would be dangerous, so they offered as
| a compromise that the city donate to
! them 100000 of bonds and a man.
damus was brought to compel the city
| to issue them.
| "It is amusing to note that the su-
| pervisor making answer to the rail-
| railroad complaint was Frank McCop-
| pen. manager of the Market street
railroad, built from Market street to
! the Mission, and soon thereafter taken
over by the G. p. McCoppen was Man
Friday to the G. p, as also were j. H.
Saunders and John B. FELTON,, who ap-
| peared in the supreme court as counsel
! for the city.
upon the showing made the court
| ordered the bonds to ISSUE
'This also was early In 1866.
"It is also worthy of note that the
| chief Justice. s. w. Sanderson in a
| short time after the rendition of these
| decisions. resigned from the bench and
| became attorney of the railroad at a
salary of $4,000 per annum, a position
/ he held up to his death--a munificent
salary forty years ago.
| Inanorf HhinaaA