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Full text of "Colton Case: Colton Case. Testimony. [1st-83d Day; Nov. 13,1883-Aug. 1, 1884."

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SEVENTH DAY 



Thursday, November 22d, 1883. 
Direct examination of 
John A. Steinberger. 

Called for Plaintiff. Sworn. 

Mr. Hayes. Q. What is your business ? 

A. Mining. 

Q. In what business are you now engaged? 

A. I am acting as coal expert for the rail- 
road compani(»s. 

Q. What railroad companies? 

A. The Central Pacific and the Southern 
Pacific. 

Q. How long have you been engaged as such ? 

A. With th(»m for about three years, I think, 
in the neighborhood of three years. 

Q. Prif)r to that what was your business ? 

A. Mining. 

Q. How were you engaged in it? 

A. Well, I was engaged in all kinds of min- 
ing, silver and gold, prior to that time, and I 
had been superintendent of mines myself. I 



I 



460 

WHS superintendent of the Amador mine at (mt^ 
time, and tlie lone. 

Q. The lone was a coal mine? 

A. Yes, sir. 

il. WhiMi were you superintendent of the 
lone coal mine? 

A. I left there, I think, four years ago, about 
that time. 

Q. And ahout three years ago you entered 
the tjmploy of the railroad companies? 

A. I think it was about three years ago. 

Q. During the intervening year, in whose 
employ, if any pi»rs(m's, were you? 

A. No jn»rson's, particularly. 

Q. You are now in the emi)loy of the (cen- 
tral Pacific and Southern Pacific? 

A. I am. 

Q. Did you in the year 1876 know Mrs. 
Movie ? 

A. I d(Mi't remember; 1 might know her if 1 
knew the circumstances. 

Q. It is a hidy who had a claim against the 
St. Ivouis Life Insurance Company. I will hand 
you this lett<*r in your own handwriting, which 
may bring it back to you possibly. [Showing 
letti»r to witness.] 

A. Yes, sir: I remember tliat at that time 1 
was Suj>erintendent of the Amador mine. 

Q. 1 will ask you now, this letter having 
been shown to vou, if you recollect the fact of 



1 



f 



I 



461 

that lady having at that tiino a ehiini against 
this Life Insurance (.'onipany? 

A. I think she had at that time. Her hus- 
band was killed in the Amador mine, and his 
life was insured, I Mieve. 

Q. Do you know who she had endeavoring 
t) collect the amount of that policy for her? 

A. I do not. 

Q. Do vou know Mr. D. T. Davis? 

A. I do. 

Q. Are you familiar with his handwriting? 

A. I am. 

Q. I will ask you if that letter is in his 
handwriting? 

[Another letter shown to witness.] 

A. Yes, sir: that is Mr. Davis' handwriting, 
I think. 

Q. Having looked at those two letters, I will 
ask vou if vou can now recollect whether (Jen- 
eral Colton undertook the collection of that 
policy for Mrs. Movie, or to aid lu»r in the 
collection of it? 

A. I <lon't know positively. I have for- 
gotten all about the circumstances connected 
with that transaction. 
J Q. You say in this letter to Mr. Colton, 

written bv yourself, '* I have seen Mrs. Movie, 
and herewith enclose her hotter to Mr. Head." 
Can you recollect to what that refers? 



 \ 



462 

A. It iiiiL'^t have iM^eri <oiiietliiiig in <-«>nnei;- 
tiori witli that in?^uranee matter. I think. 

i^. If it has passed out ufvour mind to re- 
fresFi your iiienv>rv, I will make a sujrgestion to 
%'ou. Was not that a letter which General Col- 
Um was to place in the hands of Mr. Head, a law- 
yer who was to act for her in endeavoring to 
collect the amount of this policy? 

A. It may have been st>; I cannot say posi- 
tively in regard to it. 

Mk. Havks. I will offer in evidence these 
two letters. The letter I have read to him is 
his letter to G:?neral Colton. 

Mk. M 'Allispkr. I don't sl^3 whv a letter 
from Mr. Davis to Mr. Colton is to b3 handed 
to this witness. 

Mr. IlAVh:.'i. The witness has identified the 
handwriting of Mr. Davis. 

Mr. Mr'Ai.iJSTKR. We object to that letter. 
We do not s •;• what p:*rtinency it has to this 
cist*. W<* wiuld like to hive your Honor pass 
upon the letter ?4ejmrate|y. 

Mr. lf\VK-<, Til'' firrtt one is from the wit- 
ness, Mr. St='iriher;r*T. to G(?neral Colton, dated 
Silv.M-Cr"*; J ilv 2l?li, ls7t>. 

Mr. .M \ijj»vi-Ji. \Vi* object to that letter 

bein;: rea'l, ;i- ifM'ornpetent. 

Mr. II.wk^. I urn not reading it in evidence. 

Mr. .M'Arj.iHrKR, We r>bj(»ct to that letter as 
terial, irrelevant and incompetent. 



463 

The Court. I suppose counsel can state the 
materiality of it. 

Mr. Hayks. Yes, sir; it is relating to one of 
the alleged embezzlements of General ('olton. 
Mr. Colton being dead, we have had to fol- 
low all these matters up with the slight 
clues we could get. Some links, small an<l 
disconnected, might seem to have but lit- 
tle relevancy as to the charge against 
D. D. Colton of certain embezzlements. We 
desire to show that at that time he was a(*ting 
as the friend of this lady, an<l was engaged in 
assisting her to collect the sum due her from 
the insurance company; that $1,000 was col- 
lected in currency; that the poor woman want- 
ing coin, that Mr. Coltr>n gave her coin for it, 
and took the currency for the use of the Rockv 
Mountain Coal and Iron Company, and that 
subsequently, as we will show V)y other evidence, 
he paid it out in t\vi cours^^ of the bu<iir\'*s of 
the Rocky Mountain Coal and Iron Company. 
That $1,<XMI of currency is one item alleg^*fl to 
have l>een emiiezzled by Mr. Colt^m. We pn>- 
pose to shmv how he acquired tlie curn^ncy. 
and his sul>sequent use of it in the busin^^ss of 
the company. Taking the testimr>ny of Mr. 
Steinliergnr now, as he is abrmt to g4» Kast. the 
matter seems verv much di.^^-onnected with the 
ease. We will supply the missing links when 
we take up that branch of the ca.se. 



464 



Thr Coi'KT. What vou desire to show now, 
is, with this and other testimony, Mr. Colton's 
taking on himself the collection or the attend- 
ing to this matter for the lady. 

Mr. Hayes. Yes, sir; and that he received 
$1,000 in currency, which he put into the Rock}^ 
Mountain Coal and Iron Company, paying this 
lady for it in g«>ld. We will prove the subse- 
quent use of that $1,000 in the business of the 
Rocky Mountain Coal and Iron Company. 

Mr. M(^\ luster. We don't see how this 
letter proves anything. It is from Mr. Stein- 
berger to Mr. Colton, and tlie witness says he 
cannot recolh^ct anything about the matter. I 
think it is not competent. 

TuK (jorRT. It is not very clear in mv mind 

what it has to do with the case. They may be 

marked now and identified, and they may be 

•' « 

offered in the future. 

[The lett(»rs were marked ** Steinberger, Xo. 
1,'^ a-il ''Slnnb^rg-r, No. 2."] 

Mr. Haves. 1 will not offer them now, but 
will offer them later. 

Mr. Mi\VLUsrER. I don't know whether you 
identified th(» handwriting of Mr. Davis in the 
letter that was handed to you — the letter of Mr. 
Davis to Mr. Colton of September 1st, 1876? 

A. I think it is Mr. Davis' handwriting — yes, 
sir. 



465 

Mr. Hayes. Q. What was Mr. Davis' bnsi- 
ness? 

A. He was at that time Superintendent of 
the Amador mine, in Amador county. 



Direct examination of 

Frank S. Douty — Resumed. 

Mr. Hayes. Q. Have you those additional 
impression books? 

A. I have one of the impression books here. 

Q. Does that complete the impression books? 

A. That is all that I recollect. 

Q. I will ask you a question about the ac- 
counts of the Western Development Company. 
Are all of the accounts in the Western Develop- 
ment Company kept on a gold basis. I am 
excluding those two **cash received'* books that 
were devised by yourself; the entries in the 
Southern Pacific main contract, the suspense 
account, the expense account, the ** S., H., H. 
and C' account. In all of those there is no 
distinction between gold and silver. 

A. No; none in the general books. 

Q. Or in any of the books, except those two 
** cash received *' books that you devised? 

A. In more of the books, except the ** cash 
received.'' 



V -  •  • 

Q: You know the Occidental * and Oriental 
Steamship Company, do you not? 

A. I know of it; yes, sir. 

Q. Do you know the fact that an assessment 
was levied on the stock of that company ? 

A. Yes, sir. 

Q. Stanford, Huntington, Crocker, Hopkins 
and Colton each owned ten thousand shares of 
the stock of the Occidental and Oriental Steam- 
ship Company, did they not ? 

A. Thev each subscribed ten thousand 
shares. 

Q. Who paid the assessment on their stock? 

A . The Western Development Company paid 
one or two assessments. I am not positive as to 
the number, but the books will show. 

Q. Will you turn to your ledger, p. 574? Do 
you find an entry there i-elative to the Town of 

Tracv? 

«• 

A. ,Yes, sir. 

Q. Did the Western Development Company 
own property in that town of Tracy? 

A. No, sir. 

Q. Then what is that entry there; what does 
it mean? 

A. That account was opened by myself, 
under a misapprehension. The town of Tracy 
was owned, or the land on which the town of 
Tracv stood, was owned bv ** S., H., H. and C' 
When Mr. Underbill started down there I 



467 

opened an account in the Western Development 
Companj^'s books with that town. As soon 
as 1 discovered the error, I corrected it. 

Q. Do you know a gentleman named Par- 
sons in Oakland, against whom the Western 
Development Company had a claim for sub- 
scription made to it in connection with the 
building of the Berkeley Branch Railroad? 

A. Yes, sir. 

Q. When did he make that subscription on 
which that claim was founded? 

A. I cannot remember the date. I think it 
was sometime in 1876, however. 

Q. What amount was it that he had so prom- 
ised to subscribe ? 

Mr. McAllister. Was it a written subscrip- 
tion or verbal ? 

Mr. Hayes. I don't know. 

Q. Do you know? 

A. It was a written subscription. 

Q. Have you it? 

A. I have not. It was assigned. 

Q. It was still the property of the Western 
Development ('ompany, however, on the 30th 
day of April, 1879, and on the 27th of August, 
1879. Look at the minutes of August 18th, 1880, 
and see if it was not then that it was assigned 
•for the first time. 

A. [After examining record book of the 



468 

Western Development Company.] This is an 
assignment made August 13th, 1880. 

Q. Up to that time it had been the property 
of the Western Development Company ? 

A. Xo, sir. 

Q. When did it cease to be the property of 
the Western Development Company? 

A. Several years before that. 

Q. How? 

A. The settlement was made with Mr. Bar- 
ker and Shattuek; and the arrangement was 
a verbal one, bv which he should col- 
lect certain subscriptions; and the West- 
ern Development Company gave him these 
subscripticms to collect. He brought suit 
in several instances, and this suit against 
Mr. Parsons was one of the suits. It >vas de- 
veloped in evidence that it had been dragging 
along for two or three years, and that there had 
been no written assignment of the subscription, 
and at his attorney's request the Western De- 
velopment ('ompany prepared a written assign- 
ment to be used in that case. 

Q. Then, although the assignment in writ- 
ing and of record appears in the books of the 
Western Development Company only on the 
13th of Au^icust, 1880, vou sav it had in fact 

been made several vears before that ? 

«.' 

A. It had in fact been made several vears 
before that. 



469 

t 

Mr. McAllister. Q. Tlie assignment to 
whom ? 

A. ' To F. K. Shattuck and J. L. Barker, of a 
claim against George W. Parsons. 

Mr. Hayks. Q. When did you become the 
Secretary of the Pacific Improvement Com- 
pany? 

A. At its organization. 

Q. Do you remember a transaction between ' 
the Pacific Improvement Company and Jacks 
and Gonzalez, in August, 1879, in regard to the 
Salinas Vallev Railroad? 

A. I have a general remembrance in regard 
to it. 

Q. At that time the Pacific Improvement 
Company purchased from those three gentle- 
men 1955 shares of the capital stock of the cor- 
poration known as the Monterey and Salinas 
Vallev Railroad? 

A. I don't recollect the number of shares. 
There was a certain agreement made. 

Q. Will you get your record book? Do you 
remember whether that agreement of August 
7th, 1879, was in writing? 

A. I remember the agreement of Jacks and 
Gonzales with the Pacific Improvement was in 
wTiting. 

Q. Was there any corporate action in rela- 
tion to that matter to be found on the record 
book of the Pacific Improvement Company in 



470 

August, 1870, autliorizing anvVMxly on hehalf of 
the company to execute any written contract? 
Is there any corporate action on any subject in 
the vear 1879 in the record l>ook of the Pacific 
Ini j)rovenient Company ? 

A. No, sir. 

Q. Wliat is the last meeting in 1879 shown 
in the ret^ord book of the Pacific Improvement 
Company? 

A. November 9th, 1879. 

Q. What was the next meeting of the Board 
of Directors of that institution? 

A. F(4jruarv 19th, 1880. 

Q. Can you tcJl from the books of the 
Monterev & Salinas V^iUev Railroad that vou 
have here, liovv many sliares of stock were pur- 
chased and what was paid for them, on August 
7th, 1879? 

A. 1 don't tliink there was any. 

« 

(2. The transaction was on the 7th of August, 
1879, twenty days before this compromise ? 

A. I opjn.Ml an account witli Jacks and 
Gjnzales on tlie 2:}d of August, 187J). 

Q. I want to know what was [>aid, or given, 
or (»xch:ing<* I. or bartered, or whatever the 
transaction was, for that 1955 shares of the 
stock of that company? 

Mr. McAllistkr. Wliat books do vou find it 
in? 

A. Tliu Pacilic Improvomout Comijany. 



471 

Mr. McAllister. Is this stock of the Mon- 
terey & Salinas Valley Railroad the stock of the 
Western Development Company? 

Mr. Hayes. We sav it is. Your clients 
will inform you that it is not. 

Mr. McAllistkr. We do not see how a 
transaction on the 23d of August, 1879, between 
the Pacific Improvement Company and Jacks 
and Gonzales, could have any bearing on this 
Western Dev^elopment Company. We object to 
it as incompetent, immaterial and irrelevant. 

Mr. Hayes. That transfer of the working 
plant or material of the Western Dovelopment 
Company was made when? 

A. January 1st, 1879. 

Mr. Hayes. I propose to follow this up by 
showing that the consideration paid for this 
stock was the property of the Western Develop- 
ment Company. 

The Court. Proceed, if that is the object. 

Mr. McAllister. We take an exception. 

A. I am not positive as to the number of 
shares. *' Paid Henry* Cowell in cash, $130,- 
831.39.^^ 

Mr. Hayes. Q. That was when? 

A. August 23d, 1879. 

Q. Was that all that was given ? 

A. There is a regular account here follow- 
ing. It was charged to tlie joint account of 
Jacks and Gonzales. The first entrv is on the 



472 

credit side, whereby they are credited with four 
not^^s, aggregating $120,000. 

Mr. McAllister. Who is credited with four 
notes ? 

A. Jacks and Gonzales, on August 7th, 
1879. 

Mr. Hayes. Q. Who, on behalf of the Pa- 
cific Improvement Company, managed and con- 
ducted those negotiations for the purchase of 
that road? 

A. Mr. C. P. Huntington, I think, princi- 
pally. 

Mr. MpAllister. The purchase of the Mon- 
terey and Salinas Valley road ? 
A. . Yes, sir. 

Mr. Hayes. Q. Did the Pacific Improve- 
ment ('ompHuy, on the 7th of August, 1879, or 
at any time during August, 1879,own any South- 
ern Pacific Railroad first mortgage bonds? 

A. N<xt to my knowledge. 

Q. Do you know whether or not tlu^-e was 
paid for that stock that was pur(*hased at that 
time a quantity of Southern Pacific first mort- 
gage bonds? 

A. Not to my knowh^dge. 

C^. Was there any otticer, President, Secre- 
tiiry or Director of the Pacific Improvement 
(\)m|)any who took an active or any [)art in 
these negotiations for the purchase of that 



473 

stock? or was it managed entirely by Mr Hunt- 
ington? 

A. I think both the President and Secretary 
signed the agreement, 

Q. At Mr. Huntington's direction? 

A. Mr. Huntington managed the business, 
as I remember it. 

Q. You were the Secretary?. 

A. Yes, sir. 

Q. Did vou know what was the actual con- 
sideration of the agreement; what was the ac- 
tual consideration passed over to those gen- 
tlemen for the transfer of that stock? 

A. I suppose taking up this Cowell mort- 
gage was the consideration. Henry Cowell held 
a mortgage that amounted to the figures that 
I have read, principal and interest, on that Mon- 

terev and Salinas road. 

•/ 

Q. Have you the agreement of August 7th, 
1879? 

A. I don't think I have, sir. I don't think 
that was among the papers called for. 

Q. You are right in that, I have not called 
for it yet. Is it in your possession as Secretary 
of the Pacific Improvement Company? 

A. It is in mv possession as Secretary of the 
Pacific Imj)r()vement Company. 

Q. I will get it later, then. You had no pe- 



474 
*«>nal kni»wle«lge of this transaction, then, your- 

A- Xo further than I have stated. 

rKOSS-ExAMIXATIOX OF FrANK S. DoUTY. 

Mr. McAllister. Q. What was Mr. Col- 
lou'ii full name? 

A. I)avi<l Doutv Colton. 

Q. What relative were you of Mr. Colton's? 

A. T'ousin. 

C^. At whose instance did you come to Cali- 
fornia? 

A. At the instance of General Colton. 

Q. Who first gave you employment here ? 

A. Mr. Colton. 

(2- Who got your iK)sition in the railroad 
office, and in the Western Development Com- 
pany? 

A. (fcneral Colton. 

A. You were describing, in reference to the 
Western I)eveIopment (.'ompany, the mode of 
its op<*ration; and you said that no as- 
sessment was levied. Describe the mode in 
which the capital was supplied for the 
operations of that company. 

A. It wa- s:ij>plie 1 by Lc^land Stanford, C. 
P. Huntin;rton, Mark Hopkins, Charles Crocker 
and David D. Colton. 

C^. In what way? 

A. By th'j m jney or its equivalent deposited 



476 

with the Western Development Company, and 
placed to the credit of each account. 

Q. Each individual account ? 
.A. Eaoh individual account, of each of the 
individuals who made the deposit. 

Q. Those deposits made by those individuals 
formed the capital with which the Western 
Development Company carried on its opera- 
tions? 

A. Yes, sir. 

Q, But the amount of the deposit of each 
individual varies; some would have more de- 
posited there and some less? 

A. Yes, sir. 

Q. What was the arrangement by which the 
difference between those amounts was equal- 
ized? 

Mr. Hayks. Do not speak of any arrange- 
ment, unless you have personal knowledge of 
the arrangement. 

A. I can speak of the custom that prevailed 
in the office. 

Mr. McAllister. Q. What was the well 
recognized practice as to allowing interest on 
these deposits by these different individuals? 

A. Interest was allowed on each account. 

Q. At what rate? 

A. At varying rates. In the first year it 
was twelve per cent per annum; after the organ- 
ization of the Western Development (^ompany 



476 

ton [x?r cent, per annum; and later it was eight 
per cent, per annum: then seven per cent, of 
the stock of that company, then six p?r cent., 
which rate it draws now. 

Q. That constituteil the whole capital on 
which the Western Developnient Company 
carried on its operations; these depr>sit3 by 
those individuals? 

A. Yes, sir. 

QHatl anv work been executed bv the 
Western Development Company before you took 
any part in its active management? 

A. Yes. sir: they had l>een working six or 
seven months. 

Q. Bv'fore you took any active part in its 
management? 

A. Before I had anything to do with it. 

Q. Who were the officers of the Western 
Development Company during that time ? 

A. I was the President and Mr. Miller was 
the St-en-tarv. 

<^. What was Mr. Miller's full name? 
A. .l..!in Miller. 

Q. Tht-n h*' to«ik a very active part in the 
rnis!. ij-'ii -:it durini: the time he was S.^cretarv? 
A. H- w:i- :he manairer. 

^l ' •:. y.i- .*: »:h of January. ISTo, there were 
:r •—-:::_'* :r:i:->!''rrinj fn»m the Contract and 
r::. ii^.-- *' <:i:*i:ky : » th- Wt-stern Devvit^pment 



477 

Company ? Is that on the records of the West- 
ern Development Company? 

A. Yes, sir. 

Q. I think that has been put in evidence; 
the assignment of that contract. 

Mk. Hayks. Yes, sir — that is in evidence. 

Mr. McAllister. Q. That was a transfer 
from the Contract and Finance Company to the 
Western Development Company, wasn't it? 

A. The transfer of the Southern Pacific Con- 
tract to the Western Development ('ompany. 

Q. From the Contract an<l Finance Com- 
pany to the Western Develo[)ment Company? 

A. Yes, sir. 

Q. Alxmt the same time, did the Contract 
and Finance Company make a transfer of its 
plant — that is, its machinery, horses, wagons, 
etc. — to the Western Development ( -ompany? 
Was there anv transfer of that kind made? 

A. My im[)ression is, that there was about 
that same time; the books will show, however. 

Q. Did Mr. (Jolton have full knowledge of 
those proc*eedings of transfer between the (con- 
tract and Finance (-ompany and the Western 
Development Company ? 

Mr. Haves. Inasmuch as the witness does 
not pretend to have any knowledge of the tran- 
saction, he cannot aui^wer as to whether Mr. 
Colton had. 



478 

Mh. McAllister. Q. Did you have any 
knowledj^e of it yourself? 

A. I had no personal knowledge. I was 
not in the office. 

Q. When did you first begin to take an 
active share in the operations of the Western 
Development Company? 

A. Julv, 1875. 

Q. After you began to take the active man- 
agement there, what part did Mr. Colton take 
in managing the affairs of the Western Develop- 
ment Company, as c(impared with the part 
taken bv the defendants in this case. Who was 
the more active, Mr. Colton, Mr. Crocker, Mr. 
Stanford or Mr. Huntington, in the management 
of the affairs of the Western Development Com- 
pany? 

A. (leneral CoHon was the most active. He 
was the one I invariablv went to on all matters 
pertaining to the Western Development Com- 
pany. 

Q. Did he frequently attend the meetings of 
the Directors of the company? 

A. He lias attenrled meetings. 

Q. Did any of the defendants in this case 
ever attend the meetings of the Directors of the 
Western Devehjpment Company? 

A. I don't recollect that anv of them ever 
(lid. • 

Q. Ditl not Mr. Colton take a more active 



479 

and closer management of the affairs of that 
company than any of the defendants in this 
case during the time of your administration? 

A. I endeavored to so state. He was the 
one that I invariably went to. He was my 
principal adviser in all matters pertaining to the 
management of the Western Development Com- 
pany. 

Q. Did he frequently call upon you for state- 
ments from the books of the Western Develop- 
ment (Company? 

A. Yes, sir. 

Q. Did you furnish him those statements? 

A. I alwavs did. 

••■ 

Q, Did he have a more intimate knowledge 
of the affairs of the Western Development Com- 
pany during the time of your management than 
any of the defendants in this case? 

A. 1 cannot state as to the amount of his 
knowledge. He took more interest in the affairs 
of the Company, and should have been a bet- 
ter posted man, I suppose*. 

Q. In speaking of the various corporations of 
which vou have l)een a Director and officer, 
mentioned in your Direct Examination, have 
not all of those corporations, during the time 
you have been connected with them, retained 
their corporate organization? 

A. Yes, sir. 



480 

Q. Have they not always Iiad stock and 
stoc'kholtlerfl? 

A. Yos, sir. 

Q. Hiive they not always had a Roard of 
Directors? 

A. Yt's, sir. 

Q. Have they not ahvays had corporate offi- 
cers, and a ooporate seal? 

A. Yes, sir. You refer to a President and 
Hecretary, by "cor|)orate c)ffieers" ? 

Q. Yes, sir. Have they not always trans- 
acted their Imsiness as a corporation? 

A. Yes, sir; so far as I recollect. 

Q. Have they not kept separate books? 

A. Yes, sir. 

Q. And by .separate bookkeepers? 

A. Xot always by separate bookkeepers, for 
[ kept three or four sets myself. 

Q. Separate st-ock? 

A. Separate stock. 

(j. And tlie officers of some of the corpora- 
tions were tofiether, and others had separate 
offices? 

A. All of the cjm;)anies of wliich I am Sec- 
retary an- in oTie r<K>m, ('xcepting the Rocky 
Mountain (.'oal and Iron Ciniipany. The Pa- 
cific Const oHice of thatis in that room, but the 
main office is in Wyominfi Territory. 

ii. Was Mr. Colton familiar wi'h the man- 
ner in which tliese various corporations, during 



4S1 

the time of vour connection with them, trans- 
acted their business? 

A. Yes, sir. 

Q. Do you recollect at what time Mr. Col- 
ton became the Financial Director, or received 
that title? 

A. I do not. 

Q, Was he at one time the Financial Direc- 
tor of the Central Pacific Railroad Company? 

A. He was. He used to sign letters in that 

wav. 

Q. From the 1st of July, 1875, down to the 
death of Colton, who attended to the money af- 
fairs of the Western Development Company 
and had more particular charge of them ? 

A. He did, as well as other affairs of the 
Western Development Company. I invariably 
went to him on all matters pertaining to money. 

Q. On all maters when you wanted counsel, 
direction or advice, you went to him ? 

A. Yes, sir. 

Q. Was thut also true of other corporations 
of which you were a Director or an officer, that 
you went to him for advice as to those corpora- 
tions? 

A. Yes, sir. 

Q. More frequently than to any of the de- 
fendants? 

A. Yes, sir. 

Q. Did you not frequently make entries on 



I 



I 

! * 
f 

I 

I 

I 



482 

the Ixjoks of the Western Development C<im- 
pany hy direction of Mr. Colton ? 

A. r have made entries on the hooks of the 
Western Development Company by the direc- 
tion of Mr. Colton. 

Q. Were not some of these entries ordered 

hv (xeneral Colton eontrarv to your own views 
• • • 

j as to what the proj)er entries should be ? 

j [ Mr. Havks. I object. Take up the particular 

entrv if vou desire to show anvthin«j of that 
kind. 

Mk. McAli.istkk. I propose to ask him the 
j^eneral question and then to follow it up by 
taking the instance. 

Mr. Hayks. I object to the general (|uest ion. 

Thk CoiRT. You are proposing now t(i ask 
him as to such instances as he does rememl>er ? 

Mr. McAllister. 1 will follow it up by that 
question. 

TheCoirt. I will allow the question. 

Mr. Haves. He does not i>r()pose now to ask 
for s|K.»cial instances, but to ask the general 
qu(»stion first. 

Mr. McAllister. That is it. 

Mr. Haves. I objcH't to the general ((uestion. 
Let him take up special instani^c^s. and then it 
might be pro|)(»r to ask if the witiK^ss remem- 
bers onv otluTs. But to undertake to make a 
sweeping assertion of this kind, without in the 
""•St place showing any instance of it, I don't 



483 

think is proper or that they are entitled to it, 
and I object to it as incompetent, irrelevant and 
immaterial. 

The ('otrt. I don't think it is improper on 
cross-examination. 

Mr. Hayks. We take an exception. 

Mr. McAllister. Q. Were not some of 
these entries ordered by (leneral Colton, con- 
trary to your own views as to what the proper 
entries should be. 

A. I recall two entries. 

Q. What instances are those? 

A. One was taking the stock of the National 
Gold Bank out of the books and giving it to 
General Colton, and taking in exchange there- 
fore a due bill. 

Q. A due bill of whom? 

A. Of (leneral D. D. Oolton's; and not enter- 
ing the due bill on the books. 

Q. Whv <lid vou do that ? 

A. Bv his direction. 

ftr' 

Q. Was that National G.>ld Bank sto?-k on 
the books of the Western Development Com- 
pany ? 

A. It was originally. 

Q. Have you with you a copy of the com- 
plaint in this action? Turn to Exhibit K and 
see if National Gold Bank stock is mentioned in 
that Exhibit, on page 50. The National ( fold 
Bank and Trust Co., 37^ shares. Is that the 



4M 

Na*,i'»im. 'i.»jC JJaJjk •t'j'rk **i whieJj ir**a 

m 

ijv»v ♦;;»*'ti: i ? f^ ^^ 

<^. W'i^/^ •-v^'k i»'a- tliat? Wa.^ that -»u the 
.W/Jk* '/ ih'- ^V^'i^m I l^'V^-lopifK-nt Company? 

A. Ji ifta* mj lh<- U^#kj^ of the Western Iv*- 
vi-j'^jy;;j^ijt ^''>jii}/afjy. Tlie original entr\' was 
^r^;Jvi'i Vy 4^/hii Mill<-rV ^ij^[>en^e ac-c^mnt. and 
^:.^r^^^ v# tJj*- F^ifiit \ational Gold Bank stock 

^/ !>*/ vo-3 know Ik>w nianv «har€;#« of the 
F,r** Sh<,uir^\ ^/old Bank were included in that 

^^. T\i^'r^' Iiad U-^mj. t Fieri, a transfer from 
John MilN'r* -ii*|K'ij?ie aecoiint to the ere^lit of 
the UV-t<-rri Develripnierit (^'ompany KX) shares 
of the F'ir.-t National Gold Bank stock? 

A. Thr- i-ntrv was in the hooks of the West- 
ern I>ev«'lopTiieiit Company. A credit in the 
\t4Htk> of the Western I)evelo[>nVent Company 
was ^iven to John Miller's suspense account, 
and charj^ed to the First National ( Jold Bank 
stock account. He directed that I should take 
*he stock out of the books. Mv method of 



485 

* 

doing it was to credit the National Gold Bank 
stock account and charge John Miller. 

Q. He then took the stock out of the books 
and put his due bill there in place of it ? 

A. Gave me his due bill in place of it at the 
market value at that time. If I remember 
rightly, it was $8,500. 

Q. What was the subsequent history of that 
transaction ? 

A. I did not enter the due bill in the books, 
but put it in the vault with other securities. 

Q. You did not enter that due bill in the 
books bv his direction ? 

A. Bv his direction. 

Q. What was the subsequent history of that 

due bill? 

Mr. Hayes. I object to that as not cross-ex- 
amination. I have no objection to their speci- 
fying entries made in the books at the direction 
of General Colton. 

Mr. McAllister. We desire to show that 
property was taken out of the books, that his 
own due bill was substituted, and that no entry 
was made of the due bill bv his direction. 

Mu. Haves. That the witness has alreadv 
testified to. 

Mr. McAllister. I want a further historv of 
the transaction. 

Mr. Hayes. I submit that it is not cross-ex- 
amination. 



486 

The Col'kt. Unless the further history of 
the transaction shows their method of keeping 
their books. 

Mr. Hayes. We have got to the last entry 
in connection with it now. 

Thk Court. Unless counsel claim that, I 
should think it would not be proper evidence. 

Mr. McAlx-isteir. I have not the least idea 
what the historv of this transaction was. 

The Court. I suppose if it was n>erely to 
show that Mr. Colton got money, or obtained 
90 much of the assets, it would hardly b? proper 
at this time. 

Mr. McAllister. It seems to me that everv- 
thing relating to the entries in these books is 
competent; that it is not necessary that we 
should confine ourselves to entries made bv his 
direction. Entries omitted bv his direction are 
quite as significant. 

The Court. I understand there is no objec- 
tion to th(» \>r(H)( so far as entries omitted or 
made in the book ^re concerned. The objection 
is, to following it up simply to show that Mr. 
Colton obtained certain funds or assets. 

Mr. McAlllster. I want to get the further 
historv of this due bill. Perhaps it came back 
into the books. 

Thk Court. You can ask him if there is 
anything furth(*r as to that matter in the books. 

Mr. Haves, To that I have no objection. 



487 



,<^ ■• 



Mr. McAllister. Q. Did that due bill 
come back into the books again in any way ? 
A. No, sir. 

Mr. McAllister. It seems to me that we 
are entitled to ask him what was the further 
history of that due bill as legitimate cross-ex- 
amination. 

The Court. The objection is sustained. 

Mr. McAllister. That restricts us very 
much in the cross-examination, and we will 
therefore reserve an exception. Our objection 
is on the ground that we have the right to fol- 
low up the further history of this due bill, and 
to show how it resulted as proper cros. - }xamin- 
ation upon this matter, and we take an excep- 
tion to your Honor's ruling. 

Q. You have spoken this instance of First 
National (toUI Bank stock. , Were there any 
other entries in the books directed by General 
Colton and made by yourself contrary to your 
own views of what the entry should be? 

A. The only other instance I recall is, charg- 
ing the San Pablo and Tulare contract with 
$2300 which grew out of this due bill. 

Q. What? 

A. It grew out of this due bill. 

Q. What was that $2300 in reference to the 
San Pablo and Tulare Contract? I don't un- 
derstand it. 



488 

.\ri{. FTayer. Turn to vour books an J see the 

<*ntrv. 

Mr. Mc a luster. Q. No, sir; state what 
vou know aliout it without usiiioc the entrv. I 
ask you the general question what there was 
about this ^San Pablo and Tulare Contract of 

Mr. Hayes. I object to the gjneral question 
on the ground that the witness, testifying as to 
the entries in the books, should show the 
entries. 

TuKl'OrRT. If the entries show an answer 
to tb(* question — I do not suppose they would, 
though — ^\'ou will be permitted to ask for the 
entrv itself. 

Mr. Hayks. His object is to show (J^Mieral 

Colton's control over the books. W a witness 

Hays this cMitry [i>ointing to an entry on the 

books) was made bv me bv order of (leneral 
J • • 

< /olton, it is all the evidence that thev are enti- 
tied to. 

TiiKCorRT. No, I don't sav that. There is 
no objection to the witness giving the entry, 
thmurh, if he has it. 

Mr. McAllister. Q. You say there was an 

entrv then* which vou made at his direction, 

• « 

contrarv to vour own ideas. What was that 
entrv ? 

Mr. Hayks. [ object to the question, unless 
the witness produces the entry. 



489 

The Court. If vou have the entry here, vou 
had probably better produce it. 

Mr. McAllister. If he can recall it, he can 
state without producing the books. 

Mr. Hayks. If vou can state the entry, I do 
not insist upon the production of the books. 

Mr. McAllister. Q. I do not care about 
the entry. I want \'ou to explain this transac- 
tion which you weie directed to do by (Jeneral 
Cohon; I want liis direction to you, and what 
you thought ought to be done. 

Mr. Hayes. That is what you should intro- 
duce as a part of your defense in the case. 

The Cocrt. I will allow that question as to 
what direction Mr. Colton gave him. 

Mr. Hayes. We take an exception. 

A. I paid him $2300 on a voucher, and 
made out tlie voucher according to his direc- 
tions, charging it to the San Pablo and Tulare 
contract, if I n^member rightly. He had ex- 
plained previous to that, that it \vas a part of a 
sum of mon(*y that he had expended for various 
purposes, the particulars of which (rovernor 
Stanfonl knew. 

Mr. McAllister. Q. Did you see Gov- 
ernor Stanford about it ? 
A. I did not at the time. 
Q. Did yoil see him afterwards about it? 



490 

Mr. Hayks- I object to his interviews witli 
Governor Stanford about it. 

Mr. McAllister. Q. This original due bill 
was how much ? 

A. $8500, if 1 remember rightly. 

Q. What became of the difference between 

til is $2300 and $8500? 

A. He said at that time that he had ex- 
pended an amount which was largely in excess 
of the due bill for various purposes; that he de- 
sired me to figure the interest or the dividends 
that had been paid on that stock up to date, and 
give him the account. 

(2- You mean the dividends on the sto:;k o 
the First National Gold Bank? 

A. Yes, sir. I figured the interest and 
added it t) the amount of the due bill. The 
differonc3 thsn b^twjen that am >unt so pro- 
duced, and what he said he had expended, was 
about $580) balance, if I remember rightl}^ in 
Mr. C )lt ):i's favor. ()f t!i it am )unt h;? took 
$2300 at the time. And he had me make two 
vouchers, one for $2300, and the other for $3000. 
He took the $2300, and the voucher for $3000. 
That voucher was i)robably among his papers at 
the time of his death. 

Mu. Havks. I ask that the last statement of 
the witness, as to where it was at the time of his 
death, be stricken out. 

The Court. Strike it out. 



491 

Mr. McAllister. Q. When did you last 
see that voucher for $3,000? 

A. In the latter part of August, 1878, I 
think. 

Q. I still do not understand. You say vou 
made out two vouchers by his direction, one of 
three thousand dollars, which he kept? 

A. Yes, sir. 

Q. That did not go upon the books, did it? 

A. No, sir; that did not go upon the books 
because it had not been paid. 

Q. Then there was another voucher you 
made out of $2,300, at his direction? 

A. Yes, sir. 

Q. That you charged to the San Pablo and 
Tulare contract ? 

A. Yes, sir. 

Q. Do you know any reason why that should 
be charged to the San Pablo and Tidare con- 
tract, excepting the statement of Mr. Colton to 
vou ? 

A. I know of no reason excepting his direc- 
tion. He remarked at the time that the expense 
account was too large, anyhow, and he wanted 
to put it in somewhere where it would not show 
so much. 

Q. And you never saw that voucher of 
$3,000 again? 

A. No, sir; that was never paid. 

Q. That First National Gold Bank stock, 



492 

did that HVf-r<:i>riit* back to the WVstem D^.*veIop- 
merit ^'onipany ? 

Mr. Hayes. I object to that as not cn^ss- 
examination. 

Mr. McAllister. We want to show that it 
ne\>r came back. 

Mr. Haves. The witness has testified there 
were no further entries on that subject on the 
b<H>ks. 

The ^'ocrt. I understand that he has alreadv 
answerer I. but he can answer a^ain. He savs it 
never di<I. 

Mr. MrALLL^TER. Q. That National Gold 

Bank sttn-k never did go back to the b<>:>ks of 
the Western I^^velopnient Company? 

A. No. sir. 

<2- You have s{><)ken of an entry niarle in 
reference* ti> the ^ Colorado Steam Navigati<.>n Co. 
I>idn't vou make that entrv at his instance? 

A. I don't rememfn'r the entrv. 

<2' Von eiitere<l up the Cob>rado and Steam 
Navi;iation Company, didn't you. as an asset of 
the We-itf^ni [>^velopm^^nt <l^>mpany? 

A- Vf"^ sir. I did. I opened an account with 
th»* <'o!oraI> Steam Naviiration Company, at 
th^* ririr- of the purchase. 

<2. \t who-i * direction was that done? 

A. Mr. r'olton's. 

O. iMdn't vou know at that tim-:^ that the 
stixrk of the cunipany had been purchased by S.. 



493 

H., II., C. and C, and at the time yon made that 
entry charging that as an asset of the Western 
Development Company, didn't yon know it had 
been pnrchased by Stanford, Huntington, Hop- 
kins, Crocker an<l Colton? 

Mr. Hayks. Only speak as to your personal 
knowledge. 

A. I did not clearly understand it. I was 
governed by his directions in the matter. They 
had all of the stock. 

Q. Haven't you spoken in your direct ex- 
amination of **S., H., H., C. and C' receiving all 
of the stock of the Colorado Steam Navigation 
Company? 

A. Yes, sir; that is as I have just stated; 
they had all of the stock. 

Q. And vou will recollect you were asked 
whether vou (Altered that Colorado Steam Navi- 
gation Comj)any as an asset of the Westi^rn D.^- 
velopment (.'ompany when all of the stock had 
passed to S., H., II., C. and C? 

Mr. IIavks. I asked him no such ([uestion. 

Mr. McAllistkr. Yes, vou did; how he came 
te enter that, when thev owuchI the stock. 

A. I opt^ned an account with the ('olorado 
Steam Navigation Company by direction of Mr. 
Colton, chargt?d it with its purchase price and 
credited it with whatever was received on ac- 
count. 

Q. Didn't you, at the time you made that 



494 

entry, know that that purchase had been made 
by " S., H., H., C. and C?" 

A. I cannot sav that I knew that that was 
the case. I knew that the stock had been 
issued to them individuallv, and I also knew 
that they had given their individual notes for 
the property. 

Q. Why did you nmke that entry as if the 
Colorado Steam Navigation Company had been 
purchased by the Western. Development Com- 
pany? 

Mr. Hayes. He has alreadv stated that he 
made it bv order of Mr. Colton, and that is all 
that you are entitled to go into. 

Mr. McAllister. I would like to have him 
repeat that. 

Q. You made that entry by the direction of 
Mr. Colton in that way? 

A. Bv the direction of Mr. Colton. 

Q. Did you make any entries in reference to 
the Occidental and Oriental Steamship Com- 
pany by the direction of Mr. Colton in the books 
of the Western Development Company? 

A. The first entry in the account of the O. 
and O. Steamship Company was made before I 
entered the* office. I r(Mneml)(»r having spoken 
to Mr. Colton about the account, charging it 
oflf* to the individuals. 

Q. Wlnit did he say? 

1. He said: *' Oh no; let it alone. It is 



495 

well enough where it is," or words to that effect. 
Q. You entered it on your books as an asset 
of the Western Davelopment Company and kept 
it on your books in that shape? 

A. As a debt due the Western Development 
Company — yei^, sir. 

Q. What were the proportions in which 
Stanford, Huntington, Hopkins, Crocker and 
Colton owned their portion of the stock of the 
Occidental and Oriental Steamship ('ompany? 
What was the proportion in which they owned 
that stock? 

A. Half of the capital stock was owned by 
Stanford, Huntington, Hopkins, Crocker and 
Colton, one-tifth each; one-fifth of one half. 

Q. That is of the stock held by them, one- 
fifth each? 

A. Yes, sir — or they were subscribers to 
one-fifth each? 

Q. The interest of Mr. Colton then, in that 
asset, would be one-fifth of what they owned; 
wouldn't it? He would have one-fifth of all 
their stock in the Occidental and Oriental 
Steamship Company? 

A. He would have one-fifth of the interest 
held in California of that company. 

Q. His interest in the Western Development 
Company was one-ninth? 

A. Yes, one-ninth. 

Q. By keeping that stock on the books of 



496 

(Ik* \Vest(*rii Development Company, he was 
making one-ninth carry one-fifth, wasn't he? 

Mu. Havks. I object to tliat as not cross-ex- 
aminatioii. That is argument. The witness 
lias ti^stified in regard to this, that he found the 
account in that particular shape when he went 
thens and that the dircK^tion of Mr. Col ton was 
to let th<» account stand as it was. 

TiiK CoiHT. I understand that is all that he 
kn )Wh: do Tt know as there is any harm in his 
aiiHwering the (juestion. 

Mu. McAi.MSTKU. Q. I will ask you what was 
the edecf of ke(»ping that asset of the Occiden- 
tal and Oriental Sti^amship (\mipany on the 
Ijooksof ihf Western I)eveloi)m(»nt Company 
$iH owiM*d h\ them, instead of charging up the 
pun'IniHi* pri<'e to the indivi<lual accounts of S, 
II. II, (\ and i':i 

Mu. II\vi:s. l>oes the Court permit the 
(pieHtioii y 

Tur; (*tn \n\ I tjon't see anv harm in it. 

Mu. IlwKM. W'etake an exception. 

A. I'riM'irt'jy, 1 1 would mike one-ninth 
carry a llClh. 

ii. Whiil \\i*Vi' iIm* railroad corporations in 
which Slimlord; Ihintinglon, Hopkins and 
Crofker wiM'* inhTt^-^I'Ml, in which C.Mioral Col- 
ti)n had no inhMi.^l ? 

IIavkh, I ohjeri lo thnt as irrelevant 
Hill. 



497 

Mr. McAllistkr. We claim hero is a part- 
nership, and we want to show that tliese parties 
were not partners, but w^ere simply associate 
stockholder^', and that there were various rail- 
road companies in the management of these 
other gentlemen in which Mr. (Jolton had no 
interest, and 1 want to show what those com- 
f>anies were. 

The Court. I think it would be proper to 
show their relations WMth each other. You mav 
show all their relations and all thev did, but it 
does not follow that it proves what you say. 

Mr. Havks. We take an exception. 

Mr. McAllister. Q. What were those cor- 
porations in which Mr. Colton had no interest, 
and in wdiich those other gentlemen were in- 
terested? 

Mr. Haves. If vou know of vour own 

«• « 

knowledge. 

A. I ha[)pen to know two, of my own 

knowledge, and the others to my best knowledge 

and belief. The Market Street Railwav and 

the Potrero and liav Y'ww Railwav. 

•• «• 

Q. And the Sacramento and Placerville 
Railroad ? 

A. Not to my knowledge; he w^as not in- 
terested in that. 

Q. The Stockton and C'opperopolis? 

A. The same answer. 



498 

Mr. Hayes. Q. The Potrero and Bay View 
is a street railroad? 

A. Yes, sir. 

Mr. McAllister. Q. The Oakland Water 
Front Company? 

A. He had no interest in that. 

Q. The California Street Cable Road; had 
Mr. Colton any interest in that? 

A. Not to my knowledge. 

Q. What was the proportion of Mr. Colton's 
interest in the Western Development Company? 
He had one-ninth? 

A. Yes, sir. 

Q. And the other parties each had two- 
ninths ? 

A. Yes, sir. 

Q. What was his interest in the lone Coal 
and Iron Company ? 

A. One-fifth 

Q. And his interest you have mentioned in 
the Occidental and Oriental Steamship Com- 
pany was one-tenth of the whole. 

A. One-tenth of the whole. 

Q. And one-fifth of the part that these 
parties owned? 

A. Yes, sir. 

Q. His interest in the Rocky Mountain Coal 
and Iron Compan}^ was determined by the 
number of shares he owned, wasn't it? 

A. Yes, sir. 



499 

Q. His interest in the capital stock of the 
Central Pacific Railroad Company was deter- 
mined by the number of shares he owned, and 
also his interest in the capital stock of the 
Southern Pacific Railroad Company? 

A. It was, as far as I know — yes, sir. 

Q. You don't know the number of shares in 
the Central Pacific Railroad Company, or the 
Southern Pacific Railroad Company; the capi- 
tal stock? 

A. I do not. 

Q. Who was the Secretary of the Central 
Pacific Railroad Company ? 

A. E. H. Miller, Jr. 

Q. Of what companies was J. L. Willcutt 
the Secretary? 

A. The Southern Pacific Railroad Company, 
the Market Street Railway Company, and the 
Potrero and liay View Railroad Company. 

Q. Of what companies was C. E. Green the 
S3cri3tary? 

A. The lone Coal Mining Company. 

Q. What companies was J. O. B. Gunn the 
Secretary of? 

A. The California Pacific and the Northern 
Railway ('ompany; the San Pablo and Tulare 
Railroad Company; the Amador Branch Rail- 
road Company; the Berkeley Branch Railroad 
Company; the Sacramento and Placerville Rail- 
road Company; and he may haye been Secre- 



• 500 

tiirv of one or more. I don't retnoinIx>r now. 

Q. Was not Mr. Huntington interested in 
railroads in the East, in which Mr. Colton wa? 
not interested — ^the Chesapeake and Ohio? 

A. Mr. Colton had no interest in that so far 
as I know. 

Q. The different Secretaries of these various 
compani(»s, each man looked after the interests 
of his own company, didn't he? 

A. Yes, sir. 

Q. Did you ever know of any copartnership 
name for Stanford, Huntinjijton, Hopkins, 
Crocker and(.'olton? 

Mr. Hayes. 1 ohject to that, as irrelevant 
and immaterial. The allegation of the com- 
plaint is that there never was any partnership 
name. Tlu»r(» is no issue U{>()n that suhject. 

Mr. M(\\llister. We will take down the ad- 
mission that there was no partnership name. 

(). Did von ever know of anv contracts exe- 
cuted in any partnersliip namo hy any of these 
parties? 

A. I did not. 

Q. I>id voii ever know of anv notes executed 
in the partn<M's]ii[) name of any of these parties? 

A. I nev(»r knew of anv. 

ft 

Q. Whenev(»r M(»ssrs. Stanford, Huntington, 
Hopkins, Oocker, or Colt^)n signed notes in the 
affairs of thes(» various companies, did they 
lys sign it in their individual names? 



501 

Mr. Hayes. If you know. • 

A. All of the notes I ever saw were signed 
?iathat wav. 

Mr. McAllister. Q. In their individual 
names? 

A. In their individual names. 

Q. You have spoken in your testimony of 
certain blanks in the record book of the Western 
Development Company. In whose charge was 
that record book at the time these blanks were 
left ? 

A. In my charge primarily. 

Q. Who made the entries in the book? 

A. Thav were made by various people. 

Q. I speak of the record book? 

A. Yes, sir. 

Q. Your attention was called to certain 
blanks in the record book of the Western De- 
velopment Company. Who left those blank 
pages there? I 

A. I left them, or the Secretary of the com- 
pany. 

Q. You, or one of your subordinates ? 

A. Yes, sir. 

Q. Whv did vou leave them? 

A. For no particular object that I know of. 
There was no object. 

Q. Did any of these defendants ever exam- 
ine the record book of the Western Development 
Company to your knowledge? 



Mr. ITayks. I ol)j(>ot to tho question as irri^I- 
^vant an<l iininaterial. 

TiiK Col KT. Tho ohjoctitui is ov^iMTuled. 

Mk. HAVh>. We take an exception. 
A. Nut to my kno\vle(lj»:(». 

Mk. M(;Allistkr. Q. Did you ev.M- reeeive 
any direc^tions from anv t)f the defendants, or 
ftom Mark Ho|)kins:^. to leave those bhmks in 
tlie record hook ? 

A. No. sir. 

<2. Who was the S.»cretarv at th:* tim* th^Sij 
hhinks wen* left ? Wasn't it Mr. liutler ? 

A. It wMs Mr. HuthM'. I think. 

(^. Was lu» the man that was finally dis- 
C'liarjr(M| ? 

A. No. sir; he is still in tlnMr (Muploy. 

(^. Who was the man discharged for drunk- 
enness? Mr. Irwin, wasn't it? 

A. Yes. sir. 

C^. 1 noticed that your attentitin was callcMl 
to certain incornn't stat(»ments in that r(»conl 
book: that tlu* mimit(»s of om* meetin*:: would 

« 

he writtiMi u|> in that re(*onl hook after a subso- 
(|Uent m(M'tin<i had Uhmi n^corded there. Who 
was that done l»v? 

A. Hv the S(»cretarv. Th(»se meetin<rs were 

• • «^ 

writtcMi up hv mvsi^lf or hv the Si^cn^tarv at the 
tim'/* \\\^\ W(»n» held, on slips that w.»re laid 
aside. t(^ he embodied in the minute bo(»k at 



some more conveniont time. He got tlie wrong 
slij) in first this time. 

Q. Was tliat a mere mistake, or was it ii)- 
teiitioiial? 

A. It was a mere mistake. It would Ik? ab- 
sunl to suppose* that was inteiitiimal. 

Q. Did the defeiulants or Mr. Hopkins have 
anything to do with it? 

A. No. sir. 

Q. You spoke of Mr. Phillijis acting as a 
Director of the Western Development ('Ompany, 
aft<*r he had ceased to he a Dire<*tor. How did 
that happen? 

A. It was an oversigiit of mine in calling 

the Directors together. I sup|)Ose. He ha<l 
served as a Din»ctor up to that tinn*: and I had 
lost sight of the fact tliat lu* no longer had any 
stock stainling in his name, which wtiuld dis- 
<jualify him. 

(^. That was a mere mistake of yours? 

A. That was a men* mistake of mine. He 
atteneied s<»V(M*al me(»tings Injure I disi'overed 
that. Hut then* was a <|uorum without him at 
all of those meetings. 

(). Who was tlie S(*cretarv of the lierkelev 
Branch Railroad? 

A. W. W Huntington is now. 

l^. Who was the Secretary before W. \\ 
Huntington ? 

A. J. U. li. Ciunn. 



d04 

Q. You >pe«ik of certain st^jck ^io page 9") of 
the (irinteil reciini. of the Berkeley Branch Rail- 
n.iail. an«i say that when you went to get that 
st.K*k fi»r the Western I>eveli>[»nient </om- 
pany. \oA found it had been isc?iie«l in the 
pn»}M»rtK»n> tif one-fifth each t«i Slanfonl. Hun- 
tinirtor, H«ipkins. Cnx-ker and Colton. Can 
vt»u tell nie whv that was done? 

A. I cannot. 

i^- V«»;i don't knowT 

A. Nu. sir. I was not an officer of that com- 
jKiny. 

U. But vou di«l as ><»>n as vou found that: 
ch-ir^v- t?i-*:ncich with their inlividuil a.-j" joats. 
did \x»u not T 

A. I chanr^il the ai-ctnint at the par value, 
to each iuvlivitluul a'.wHiiit. 

Q. n.iVv- vui anv idea or kiiowle^ige that 
tliese defen hints wert^ aovjuaiute^l with these 
irr<*,xularitie> in t!i- Ux^ks of the Western De- 
velopment i 'oinpany ? 

Mk. Hvyks. I obitvt to thv ivleas of the wit- 
ness. 

Mk. MrAiiisiKK. I want t* kti.»\v whether 
Y«.Hi know tliat thv^sv' blanks or irre:^uhirities in 
the* b » »k< i»f th ^ We-tera IVvoI>'ku/:u t">ru- 
jKiny did or did nv*t ever ovMtio to the knowled*n? 
of the ilcfendants, 

A, Tu \v h 1 1 no k»i nvL^ U \ s;i tar as I knew 



505 

Q. On page 107 of the printed* transcript, 
you speak of that California * Pacific Railroad 
stock which was purchased by Mr. Huntington 
in New^ York, and at a cost of $6131.07. You 
said, if I recollect right, that you did not know 
how to charge that, and that you put it down 
as an asset of the Western Development Com- 
pany. 

A. Yes, sir; the Western Development Com- 
pany paid for it. 

Q. The Western Development Company 
paid for it and you subsequently charg3d it to 
S., H., H. and C. ? 

A. Yes, sir; to whom it belonged. 

Q. When you got further information ? 

A. Yes, sir. 

Q. Now that stock was placed upon your 
copy of the assets and liabilities of April 3Qth, 
1879, wasn't it? 

A. Yes, sir. 

Q. But it was omitted by Mr. Brown in 
making out the original of Exhibit E. It is 
not on Exhibit E. 

A It is not on Exhibit E. 

Q. You have spoken here of the Western 
Development Company being engaged in build- 
ing and constructing various works. The 
steamer Oakland you say they biiilt? 

A. Yes, sir. 

Q. Were they not paid for that ? 



506 

A. Yes sir. 

l^. You say tlio Western Development Com- 
p.iiiy re^)ain^'l certain steamers. Were the}' not 
paid for ho doing? 

A. Yes, sir. 

Q. You say the Western Development Com- 
|mny rxpfUtliMl inoney in the construction of 
\\w houses of Crovernor Stanford and Mr. Hop- 
kins, and to some extent of Mr. Crocker's. Were 
lh(»y nt>t paid for all that ? 

A, Yes» sir. 

t^. Wen* not thi>s<* gentlemen charged in 
their indivitlual accounts tV>r all monevs ex- 
pendtMl for thiMr ivsjnvtive houses on the books 
of tht» Western iVvelopment iVmpany? 

A. Yes, Mir» Whatever was s|>ent by the 
Westoru l>evelopn\ent i\uupany was charged 
to \\\v\\\. 

t^> hid they not at that time have large 
«iuount«* to their e^^nUt in the tn^asurv of the 

\ In ihp h\»ok^ \^f the Wcsreru Dv>velop- 
u\eut t \Mu|Mn\ \v\MH^ lar^iv^ oiwlits t.^ their ac- 
eo\uU>» 

^i \\sA \\w\ ^\\\\\A\ ;\\\\ xuK<:an:iaUy drew 
Uj^^^u th>»:ii^ *i»> Iil5 t\M h ul hu< th^^<^ h>u>i^> ? 

A \ oa sM 



508 

Douty to W*. V. Huntington. I will ask you to 
look at that letter [showing.] 

Mr. Hayes. What is the number of that 
book? 

A. It is the last letter book of the company. 
I don't see any number upon it. 

Mr. McAi^uster. Q. Is that a letter writ- 
ten, by j^ou at that date to W. V. Huntington as 
the President of the Northern Railway Com- 
pany? 

A. It is a press copy of a letter from me to 
Mr. Huntington as the President of the North- 
ern Railway Company. 

Mr. McAllister. Please read that letter. I 
will put that in evidence. ' 

[The witness read said letter, which was 
marked '^Defendant's Exhibit A — Douty/' and 
is as follows: 

*^ DEFENDANTS' EXHIBIT A— DOUTY." 

Sept. 3d, 1879. 
W. V. Huntington, Esq., 

President Northern Railway Co., 

Sir: 

Owing to the very great cost of constructing 

that portion of the Northern Railway between 

Benicia and Fairfield, which has far exceeded 

the estimate of your engineers, this company 

has suffered excessive loss in prosecuting the 

work, amounting in the aggregate to six hun- 



o]0 

• « 

previous to the date of your letter of September 
3rl. 1879? 

A. No, sir; not to my knowledge. I had 
presented none. 

Q. Had the building of that road been a 
large expense to the Western Development 
Company, much larger than anything they re- 
ceived for the building of it? 

A. It is mv memorv that the fact is as 
stated there. 

Q. Can you exphiin to us why that road had 
cost so much more than was anticipated? 

A. Owing to the nature of the material that 
they worked in. The road would repeatedly 
sink in places, and where we supposed there 
would be a light fill and nothing more required, 
thev had to fill it dozens of times sometimes, to 
fill the whole country up. 

Q. You made this claim then, on September 
3d, 1879, on the Northern Railway Company, 
and subsecjuent to that saw Mr. Huntington 
about it, I suppose? 

A. 1 don't remember anv conversation with 
Mr. Huntin;j;ti:i. I simply gav^e him that letter. 
All conversations I have had in relation to the 
matt(»r were with Mr. Gunn, who was the Secre- 
tarvof thit Company. 

Q. W. V. Huntington was the President of 
the Northern Railway Company, and Mr. Gunn 
was the Secretarv then? 



511 

A. Yes, sir, at that time. 

Q. Did the NorthetTi; Railway Company ac- 
quiesce in that claim? 

A. Yes, sir, finally. 

Q. And was it in pursuance of that allow- 
ance of that claim that those amounts were re- 
ceived from the Northern Railway, mentioned 
in your direct examination, subsequent tj. Au- 
gust 27, 1879? 

A. Yes, sir. . 

Q. I refer you more particular!}^ to the ac- 
counts you spoke of. 

A. 610 bonds, with a certain am3unt of 
interest accruing thereon. 

Q. On the direct examination you said on 
page 20: **Q. When, if at all, did it ne:?ct receive 
any of the Northern Railway bonds? A. Feb- 
ruary 13th, 1880. Q.' How many? A.. 148, 
at the par value of one thousand dollars each. 
Q. Those bonds were delivered to it in payment 
of work done by it for the Northern . Railway 
Company, were they not? A. Yes, air. Q. 
Where, if at all, in 'Exhibit E' are those last 
five items of Northern Railway bonds shown ? 
A. They do not appear in 'Exhibit E.' " 

Mr. Hayes. That ''five'' is a misprint; "two'' 
was the word used. 

Mr. McAllister. Q. Then your attention 
was called \^^ vouchers 121, 4374, 4502 and 4457 
in relation to bonds and coupons of the Northern 



I 



512 

Railway. These bonds and coupons represent 
this allowance made to you by the Northern 
Railway as a kind of bonus upon the work, dc 
thev not ? 
A. Yes, sir. 

Q. That matter originated in this letter ol 
yours of September 3d, 1879, to Mr. Hunting- 
ton? 

A. That is what started it so far as 1 
know. 

Mr. Hayes. Q. Started the negotiations 1 
A. Yes, sir. 

Mr. McAllister: Q. Had there been any 
such claim presented to the Northern Railway 
Company previous to that time? 

A. I have not presented any. 

Q. Did you ever know of any being pre- 
sented ? 

A. No, sir. I did not. 

Q. On page 125 of the printed transcript oi 
your examination you were asked this question; 
" Tould a stranger going into the office of the 
" Western Development Company on the 30th 
*' day of April, 1879, or on any day between the 
" 1st of January, 1879, and the 27th of August, 
" 1879, by an inspection of its books, have dis- 
jred that it was entitled to or could receive 
e 610 bonds or the interest on them? 



513 

"A. No sir, it was not entitled to them at 
'' that time/' 

Q. You mean by that, that there was no 
claim for any such bonus, and no allowance of 
anv such bonus at that time? 

A. No, sir — there was pot. 

Q. Did you or Mr. Gunn call the attention 
df these defendants to this claim before it was 
allowed by the Northern Railway Company? 

A. I did not. 

Q. Had vou ever heard of anv such claim 
being made previous to August 27, 1879; ever 
discussed it or talked at or to anybody about 
such a claim against the Northern Railway ? 

A. I don't recollect that I ever had a talk 
with any one about it. I am positive that I 
never had. 

Q. This claim of yours, as representing the 
.Western Development Company against the 
Northern Railway Company, was not based 
upon any actual right under the contract, was 
it; but was simply a matter of favor? 

Mr. Havks. I object to that as calling for 
the opinion of the witness. You have got the 
facts of it, 

Mr. McAllister. I want to show that this 
is not a claim made under the contract. The 
contract had been executed entirely; but it was 
a mere claim, as a matter of favor, made for a 
bonus upon the Northern Railway ('ompany, 



314 

opoR tfie gmand thaf 'the We!»tem IX^-velop- 
ment C.*ornpany had made that moeh loi«i§ in 
the execution of the contract. I want to know 
if that wsL^ the foundation of the claini. 

Mb. Have.-*. The te^^timrmv is that baring 
incurrerl large losses in the exeeaticKi of the 
€r>n tract: ha\ing lost mx hundred and odd 
thou.-^^and #loifars mentioned in the letter, they 
therefore a^^^ked the Northern Railwav Com- 

m 

pany to reimbunie them hy giving them that 
amount in bonds. Those are the facts. The 
o{>inion of th - witness upon that is not proper. 

The CorRT. Is thsit contract in evidence? 

Mr. Hayks. All of the contracts ex^?p!: for 
a part of the Northern Railway, for which there^ 
were no contracts or which were built without 
writtMi c>.itM?ts. bat sim >lv bv the direction 
of Mr. Colton in that instance. I believe, till- 
ing them to g> ahead and build; and Mr. Douty 
had no knowie Ige of a contract b^ing m lie or 
what the cr>ntract was. He simply obeyed Mr. 
Colton's direction. 

Mr. McAllister. I think Uiere was some 
subsequent recognition of that. 

A. SubsequLMitly there was a contract made? 

Mr. Hayes. After Mr. Coltoa's death. 

Mr. M(\\i,LrsTER. Q. There was a recognition 
of it in the boi>ks of the Western Development 
Company? 



516 

lie Sinking Fund bonds, and that the Western 
Development Company acquired them from the 
Central Pacific Railroad Company, in pa^^ment 
of a debt due by the Central Pacific Railroad 
Company to the Western Development Com- 
pany? 

A. Yes, sir. 
, Q. 1 ask you whether Mr. Colton did not 
liave a full knowledge of that transaction in his 
lifetime — this transaction and the receipt of 
those bonds by the Western Development Com- 
pany? 

A. He had knowledge of a part of it? 

Q. What knowledge oi what part of it? 
A. The transaction of 1040 bonds there. 

Mr. Hayes. You were asked only about that 
Qf September 8th, ajud the recei|>t of the bonds 
by the Western Development Company. 

Mr. McAf^listkr- I want to know what 
knowledge Mr. Colton had of that transaction 
between the Central Pacific Railroad Company 
and the Western Development Company as to 
'these Cwitral Pacific Sinking Fund bonds. 

A. H.^ was aware of that transaction. 

Mr. Havks. We concede that fact. 

Mr. McAllister. Q. You say he was 
aware of that transaction that those bonds were 
sold, by the W(»stern Development Company? 

A. . Yes, sir; he was aware of it. 



517 

Q. And they were sold prior to April 30th, 
1879? 

A. Yes, sir. 

Q. Then the Western Development Com- 
pany owed this large debt to the Central Pacific 
Railroad Company, and it w^as paid in bonds in 
this wav? 

A. Yes, sir; the Central Pacific Railroad 
Company owed the Western Development Com- 
pany, and paid it in those bonds. 

Q. And then these bonds were sold by the 
Western Development Company to Charles 
Crocker, C. P. Huntingt^^n and S., H., H., and 

C, and they were taken by them at par? 

> 

A. Yes, sir; at par and accrued interest. 

Q. You spoke of these bonds being sold by 
the Western Djvelopment Company to Charles 
Crocker, C. P. Huntington and S., H., H. and 
C. and being taken at par. Did you give the 
dat<3? 

A. I cannot giv^e the date. 

Mr. Hayes. March 15th, 1879, is the one 
you are inquiring about. 

Mr. McAllister. I think you were given the 
dates of September 9th, 1879, and March 15th, 
1879. I think that is the ftict. 

Q. These bonds had all been sold, and the 
Western Development Company had received 
the credit before April 30th, 1879? 

A. Yes, sir. 



520 

A. r ilu\. 

C^. Allowing iJotWO for the failure to furnifth 
tli(* (Mjuipiuent? 

A. Yc*s, sir; to cover the rolling-stock not fur- 
nished then. 

Q. ^ Pn August 27th you were familiar with 
th(» cost of the equipment of a road of that kind^ 
were vou not? 

A. 1 had all of the data at hand, by which I 
eould form a verv reasonable estimate. 

Q. How did you arrive at that estimate that 
$2()»()0() would be a fair allowance of the bonds 
coming to you from that railroad, in view of the 
fact that thi'V had not furnished the equip- 
ment ? How did vou arrive at that estimate of 
the eiiuipnient at ^o.OlK) a mile? 

Mh. ILvvh^i. I object Ui the question as irrel- 
evant and inciunjH'tent. 

Mk. Mt Allistkk. 1 desire to show that this 
gentleman, who i^ acquainted with the value of 
the tHjuipment of roads, maile a thi>rough esti- 
n\ate, and allowed ti> that estimate all that it 
was entitletl tt>. 

Mk. Havks. Mr. Douty never built a road. 
and the contract was actuallv m:i'lt* — if it is to 
bi* di^niKcd bv that name — between the two 
rompanit/s, as to what they should receive and 
what should be tleducted tt>rthe equipment and 
tock. on the 27th of August, lS7y. 



521 

The Court. Well, h^ mav tell how he made 
his estimate in making out Exhibit E. 

Mr. McAllister. On the 30th April, 1879, 
Mr. Douty makes an estimate which I propose 
to show by him was a fair and just estimate, so 
far as he knew, of the amount coming to the 
Western Development Compau)'^ from the San 
Pablo and Tulare Railroad; and he allowed in 
that $5,000 for the failure to furnish the equip- 
ment. Then on the 27th August, 1879, as we 
shall show, after this compromise had been 
made, the company took this matter up and 
they changed the allowance of Mr. Douty from 
$5,000, I think it was, to $3,000, that is they 
allowed for the equipment $3,000 instead of 
$5,000, which made the bonds from the San 
Pablo and Tulare Railroad Company $22,000 a 
mile instead of the allowance of Douty, $20,000 
per mile. Those are the facts. I seek to show 
now that when Mr. Douty on the 30th 
April, 1879, made up the assets and liabilities 
of the Western Development Company he made 
what he believed at that time to be a fair esti- 
mate of what was due for the non-furnishing of 
the equipment of the road. 

Mr Hayes. Inasmuch as Mr. Douty's state- 
ment was not the one furnished us, but Mr. 
Brown's, which came from the defendants par- 
ticularlv, I submit that is immaterial. We have 
made no charge against Mr. Douty of doing any 



522 

Tnrrmg. He id not the defendant here. Exhibit 
E Wiw not prepared by Mr. Djuty. W. E. 
Brown and the defendants theras^lv^es are the 
authors of that document. L^t them prove their 
ealcTilation?* to be fair and honest bv another 
paper. That ifi not the paper on which the case 
re?»ts or def>ends. 

Mr. McALrxsTKR. Mr. D)utv hx3 famished 
a statem mt here which undoubtedly was the 

Ml 

firnt statement of the assets and liabilities of the 
Western Development (Company. This state- 
ment of Mr. Doutv's was shown to Mr. Wilson. 

Mr. H.wes. Xo, sir. 

Mr. McAllister. I am stating my under- 
standing of the facts, not yours. That state- 
ment was shown to Mr. Wilson. Then that 
statement had no valuations attached tt> it. W. 
E. Brown was rcMjuesteil to make out valuations 
to affix to that statement. And he then ti>ok 
to you the original of what is called here ''Ex- 
hibit E," attat*hed to the complaint, which was 
also shown t > Mr. Wils'm. Bat in this particu- 
lar thf*rc was no difference between Mr. Doutv's 
statement and Mr. Brown's. In fact, there is 
but little diH'»r-nce betw;*en them at all. In this 
particular item they are identical. What w«* claim 
'^ that when Mr. Oocker aske<l Mr. I>outy — 

I b.'lieve Mr. 0»>eker asked yi>u to make 
[lis statem.^nt of the assets and liabilities — 



52S 

A. Yes, sir. 

Q. And you went to work to make it out? 

A. Yes, sir. 

C^. And Mr. Crocker gave you at that time 
no directions how you should make it out? 

A. No, sir. 

Q. Did he limit you in any way? 

A. No, sir 

Q. Did he instruct you in any way ? 

A. No, sir. 

Q. Did he tell you to make out simply a 
statement of the assets and liabilities of the 
Western Development Company? 

A. Yes, sir. 

Q. And did you then make out the paper 
which has been put in evidence here, as your 
statement, which is to be found on page 214 of 
the printed transcript. You then made out 
that statement which is called here ** Plaintiff's 
Exhibit 17— Douty"? 

A. I did. 

Q. Did you make out that statement to the 
best of your ability, fairly and justly? 

A. I did, sir. 

Q. Did you receive any instructions from 
any one to make out an unfair statement? 

A. I did not. 

Q. Was the mdtter left entirely to your own 
judgment and knowledge of the affairs of the 
company? 



524 

\ It N\l»^- 

\} roiuiiiK '^^^^''^ ^** ^'*i** ^'^^ Pal»lf> and 

l\il.nr K lilrojwl iN>ni|)jmy. You made' out 

\\u^ , l^mxU ju^t as tlu^v appear in Exhibit 

\ Au\\.M\\M''' l..>t>k at Kxliihit E, and state. 

\ \ \\\\\\\k iluiv was no variation as to the 

N,^ W . - i ^^:\v ^*^* ••naintiflTs Exhibit 
 1^ \ > V  -i T\^ is anv variation in 
\  V V V x\, -: :h-- lv»uis of the San 

■\v>: :n that st4itenient and 
> :.>. S^%Th nine hundred 
^ -**:.>T- i^ld dollars. 

>.in PaMo and 






"^ V ^ . :--^'. m ir- of 

' ;*' ^•••"•Tioii for 

^ :;:»u Tulare 

^ . lUXix . tile 



■•\"* 






-  » : 



\ \ 



525 

The Court. He may tell how he made the 
computation. 

Mr. Hayes. This is only put in to show 
that it contains items of assets not furnished in 
Exhibit E. 

The ( -ourt. 1 suppose it can be used for all 
purposes. 

Mr. Hayes. Voa can put it in for any other 
purpose; but I do not think it is material or 
relevant to the direct examination to ask him 
whether in the preparation of the statement that 
he prepared and on which no attack has been 
made, because it is not in the case, the manner 
in which the settlement is made, at all. To ask 
him whether he made that, or intended to make 
that as a fair statement, is irrelevant and im- 
material. 

The Court. It will be harmless, at all events. 

Mr. Hayes. We take an exception to your 
Honor's ruling. 

Mr. McAllister. In estimating in your state- 
ment of the imh of April, 1879, 'Tlaintiff's Ex- 
hibit 17 — Douty," the San Pablo and Tulare 
Railroad bonds as at $930,360 par value, that 
estimate meant $20,000 a mile? 

A. Yes, sir. 

Q; I ask you whether in making that esti- 
mate you intended to make a fair and just esti- 
mate? 

A. I did. 



523 

Q. What is ycnir belief, now, as to whether or 
not that was a just and fair estimate that you 

then made. 

Mu. Hayf-s. I obje(.*t- 

(Question withdrawn.] 

Mr. McAllister. Q. Was that a fair and 
just estimate that you then made? 

Mr. Hayrs. I object. He has alread}' testi- 
fied that lie tried at that time to make a fair and 
just estimate. 

Mr. McAllister. I want to prove now that 
he succe^liMj. 

Mr. Hayes. In view of the fact that on the 
day of this st^ttlement the two comj)anies met 
and made a <lefinite agreement, I think that is 
not relevant or material, and I object to it. 

Mr. McAllister. We think we have the 
right to cross-examine uj)on the exhibit which 
they have phiced in evidence; and we think this 
is fair cr(>ss-(*xamination upon that exhil)it. 

The (/ocrt. Ask the question. The objec- 
tion is ovcM'ruU^l. 

Mr. Hayes. We take an exception. 

Mr. McAlllster. Q. Was that a fjiir and 
just estimate^ tliat you then made? 

A. To the best of mv knowled<i:i^ and belief 
it was. 

Q. What had been your opportunities of un- 
derstanding tbe cost of the equi|)[)ing of a road of 

is kind at the time vou made this estimate of 



627 

the 30th of April, 1879, as to the cost of loco- 
motives and other matters involved in their 
equipment? 

A. There was a certain rule for equipping 
railroads with rolling stook. 

Q. Are you familiar with that rule? 

A. I was familiar with that rule. 

Q. Were you at that time familiar with the 
cost of locomotives, and various other articles 
going to make up equipment? 

A. Yes, sir. 

Q. In your direct evidence, pages 133 and 
134 of the printed transcript, your attention 
has been called there to the money held by the 
Directors of the Western Development Com- 
pany in which this languages occurs: *^ Whereas, 
the said San Pablo and Tulare Railroad Company 
has advised this company that it has leased, or 
is about to lease, its railroad to the Central Pacific 
Railroad Compan}^ for a term of years, and 
does not, therefore, desire or require that its 
railroad shall be equipped as provided for in 
said contract of the 30th day of April, 1877, 
and desires that said contract, so far as it re- 
lates to the equpment of said road, be cancelled 
and annulled; and whereas said San Pablo 
and Tulare Railroad Company proposes to pay 
for the construction of said road $22,000 in 
its V)onds per mile instead of $25,000, as pro- 
vided in said contract, and $40,000 in capital 



628 

Stock as provided in said contract; Now, there- 
fore, Re.Holved, that said proposition on the part 
of said San Pablo and Tulare Railroad Com- 
pany be and the same is hereby accepted/' 
That was a change of your estimate, then, 
from $20,000 to $22,000 a mile. 

A. Yes, sir. 

Q. Do you know why that change was 
made ? 

A. I have no recollection in regard to the 
matter, excepting in a general way. 

Q. I will call your attention now to the item 
which appears, $45,040 58 duo from the North- 
ern Railway Company. That appears in your 
exhibits,'* Plaintiffs Exhibit 17 — Douty,'' does it 
not, under the head of accounts? State how 
you liave that item expressed in your statement 
of the assets and liabilities; see page 215 of the 
printed transcript. You have it under the head 
of accounts ? 

A. Under the head of '* Accounts Current; 
am't due from N. Rv. Co.'' 

Q. You hive it stat2i thara cDrrectly, 
haven't vou? 

A. Yt*s, sir: as I believe. 

Q. That represented so much monev due bv 
the Northern Railway Company to the West- 
n Development Company? 
A. Yes, sir. 



529 

Q. When Mr. Brown came to make out Ex- 
hibit E, he changed that item, did he not? 

Mr. Hayes. Have you any knowledge upon 
that subject? 

Mr. McAllister. By looking at the two papers 
you can see the change. 

 • 

Mr. Hayes. He cannot see who changed it. 
A. It is not the same in Exhibit E of the 
complaint. 

Mr. McAllister. Q. What is the dlffcjrence 
as to that item in Exhibit E, and in that plain- 
tiffs Exhibit 17? 

A. As I have stated, in 'Tlaintiff^s Exhibit 17 
— Douty'' this item appears under the head 
of ^'Accounts Current,'' as the amount due from 
the Northern Railway Company. 

Q. In Exhibit E the same amount appears, 
bnt simply payable in stock? 

A. Payable in stock, and appears under the 
head of stock. 

Mr. Hayes. Valued at what, there? 

A. There is no value here. 

Mr. McAllister. That was evidentlv done 
by Mr. Brown. Do you know who made out 
the original of Exhibit E? 

A. I have seen a statement similar to this 
in the handwriting of W. E. Brown. 

Q Who was W. E. Brown? 



550^ 

iV- He was the bookkeeper for S.^ H., H. 
and C principally, and connected with them. 

Q. How long had he been connected with 
the office of the Central Pacific Railroad Com- 
pan}^ and with these gentlemen, Stanford, 
Huntington, Hopkins and Crocker? 

A. I have heard of him in connection with 
those gentlemen from the time of the building 
of the Central Pacific railroad. 

U. He was for many years with them ? 

A. Yes, sir. 

Q. And was in their empk\y at this time? 

A. And was in their employ at this time. 

Q. I will call your attention to another item, 
the Los Angeles and San Diego Railroad Com- 
pany to be found on pages 138, 139 and 140 of 
the printed transcript. How was that Los 
Angeles and San Diego Railroad expressed in 
your **Exhibit 17 — l)outy'7 

A. It was put down as stock. 

Q. Read the item in your account. 

A. Under the lu»ad of '* Stock, Los Angeles 
and San Diego Railroad Co., due, not paid, $832,- 
800, i)ar yalue." 

Q. Tint is t!ie sam} in ''Exhibit E/' is it 
not, as in yours? 
A. Yes, sir. 

ecess is lijre taken until 2 o'clock p. m. 






531 



AFTERNOON SESSION. 
Cross-Ex AMiNATioN of F. S. Douty — Continued. 

Mr. McAllister. Q. In speaking of that 
transaction of the stock of the National Gold 
Bank, in the course of which you say that at the 
request of Mr. Colton you gave him a voucher 
for $3,000, and that he carried away that 
voucher, what was t.he nature of that voucher 
that he carried away and which you had pre- 
pared at his request? 

A. It was similar in nature to the voucher 
for $2300 which I paid him. I don't remember 
saying that he carried it away. He retained it. 

Q. You have not produced here the voucher 
. which you made at that time for $2300, which 
you charged to the San Pablo and Tulare con- 
tract. Have you got that voucher? 

A. I dcm't think I have that voucher, 

Q. Hav'e you got a charge in your ledger, or 
anv other book, to the San Pablo and Tulare 
contract of that $2300? 

A. I think I can find the charge. 

Q. I wish you would find the charge if you 
please. 

A. I find that I have the voucher, but it is 
charged a little differently from what I stated. 
[The witness now produces cash voucher No. 
4135.] 



532 

Mr. M( Allister. I will put that in evi- 
dence. 

[Voucher 4135 was then read in evidence and 
marked ''Defendants' Exhibit B — Doutv/' and is 
as follows:] 

'' Defendants' Exhibit B — Douty." 

7-25-5,000. 

187... 

S. P. & T. Rv. contract. 

To Cash, Dr. 
Sept. 10. For various expenditures 

on acct. of construction 
and right of way 2,300 00 

Sept. 10th, 1878. 

Received from Western Development Com- 
pany twenty-three hundred doUars in full for 

above account. 

David D. Colton. 
[Endorsed.] 

C. Vo. No. 4135, $2,300.00. 

Folio 359. 

Credit cash. 

For cash on acct. 

Month of Sept. 10. 

Entered Sept. 10th, 1878. 

Chargeable to S. P. & T. Ry. contract, $300. 

Right of way, 2,000. 

I certify that the within account, amounting 
•'^ $2,300.00, is correct. 



533 

Computations examined by D. 

Approved. 

F. S. Douty, President. 

Allowed — Colton. 

Mr. McAllister. Q. Is the signature to 
that receipt in the handwriting of D. D. Colton? 

A. It is. 

Q. Then, as I understand you, you made out 
that voucher at Mr. Colton's dictation or request. 

A. Yes, sir. 

Q. You then paid him the money called for 
by the voucher, $2,300. 

A. Yes, sir. 

Q. Then you charged it in 3'^our books to the 
San Pablo and Tulare contract. 

A. A part of it to the San Pablo and Tulare 
contract, and a part of it to the San Pablo and 
Tulare riglit of way, as I see by the distribu- 
tion on the voucher now. I stated this morn- 
ing that it was all charged to the contract, but 
that was an error. 

Mr. Hayes. Q. Give the portions that were 
charged to each. What is the date of the voucher? 

A. September 10th, 1878. The San Pahlo and 
Tulare contract was charged with $300; the 
right of way with $2,000. 

Mr. McAllister. Q. Do you know of any 
right of way l)eing paid for or any matter grow- 
ing out of the contract being paid for by that 
$2,300? 



534 

A . I do not. 

Q. Vou simply made it in that form because 
you were told to do so by General Colton ? 

A. Yes, sir. 

Q. Who was the agent at that time for the 
San Pablo and Tulare right of way ? 

A. Judge Underbill. 

Q. You spoke at that time of making out 
another voucher for Mr. Colton of $3000; what 
was the form and shape of that other voucher? 

A. It was a voucher similar to this. I don't 
remember what it contained on the inside. 

Mr. Hayes. You mean the blank was simi- 
lar to this. 

A. Tlie blank was similar to this, and the 
subject matter, as I remember it, was similar to 
that. 

Mr. McAllister. Filled up as the claim for 
$3000 against the San Pablo and Tulare Con- 
tract and the right of way? 

A. Not nccessarilv the San Pablo and Tulare 
contract, but some other account. The same 
principle was observed in filling up the $3000 
voucher as was observed in making up this. 

Mr. McAllister. The same want of princi- 
|)l(\ l)ccausc there really was no principle about 
it. 

A. The same theorv; ves, sir. 

Mr. Haves. The same may be said of 
Crocker or Huntington exactly. 



535 

Mr. McAllister. Q. That $3,000 voucher 
you did not pay, as I understand, at all? 

A. No, sir, that was not paid. 

Q. What did he say to you, if anything, at 
that time when he took off that $3,000 voucher? 

A. He said: ''I will collect this at a later 
date,'' or something to that effect, or **at some 
other time." 

Q. And that was the last you saw of that 
$3,000 voucher? 

A. Yes, sir. 

Q. Turn to the Ix)s Angeles and San Diego 
Railroad Company, in ^TlaintifTs Exhibit 17 — 
Douty.'' How did you express that there in 
vour own exhibit of the assets and liabilities of 
the Western Development Company? 

A. Under the head of stock. **The Los An- 
geles and San Diego Railroad, due — not paid — 
$832,800,'' the par value. 

Q. You say, '' due, but not paid." Do yoxi 
mean by that that you had not received the stock 
when vou made out this statement of assets and 
liabilities ? 

A. Yes, sir. 

Q. That is expressed in the same way in 
" Exhibit E," is it not? Just read it as it ap- 
pears in ^^ Exhibit E"? 

A. It appears in '* Exhibit E," under the 
head of stocks, Los Angeles and San Diego R. 
R. $832,800. 



536 

Q. I understand you in your testimony on 
pages 138 and 139 of the printed transcript to 
say that subsequently that took a different 
shaj)e ? 

A. Yi\s, sir. 

Q. And one-half was paid in stock, and tlie 
other half r<:K*eived in bonds? 

A. Yes, sir. 

Q. Previous to this statement of yours of 
April 30th, 1879, ^^ Plaintiff* 's Exhibit 17— 
Douty,'' and up to that point of time, had the 
understanding been that that was to be paid in 
stock ? 

A. I so un(lerst(X>d it. 

Q, When was the change in that arrange- 
ment made, so that it appeared half payable in 
stock and half payable in lx)nds? How long 
subsequent, or was it subsequent to August 
27th, 1879 ? 

A. If my memory serves me rightly, it was 
subsequent to the settlement of August 27th, 
1879. 

il. And can you tell me, or is this correct 
here. The first time that you received any 
bonds under this new arrangement. You say 
in your direct examination the last charge for 
the work of building the Los Angeles and San 
Diego Riilroad was December 31st, 1878. 

'* Q. When was it paid and what did it re- 
'* c'ive in payment for that work? 



537 

'' A. November 30th, 1880, it received 4168 
'* shares of stock. On January 6th, 1881, it re- 
** ceived 90 more shares; and January 30th, 1881, 
*' they got 416 bonds of the par value of $416,- 
'' 000." Then on January 20th, 1881, is the first 
date on which you received any bonds under 
this new arrangement. 

A. Yes sir; I think that is correctly re- 
ported. 

Q. The reason therefore, that this $832,800 
appeared in your exhibit, **Plaintiff's Exhibit 
17 — Douty" and in '' Exhibit E,'' as payable in 
stock was, because at that time it was payable 
in stock, wasn't it ? 

A. I so understood it — ves, sir. 

Q. You speak on page 140 of the printed 
transcript of collecting interest on those Los An- 
geles and San Diego bonds, and I want to find 
out when vou had first received anv interest on 
those bonds ? 

A. I will have to refer to the books. 

Q. I suppose it was some time after January, 
1881, but you can look and see. 

A. The first entry I find is January 20th, 
1881. 

Q. The first collection of any interest on the 
bonds of the Los Angeles and San Diego Rail- 
road Company ? 

A. Yes, sir. 

Q. The next item I will call your attention 



638 

to, is William Hamilton's note. How is that 
note expressed in ^'Plaintiffs Exhibit 17 — 
Djuty'^? 

A. ** William Hamilton's note and accrued 
interest." 

Q. Under the head of ''Bills Receivable" in 
said statement, isn't it? 

A. Yes, sir; but the heading is not marked 
in this. 

Q. Read the whole entr}' in your statement 
thereof, the assets and liabilities, referring to 
William Hamilton. 

A. '* William Hamilton's note, and accrued 
interest, |49,993.15.'' 

Q. How is it expressed in "Exhibit E'' ? 
A. *' Bills rocoivable, W. Hamilton/' 

Q. No amount stated? 

A. No, sir; no amount stated. 

Q. TluMi in your statement of the assets, 
vou treatc'd tliat note as the individual note of 

William Hamilton, did vou not? 

%• 

A. Yi»s, sir. 

Q, IxM^king at your tes timony, I see that that 
note orijrinally was for $48,71)8.48. But when 

you sp(^ak of it in the assets, you put it down as 
$49,00:}. 15. 

A. Y<^s, sir. 

Q. What makes the difftrence betwecMi that 
original note as expressed here, and that state- 



540 

sent(»(l $85,132.85. That was the simple interest 
on the note? 

A. Yes, sir. 

Q. Why did you treat that as the individual 

4 

note of William Hamilton in vour statement of 
assets and liabilities, it having been endorsed by 
Messrs. Stanford and Hopkins ? Wh}^ did you 
treat that in your statement as simply the note 
of Mr. Hamilton? 

A. Mr. Hamilton's name was signed to it. 

Q. Did you receivx^ any directions from the 
defendants to express it in that way in your 
statement of the assets and liabilities, or was 
that of vour own motion? 

A. That was of mv own motion. I received 

no instructions in regard to it one way or the 

other from anvbody. 

Q. We will pass to a transaction which you 

speak of in connection with the Oakland Water 

Front Company, on the 30th of April, 1879, 

Ix^ing indebted to the Western Development 

Company, $0320. 13; voucher 4225. You say in 

that voucher: '* July 1st, 1879, Oakland Water 

'• Front ( vompanv, to profit and loss, Dr. For 

'* amount over-credite 1 Oakland Water Front 

'' C.)mp my, O -tob-r 28th, 1878, $12;if).3(). The 

** Oakland W. F. Co. paid this company, 

'' Oct()l)er 2Sth, 1878, the amount of its bill, 

*' $15,371.10, which amounts were credited, as 

'' follows, viz: 



541 

• 

'* Oakland Water Front Company . .$13,973 78 
** Expense account 1,397 38 



a 



Total $15;371 16 



The result of that operation was that the 
Oakland Water Front Company obtained a 
credit of $1230.36 too much. Is that so? 

A. Yes, sir. 

Q. How did that mistake occur? Was that 
by any action of these defendants, or a clerical 
error ? 

A. It was not bv the action of these defend- 
ants; it was entirely a clerical error. It was a 
credit to the Oakland Water Front Company with 
the whole sum of money received, when it 
should have been credited only with a part. 

Q. This voucher, 4225, of July 1st, 1879, was 
for the purpose of correcting that error. 

A. For the purpose of correcting that error. 
It was corrected as soon as we found it out. 

Q. I will call your attention to what you 
stated in your direct examination in reference 
to vouchers 4556 and 4559, pages 153 and 154 
of the printed transcript. You were asked in 
reference to the account of '*S. H., H. and C." 
which stands credited in your exhibit, I believe, 
$298,208.35, isn't it? 

A. Yes, sir. 

Q. That appoars in the same wa\' upon Ex- 
hibit E, page 51, of the complaint? 



54S 

A. Yes, sjir. 

Q. As I understand you, by these two ex- 
hibits it turned out that there were certain re- 
ductions to be made from that account of S., 
H., H. and Cl; that is, as to the three headlights 
and these engines and locomotives; is that cor- 
rect ? 

A. It is; ves, sir. 

Q. How is it that you happened to omit to 
charge that to S., H., H. and C. previous to these 
vouchers 4231) and 4559 ? 

A. Bv reason of failure to discover the error. 

Q. What did the error consist of? 

A. It consisted in charging those three loco- 
motives, with their headlights, to the Southern 
Pacific main contract, when thev should have 
Jbeen charged to S., H., H. and C. 

Q. Why should they havo been charged to 
S., H., H. and C. ? 

A. Because they were intended to and did 
apply on tlie contract of the Contract and Fi- 
nance C'o. with the Southern l^icific Railroad 
Company, which S., H., H. and C. were re- 
sponsible for. 

Q. They had assumed the obligations of the 
Contract and Finance Company, and they were 
bound to respond to all the obligations of that 
contract with the Contract and Finance Com- 
pany as to the Southern Pacific Railroad? 

A. Yes, sir. 



545 

Q. How did you happen, then, to charge 
them to the Southern Pacific main contract? 

A. Because I thought they applied on that 
contract. I don't know of anv other reason. 
I supposed J was right in making the charge in 
that wav. 

Q. Then a portion of the Southern Pacific 
Railroad was built under a contract with the 
Contract and Finance Company, and another 
portion built by the Western Development Com- 
pany ? 

A. Yes, sir; that is a fact. 

Q. What portion of the Southern Pacific 
Railroad was built by the Contract and Finance 
Company? 

A. The portion from Gilroy to Sole dad and 
Tres Pinos, I think; from Goshen to Sumner; 
from San Fernando to Los Angeles, and from 
Los Angeles to Spadra, was built by the Con- 
tract and Finance Company; and the Western 
Development Company built the remaining por- 
tions from Sumner to San Fernando, and from 
Spadra to the Colorado river, and from Goshen 
to Huron. 

Q. When the bill for those locomitives and 
headlights first came out, you thought it be- 
longed to that part of the Southern Pacific con- 
tract that was built by the Western Dev^elop- 
ment Company? 

A. Yes, sir. 



544 

Q. And so vou treated it in that wav? 

A. Yes, sir: I did, sir. 

Q. And you subsequently discovered that it 
belonged to tKe other part of the contract, and 
then you charged it up to S., H., H. an<l C? 

A. Yes, sir. 

<). And vou made that discoverv alx>ut the 
time of these vouchers? 

A. The vouchers were almost the immediate 
result of the <liscoverv. 

Q. At whose direction and instance did vou 
do that, or did vou do it at vour own instance? 
How did vou make that discoverv? 

A. I made the correction at mv own instance: 
1 made the discn'erv,if I remember righllv.bv 
examining the rolling stt)ck list in Mr. WiT- 
cutt's ofli(*e, and finding that these engines were 
in use on the Northern Division. 

Q. That is, bv the **Xorthern Division'* vou 
mean that part that was built by the Contract 
and Finance Company? 

A. I mean that [)art that was built by the 
Contract and Finance Company. That was my 
recollection of it. 

(2- Then tlu^se two vouchers were made up 
bv V ):irs »!f t > c )iTc^/t t!i it err.)r? 

A. Yes, sir; by myself or under my super- 
vision. 

<\. At the time you made out that original 
statement of the* assets and liabilities, '* Plain- 



545 

tiflTs Exhibit 17 — Douty/'you had no knowledge 
of error at that time? 

A. No, sir; I had not. 

Q. And therefore^)u had not charged these 
amounts over to th^^yit of S., H., H. and C? 

A. I had not. 

Q. In your statements of the assets and 
liabilities, Exhibit 17, I think you speak of the 
Mojave Hotel under the head of '* Accounts," 
do vou not ? 

A. . Under the head of *' Property Accounts.'' 

Q. How is that item in your account there 
in Exhibit 17? 

Q. Under the head of '' Property Account": 
*' One hotel at Mojave, cost $6473.93. 

Q. You simply intended then to set forth 
the cost of the hotel to the Western Develop- 
ment Company ? 

A. Yes, sir; that was all that I could do. 

Q. You had no knowledge of its valuation 
on April 30th, 1879? You did not understand 
that as the valuation, but simply as the cost? 

A. I intended to make no valuations. 

Mr. Hayes. That statement does not contain 
any valuations. 

Mr. McAllister. You have got in that ac- 
count, also, the Yuma VV'ater Works. You 
probably explained that on your direct exam- 
ination there is no such water works, but noth- 
ing but water is there ? 



I 



A. The pipe and tank do belong to the rail- 
road company. 

Q. Wouldn't it, as soon as the work was 
completed and turned over by the Western De- 
velopment Company to the Southern Pacific 
Railroad Company, be the property of the South- 
ern Pacific Railroad Company ? 

A. Yes, sir. 

Mr.. Hayes, We do not claim the tank or 
pipe, and I so stated in his direct examination. 

Mr. McAllister. Q. Were the Mojave 
Water Works of the same character? 

A. Yes, sir; they were of the same charac- 
ter excepting there was no charge to them in 
any way — no account of them. 

Q. There is an item here which you speak 
of, page 167 of printed transcript, in reference 
to a water pipe taken from Frink's Springs and 
sent to Texas Hill, "25,020 feet of two-inch 
pipe, at 20 cents." Why was that not embracer! 
in vour statement. '^PlaintifTs Exhibit 17 — 
Doutv"? 

A. It was down at P'rink's Springs, hurierl 
in the sand. It was lK>ught for account i>f the 
S. P. main contract. There was mmie water 
at Frink^s Springs, and it was used to conduct 
the water to the railroad] tank at that fxiint. 
The spring suI>S4fquentIy gave out. and having 
no use for the pipe, I sent it to a place where it 
coold be u^ed. 



548 

Q. To Texas Hill? 

A. To Texas Hill, and collected pay for it* 

il. After you put the pipe down there at 
Frink's Springs, and concluded the railroad 
tank, di<ln't it l)elong to the railroad company? 
You put it there in the performance of your 
contract with the Southern Pacific? 

A. I held my own idea in the matter. I 
thought Wv^ were not called upon to furnish any 
surjilus mat'v*rial to the Southern Pacific Rail- 
road (/onipany. 

Q. When you originally put the pipe down 
at Frink's Springs, you did it in the perform- 
an:*? of tlri S>uthern Pacific Railroad contract? 

A. Yes, sir. 

Q. When you had once constructed that -for 
the railroad, didn't it b'joome the property of 
the railroad th(»n ? 

A. I didn't consider it so. 

Q. Wh(»re was that pipe taken; also on the 
line of the Southern Pacific Railroad Company? 

A. It was in Arizona, on the line of the South- 
ern Pacific of Arizona. 

Q. Why didn't you put this in your Exhibit 
17? 

A. I divln't know anythin^^ ab )ut it then. 

Q. You ha 1 no intention to suppress it? 

A. No, sir. 

Q. Tlie next item is a lot of wood left bv the 
graders in constructing the Southern Pacific 



549 

Railroad, $400. Why was that not put into 
your statement, ''Plaintiff's Exhibit 17-Douty''? 

A. I didn't know of it at that time. 

Q. It did not exist on your books then? 

A. No, sir. 

Q. That was wood left by the graders con- 
structing the road; surplus wood? 

A. Yes, sir. 

Q. And that surplus you subsequently ascer- 
tained existed and you took possession of it as 
belonging to the Western Dev^elopm^nt Com- 
pany? 

A. I did. 

Q. But it was not within your knowlege 
when you made out "PlaintifTs Exhibit 17 — 

Doutv'? 

A. It was not. 

Q. Voucher 4561 related to a China section 
and cook hiasjs at Sini Cr33k, $410.55, pi.g3 
172 of the printed transcript. The dat3 of that 
voucher is April 3d, 1880. Why didn't you in- 
clude that in your statement of assets and lia- 
bilities which you made out on the 30th of April 
1879? 

A. I had no knowledge of it at the time the 
statement of assets and liabilities was made out. 

Q. It was not then intentionally sup- 
pressed ? 

A. No, sir. 

Q. I will ask you whether there was any- 



550 

1111112 in that statement of voiirs of the assets 
and liahilitios intentionally suppressed by you 
in making it out? 

A. Then? was not. I intended, to the best 
of rnv ability, to make out a full, true and cor- 
reft statemf*nt in every particular. If I failed 
in any respect, it was from a lack of knowledge, 
and not from a lack of intention. 

(I. You marie out this statement of yours, 
** Plaintiffs Kxhibit 17 — Douty/' entirely with- 
out the pr(?s(?nce or direction of defendants, did 
you not? 

A. I don't think a word passed between us 
during the transaction. Mr. Crocker simply 
instructed me to prepare a statement of the 
ass(»ts and liabilities of the Western Develop- 
nH?nt Company. 

Q. You did not go to Mr. Crocker, or to any 

of the defendants, to consult them as to what 

shoulrl be put in or what should be left out, did 
you ? 

» 

A. No, sir. I did not go near them until it 
was done. 

(2- You rn.ide it out yourself? 

A. 1 did. 

Q. Tli(»re is an it(Mn of ''Interest account, 

'* v()uch(»r 29{)r), pag(» 17G of printed manuscript, 

** in your direct examination, Journal Western 

** I)(*vel()])ment Company, San Francisco, May 

* <78. Interest account, cr. $320. 



551 

" By C. P. R. R. cr. from C. P. Huntington, 
" May 10, 1878, $320." You knew nothing 
about that matter, vou sav? 

A. I did not, any further than the entry it- 
self would indicate. 

Q. How is it that that did not appear on 
your account there? Should it not have ap- 
peared in your Exhibit 17? 

Mr. Hayes. No, sir; we do not claim that 
that $320 should. It was properly entered on 
the books. We want to know on what security 
that was collected, but we want to know it from 
C. r. Huntington. 

Mr. McAllister. Q. Your attention was 
called to voucher 4596, Pacific Improvement 
Company. To the Western Development Com- 
pany, Dr. printed transcript, page 178. It 
says: ** April 2d, 1880, $100,000, First Mort- 
gage Bonds S. P. at 87^ cts." 

" April 10th, 1880, 134,000 bonds at 87^ cts. 
'' April 2, 1880, interest.'^ There is nothing in 
that item by which the Western Development 
Company loses anything, is there; nothing left 
out there or nothing omitted that should be 
shown in vour statement of assets ? 

A. No, sir; there are no securities left out of 
that statement of assets. If I remember the 
entry rightly, that is simolv a sale of some of 
these securities. 



552 

Q. There was no omission of the securities 
in vour statement ? 

A. No, sir; all of the securities were there. 

Mr. Hayes. That was introduced to show 
that C. P. Huntington in New York had securi- 
ties belonging to this company in his hands, on 
which, on April 2d, he had collected the in- 
terest. It has nothing to do with the sale of the 
Southern Pacific Bonds. These are all right, as 
far as I know. 

Mr. McAllister. You refer to voucher 
459(i, interest on S. C. and P. R. R. stock 
$31.50. 

Mr. Hayes. Yes, sir; simply to show that 
Mr. Huntington held these securities in New 
York and nobody here knows anything about 
it, except that he forwarded the interest. 

Q. I Avill call your attention to voucher 
4379: '* Interest account to C\ P. H. Bond ac- 
'* count. Dr., October 31, 1879. For two bonds 
** sold in New York, the proceeds of which were 
** originally, through lack of information^ 
** credited to interest account, this to correct, 
" $1,953.52/' 1 would like to understand some- 
thing about that. 

Mr. Hayes. There is no charge made on 
vou in that connection. Voucher 4379 show's 
that on the 24th October, 1879, Mr. Hunting- 
ton had c(»rtain bonds in his possession and for- 

irded the interest on them, and nobodv in 



553 

San Francisco knew anything about there. 
That is all that that voucher was introduced bv 
us for. 

Mr. McAllister. Then there is no claim on 
that $1953.52. 

Mr. Hayes. Xo, sir. 

Mr. McAllister. You have spoken of the 
Los Angeles and Independence Railroad, and I 
think you have spoken of its paying interest on 
its bonds, haven't vou? 

Mr. Haves. No, sir; it has got no bonds. 

Mr. McAllister. But it is paying dividends. 

A. The Ix)s Angeles and Independence Rail- 
road has paid dividends. 

Q. That is under lease by the Central Pacific 
Railroad Company, isn't it? 

A. It is. 

Q. I want to know whether vou know anv- 
thing about that road? Do you know whether its 
actual earnings outside of its lease rent would 
pay anything? 

A. I know on information. 

Q. You don't know personally? 

A. No, sir; I have seen the papers. 

Q. The town of Colton; how does that ap- 
pear in that exhibit? Does it appear in the 
same way that it in does ''Exhibit E''? 

A. It appears in two places. 

Q. In the first plac(% it is entere 1 in *'Ex- 
hibit E" in the same way it is in your account, 



555 

A. It represents the Western Development 
proportion of the unsold lands. » 

' Q. In your account have you ['* Plaintiffs 
Exhibit 17 — Douty"] carried out the valua- 
tions of those lands, have you not? 

A. Under the head of " par value," yes, sir. 

Q. You had no personal knowledge of that 
matter at all, had you, of the value of those 
lands ? 

A. Only on information. As to the Paul 
tract, I put down there what was thj purchase 
price. 

Q. I mean those different towns of Williams, 
Goshen, Hanford, Livermore, Caliente, Tehach- 
api, Mojave, Newhall, Savanna and Santa Ana; 
those valuations put in your account were 
simply upon information, as I understand it? 

A. Yes, sir. 

Q. The valuations in " Exhibit E '' are 
different from vours, are thev not, in some 
instances? 

A. Yes, sir. 

Q. You were examined to some extent ves- 
terday in reference to lots sold and not paid for 
in those different towns of Colton and others, 
and you gave us some items in that regard. 
Was not all of that embraced in that portion of 
this statement which is ^^ Due on town lots sold, 
$1(5,267.01 "? 

Mr. Hayes. Inasmuch as all of that was 



556 

after the 30th ^ and his statement was only up 
to the 30th of April, all of these sales being after 
Viat dat s I dropped that when he said he could 
not say whether thej^ were sales or corrections. 

Mr. M(\\l.lister. You only have due on 
Town Lots sold, $16,000 and odd dollars? 

A. $10,267 01. 

Q. I do not recollect whether those sales you 
were speaking of that you gave some testimony 
about vesterdav afternoon, were embraced in 
that sum as the amount due on town lots sold 
and not paid for? 

A. That embraces all of the town lots in the 
various towns, which had been sold, but not 
fully paid for, and for which no deeds had been 
given. 

Q. From whom did you get your informa- 
tion upon that subject? 

A. From Judge Underbill, I think, or his 
assistant; from the books under his control. 

Q. He would know more about that than 
you would ? 

A. Yes, sir; he has the data at hand. 

Q. What did you put down in your Exhibit 
17 as the amount of stock owned by the Western 
Develof)ment Company in the Southern Pacific 
Railroad. 

A. $1,076,700 par value. 

Q. That is the par value ? 

A. Yes, sir. 



557 

Q. You put down the Southern Pacific Rail- 
road Company's stock owned by the Western 
Development Company as $1,076,700? What 
did Mr. Brown put it down in the original of 
Exhibit E at ? What does it appear at in Ex- 
hibit E ? 

A. In Exhibit E, before me, it appears 
$1,760,700 par value. t 

Mr. Hayes. It should be $1,076,700. 

Mr. McAllister. Making a difference, ex- 
cess over the true amount shown by Exhibit E, 
of how mativ shares of stock of the Southern 
Pacific Railroad Company? 

A. About 6840 shares. 

Q. Par value of 6840 shares? 

A. $84,000. 

Q. Then Exhibit E there shows that amount 
in excess, in Southern Pacific stock which the 
Western Development Company did not really 
own at that date? 

A. This printed Exhibit E shows that. 

Q. You have the corrected amount in your 
Exhibit? $1,076,700? 

A. Yes, sir. 

Q. That is the correct amount? 

A. Yes, sir. 

Q. There is an item expressed in voucher 
4334, of 6443 feet of railroad between the North- 
ern Railway and the California Pacific at Sui- 



559 

G443 feet of railroad. That is a charge td the 
Northern Railway contract 

A. To the Benicia contract of the Northern 
Railway Company — yes, sir. 

Q. And you finally, on this day, September, 
27th, 1879, ascertained that that was a wrong 
charge ? 

A. I ascertained that the California Pacific 
would pay for that piece of work. 

Q. And, therefore, j'^ou charged that $15,- 
075.20 to the California Pacific on that day, 
September 29, 1879? 

A.. Yes, sir; charged or collected the money. 

Mr. Hayes. Collected. 

Mr. McAllister. Then the reason that this 
was omitted from your statement, Exhibit 17, 
was that you were under a mistake as to the facts? 

A. I had no knowledge of the facts. 

Q. It was no intentional omission on your 
part? 

A. No, sir. 

Q. What are all of the diiferences between 
the statement that you made up and the origi- 
nal of Exhibit E? 

A. The principal difference, and the one 
which I noticed first, is the aV)sence of interest 
on the bonds. 

Q. That is to say, in your statement the ac- 
crued interest on the bonds is mentioned, but in 
Exhibit E it is not mentioned. 



560 

A. Exhibit E does not, but it is inentioneil 
in Exhibit 17. 

Q. In reference to that, did you have any in- 
terviews with S. M. Wilson at the time of this 
settlement, or before it? 

A. I did. I had several interviews with him 
before this settlement. 

Q. Did you in the course of those interviews 
explain to Mr. Wilson that there was accrued 
interest on those bonds? 

A. I did. 

Q. Do you know what paper you and Mn 
Wilson had l>eforeyou at the time of your state- 
ment to him about the accrued interest on these 
bonds; whether you had your **Exhibit 17 — 
Doutv/' or whether vou had Mr. Brown's "Ex- 
hibit E"? 

A. The exhibit we had was the one made 
out in the handwriting of Mr. Brown. 

Q. Do you understand that to have been 
the original of "Exhibit E'' annexed to the com- 
plaint? 

A. I l>eliove it to be. 

Q. And you explained to Mr. Wilson that 
the accrued interest was not expressed on the 
face of that exhibit on these bonds? 

A. Yes, sir. 

Q. What is the next difference between your 
stattnnent, " PlaintiflTs Exhibit 17 — Douty " and 
Exhibit E? 



561 

A. The stock matter, which we have cor- 
rected. 

Q. Which 6tock matter? 

A. The Southern Pacific Railroad stock 
matter. 

Q. That we have corrected ? 

A. Yes, sir; the California Pacific stock. 

Q. You mean the California Pacific Railroad 
stock in the possession of C. P. Huntington, in 
New York, cost $6,131.07 ? 

A. Yes, sir; that is omitted in Exhibit E. 

Q. Is there any other omission now ? 

A. I don't notice any other omission. 

Q. The valuations of the real estate are dif- 
ferent ? 

A. Yes. sir; the valuations of the real estate 
are different. 

Q. You express them under the head of 
'* par value 'Hhere, I understand. There is also 
a difference in the amount due for lots sold. 
You have it $16,267.01 and Exhibit E has it 
$12,000. 

A. Yes, sir. 

Q. At the end of your exhibit, on page 217, 
you say '' Excess of assets over liabilities, face 
vahie, $7,513,080 62.'^ That is omitted in Ex- 
hibit E, isn't it? 

A. Yes, sir. 

Q. That was assuming each of these assets 
to be of par value, this statement of yours? 



562 

A, Yes, ?in 

Q. You were familiar with the assets and 
liabilities of the Western Development Com- 
pany on this 3()th of April, 1879, when yoa 
made out vour statement, were vou not, as fa- 
miliar as anv one? 

A. I was familiar with all the securities tliat 
we had in our possession; as to what we had. 

Q. Was it your judgment at that tima that 
the assets exceeded its liabilities ? 

A. No, sir. 

Q. Your information was that the liabilities 
exceeded the assets? 

A. Yes, sir. I believe that to be th'j fact. 

Q. You have spoken of Mr. Wilson. Da 
vou refer to S. M. Wilson? 

A. Yc^s, sir. He was acting at th it time in 
behalf of Mrs. Colton. 

Q. Who was it showed you the statement of 
assets and liabilities, which you say was in the 
handwriting of W. E. Brown? 

A. Mr. Wilson. 

Q. Mr. Wilson brought that and showed it 
to vou, and then he and vou sat down with it 
before vou. 

A. Yes, sir. 

Q. And you explained to him that there 
was accru(»d interest on these bonds? 

A. Yes, sir. 

Q. You say that there was no work done by 



563 

the Western Development Company after Jan- 
uary, 1879? 

A. To my best recollection. 

Q. But you have mentioned some assets 
which came in after that date, which are not in 
^'Exhibit E." Were there not also some liabili- 
ties that accrued while the Western Develop- 
ment Company were at work, which came into 
the books after January 1st, 1879, and after 
this settlement? 

Mr. Hayks. I think that is scarcelv cross- 
examination. 

Mr. McAllister. You took the credit side 
of the account, and we want to show the debit 
side. 

Mr. Hayes. I have proved simply the 
omission of certain specific items of assets. If 
this is admissible at all, which I don't think it is, 
even in their own case, and I shall object to it 
then — it certainly is not admissible in cross- 
examination, we having examined him simply 
as to certain specific items of assets, which we 
claim to have been omitted. It is not cross- 
examination to sav there were liabilities 
omitted, too. 

Mr. McAllister. The locomotives, head- 
lights, etc., they have referred to, and the build- 
ings at Sand Creek, and the matter of the pipe, 
etc., all of these assets were put in as assets which 
had accrued to the company, although they had 



665 

to vour Honor's ruling out that portion subso- 
quent to August, 1880. 

• [Mr. Hayes then read the answer to the sev- 
enth interrogatory down to and inchiding the 
the quotation of August 26th, 1880, and, under 
the ruling of the ( -ourt, omitting the quotations 
after that date, and also continued and concluded 
the reading of the deposition.] 

Mr. Haves then offered and read in evidence 
the deposition of 

Hakuv Allkn, 

Taken on hehalf of plaintiff, omitting there- 
from in the answer to the third interrogatory, 
the quotations given after August, 1880.] 

Mr. M('Allistp:r. We make the same objec- 
tion to this testimonv as to Mr. Whitelv's. I 
suppose the same ruling, and we take the same 
exception. 

The CorRT. By both sides, I suppose. 

Mr. Haves. Yes, sir; by both sides. 

Mr. Hayes. [To Mr. McAllister]. I served 
notice upon you for the production of copies of 
each of the bonds and mortgages. 

Mr. M( Allister. I don't know that I have 
the mortgages. Here are the bonds. 

Mr. Hayes. I will next read in evidence one 
of the bonds of the Northern Railwav Com 
pany, marked '^Plaintiff 's Plxhibit 45/' which is 
as follows: 



666 



*' PLAINTIFF'S EXHIBIT 45/^ 

^^$1,000 $1,000. 

rnited States of America, 

State of California. 

Nuiul)er 1700- Xuinher 17()(L 

Northern Railway Company. 

The Northern Railway Company aeknowledjr- 

es itself indehted to Mark .Hopkins of the* ('ity 

and Countv of San Francisc(),or the holder there- 

of, in the sum of one thousand dollars, gold coin 

of the United States of America, which sum it 

promises to pay to the holder hereof, at the 

Citv of New York, on the first dav of JamuirVr 

A. 1>. 1007, with interest thereon at the rate of 

six per centum per annum, payahle semi-an- 

nually, on the first day of July, A. D. 1877, and 

on the first dav of January and Julv of each 

•/ «/ t' 

year thereafter, at the City of New York, upon 
the surrender of the annexed coup)iis, b )th 
pi incipal and interest payable in gold coin of 
the United States of America This bond is one 
of six thousand and three hundred, numbered 
from one to six thousand and tliree hun- 
dred, inclusive, each of which is a copy hereof, 
and all of which are secured by a first mortgaj^c- 
on the railroad, roUin}:; stock, fixtures and fran- 
chises of said Northern Railway Company. 
Said railroad is situated in the City and County 
of Saii Francisco, the counties of Alame hi. 



667 

Centra Costa, Solano, Yolo, Sacramento, Colusa 
and Tehama, in the State of California, and 
commences in the first-named countv and tor- 
minates in the la^t-named countv, beinf:^ two 
hundred and ten miles in length. Said mort- 
gage is made to Eugene Kelly and Henrv H. 
Laidlaw, of the City of New York, as trustees 
for the holders of said bonds. The paymcMit of 
said bonds is also further secured by setting 
apart in the year IHHfj and (»ach year then^afUM', 
from the net income of said road, th(» sum of 
forty thousand dollars, which fund, with the in- 
terest and increase thereof, is irrevocably 
pledged to the redemption and payment of sai<l 
bonds. 

In t(*stimony whereof, [pursuant to an onlerof 
its Board of Directors, said Northern Railway 
Company has caused these presents to be signed 
In' its President, countersigned by its Secretary 
and sealed with its corporate seal on the first 

day of January, A. D. 1877. 

» *■■ 

[seal] 
Northern Railway? Leland STA\Fi)Ri), 

Company. ) President. 

E. H. MiLLKK, Jr., 

Secretary. 

Attached an* such couj>ons as liave not lM*en 
paid. 

[KndursiHl.| Number 1700. 
Northern Railway <'onii>any. 

a.  * 



668 

First Mortgage, six per cent, gold bond. 
$1000. 

Principal due Jany. 1st, 1907. 

Interest payable January 1st and July 1st, in 
the Citv of New York. 

Trfstkes' Ckrtifkwtk. 
We her(»l>v certify' that the within bond is 
one of the bonds s(H'ured by the mortgage or 
deedoftnist therein mentioned and delivered 
to us as trustees, whicli has be(4i duly recorded 
in each of the counties in which the railroad 
therein iniMitioned, or any jmrt tluM-eof, is- 

situated. 

EroENE Kelly,) r,. 

HT) r > 1 rustet^s. 

Mr. Haves;. I will next xv.nd in evidence- 
one of th(» bonds of the San Pablo and Tulare 
liailroad Con^pany, wliich is as follows 
(Marked F^hiintirs Exhibit 4(5): 

PLAINTIFF\S EXHIBIT 46. 

First Mortgage Bond. 

United States of America. 

$1000 $1000 

In United States Gold Coin. 

No. 1 

In United States Gold Coin. 

No. 1. 
San Pablo and Tulare Railroad •Company of 
California. 



569 

examination, and as immaterial, irrelevant and 
incompetent. 

Mr. McAllister. We understand that the 
other side have been attacking ** Exhibit E,'' 
annexed to the complaint, as a statement of thci 
assets of the Western Development Company, 
and they have gone into the various items; and 
what we seek to show is that certain items of 
that kind have been improperly placed there as 
the assets of the Western Development Com- 
pany which did not belong there; that some six 
of the items of that account, or perhaps seven, 
are not properly there; and as this witness has 
gone into this account, we think we have the 
right to show by him— — . We seek to show 
that certain assets were included as assets of the 
W^estern Development Company which did not 
belong to that company. 

The Court. Is it the same objection as to th^ 
preceding question ? 

Mr. Hayes. Precisely. 

The Court. It seems to me to be of the same 
nature. 

Mr. Hayes. That is also pleaded affirni- 
atively in the amended answer as an affirm- 
ative defense. 

Mr. McAllisier. That is not a question of 
pleading, but of cross-examination. They have 
taken up this particular account and have at- 
tacked it in certain points by this witness. , We 






I '■ 



570 

»eek ti) show as to the same account, on cross- 
examination, in what respects it was incorrect, 
as against ourselves. 

Thk Court. "Exhibit E/' I understand, is a 
«tat3ment which they allege you made to 
them to induce them to make the compromise 
or 8ettlem3nt. They have attempted to show 
that some of the assets were not included. You 
propose to show on cross-examination that you 
included some that ought not to have been in- 
cluded ? 

Mr. McAllistkr. Yes, sir. 

Thk Court. It does not seem to me that it is 
proper on cross-examination. 

Mr. MrALLiSTER. Our proposition is to take 
up this same account, " Exhibit E," as to which 
this witness has been examined, and to show 
that certain other items than those specified in 
the direct examination are incorrect; and that 
th)-*) o!:'i »r itim^ mik.ta showing of assets 
monj favorable to the Western IXn-elopmant 
ComT)anv than thev were entitled to have. In 
other words, that property was included which 
did not b »loiig to the Western I) »volopm?nt 
Com[)any. They object to that a^ n')t cross- 
examination: your Honor sustains th^ objec- 
tion, and we (>xcept. 

il. I sin» m »ntioned among the stocks the 
National (J )ld B.ink and Trust Company, 37^ 
shares $2025, as one of the assets of the West- 



571 

em Development Company. Did not that 
bank, the National Gold Bank and Trust Com- 
pany? 

A. Yes sir. 

Mr. Hayes. I object to that as irrelevant 
and immaterial. That is not proper cross-ex- 
amination. 

The Court. There was some examination 
about that item, was there not ? 

Mr. Hayes. No, sir; Mr. McAllister in his 
cross-examination has brought up the name of 
another bank in connection with another mat- 
ter, which was the First National' Gold Bank. 
That is a different bank from this. There has 
been no reference to this item in the direct or 
cross-examination. 

Mr. McAllister. I don't think that item 
has been gone into excepting as a part of this 
exhibit generally. There have been no special 
questions asked about it. 

The Court. Then I suppose the ruling should 
be the same. 

Mr. McAlllster. We take an exception. 

Mr. Haves. I move to strike out the answer. 

Mr. McAllister. Certainly. We reserve an 
exception. 

The Court. The motion is granted. 

Mr. McAllister. There are various other 
questions that I desire to ask: for instance, the 
bills receivable here in this account are valued at 



572 

$65,104, I desire to show by this witness that 
a portion of these bills were valueless and worth- 
less. If there is no objection to that, I will 
show it. 

Mr. Hayi!;s- There is an objection to it being 
shown no^y. 

The Court. The same ruling as to that. 

Mr. McAllister. We take an exception. 

Q. Something has been said on your direct 
examination about the Willows Depot, page 222, 
I think, of the printed transcript. How is that 
expressed in your exhibit, ^'Plaintiffs Exhibit 
17_Douty"?t 

A. It is not expressed at all. 

Q. Whv was it omitted? What is vour ex- 
planation about that here? 

A. That is under the head of ^'Real Estate.'' 

Q. It a-ppears in your Exhibit 17, "Town of 
Willows, an undivided ^ — 56 525-1000 acres, @ 
$175.'' 
: A. Yesi ^ir. 

Q. You were asked about the Willows Depot, 
"Who built it/' and you say: ''I don't have any 
special recollection in regard to it.'' Q. Do you 
know by whom it was built; whether bv the 
Western Development Company or not? 

**A. I have no recollection in regard to the 
matter, 

, ''Q. Well, turn to your journal; perhaps that 
will refresh vou. 



573 

''[Witness does so.] 

'*Q. Have you found that entry? 

''A. Yes, sir. 

*'Q. What does it refer to? 

"A. It refers to a credit to the Willows con- 
tract, a debit to the Pacific Improvement Com- 
pany for a depot. First charged to the Willows 
contract and then removed to the Benicia 
branch. 

**Q. What is the date of the item? 

*'A. The date of the correction is September 
30th, 79. 

''Q. On that date did the Western Develop- 
ment Company receive — ? 

'*A. It has received credit for that amount of 
$2547.24.^' 

* 

*'Q. Can you explain that — why it was 
omitted from your statement of April 30th, 
1879, plaintiff's ^'Exhibit 17.'^ 

A. I had no knowledge of it at the time. 

Q. What was the precise nature of that 
transaction — of the correction ? 

A. I don't know that I can throw any more 
light upon it than I did in the direct exami- 
nation. 

Q. Then let it pass. 

A. It has passed entirely fiom my recol- 
lection. 

Q. You speak, on pages 227 and 228 of the 
printed^transcript, in reference to a certain note. 



574 

 

" The note for $878,000, which was given in Sep- 
tember, 1875, to the Central Pacific Railroad 
Company by the Western Development Com- 
I>any/' What was it secured by? Was there any 
collateral for it ? 

A. T don't remember. 

(i. While it is true that note was given by 
the Western Development Company as an ac- 
commodation to the gentlemen named there^ 
Stanford, Huntington, Hopkins and Crocker^ 
and subsequently paid by the Western Develop- 
ment Company, yet it is also true that they 
charged it up to the individual accounts of 
those gentlemen, is it not? 

A. Yes, sir; as I remember the transaction. 

Q. It was charged up to the account of *' S., 
H., H. and (!/' The note was secured bv Cen- 
tral Pacific Railroad stock. Those notes were 
given and renewed, until finally a note of the 
Western Development Company was giv^en to 
the Central Pacific Railroad Company for $3,- 
086,259.72? 

A. Those are the figures that are here. 

Q. There was no loss to the Western Devel- 
opment Comi)any in that transaction, was 
there, as to the giving of this $3,000,000 note, 
and the various notes? 

Mr. Hayes. No, sir. It had borrowed the 
monev from the Central Pacific Railroad Com- 



07o 

paiiy, and it is not claimed tliore was any loss 
in the making of the note. 

Mr.. McAllister. Q. , That was finally all 
charged up to the individual holders of that 
note. Is that so? 

A. This last note was paid by the Southern 
Pacific Railroad bonds. 

Mr. Hayes. The $878,000 was charged up 
to the individual accounts; that is all the indi- 
viduals had to do with it. 

Mr. McAllister. Q. In this transaction 
of the $878,000 note, and this other note, there 
was no loss to the Western Development Com- 
pany in that matter, was there ? 

A. No, sir; not that I know of. 

Q. Something has been said here and shown 
of voucher 267.1 , January 31st, 1878, as to the 
sale of some $500,000 worth of Southern Pacific 
bonds to the Oakland Water Front Compan3% 
page 251 of the printed transcript, in a trade 
with Edson Adams. Do you know whether 
Mr. Colton had knowledge of that matter? 

A. Yes, sir; he did. He had knowledge of 
what I had done in the matter, that I had dis- 
posed of the bonds in the manner suggested. 

Q. He had knowledge of your action in that 
matter? A. Yes, sir. 

Q. Was the ^* Cash Received '' book, which 
has been referred to, a book ke[>t in the W. I), 
office? 



570 

A. It was. 

Q. I wish you would make a calculation^ 
after you leave the stand, to show the total 
amount of gold and the total amount of silver 
paid by the C. P. R. R. Co. to the W. D. Co. 
between September 17th, 1875, and October 8th, 
1878? As I understand you, these were paid 
into the W. D. Co. bv the C. P. R. R. Co. just 
as its receipts came, in silver and gold, to the 
Central Pacific Railrdoad Company. 

Mr. Hayes. He has not said that. 

A. It was received by the W. D. (^o., as the 
W. D. Co. required money to use. 

Mr. McAllister. Q. I mean the moneys 
due the W. D. Co. bv the C. P. R. R, (^o. 

A. We usually had a large credit on the books 
of the C. P. R. R. Co. which we drew against. 

Q. Do you know the assets referred to in 
this account as the Miller account in '' Ex- 
hibit E"? 

A. Yes, sir. 

Q. Did Mr. Colton ever speak to you in 
I'efcrence to those Miller assets? 

Mr. Hayes. I object to that as irrelevant, 
immat<}rial and not cross-examination. There 
has been no testimonv alHUit the MilliT assets 
in the contract. 

Mr. McAllister. W(» submit that to the 
( 'Ourt. We seek to show the directions of Mr. 
Colton to Mr. Douty in n^ference to ke<*ping the 



577 

Western Development Company's books, so far 
as these Miller assets were concerned. The 
mode of keeping these books has been largely 
gone into by the other side, and we seek to show 
Mr. Colton's directions upon that subject. 

The Court. Is it simply to show that the 
books were kept under his directions? 

Mr. McAllister. To show special direction 
in reference to the Miller assets; why he 
wanted them kept on the books of the West- 
ern Development Company. 

Mr. Hayes. That we object to. He can ask 
if the account was entered in the books under 
the direction of Mr. Colton, but as to any 
reasons, or arguments, or views connected with 
the matter, I don't think he has a right to go 
into on cross-examination. 

The Court. Do you desire to show the con- 
trol Mr. Colton had of the books? I suppose it 
is admissible. I don't know for what purpose 
it is offered. 

Mr. Hayes We take an exception. 

Mr. McAllister. What directions, if anv, 
did Mr. Colton ever give you in reference to 
putting the Miller assets, or keeping the Miller 
assets on the books of the Western Develop- 
ment Company? 

A. He said that it had been arransied so that 
the Western Development Company would as- 
sume the liabilities of John Miller and take his 



578 

assets. And that was the reason why these Mil- 
ler assets appeared in the statement. I sup- 
pose when I made it up that it belonged to the 
Western Development Company, on that author- 
ity. 

Mr. Hayes. You are not incorrect. 

Mr, McAlustkr. All of the vouchers that 
have been produced here in the course of your 
direct examination or cross-examination except 
tho^3 which originated after August 27th, 1879, 
were on file in the office of the Western D3vel- 
opment Company at the date of and prior to 
the 27th of August, 1879, were they not? 

A. Yes, sir. 

Mr. Haye>. Were tho32 dated prior tj that 
date? 

A. Yes, sir. 

Mr. McvVlllster. Did you know of any con- 
tract between the Western Development Com- 
pany and th'3 Southern Pacific Railroad Com- 
pany of Arizona? 

A. No, sir. 

Q. The main contract b3tWs}?n th? Western 
Dev.dopment (Company and the Southern Paci- 
fic Railroad (•ompany has be^n put inevid3nc':>. 
In that main contract was there a portion of it 
not p^rform^ 1 by the Western Djv3lopment 
Company. 

A. Yes, sir. 

il. What portion of the road was that? 



579 

A. From Mojare to the Needles. 

Q. A distance of how many miles? Is it 
242 51-100 miles? 

A. 242 51-100— yes, sir. 

Q. That is '' PlaintifTs Exhibit 26— Dout^" 
— page 361 of the printed transcript. Look at 
this contract, the S. P. main contract. I want 
to know if there was any other part of that S. 
P. main contract road that the Western Devel- 
opment Company did not build b33id3s the 
space between Mojave and the Needles? 

A. Yes, sir; there seemed to be two portions. 
The contract reads: *' Beginning at S )ledad, in 
the county of Monterey; thence to the eastern 
boundary of the State, on the Colorado river, at 
or near the Needles.'' 

Q. Read it to yourself, and state if you know 
any other portion, not completed by them, be- 
sides that from Mojave to the Needles ? 

A. I don't know where Los Gatos Creek is. 

Q. If you cannot state it, let it go. Los 
Gatos is called Huron, I understand. 

A. Los Gatos is, but in this contract it is 
Los Gatos Creek. 

Q. This contract, never having been com- 
pleted by the Western Development Company, 
was it ever annulled between the Southern Pa- 
cific and the Western Development Company? 

A. ^ Yes, sir. 

Q. Was there a new contract made between 



580 

•h^- Soiitfifrn Pacific and the Pacific Impri^Vv- 
thf'Ut ('nui\mny to build the road from Mojav^ 
if tfi^' Xe^jrlli'H ? 

A, YfH, HIT. 

<l. Was it in writing? 

A, YcH, sir. 

<l. Have yoii got that contract here? 

A, No, nir; I don't think we have. 

Mk. MrALUSTEU. Here is tlie contract. 
Mil. Havks. It seems to Vx* diily executed- 

Mk. McAlustkr. Q. You sav vou know of 
no contrac't b(;tween the Western Development 
rornpany and the Southern Pacific Railroad of 
Arizona. 

A. I do not know of any such contract. 

Q. I>o you recolhrct when the Pacific Im- 
provement Company was organized ? 

A. In November, 1879. 

Q. November Dth, 1878, is the precise date, 
I believe. 

Mr. Haves. Then let us take that as an ac- 
cepted fact. 

The Witness. [Referring to record.] Th? arti- 
cles of inc )rp>ratiou are dated Noveiubc^r 4th, 
1878: filed in the Count v Clerk's office on the 
2d dav of November, 1878. 

Mr. Haves. Dated on the 4th, and filed two 
davs before it is dated. 



581 

A. The date is the date used by the Secretary 
of State. That was considered the date. 

Q. Filed in the Secretary of State's office on 
the 4th. 

A. Yes, sir; and in the County Clerk's office 
on the 2d, and the first meeting was held on the 
9thof November, 1878. 

Mr. McAllister. Q. You appear to have 
made some etitries in the books of the Western 
Development Company between October, 1878, 
and the end of December, 1878, under the head 
of *' Arizona Contract.'' I understand you that 
there was no contract, to your knowledge, be- 
tween the Southern Pacific Railroad Company 
of Arizona and the Western Development Com- 
pany? 

A. There was no contract. 

Q. Do you know .of any contract of the 
Western Development Company to build a rail- 
road in Arizona? 

A. No, sir. 

Q. Why did you open in your books of the 

Western Development, between October, 1878, 
and the end of December, 1878, an account 

called the Arizona contract? Was that the name 

of the account? 

A. Yes, sir; that was the name of it. 

Q. There was such an account in the books 
of the Western Development Company. 

A. Yes, sir. 



582 

Q. Wliy was thatacconnt there at that time 
and under that name ? 

A. At the time we began work in Arizona 
I had no Pacific Improvement Company books, 
and for mv own convenience I started these 
accounts in the books of the Western Develop- 
ment Company. 

Q. What accounts do you mean by '^ these 
accounts*'? 

A- Arizona Contract, Arizona Survey, Ari- 
zona Right of Way, and Arizona Telegraph. 1 
think four accounts cover it. 

Q.. You started those in the books. o(. the 
Western Development . Company ? 

A. Yes, sir. 

Q. And in those accounts you put various 
items as they owairred between October, 1878, 
and December 31st, 1878? 

A. Yes, sir. 

Q. And then on the 1st of January, 1879, 
you transferred the wliole thing over to the 
Pacific Im[)rovement Company? 

A. Yes, sir; in detail, with accrued interest. 

Q. These entries and these headings were 
all vour own volition? You were not directed 
to do it bv anvbodv, were vou? 

A. That was mv own idea in the matter and 

»■ 

was for mv own convenience. 

Q. And the whole thing was charged over to 



585' 

the Pacific Improvement Company on the Ifet 
of January, 1879? 

A. Yes, sir. 

Q. Do you recollect whether that account 
between the Pacific Improvement Company 
and the Western Development Company in 
which these items were charged over on the Ifef 
of Januarj', 1879, was shown to Mr. S. M. 
Wilson? 

A. The statement was prepared for Mr. 
Wilson. 

Mr. Hayes. Of what ? 

A. Of that account- — of the account of the.- 
Western Development* Company and the Pacific: 
Improvement Company. The account \vaspre^; 
pared and handed to Mr. Crocker. 

Q. In reference to those surveys, some sutj^ 
veys which you did not charge over to the Pa- 
cific Improvement Company; the Desert Surr- 
vey and others. Here it is, the voucher is 2796, 
dated March loth, 1878, it says: '* F'or transfer 
of desert survey account, $50,471.26." What 
was that desert survev? How much of that was 
in California, and how much, if any, in Ari- 
zona ? 

A. I cannot state precisely how much of. 

that was in (^'alifornia; there was more or less. 

It was the survey which preceded the building 
of the road from a point beyond Colton, or near 

the San Gorgonia Pass to the Colorado river, 



584 

and then the same surveyors went over int> 
Arizona, and made more or less surveys, con- 
tinued observations. 

Q. In what year was that desert survey 
spoken of here as costing over $50,000 made? 

A. In 1875 and 1876, I think, and 1877 per- 
haps. 

Q. Can you state whether very much the 
larger proportion of that survey was done in 
California ? 

A. I can't state what proportion. 

Q. VVho were the survej'^ors, or who was at 
the head of the surveyors who made that sur- 
vey designated here in this voucher as ^'Desert 
survey?'' 

A. William Hood had charge of a party, I 
think. 

Q. What is the survex^; ** Arizona survey 
$13,405.61,*' in the same journal voucher? 

A. That is for services in and alM>ut Ari- 
zona. There were several parties at various 
times surveved there. 

Q. Who was at tlie head of that survey ? 

A. I don't recoUec't now. There were sur- 
veys made by Isaac* W. Smith in that section^ 
by William Ho(xl and E. A. Phillips, I think, 
who has since died. 

Q. Then you have ''Southern Pacific survey 
$8,521.1 1 r What survev was that ? 



585 

A. That was a survey, I think, from San 

Diego to Yuma. 

Q. That was in California, then? 

A. Yes, sir, the greater part of it. It verged 

into Mexico at times. 

Q. These surveys were made in 1875 and 
1876, you say ? 

A. Possibly some in 1877; some portion of 
them. I am not clear upon that point. 

Q. This was before the Pacific Improve- 
ment Company had made any contract with 
the Southern Pacific of Arizona. 

A. Yes, sir. 

Q. That did not exist at that time at all? 

A. No, sir. 

Q. Did the Pacific Improvement Company 
adopt those surveys for any work that they did; 
or were they surveys that were merely 
abandoned? 

A. I don't know as to that, except upon in- 
formation. • 

Q. What was the cause of making this 
voucher of March 15th, 1878? 

A. To close out a lot of those debt accounts. 

Q. Is that voucher made by yourself? 

A. It is made by my bookkeeper, under 
mv direction. 

Q. To what account had these surveys been 
charged up to that time? 

A. To the S. P. main contract. 



586 

Q. What charge did you make in reference 
to them at this time when you made this 
voucher out? 

A. I charged the S. P. main contract and 
credited the different surveys, or the different 
accounts which appear upon the back of this. 

Q. Under what accounts had they existed 
before ? 

A. Under the accounts of ** Desert survey, 
Arizona survey, Arizona right of way, and 
Southern Pacific survey." 

Q. As I understand you, all of thos9 matters 
of the Arizona contract and Arizona survey had 
been put into the books of the Western Deyelop- 
ment Company under these headings by you 
between October, 1878, and I>ecemV)er, 1878, 
simply as a matter of convcMiience, and then on 
the 1st of January, 1879, all of them We»re trans- 
ferred to th3 Western r>3velopm(*nt Company. 
I want to know wliv these were not transferred 
at that time. 

A. The only reason this Wiis not transferred, 
or that portion of it, which, perhaps, should 
havo l>een transferred was, the whole thing wa3 
Iniried in thj S. P. main contract and oyer- 
looked. I didn't know and 1 could 
not tell without a careful examination 
what part of the work l>elonge(l to 
the Pacific Improyement Company, to he re- 
funded but my intention at that time was to 



587 

Tiave the Pacific Improvement Company pay 
ba?k their account, or for all the work the West- 
ern Development Compan}^ had done which the 
Pacific Improvement Company was likely to 
thereafter have anything to do with. 

Q. This then escaped your attention on the 
1st of January, 1879, when you made the trans- 
fer of these other items to the Western Develop- 
ment Company? 

A. Yes, sir; I cannot say positively now 
that the transfer has been made. I don't think 
it has; but it was omitted because it was over- 
looked. 

Q. You have testified on your direct exam- 
ination to large amounts paid to the credit of 
"S., H., H. and C." Stanford, Huntington, 
Hopkin:5 and Crocker, respectively, during 
1876, 1877 and 1878. Those, I understand, 
came^from the Central Pacific Company, didn't 
they, or where did they come from ? 

A. They were composed of coupons and div- 
idend warrants, which were collectable from the 
Central Pacific Railroad Company, and were in 
effect collected. 

Q. Were* all of those amounts which you 
have read off here, beginning in April, 1876, and 
running down to the end of November, 1878, to 
the credit of Crocker, Stanford, Hopkins and 
Huntington, or ''S., H., H. and C' payable in 
gold? 



^88 

A. Yes, sir. 

Q. They were gold coupons; gold bonds, 
were thev not ? 

A. Gold coupons. And the dividend war- 
rants were also payable in gold. 

Mr. Hayes. We admit that these claims 
which are the basis of this transfer were pay- 
able to them in gold; that they were entitled 
to them in gold. 

Mr. McAllister. Q. In reference to the 
monthly statements of Mr. Huntington during 
the time of your connection with these Rail- 
road Companies and the Western Development 
Company, was Mr. Huntington in the habit of 
sending monthly statements to the AVestern 
Development Company ? 

A. Yes, sir; I am positive that was his prac- 
tice. I have seen a good many of his state- 
ments. 

Q. Was G3:i9ral C.)lt)n in his lifetim) fa- 
miliar with the mode in which those statements 
of Mr. Huntington cam3 from New York? 

A. He was. 

Q. Was not the same form of statement pur- 
su3i by Mr. Huntington previous to Mr. Col- 
t^n's death, which he pursued subsequently in 
these monthly statements? 

A. Rjterriiig to the Western Development 

Company — yo^y sir. 

Q. Had it n:>t alwciys boen the pra'?tice and 



589 

custom for Mr. Huntington's monthly state- 
ment to be accepted at the offices there without 
any question and without any vouchers ? 

Mr. Hayes. If vou know. 

Mr. McAllister. Q. Was Mr. Colton 
familiar with these statem ents of Mr. Hunting- 
ton and the mode in which they came? 

A. I cannot sav as to the statements; but 
that part of the statements which were charge- 
able to the Western Development Company he 
was familiar with; for each month when the}'' 
would come, or when Mr. Miller would render 
me the bill, I was in the habit of taking it up 
to him for him to look over — for him and Mr. 
Crocker to look over. 

Q. Did Mr. Colton always recognize those 
statements of Mr. Huntington as good vouchers, 
even when they were not accompanied by any- 
thing more than the statement of Mr. Hunt- 
ington ? 

A. He always accepted them. 

Q. Wasn't it the practice of Mr. Hunting- 
ton to send these statements without vouchers 
to a great extent? 

A. All that I ever got was a bill from the 
Central Pacific Railroad Company, and that 
bill contained all the information which the 
statement had. Those bills I was in the habit 
of taking to General Colton and to Mr. Crocker, 
and they were in the habit of saying ^'all right.'' 



590 

I took thjTiT there as a matter of form. I did 
not know anything about the contents of them^ 
but I wi8h3d to adviso with General Colton and 
Mr. Crocker. The result was tliat I always 
cliarged them up the best way I could. 

Q. And those statements were unaecom^- 
panied with voucliers. 

A. Those statements were unaccompanied 
with vouchers. 

Q. And they were always accepted by ^Ir. 
Colton and Mr. Crocker, without question, were 
the V not ? 

A. Yes, sir. 

Q, Wa^ there any difference in the form of 
statement as to the $10U,(XJ0 of April 12th, 
'1879y and as to the $91,01(>.G7; was there any 
difference in the form of tliose statements from 
previous statements of Mr. Huntington. 

A. They were all made up in the same way, 
sometimes they would have a little more infor- 
mation and sometimes thev would have a little 
less information. It averaged about the same. 

Q. Were you not directed by the defendants,, 
or some of them, to charge all nioneys that had 
been paid l)V the Western Development Com- 
pany for surveys or wT^rk in Arizona, to the 
Pacific Improvement Company? 

A. Those Wi'VQ mv instructions; ves. sir. 

«. «. 

Q. And you fulfilled those instructions, ex- 
cept in the certain particular that we have been 



591 

calling your attention to, ils to the desert survey 
which you have spoken of, and' the Arizona 
right of way, etc.? 

A. Yes, sir; those were my omissions. 

Q. Not the omissions of am- of the de- 
fendants? 

A. Not the defendants; whatever part of 
them belonged to Arizona were omitted by 
mvself. 

Q. You have been called upon to produce all 
the impression books, or the impression state- 
ment books of the Western Development Com- 
pany. Have you produced them all? 

A. I believe they are all here-r-yes, sir. 

Q. In reference to voucher 4569, dated April 
24th, 1880; it refers to that $150,000 which it de- 
scribes as once in the hands of Mills, the Treas- 
urer, that was Treasurer of the old Southern 
Pacific, and Hopkins, Treasurer. What I want 
to get at is, the first information that the 
Western Development Company ever had in 
that matter was on the 24th of April, 1880, 
was it not? 

A. On the date of that voucher, whatever 
it is. 

Q. Did that enter into the books of. the 
Western Development Company before the date 
of your voucher, April 24, 1880? 

A. Not that I am aware of. 

Q. But what you did on that day, as I un- 



592 

derstand you, was, you charged that $150,000 
on the 24th of April, 1830, to the Southern Pa- 
cific main contract? 

A. I did. 

Q. And that was by the direction of Mr. 
Crocker, I understand? 

A. Yes, sir. 

Q. You were asked about certain locomo- 
tives — ^v^oucher 3487, sent from the East bv the 
Central Pacific Railroad Company, on which no 
freight was charged. Have you got that 
voucher? I will ask you whether, when freight 
was earned, as against any of these parties, 
whether it was the Western Djvelopmjnt Cjra- 
pany, or Stanford, Crocker, Huntington, Hop- 
kins or Colton, freight was always charged. 

A. Always, wlien it came through me. 

Q. Those locomotives were sent from the 
p]ast by the Central Pacific Railroad Company 
I understand this voucher ? 

A. Thev were sent by Mr. Huntino-ton. He 
usually purchased all of the stock that we used. 

Q. They were sent by him for the Western 
Development Company, I suppose ? 

A. Thej>e particular ones were, as it turned 
out, sent to '*S., H, H & C.,'' if that is th-^ vouch- 
or that Wvihave been talking about. 

Mr. Havks. That is the same voucher. 

Mr. McAllistkr. The account showed that 
no freight was charged, as I understand it. Do 



393 

)nou know whether or not there was freight 
charged on those locomotives? 

A. The freight would not necessarily b^ 
shown on that bill, because the Capital Pacific 
would render an expense bill from Ogden to 
Sa?ramento, where the engine was set up, and 

that would come in in another wav. 

•/ 

Q. Then you say freight might have been 
paid on these locomotives, althougli not ex- 
pressed in this voucher 3i87 ? 

A. Yes, sir. 

Q. And was it the practice to charga freight 
and have it paid ? 

A. Yes, sir; they always paid freight.. 

Q. If individual packages came to any of 
these individual defendants, yau would always 
pay freight on them ? 

A. If it came through me I always had to 
pay freight on it. That is the general under- 
standing — that everybody pays freight, 

Q. You said that on the Ist of January, 
1879, you charged over to the Pacific Improve- 
ment Company all that period in these various 
accounts, **Arizona Contract,'' and **Arizona 
Survey.'' Were those amounts paid by the Pa- 
cific Improvement Company to the Western De- 
velopment Company? 

A. The Pacific Improvement Company al- 
lowed the accounts and gave the Western De- 



594 

velopraertt Company credit for them oa its 
books. 

Q. That is the same as payment, I suppose? 

A. We regarded it as an equivalent. If the 
account is sound, it i& as good as coin. 

Q. Did I understand you that that $100,000 
item of Mr. Huntington's and that $91,010 item 
were both charged to the S. P. main contract? 

A. Indirectly; yes^ sir. They were origin- 
ally charged to the suspense account, the bal- 
ance of that account being finally transferred to 
the 8. P. main contract. 

Q. Was that transfer from the suspense 
account to the S. P. main contract done bv the 
direction of the defendants, or anv of them? 

A. No, sir; it was done on my own motion, 
to get rid of the old dead accounts. 

Q. Your attention was called to voucher 4120, 
dated Mav 1, 1879, which was a note of the 
Western Development Company to Mr. Carpen- 
tier. That transaction was for the benefit, as I 

 

.understand you, of the Pacific Improvement 
Company? 

A. The Pacific Improvement Company got 
the money. 

Q. Bjt th3y wjro charge:! with it, wjrj th^^y 
not? 

A. Yes, sir. 

Q. Do you recollect what was stated to you 
at the time, of the reason why the Western 



595 

Development Company note was given instead 
of the Pacific Improvement Company's note. 

A. 1 recall a reason given by Mr. Crocker 

about that time. 

Q. What was that reason ? 

A. That the Western Development Com- 
pany's notes were given so that the estate of 
Mark Hopkins would be included. 

Q. Mr. Mark Hopkins died before the Pacifi.c 
Improvement Company was formed. 

A. Yes, sir. 

Q. And that note was paid to the Western 
Dev'elopment Company by the Pacific Improve- 
ment Company, and also the other note you 
have spoken of, the note of $10,000, voucher 
4179. 

A. Yes, sir. 

Q. There was no loss to the Western Devel- 
opment Company by giving these notes for the 
accommodation of the Pacific Improvement 
Company, was there? 

A. No, sir. 

Q. As I understand vou with reference to 
this Monterey and Salinas Valley Railroad, you 
understood that t:) b3 a purchase by paying off 
this mortgage of Mr. CowelFs, of over $130,000? 

A. That was one of the elements which en- 
tered into the purchase. 

Q. Were you ever direct3J by any of thes< 



e 



596 

defendants, or Mark Hopkins, in his lifetime^ 
to make any improper charges upon your books ? 

A. No, sir. 

Q. Did they ever ask you to insert there any- 
thing contrary to the tJ^th ? 

A. No, sir. 

Mr. McAllister. I do not think of any 
more questions at present, but I would like to 
have the privilege of looking over my notes, 
and if I have omitted anything, in the morning 
I can ask him concerning them. 



An adjournment is here taken until to-mor- 
row morning at ten o'clock. 



EIGHTH DAY. 



Friday, November 23d, 1883. 
Cross-Examination of 
Frank S. Dofty — Resumed. 

• 

Mr. McAllister, You were speaking of a 
road between Mojave and the Needles, that was 
not built by the Western Development Com- 
pany. Under the S. P. main contract, the agree- 
ment was to build a road from Soledad to he 
Needles ? 

A. So the contract reads. 

Q. Andf was that road ever built by the 
Western Development Company? 

A. No, sir. 

Q. That road from Soledad to Mojave has 
never been built at all, has it ? 

A. No, sir. 

Q. Did the Pacific Improvement Company 
build the road from Mojave to the Needles? 

A. Yes, sir. 

Q. When did it build it? 

A. It began the road in the spring of 1882, 



GOO 

and completed it in the spring of 1883. They 
operated its entii'e length, July 1st, I think, of 
this year. 

Q. Then between the date of the Southern 
Pacific main contract, which was, I think, in 
1875, and the spring of 1882, nothing had been 
done by the Western Development Company 
towards building the road from Soledad to the 
Needles, or any part of that road ? 

A. Nothing had been done by the Western 
Development Company. 

Q. This road from Soledad to the Needles, 

or that portion of the road between Mojave and 

the Needles, that is not on the main road 
to Yuma at all, is it? 

A. No, sir. 

Q. That was continued in connection with 
the Atlantic and Pacific ? 

A. It was built for that purpose, to connect 
with the Atlantic and Pacific. 

Q. You have spoken of the bonds of the 
Southern Pacific being issued. I will ask you 
whether they only issued l>onds in proportion 
to the road built? 

A. That is precisely what they did. The 
bonds were issued for what road was built and 
in operation. 

Q. And as it was built ? 

A. And as it was built — ^yes, sir. 

Q. Built and accepted, I suppose? 



GOl 

A. Yes, sir. 

Q. You have spoken of the bonds of the Los 
Angeles and San Diego Railroad. Has any- 
thing ever been done to those bonds, or are they 
still on hand? 

A. They are still in the possession of the 
Western Development Company. 

Q. Nothing has been done in the way of dis- 
counting or selling them ? 

A. No, sir. 

Q. You have spoken of certain steel rails 
and trimmings, on page 421 of the printed 
transcript, which went down to Arizona. 

Mr. Hayes. It is only spikes, included in 
the account of rails and trimmings. 

Mr. McAllisteji. It was only spikes sent to 
Arizona. 

A. Spikes were sent to Arizona, and charged 
in the Arizona contract. 

Q. I don't think it clearly appears that the 
cost of those spikes, steel rails, or whatever th'\y 
were was ever paid by the Pacific Improvement 
Company, but it vms paid by the Pacific Im- 
provement Company, wasn't it? 

A. Yes, sir. 

Q. Transferred to the Pacific Improvement 
Company by you, on the 1st of January, 1879, 
when you made the general transfer? 

A. Yes, sir. 

Q. I don't know whether I asked you in 



602 

reference to the 91,000 and odd dollars in the 
Huntington voucher. That you say you trans- 
ferred, with certain other balances, to the South- 
ern Pacific Railroad Company on January 23d, 
1883. I want to ask you whether you did that 
by the direction of any of the defendants? 

A. No, sir. 

Q. Where was the California office of the 
Rocky Mountain Coal and Iron Company? 

A. The Pacific coast office, so-called, when I 
first had any knowledge of it, was in 402 Mont- 
gomery street, in General Colton's office. 

Q. Was that in Gleneral Col ton's building or 
office? 

A. In General Colton's office. 

Q. When was it moved from General Col- 
ton's office down to the railroad office, on 
Fourth and Town sen 1 streets ? 

A. At the time I became Secretar\% that was 
in the spring of 1877. 

Q. At the time you became Secretary of the 
Rocky Mountain Coal and Iron Company? 

A. Yos, sir. 

Q. Previous to that time, the books had 
been kept in G.meral Oolton's office? 

A. Yes, sir; so far as I know. 

Q. Tlicn after the spring of 1877, you kept 
the books of th(» Rocky Mountain Coal and Iron 
('onipany ? 

A. Yes, sir. 



603 

Q. And you kept them in your office down 
in the railroad building on Fourth and Towns- 
end streets? 

A. Yes, sir. 

Q. Did any of these defendants, to your 
knowledge, ever see those books? 

A. Never, to my knowledge. 

Q. You have spoken of certain notes given 
by the Western Development Company for the 
accommodation of the Pacific Improvement 
Company previous to August 27th, 1879. Were 
all of those notes paid by the Pacific Improve- 
ment Company? 

A. Yes, sir; at their maturity. 

Q. Did the giving of any of those notes by 
the Western Development Company for the 
accommodation of the Pacific Improvement 
Company have any effect upon the statement 
*'ExhibitE"? 

A. No, sir. The money that was borrowed 
was charged to the Pacific Improvement Com- 
pany, and when it was paid, it was paid by the 
Pacific Improvement Company and charged to 
the Western Development Company. 

Q. So it made no difference in the showing 
of the accounts at all ? 

A. No, sir. 

Re-Direct Examination of F. S. Douty. 

By Mr. Hayes. Q. You testified on your 
cross-examination that you came to ("alifornia 



G04 

at the instance of Greneral Colton. Did he seek 
you out for the purpose of having you come to 
California, or was the suggestion made first by 

you or somebody on your behalf? 

A. The beginning of it was a letter writter^ 
by myself to General Colton, without knowing 
where he was, or anything about it, thinking 
that a letter perhaps to San Francisco, Cali- 
fornia, would get to him, I wrote to him and 
several others at the same time; and that letter 
I received a response to in New York. 

Q. By personal interview, was it? 
A. By letter, requesting me to come to New 
York and see him. 
Q. Where he was ? 

A. Where he was. 

Q. At that interview, do you recollect how 
he expressod himself with regard to having his 
relatives come to f5alifornia and go into his 
business there? 

A. Yes, sir, he took occasion to sav that his 
exp3rience with relatives had been very unfor- 
tunate, that he liked my looks, and would like 
to have me come to California; that the onlv 
objection he could see was that I was a rehitive. 
He said: *'Sink that, and I should like Itave vou 
come," or something to that effect. 

Q. Did he say something about a relative 
who was thou doing some business for him? 



605 

Mr. McxVllister. I object to this conversa- 
tion, when we were not present. 

Mr. Hayes. I will not press that any far- 
ther. 

Q. You have spoken also in your cross-ex- 
amination about the contract of the Contract 
and Finance Company that was assigned to the 
Western Development Company for the build- 
ing of the Southern Pacific Railroad. Where is 
that contract? 

Ma. McAllister. Did h3 say that th3 South- 
ern Pacific contract was assigned? 

Mr. Hayes. The C. and F. contract for the 
building of the Southern Pacific was assigned to 
the Western Development Company. We have 
the assignment in the record of the Western 
Development Company; but the original con- 
tract, where is that? 

A. I don't know. I don't know that I ever 
saw it. 

Q. And we cannot get you to give it to us? 

A. Not very well. 

Q. You have been asked very considerable 
here about transactions in regard to this bank 
stock, and I want to have you get that straight. 
Look at your books and tell me when it was that 
you took the bank stock out of the books? Do 
you know without going to the books? 

A. It was taken out under date of December 
31st, 1877.' 



f)()f) 

Mr. McAlustrr. Q. That is Gold Banfc 
Rtock? 

Mr. Hayes. Ye», sir. 

Q. It wns at that time that CJoneral Coltoiip 
came to yoii and told you, I understand, that he- 
wanted that stock hinnself, and directed you to* 
take it out ot'the books of the company and 
gave you his due bill? 

A. It Avas in the month of Januar}'- following; 
that is, January,! 878. But the entry^ was put 
back to the 31st of Itecember, 1877. 

Q. He came and told j'^ou that he wanted 
the stock himself, and told you to* take- it out of 
the books, and gave you his due bill for tho 
then market value of the stock? 

A. Yes, s^ir. 

Q. Was it for the full market value of the- 
stock ? 

A. It was what I ro^nitembor was the market 
value, 85. 

Q. The- transaction then stood in that way; 
you, as I understand you, under his direction,, 
not entering his^ due bill in the books for several 
months after that. 

A. I never entered the due bill, biit I had it 
in my possession. 

Q. And the transaction stood that way for 
several months? 

A. Yes, sir. 



007 

Q. Then on or about what day was it when 
he came to you and got this $2300 voucher ? 

A. The exact date when the voucher was en- 
tered was September 10th, 1878. There were 
several, one or two conversations between us 
prior to this date, during the month of August, 
in the latter part of August. 

Q. His direction to you to make out this 
voucher was not until September, although lie 
mentioned the subject to you previously ? 

A. Yes, sir. 

Q. He had mentioned to you that he was 
paying out money for the Western Development 
Company? 

A. Yes, sir. 

Q. When he came to you in September, 
1878, he informed you, I understand, that he 
had paid out certain moneys for the Western 
Development Company, in excess of the 
amount of his due bill. 

A. Yes, sir. 

Q. I will ask you if vou do not remember 
that he at that same time presented to you a 
memorandum of the sums he had paid out? 

A. Yes, sir; I think he did, on a slip of 
paper. 

Q. Is this the memorandum that ho then 
presented to you ? [Showing.] 

Q. This is a memorandum that he then pre- 



608 

sented to 3^011 as a statement of the amounts he 
had paid out? 

A. Yes, sir. 

Q. And according to that he claimed to have 
paid out, and stated to you that he had paid out 
for the Western Development Company, on the 
5th of July, $4500. 

Mr. Mc Alustrr. Better road the memoran- 
dum. 

Mii. H.^YEs. This memorandum is nothing 
but a collection of figures. I will offer and read 
it in evidenc3. When he handed you this mem- 
orandum he stated that on the 5th of July he 
had paid out for the Western Development 
Company — 

Mr. McAluster. Ask him what he stated. 
Mr. Hayes. Take the memorandum and tc^ll 

me what he stated. 
A. He stated that he had paid out $14,200. 
Q. Rut the dates he did not mention? 
A. The dates show on the paper: 

^Muly 5th $ 4,500 

August 20th 9,700 

Total $14,200/' 

He requested me to figure the other side of 
the account; that is, his due bill, and the 
accrued interest on the stock that he had col- 
lected. 

Q. That he had collected at the time ho took 



GOO 

the stock? Since that time he had collected the 
dividend or interest? 

A. Yes, sir. 

Q. And he told you to charge them up, too, 
as well as the due bill ? 

A. Precisely; which I did, and that made 
the total of $8900. 

Q. And left a balance coming to him? 
A. Left a balance coming to him of $5300. 
Q. Of that $5300, he then and there, as I 
understand you, collected from j^ou $2300? 

A. Yes, sir. 

Q. And gave you a receipt for it? 

A. Yes, sir. 

Q. That is the voucher you produced yester- 

dav? 

A. Yes, sir. 

Q. He then took the voucher for the remain- 
ing $3000. 

A. Y'^es, sir. 

Q. Which he did not collect from you ? 

A. He did not collect it from me. 

Q. But which he retained in his own posses- 
sion? 

A. Y'^es, sir. 

Q. The effect of that was simply as if he had 
taken the due bill of the Western Development 
Company for that $3000. It had that practical 
effect? 



610 

A. Yes^, sir; it wmild have boon paid at any 
timo ho had presented it, 

Q. It was, in other words, a voucher on the- 
presentation of which by him to the Western 
Development Company he would have drawn 
$3000, assuming his statement as to expend- 
itures to be correct, the whole practical effect of 
that operation would be that General Oolton 
was the only one injured; and that t<i the ex- 
tent of $3000 he did not collect; assuming his 
statement to be correct. 

A. Yes, sir; assuming his statement to be 
correct. 

Q. If he failed to collect that $3000 he 
would be out of pocket tliat much, and would 
be the only one out of pocket? 

A. Yes, sir; providing I gave a fair value to 
the stock. 

Q. And you understand that you did? 
A. At that timo, I did — j^es, sir. 

Mr. Hayrs. I will offer this memorandum 
in evidence. 

Q. He never did present or collect the three 
thousand dollar vouchor? 

A. No, sir. 

Q. With r(»giird to those disbursements, 
wbat did h(* say al)out any person having any 
knowledge of that at the timo h(» made that 
statomont to you concerning it? 



611 

A. He said Governor Stanford knew of the 
transaction. 

Mr. Hayes. I will read as much of this 
memorandum as is in the handwriting of Mr, 
Colton. At the top of the piece of paper is '*S 
and C. for W. D. Co." Underneath that is: '^S. 
H. & C." Then follows these two items: "July 
5th, 4500; August 20th, 9700." Total footed up, 
"14,200." Over those items, in the hand- 
writing of Mr. Douty, I believe, are the U^tters 
"Cr." for credit. 

A . Yes, sir. 

Q. Those items are on the left hand side of 
that piece of paper. On the right hand side in 
Mr. Douty's handwriting is "Dr. 8500; 400 div- 
idends; 8900." 

A. Yes, sir. 

Q. "Balance of credit to D. D. C, $5303." 
Added up makes $14,200. That is the whole 

of the net value of that stock transaction, and 

also of these two vouchers, the $2300 and $3000 

vouchers ? 

A. That is a full history. 

Q. Was General Colton a practical book- 
keeper ? 

A. I did not regard him as such. 

Q. Did he ever frame an entry for you in 
your books, or give you special orders? 

A. No, sir; he did not. He limited himself 
to saying: "Charge such on account." 



612 

Q. With regard to the Colorado Steam Navi- 
gation Company, who paid the purchase price 
of that property? 

A. The money was paid hy the Western De- 
velopment Company. 

Q. The Western Development Company 
paid for it? 
A. Yes, sir. 

Q. What, if anj% practical difference did the 
entry of that company, as an asset, or account 
or whatever you call it, make in the books of 
the Western Development Company? The 
Western Development Company paid for it„ 
didnH it ? 

A. Yes, sir. 

Q. In what proportions did the five parties 
own the Colorado Steam Navigation (com- 
pany ? 

A. Stanford, Huntington, Hopkins and 
Crocker, tvto-ninths each, and Colton, one- 
ninth. 

Q. Then what practical difference did it 
make, as Uy results, whether that' account was 
entered in the Western Development books as 
it was entered, or whether it had been entered 
up by charging the payment and other matters 
connected with it, in those proportions, to the 
five individuals of that company ? 

A. I don't know that it made any practical 



613 

difference, only it would have been right to have 
charged the individuals at that time. 

Q. It would have been better bookkeeping? 
A. Altogether. 

Q. You were asked yesterday in regard to 
the California Pacific stock, about your having 
placed it in your schedule which you had pre- 
pared, and about its being omitted from '' Ex- 
hibit E " ? 

A. Yes, sir. 

Q. Should it not properly and justly, either 
the stock itself or the cost of it, have been placed 
in ^* Exhibit E'^? 

A. No, sir. 

Q. Where is that letter? This book, from 
which you read that letter yesterday, is a letter- 
l)ook of the Western Development Company? 

A. Yes, sir; one of the letter-lx)oks. 

Q. Are there any others? 
A. Yes, sir. 

Q. I would like to have you send them on. 
We did not get our eyes on this one until yestor- 
dav. 

A. Thev will be here. 

Q. This letter of September 3d, 1879, which 
was read by you yesterday from this book — by 
whose instructions or directions, if any person's, 
did you write it? 

A. B}" nobody's instructions or directions. 



614 

Q. Wlien (lid ft first occur to you to write it? 

A. (^11 that same day. 

Q, You never had an i(k>a of pi'escMiting that 
claim V)efore that time? 

A. No, sir. 

Q. And it was evolved then out erf your own 
head? 

A. It was the res^ilt of con versation between 
myself and Mr. Gunn, the Secn'etary of that 
Company? 

Q^. When was that conversation had ? 

A. Darinx the dav on which that letter was 
written. 

Q. You say that these bonds were received 
as the result of negotiations, started by your let- 
ter, for the purpose of recovering the loss su.^- 
tained b-y the Western Development Company 
in consequence of loss by the contract owing to 
the nature and sinking of the ground? 

A. Yes, sir. 

Q. Tliat loSvS. occurred while (Jeneral Col- 
ton's estate was interested in the WesU^^rn IX^- 
velopn^ent Companj^? 

A. I cannot 1k> exact as to that, but it was 
on work more or less of which was done during 
(ieneral Col ton's lifetime. 

Q. The Western Development Company did 

not do anv work in Januarv, 1H79? 
« • 

A. No, sir. 

Q. I am not confi.ning you to Mr. Colton's 



615 

lifetime, because that is the reason I use the 
words *4iis estate." 

A. Yes, sir; it was before the settlement. 

Q. It was then for loss occurring while 
he or his estate were interested in the Western 
Development Company? 

A. Yes, sir. 

Q. Who were the Directors of the Northern 
Railway Company on the 3d of Septeml)er, 
1879? 

A. 1 don*t know. 

Q. Who were the Directors of the Western 
Devolopment Company on that day? 

A. I will have to consult the record. 

A. F. S. Douty, E. C. Wright, C. E. Green, 
B. R. Crocker and D. T. Phillips. I think that 
was the list. 

Q. Did Mr. Phillips have stock in his name 
on that day? 

A. That is just what I w^as trying to think 
of. If he did not, strike his name off. 

Q. Would you put his name in then ? 

A. No, sir; he had just become disqualified 
in the latter part of the preceding month. 

Q. Who took his place? 

A. His place has not yet been filled; it is 
still vacant. 

Q. On page 515, of the printed transcript, I 
see, giving your cross-examination of yesterday, 
you are made by the type to say that the writ- 



61(> 

ten crmtractK here — one written contract which 
is produced, and the other contained in the 
record hook — completed all of the Northern 
Railway that the Western Development Com- 
pany built. Is that correct, that those two con- 
tracts were all ? 

A. There were three contracts to build all of 
the road that the Western D3velopment C-om- 
pany built. 

Q. Those two contracts produced and in 
evidence here, one being in the record book 
and the other being introduced in evidence^ 
those two did not complete the Northern Rail- 
way which the Western Development Company 
built? 

A. No, sir. 

Q. Will you turn to your record book, and 
turn to that meeting of the 27th of August, 
1879, that vour attention was di rected to yes- 

terdav? 

t/ 

A. Yes, sir. 

Q. That contract made on that day betWt^en 
the San Pablo and Tulare Railroad Company 
and the Western Development Company, was 
that contract in writing and prepared boforo that 
meeting was called? Was not the mooting 
callcMl for the express purpose of passing it? 

A. If I remember rightly, the mooting was 
called for the purpose of passing this contract. 

Q. That contract was all in writing then? 



617 

A. Yes, sir; I think so. 

Q. It recites: *' Whereas, the said San Pablo 
and Tulare Railroad Company has advised this 
company that it has leased, or is about to lease 
its railroad to the Central Pacific Raih'oad Com- 
pany for a term of years." You will find that 
in the preamble. With regard to that, when 
did the San Pablo and Tulare Railroad Com- 
pany give that advice — advise the Western 
Development Compan}^ of that fact, and how; 
in writing or otherwise? 

A. I don't recollect any other advice than 
this resolution carried with it, unless it was 
some conversation. 

Q. You don't recollect any other advice than 
the resolution of the Western Development (%)m- 
pany? 

A. No, sir. 

Q. Than the Western Development Com- 
pany resolution that the San Pablo and Tulare 
Railroad Company had advised it of these fticts; 
that was the only advice the Western Develop- 
ment had? . 

. A. Unless there was some verbal conversa- 
tion between the Secretary and myself. Thosi* 
things were talked over more or less. 

Q. If itAvas verbal, when was it? 

A. I don't recollect. 

Q. It would be before the 27th of August, 
1879, wouldn't it? 



618 

A. It w^ould bo- on or before tliat date. 

A. It would bo on or l>efore that date. 

Q. Who \vToto the contract procUiced and 
passed at that mooting? 

A. I think it was prepared b}^ the I^aw De- 
partment. 

Q. Who requested the I^aw I>epartmcnt to* 
prepare it? 

A. I don t know. 

Q. When were they roquosteil to- prepare it? 

A. I don't know. 

Q. Wlien Avas it furnished to- you by the- 
Law Department, if it wus furnished to you by 
that department ? Was it? 

A. That is m3^ recollection of it; through 
them or Mr. Grunn. 

Q. When did he or the I^aw Department 
furnish you that resolution? 

A. (>n this day, I think. 

Q. Then, when were the instructions given 
to the I^aw Dapartmont to preimre it? 

A. I don't know. 

Q. Did you, or any officer or Director of the 
Western Development Company, give instruc- 
tions for its preparation ? 

A. I did not. 

Q. Is there any Di rotator of the Western De- 
velopment Company that could give such in- 
structions? 

A. It would not bo usual. 



619 

Q. Then, as a matter of course, the same 
thing, I suppose, will apply to the further recital 
that, '* Whereas, the San Pablo and Tulare Rail- 
road Companj'^ proposes to pay for the construc- 
tion of said road $22,000 in its bonds, per mile." 
Do you say that the first time that proposition 
was made was when the Western Development 
Company itself passed its resolution reciting 
that it had been made. When did the San 
Pablo and Tulare Railroad Company propose 
to pay $22,000 a mile to the Western Develop- 
ment Company? 

A. I have no recollection other than what 
this resolution gives. 

Q. It must have proposed it, must it jiot, 
before the Central Pacific Law Department was 
set in operation to draw this contract? 

A. On or before. 

Q. It would not be in the (]!entral Pacific 
Law Department that the proposition would 
Iw made? The San Pablo and Tulare Rail- 
road Company does not transact its business 
there ? 

A. I do not know. I presume the Secretary 
of that Company could inform you. 

Mu. McAllister. Who was the Secretary of 
that company at that time? 

A. J. O. B. Gunn. 

Mr. Hayes. Q. That proposition must 
necessarily have been made and in existence be- 



f tn- lh»- Law E^partmft-nt wviv in^^lct€^^ t*» pre- 
par*.' this r-iintrac-t? 

A. I pivsume thev pnepanE^l it un^i^r some- 
l^f^lv's instructions: ami the* instnictions car- 

m 

ri^l with it that information. 

Q. It heing a paper for the Western Devel- 
^ipment Company, or a resolution f«>r the West- 
em iJ^velopnient Company to pass, who gave 
th^>s^- instructions, or would give them? 

A. I have already stated that I did not give 
the Law F^epartment any. and I don't know 
who did. 

Q. IHd Mr. Stanford, Huntington or Crocker 
give directions upon that subject to the Law 
I>epartment? 

A. Xot t« > my knowle«1ge. 

Q. Al>«rHit September. H78, was there nt>t 
icTjm * litijjation going on ct>nceminir the San 
Pal»lo and Tulare C^ompany's right of way 
through I^ !>. Robinson's land? 

A. I rec^Jlnct si^mt^ litigation with L. Lu 
R/Jansrm. 

Q. Y«>sterday. after stating what apf>eared in 
"Exhibit E. ' under the h»^a^l of "Stocks. Lo^ 
Angelt>s and San I>ieg«^ Railn^ad Company. 
f^S^^.J^Vr/* vou were aske^l bv Mr. ^Ft Allister: 
"*! understand vou in v«xir testimonv. paire 130. 
in say that that subset [Uently took a different 
^ha[>f-? A. Yes. sir." Win* made it subse- 
HUf-ntly take a different shaiH*? 



621 

A. The officers of the Los Angeles and San 
Diego Railroad Company. 

Q. Did they ever address any letter to the 
Western Development Company on that subject? 

A. No, sir. 

Q. Did the Western Development Company 
to them? 

A. No, sir. 

Q. You do not know, then, how they came to 
make the proposition ? When did they make 
it take that shape, or inform the Western De- 
velopment Company they were going to give it 
bpnds instead o^ stock ? 

A. I don't recollect the time; probably a 
sufficient length of time to prepare the bonds. 

Q. How long does that take ? 
A. Judging by the looks of the bonds it did 
riot require a great length of time. 

Q. When did you first receive the bonds ? 
A. On January 1st. 

Mr. McAllister. He has gone all over that 
in the direct examination. 

Mr. Hayes. No, sir — it was on his cross- 
examination. 

Q. You stated, '^On November 30th, 1880, it 
received 4168 shares of stock. January Gth, 
1881, it received 90 more shares, and January 
30th, 1881, 41G bonds of the par value of 
$416,000.^' 



G22 

A. Whatever is mentioned there I got fronrr 
the books. 

Q. You think that it was only a sufficiently 
long time before that date to make the bonds, 
that the change was made? 

A. I did not quite say that. It was at least 
that length of time, of course, and might have 
been longer. 

Q. At most, how long was it before that,, 
that you got that information that you were to 
get bonds instead of stock? 

A. It is rather hard for me to estimate- some- 

r 

thing that I don't recollect. 

Q. Did you know it as early as January,, 
1880? You did not get these bonds until Jan- 
uary, 1881? 

A. I don't recollect. 

Q. Will you look at this Western Develop- 
ment letter book, and see if that won't refresh 
your recollection ; see if you did not know that 
in January, 18S0, that you were going to get 
bonds instead of stock? 

Mr. McAltjstrr. Piefore you answer, let me 
see that letter. 

Mr. Hayes. It is not a letter; it is a state- 
ment of the assets of the Western Development 
Company on the 31st of January, 1880, page 71 
of the letter book. 

Q. That is a statement of the assets and lia- 



623 

bilities of the Western Development Company 
(m January 31st, 1880, is it? 

A. It is a statement showing bonds and 
stocks belonging to and due the Western De- 
velopment Compan}^ January 3l8t, 1880. 

Q. It only includes bonds and stocks? 
A. That is all. 

Q. In that statement is there not included 
416 bonds of the IjOh Angeles and San Diego 
Railroad Company? 

A. Yes, sir; 416 4-10 

Q. At that date then and before that date, 
3"ou must have known that you were going to 
get bonds ? 

A. Yes, sir. 

Q. With that to refresh your memory, can 
you say how long before that you got your in- 
formation? 

A. That does not refresh my memory. 

Q. Then, as tar as your present recollection 
goes, you may have known that fact, that you 
were to receive those bonds as early as July or 
August, 1879? 

A. I don't think it quite likely, for I see before 
this a statement which I had prepared to give 
this same information, and I see that these com- 
panies are omitted from that statement, so that 
I must have got that knowledge about this 
time. 



624 

Q, IiT that previous statement, is not tfie 
stock omitted, too, as well as the honds? 

A. Yes, sir; it is. 

Q. Then you must have known something; 
about the change when you omitted it in the 
previous statement. You omitted both the 
stock and the bonds. 

A. Yes, sir; that does not throw any light 
upon it apparently. 

Q. As far as your present recollection goes, 

may you not have known as far back as July 
or August, 1879, that you were to* get bonds? 

A. I don't think I knew back as far as that,. 
l>ecause it was some time in March, 1879, that 
Governor Stanford told me that thev would 
probably pay all in s^tock; that they would not 
issue any bonds. 

Q. I wnll ask you, going back to March,. 
1879, isn't it a fact, that at that time it was un- 
<letermined, and that you had been informed by 
Governor Stanford that it was undetermined 
whether they would pay all stock or part stock 
and part bonds? 

A. That was what Mr. Willcutt informed 
me. Governor Stanford told me then, and that 
is why I put it in my statement in the form I 
did, that the Los Angeles and San Diego Rail- 
road Company would probably pay in stock. 

Q. Governor Stanford said to vou that the 



625 

Jj)s Angeles and San Diego Railroad Company 
would pay $832,800 in stock. 

A. He was my authority for entering it in 
the way I did. 

Q. That was the probability then ? 

A. That was the probability then, and I so 
believed it. 

Q. Was there any contract in writing for the 
building of that road ? 
A. No, sir. 

Q. You had no knowledge yourself, although 
you were President of the Western Develop- 
ment Company, of what the compensation 
would be, or how it would be paid ? 

A. I had no knowledge of what the compen- 
sation would be. 

Q. That rested in tho breast of Governor 
Stanford and others whoso minds would deter- 
mine that subject, didn't it? 

A. It rested with the officers and Directors of 
the Los Angeles and San Diego Railroad Com- 
pany. 

Q. You were made to say in your cross-ex- 
amination, yesterday, that, notwithstanding 
in that voucher, with regard to those three loco- 
motives, there is no freight shown on them, that 
it would not necessarily be there; that it might 
be in another voucher. 

A. Yes, sir. 



G26 

Q. Do vou undertake to sav as a fact that 
freight on tlioso three locomotives was paid ? 

A. I <lo not state that as a fact, except that 
ti my knowledge no freight was ever hauled 
for the Western Development CJompany that 
they did not pay for. 

Q. That was for S. H. H. <fe C. Can you find 
or show any charge in your Ix>oks to S. H. H. & 
(\ for that freight? 

A. I don't know whether I can or not. I 
think I can if I have time. 

Q. I will not detain you now to look, hut if 
you find, on examination of your lK>oks, anj'^ 
charge to S. H. H. & C. for that freight, you can 
send a line to Mr. McAllister, stating it, and 
when the charge is made, and I will accept that 
as your testimony on the suhject. If that infor- 
mation does not com3, I will believe there is n> 
charge to S. H. H. & 0. in that form. 

A. I leave my lKx>ks here, so that will he 
impossible. 

Q. Please hunt up that one item before you 
go down. Where is John Miller, or Ambrose 
Woodruff? 

A. I don't know. 

Q. When did you hear from him la^t ? 

A. I think tlie last I heard from him directly 
was wluMi I was a witness on tlu^ stand when 
h(^ was on trial. 

(2- You know nothing now of his where- 



^ - 



627 

a\)outs ? 

A. I do not. I have not heard from him for 
years. 

Mr. Hayes. [To Mr. McAllister.] Will you 
let me have the contract bet\vo3n the Southern 
Pacific Railroad Company of Arizona and the 
Western Development Company ? 

[Mr. McAllister produces it.] 

Q. I will hand you this contract, executed 
by yourself, as Secretary of the Pacific Improve- 
ment Company, and Mr. Strowbridgo as Presi- 
dent, and C. F. Crocker as President and H. K. 
White as Secretarj^ of the Southern Pacific of 
Arizona. It is a contract for building the South- 
ern Pacific Railroad in Arizona, between that 
company, the Southern Pacific, and the Western 
Development Company, dated Febuary 3d, 1871). 
Look at that paper and state whether that con- 
tract was actually signerl on the 3d of February 
1879, or at a later date. 

Mr. McAllistek. I object to the introduc- 
tion in evidence of anv contract between the 
Pacific Improvement Company and the South- 
ern Pacific Railroad Company of Arizona, so- 
called, on the ground that there never was any 
contract with the Western Development Com- 
Company to build any railroad in Arizona. I 
object to it as irrelevant and immaterial in this 
case. I have made that ol>jection before, but I 



(>28 

T\nll repeat it ovory time that testimony corner 
wp. 

TiiE OouRT. They propose to put in further 
testimony, counsel has stated. 

Mr. McAixister. The order of proof is in 
the discretion of your Honor. But inasmuch 
as that lets in a quantity of testimony it seems. 
tf> me that it would he quite proper to make 
proof first that there was a contract by the 
Western Developn-ient Company to build a rail- 
road in Arizona; then all of this testimony 
might properly come in. 

The Court. One difficulty that occurred to 
me was that this wntness would not remain here 
to be called. 

Mr. Hayes. Furthermore, Avith regard to 
this, I state that I am intro<lucing this now, not 
for the purpose I had lx>fore, but as a part of 
the re-direct examination of this witness, in 
explanation f)f his cro8s-exami nation of yester- 
day witli regard to the entries in the Western 
Development Company's lx)(>k8 of the Arizona 
contract account. T want to clear up the state- 
ment mad^ V>v him on that subject in his 
cross-examination vesterdjiy. 

Mr. MoAluster. We want to have our 
exception reserved to this testimony. 

The ('Ourt. I understand it is limited to 
this one purpose now, 
Mr. Hayes. Y(»s, sir. 



629 

Mr. McAllister. We did not put this in 
evidence. We object to the testimony as im- 
material, irrelevant and incompetent, and take 
an exception to your Honor's ruling. 

Mr. Hayes. Q. State whether, as a matter 
of fact, th^ contract was not actually signed 
some time later than the date that it bears on 
its face? 

A. It was signed at various times. Mr 
Strowbridge was in Arizona, and Mr. White 
was in Arizona, and I was here, and Mr, Crocker 
was either here or in Arizona — C. F. Crocker. 

Q. State if there was a single signature 
placed on that contract on the 3d of February, 
1879. Was not every signature that is on it 
to-day placed there at a subsequent date? 

A. I will have to look at the record book to 
enlighten me. I think they signed it the same 
day. [Referring to the record book.] 

Q. Is that the record book of the Pacific Im- 
provement Company you are looking at? 
A. Yes, sir. 

Q. Don't you know there are no records of 
any meeting of the Pacific Imprcrvemont Com- 
pany during 1879 at all, not a single meeting of 
its Board to be found in that year? 

Av I think we did ascertain that fact yes- 
terdav. 

Q. There is no corporate action regarding 



< 



630 

this ontra ;t t> \>j fixinl in that minute Tx>ofc: 
in 1H78 or 1879, is there? 

A. No, sir. 

Q. You said yestenlay that you opened an 
account headed "Arizona Contract/' in the 
Western Development Company 's^ books in 
1878, because vou had not at that time anv 
Pac^ifi? Improvement b^oks, and did not get 
them until Januarv. I will ask vou now 
whether in 1878, or during the tim? that these 
items under the head of '' Arizona Contract '* 
are in th? Western I>evv?lopment Company 
l>ooks, there was anv contract between the Paci- 
fie Improvement Company and the S^iuthern 
Pa'^ifie Riilroad Company for the building of 
this road in Arizona? 

A. Xo, sir; there was no contract. 

Q. Then it was not a contract of the Piciffc 
Improvement Company with the Southern Pa- 
cific to baild the Ariz ma roal that voa meant 
])y " Arizona contract " in that account in the 
Western Development Company's l>ooks? 

A. It was t^ whatever cmtra'^t that would 
apply on. 

Q. If S:a*if)r 1, Huntington or Cro:»ker in- 

formel v )a that thev intenlel in Januarv, 

• • • 

187.), tha*: Vv Western Development Company 
sh ) il 1 bailfl tint roa I, you WiUild h:ive kept it 
(m in th yse b)f)ks and it would have lw?en a 
W(*st"»r.i Devolopn'ient account? 



631 

A. r should have followed their directions, 
whatever they might have heen. 

Q. Will you turn to the Arizona contract in 
your Western Development ledger, page 200, 
please, and tell me how many items there are 
in it. Give me the date of the first itom in 
that account, and the last. 

A. Octoher 31st, 1878, and Decemher 31st, 
1878. 

Q. How many items are there there hetween 
those dates, that is the Western Development 
(.'Ompany ledger you are reading from? 

A. Yes, sir; there are about thirty-nine 
items. 

Q. Aggregating how much money? 
A. $360,605.75. 

Q. You were cross-examined yesterdav with 
regard to the transfer of the suspense account 
to the Southern Pacific main contract account. 
You stated then that you made that for the pur- 
pose of balancing accounts and getting debt ac- 
counts off the books. I will ask you if at the 
time the transfer was made, the Railroad Com- 
missioners of this State were not investigating 
the affairs of the Southern Pacific Railroad 
Company, endeavoring to ascertain its cost ? 

A. About that date, I think. 

Q. That transfer had the effect, carrying it 
to the account of the S. P. main contract, of 



632 

incroasiiif]^ the cost of the Soutliom Pacific Rail- 
road, liadn't it, according to the books? 

A. It would have that effect; yes, sir. 

Q. Who is W. V. Huntington, President of 
the Northern Railway Company? 

A. He is the President of tlie Northern Rail- 
way Company. 

Q. Personally, who is he? 

A. He is a nephew of C. P. Huntington. 

Q. What age is he? 

A. He must l>e thirty years or past. I 
don't know his age, but judging from his 
looks. 

Q. Do you think he is thirty years of age 
now? 

A. I sliould judge so by his ap|x>arance. 

Q. Didn't you notify Charles Crocker that 
the Western IX^velopment had a claim for pay- 
ment of that '* V '■ road up there, lx?tween the 
Northern Railway and tlie California Pacific, 
before Ai)ril imh 1879. Turn to page 2G, of the 
Western Development Company's letter book 
there, and sec* if you did not bring to his atten- 
tion the fact that the Western Development 
( 'ompany had a claim to b(» j>aid for that. Do 
vou find a letter tlu^re to Charles Cnn^ker? 

A. Yes, sir. 

Q. Isn't that on that subject ? 

A. Yes, sir; daterl Februarv IHth, 1879. 



633 

Mr. Hayks. I will now put this letter, dated 
February 18th, 1879, in evidence. 

Said letter was then offered in evidence, 
marked " Plaintiff's Exhibit 43— Doutv," and 
read, as follows: 

'' PLAINTIFFS EXHIBIT 48— DOUTY." 

"Feb'y 18th 9 

Chas. Crocker, Esq., 

Pres't. S. P. R. R. Co. 
Dear Sir: 

The Western Development 
f ;ompany have built and made ready for opera- 
tion 7378 feet of railroad, connecting the Cala. 
Pac. R. R. with the N. Ry's line at Suisun from 
the east: in time the mam line of the Cala. 
Pac. R. R. will doubtless include this link. 

For the work thus performed the W. D. Co. 
has received no pay; it desires to know which 
company have the right to ])ay for the same; 
should the Cala. Pac. R. R. assume the payment 
of its bill, what price shall be charged per mile? 

Yours respectfully, 

F. S. DorTV, 

Pres't.'' 
(2. What (*ontrol on that date had the Presi- 
ident of the Southern Pacific Itailroad Company 
over th(» Western Development Company? 

A. He had no control as President of that 
Company. 



Q. The individual, however, whom you ad- 
ilrt^s.sed as the President of the S^^uthem Pacific 
Railrr>ad C^>nipan\% had a control? 

A. The in^i\ndQal had a control. 

Q. A nd, therefore, it was that you wrote to 
him to ascertain who you should collect the bill 
of for that piece of road, and what amount you 
should collect? 

A. I wrote for that information; ves, sir. 

Q. Bc*caase he was the party that had charge 
of the Western Development Company? 
A. I rt^arded him as the party. 

Mr. Haves. Here is another letter on the 
same hook, the first letter on page 21>. 

Mr. McAt>i>ister. Does that relate to the 
»ame matter ? 

Mr. Havks. No, sir; it n^hites to a different 
matter. 

Mr. ^IcAlustkr. Xo <rf)jectinn. 

Mr. Hayrs. \am>V on this letter on page 29 
of th(» W. D. letter-hook datefl Februarv 19th, 
IH79, and tell nie if you addressed that letter to 
Charles 0<H*ker. [Showing.] 

A. 1 did. 

Q. Will you read that letter, which we will 
put in evidence and mark '' Plaintiff*'s Exhibit 
44_])(,ntv.^' 

Th(» witness then read in evidence " Plain- 
tiff's Exhibit 44 — Douty," which is as follows: 



^^ 



*' Plaintiff's Exhibit 44 — Douty/' 

Feb'y 19th, .9 
Charles Crockkr, I^sq., 

President. 

Dear Sir: 

The Western Development 
Company have completed the second track from 
West Berkeley to Oakland point, a distance of 
24,717 feet or 4,681-1033 miles; the work has 
cost, exchisive of interest and profit, $79,881.25. 

The track is used principally to accommodate 
the local train to and from Berkelev, but is 
l)uilt on the line of the Xorthern R.iilwav, to 
wliich company it should (loubtle.-^s belong — 
shall 1 make a bill a^jainst the latter c )mpany, 
and at what price? 

Yours resi>ectfully, 

F. S. Doi'TV, 

President. 

Q. Before the date of that letter you had re- 
ceived 2500 Northern Railway bonds? 

A. I think so. The books will show, how- 
ever. 

Q. Look at the books and ascertain if that 
is not the fact. The Berkeley siding, the name 
of the account was. There is a Berkeley siding 
account there. I^ok at February 19th, 1879. 

A. It received all but 65. 

Q. When did you receive them? 



636 

A. ( )n F('l>niar\' 27tl). 

(>. IHd vou receive any answ-er from Mr. 
Ooeker to this letter ? 

A. I (lork't HHioJlect^that I did. 

(I, How is it as to the othc^r? 

A. The same as to the others. 

^lu. M''Allistp:k. All of the lx>nds of the- 
Xortliorn Riihvav were received wlieii ? 

A. Received Febraarv 10th, 1H7D; on or bo- 
fori* tliat date. 

(^. T(»ll iu:> what that account i» in your 
l¥)oks, of tliat i>iece of road, that Berkeley sid- 
iiij? ac(Mrtiiit, ]Kifi;i*572, I Ixdieve it is? 

A. Thi* hisl (»ntrv in tliat was the Berkelev 
sidinjc account. 

Mil. McALi^isn-rR. What is that? 

A. Th(» l(»d^(»r of the VV'esttTii I>evelo[Mnent 
Tonipany, p. o72, *' Account Ii<?rkeley Siding.'* 

Mil. I[aviv<. <^ What d(K?s that l>)f>k show 
there to he the last (Mitrv? 

A. Th(^ last (Mitry is April IMftK 1871). 

il. What is the cHNlit to that account? What 
does that account show th(» Pacific Improve- 
ment < '.)ini);iuy re-c;MV(^l tor tin* constructi()n of 

that? 

A. |lS7.24t> stfK'k and ,^I 17,()2.'> in bonds is 
what W(* creditetl to the account. 

(2- What l>:Mids would th(\v he? 

A. Honds of the Northern Railwav, I think. 

C2 WIkmi w<uv they nreived? 



637 

A. I cannot identify them with any amount 
here. 

Q. Look at this statement, page 268 of this 
letter-book, and tell me if the bonds given for 
the construction of that road did not furnish a 
part of the 3148 bonds received altogether; that 
is, of the additional number. 

A. Yes, sir; they are included in that 
amount of 3148 bonds. 

Q. But you cannot tell when that particular 
$117,02o was received? 

A. I don't think the 117,025 was received. 
I noticed on the other side a deduction for roll- 
ing stock, which would reduce those — 

Mr. MrALLisTER. Included in that amount 
of 3 148 bonds? 

A. Th(Te is an item charged to the account 
of rolling stock not furnished, $20,100. 

Q. A reduc*tion for rolling stock of how 
much? 

A. $20,100. 

Mr. Hayks. Under what date ? 

A. December 31st, 1878, so that we realized 
in bonds from that $90,925. 

Mr. McAllistkr. What is that $90,925? 

A. The amount realized in bonds for con- 
structing the Berkele}' siding. 
Q. Received when ? 

A. I don't know what date it was received; 
it is in with other amounts here. 



Q. Was not that amount in and a part of 
that 462 bonds ? 

A. They received their bonds in various, 
proportions. 

Q. Wasn't it a part of that 462 bonds? 

A. I think not. 

Q. When received? 

Mr. Hayks. They are put down as received 
October 29th, 1879. 

Q. You don't know, then, what particuhir in- 
s^talhnont to refer that to? 

A. I do not. 

Mr. Hayp>;. I will offer this statement in 
evidence. Tt is found on page 68 of this same 
letter-book. 

^[r. A[(\Vllistkr. Q. You spoke of :n48 
bonds. 

A. :il48 bonds is the total number of bonds, 
received from the Northern Railwa}^ Company^ 
including the 610. 

The wltn3s-i then real from pag3 6S of the 
letter-book the statement, as follows: 

*Man. 2M, ...80. 
A statement showing amount of bonds and 
?*tock authorized to be issued in paym3nt of 
contracts between this Co. and Northern and 
San Pablo and Tulare R. KM Cos. 

By Northern Railway. 



639 

113 ^ miles of main line bonds 3,051,075 00 
4 5810 a 2d track Oakland '' 96,925 00 



Total bonds 3,148,000 00 

On same '' stock 4,710,500 00 

" '' '' cash. . 39 50 

By San Pablo and Tulare Ry. 

40 *J^ miles main line bonds 1,023,000 00 

Stock 1,8G1,(X)0 00 

(\ash. 116 00 



Total bonds, stock and cash $10,742,655 50 

F. S. DOUTY, 

President/' 

Mr. Hayes. Q. You spoke yesterday, in 
your cross-examination, of these different cor- 
porations, the Northern Railway Co., the San 
Pablo and Tulare Railroad (Company, the Los 
Anj^eles and Independence Railroad Company, 
always keeping up their corporate organization, 
and always having stock and stockholders. Do 
vou desire to be understood to state that as a 
fact, that there was any of the stock of 
any of those companies held by any other 
persons other than S., H. and C. and C. in his 
lifetime, or Mr. Colton, or the Western De- 
velopment Company, except a few shares put in 
each of the names of persons to qualify them 
to act as Directors? In other words, was there 



640 

any stock of these companies in the hanJs of 
♦mtsirlers? 

A. I cannot answer for outside companies; 
tmly for the Western Development Compan\% 
and those companies for which I am an officer. 

Q. I will ask you with regard to those com- 
[>ani 'S you are not connected with, how did you 
undertake to sav that thev had stockholders, if 
you had no knowledge of their affairs? Have 
yoi personal knowledge that they had stock- 
holders ? 

A. The most of them. 

Q. Oatsid^ of Stanford, Huntington, Hop- 
kins, rVr>cker, Colton and the Western Develop- 
ment Company? 

A. Th(* Western Development (\>mpany and 
the PaciHc Improvement Compaiiv owned stock 
in more or less of these companies, and I know 
thev have had reucular stockholders' moetiuiics, 
iK'cause 1 have voted st(K*k owhcmI hv the com- 
panv which 1 represent. 

CJ. At anv of these meetings or in anv wav, 
«lo vol! know of anv outsiders — And I use that 
term in contradistinction to the Western Devel- 
opment (N)mpauy, the* Pacific Improvement 
Company, and Stanford, Huntinjrton, Hopkins. 

CrockcM' and (V>hon — lo vou know of anv other 

« * 

outsider holdin^r anv stock? 

« « 

A. In the Rockv Mountain Coal and Iron 

t. 

Company there are a number. 



■jlfV. 



Ml' 



Q. Mr. Gray and Mr. Towne hava stock 
there? 

A. Yes, sir — some shares. 

Q. Outside of it, I am talking of those rail- 
road corporations and carrying corporations, 
have any outsiders cot stock in any of them ? 

A. I cannot state as to the companies out- 
sid(^ of the Western Deyelopment Company. 



Rk-Ckoss-Kxamination of Fkank 8. Dorxv. 

Mr. McAllister. Q. Referring to that 
due-bill or memorandum of Mr. Cohon's which 
has been put in evidence, did he hand to you at 
the time of the transaction spoken of, when he 
gave, you his due bill and told j'ou not to enter 
it in the book, did he give you that memoran- 
dum? 

A. No, sir; he gave me the due-bill simply 
and told me to keep that in place of the stock. 

Q. He did not give you the memorandum ? 

A. No, sir; he did not give me the memo- 
randum. 

Q. He showed you the memorandum, but 
that was not at the time when he gave 3^ou the 
due bill? 

A. No, sir; that was the time he wanted the 
money. 

Q. When he came to get the $2300 ? 

A. When he sent for to pay him that. 



f 1 



••'"'' Qtk2 ;. ,, 



» » , .'/ 






Q. And ^-mi charged it to the San Pablo. and 
Tulare contract ? ' ' 

A. 1 . charged it to the San Pablo and Tulare 
nght of Avay. ' 

Q. Djcj .ho at that time give you a memo- 
randum..-. , 

A. That was the memorandum that he gave 
jiie that is produced here. 

Q. Where has that ni';jmor4ndum been kept 
ever since ? 

Al When I got through with it t retui'nfed it 

 

to him, and I don't know that I have ever seen 
it- since until to-day, . 

Q. Yt)u say whejn you got through with it; 
how did you get through with it? " ' 

A. I handed it hack to MrVColt<)tt: 'He 
handed it to me to r>ut on the due hill aiiid'the 

accrued interest, and fiijure out the balan'ce that 

"• •'^ i */.'. ., 

was due him: and I lMind(Ml it back to liiiii. 

il. I tloiTt unde,r^Jtand that yVVu put any- 
thing in that memoranduin intoyinir l>o'oks ? 

A. I did not, notjiing from that memoran- 

duni. 

• • ' .  , ... . . 

(2- Then, after h(» liande<l yoii thatmenio- 
ranchnn* and vou looked at and maa^^' Vohr fi*^- 
ur(»s uj)(>n it, you handed th(* memorandum 
back to him and vou have never seen it Hi nee? 

• - 

A. I did, and I hav(* n(»v(*r seon it since, to 
niv rc'concction. 

C^. llow did y(»u identity it this morning? 



t>43 



• J-' .«• 



Ar I am familiar with my own handwriting, 
Q. By your own handwriting on it ? 
A. Yes, sir. 

' I • , • 

,(). Your attention was called to a statement 

*^ * i - .• 

I 

in, the books of the Western Pi?ve!lopnient Com- 
pany, January 31st, 1880,. in which you speak of 
416 bonds of the Los Angeles and San Diego 
JtBrU^Qad Company, and then, spe^k of a pre- 
vious statement. Where is tljie .previous state- 
ment in the letter book, previous to January 
Slst, 1880? 

^\. On the preceding pag^, , [Showing.] 

Q. Is that previous statemen.! dated ? 

A. Yes, sir; it is the same dat^ and was in- 
tended to be what this was^. [sho>ying] but I 
notice that JjOs Angeles and San Diego bonds 
and stocks were left out of this statement. 

Q. What was the date of this previous state- 
. rnent? On page 70 of the Western Dvn'elopmint 
letter book? 

A. Jaiuiarv :51st. 1880. 

Mr; Havks. Both were omitted from the 
first statement. 

Mr. McAllistkr. . Yes, sar: hq [ see. 
; Q. When you opcuied in the Western i)j\'el- 
ppiuent ('0mpany*s books the ac^*ount of the 
Arizona contract, did vou intend to refer to any 
existing contract at that time?, , 

A. I knew of no CvOntract at that time. 



•* p 



644 

Q. You knew of no Arizona contract with 
anybody? 

A. No, sir. 

Q. But you simply opened that account^ 
and selected the name **Arizona contract" 
yourself? 

A. That was the name I selected. 

Q. Thai: was the name and heidinz of that 
account? 

A. Yes. sir. 

(2. Will you turn to that ledji^T of the West- 
ern I)evelo{)ment Company, page 2(>(), and let 
me see those itcmts which you gave the first 
and last of, amounting to $'if)fi,*i(>")? 

Mr. Hayks, He only gave the dates of the 
first an<l last, and th? whole account onlv 
amounts t^) $8l)(),.*iOo. 

Mr. McAllister. That is what I under- 
stand — that the whole account onl}' am )unts to 
that. 

Q. Your attention was called to a letter in a 
b.);)k of th? Westc^rn Development Company^ 
\>xj^.) 2'), d.ital February 19th, 1S79, sp3aking of 

a letter which vou wrote to Mr. Crocker, as to 

< 

the cost of the track from West Berkelev to 
Oakland Point being $79,881.75. Did you re^ 
ceiv(» an answer to that letter which vou wrote 
to Mr. Crocker? 

A. 1 don't reeolltK't that I ever did. 



645 
Q. Have you ever examined your letters to 



see? 



A. I have not, with that in view. I had 
forgotten all about the letter. 

Q. Do you recollect any answer, either writ- 
ten or verbal, from Mr. ( -rocker, upon the sub- 
ject of that letter? 

A. I nuist have got some answer, verbally, I 
think, at some time, from somebody, as I made 
up a bill for the Berkeley siding, and collected 
it, and I take it for granted that I got an an- 
swer, but 1 don't recollect of anv answer. 

' 4.- 

Q. When did you collect that bill? It was 
payalde in bonds, was'ntit? 

A. Part bonds and part stock. • 

Q. That was for the siding, I understand. 
A. That was for the siding; yes, sir. 

Q. And it came in that Berkeley siding ac- 
count? 

A. Yes, sir; it came in the Berkeley siding 
account. 

Q. You were paid for that, of course, by the 
Northern Railway Company? 
A. Yes, sir. 

Q. The point is, when were you paid for that 
in stock and bonds? You can find out from 
your books when you were paid for that. If 
you cannot find out now, and require further 
time, vou can take it. 



646 

A, I may bo able to find out from the books 
and papers here. 

(}, At present you do not seem to know pre- 
iMsely when you were paid. 

A. I do not remember the dat(^on which we 
were paid. I have the date when the bill was 
charged. 

Q. What date was the bill ehargcnl for that 
work ? 

A. December :iUt 1881. 

(2, Ts not that the charge of the bill of the 
Berkeley siding — of the account ? 

A. That is the aggregate of the bill of the 
Berkeley siding account. 

Q. For that amount of work, eh ? 

A. For the amount of l>onds and st(x*k that 
were due upon that work. 

K. Wliat have you got upon the other side 
of that account? 

A. The cost of the work, and the rolling 
stock. 

Q. Where is the entry there, as to the pay- 
ment of that account? 

A. That s(juares the account so far as that 
goes. 

(). Wh(*re would vou look to see when vou 
receive 1 the bonds for that siding? 

A. I would look in the Nortlu^rn Kailwav 
account, I think. 

(). Then vou cannot tell from vour books? 



647 

A. I think so: ves, sir. 

Q. We might as well ascertain what that was 
])ai(l for. 

A. It was charged to the Northern Railway 
Company, December 31st, 1878. 

Q. What do you read from now? 

A. T read from the ledger of the Western 
Development Company, page 580, the account 
with the Northern Railway Company. 

Q. Read the entry there. 

A. 1878. 

*' December 31, Berkeley siding. 
''Herkele}^ contract completed road $319,949.00.'' 

That is the par value of the securities to 
which the Western Development Company was 
entitled. 

Q. Which you received for that siding ? 

A. For the siding. And there was a little 
balance due on the Northern Railwav itself, 
from the Atlantic-street track. 

Q. Then do you say that you received the 
stock and bonds on the 31st of December, 1878, 
for the payment for this siding? 

A. No, sir; that was the date on which the 
charge was made to the Northern Railway ('o. 

Q. Now can you tell when you received from 
the Northern Railwav the stock and l>on(ls in 
])ayment for that siding? 

A. Yes, sir. T think I can tell from the 
books here somewhere, f Referring to the l)ooks. | 



648 

These vouchers offer no information upon the 
subject as to when this particular bill was col- 
lected. Bonds were paid in from time to time 
as thev became ready to pay it. 

Q. We will pass that sulyect then. You 
were sj>eaking of the stockholders of the differ- 
ent corporations, saying that one-half of the 
stock of that Occidental and Oriental Steamshij> 
Company was owned outside of the State by 
stockholders outside of the State ? 

A. Yes, sir; as I understand it. 

(). And when I say outside of the State, I 
mean excluding Mr. Huntington. Wasn't it 
owned by (^ther parties other than Stan ford » 
Huntington, Hopkins, Crocker and Colton ? 

Mk. Havf>4. The other half was owned by 
Jay (Jould and Dillon. 

ft.- 

Mr. MrALLisTER. I understand it was owned 
by the Union Pacific Company; but that is not 
testimony. 

Mr. Hayks. Do you know who the' parties 
were that owned this half of the stock of the 
Occidental and Oriental Steamship Company 
outside of the State t 

A. The Union Pacific Railroad Company 
I have always understood. 

Ri:-DiRE(T ExAMiNATiox OF Fraxk S. Doutv. 

]\Ir. Hayks. I^^t mo luiye that hotter back 
ajz:ain. That bill for the completion of the road 



649 

had not boen paid at the time you wrote that 
letter, had it? 

A. It had not. 

Q. That is February 19th, 1879 ? 

A. Yes, sir. 

Q. Then it certainly was not paid on the 
31st of December, 1878? It could not have 
been paid on the 31st of December, 1878, and 
you write that letter on February 19th, 1879? 

A. No, sir; it could not. 

Q. Must it not have been paid by some of 
the bonds of the Northern Railway Company 
that you received subsequent to the writing of 
that letter? 

A. It must have been: ves, sir. 

Q. Then nuist it not have been a portion 
either of the 4(}2 or the 148 bonds received ().*- 
tober 29th, 1879, and Februarv 13th, 1880? 

A. I don't think so, I)ecause 4H2 and 148 
make r)l() and that was the amount ri*ceived 
from the Northern Railway Company agreeable 
to that letter that I wrote September 3d. 

Q. After the letter to Mr. Crocker of Febru- 
arv 18th, vou received 38 bonds of the Northern 
Railwav on Mav 19th. 

A. Yes, sir. 

Q. That was for this third item here in **Ex- 
hibit E," ^'Northern R. R. account, payaV>le in 
bonds $38,307.50''? 

A. Yes, sir: I think so. 



650 

Q. Therefore, it was not after this account 
referred to in your letter? Then it never has 
Iveen paid or collected, has it? One or the other 
must be included. It must have been included 
in the (>10 Vvonds, or it has never l>een collected? 

Q. Which is it? Look at page (>8 of your 
letter book^ awl see if it will give you any sug- 
gestions on the subject? Isn't that item for 
Berkeley siding included in that statement, on 
page ()H? 

A. Yes, sir: the price of that goes to make 
up the total of the Inrnds received from the 
Northern Railway Company. 

Q. You had not received it prior to the 
writing of this letter of Fc^bniary, 1H79, to Mr. 
Crocker? 

A. No, sir. 

il. TluMi you nnist have receivinl it in the 
subse(iU(Mit Inrnds, 402 or 4(58, or else* it has 
never been paid. Isn't that necessarily the fact? 
You have never collected the bonds for it, or 
else it was included in those 610 bonds? 

A. I don't understand this thing, some way. 
I know it is all right if I could get a chance to 
figure it out; but my impression is so distinct 
that those 010 bonds applied as a response to 
that letter of September JM, 1879, that I am not 
willing to admit 'that the Berkeley branch cut 
anv figure in it at all. It must have lx?en out 
of the i)ri'vi()us lots (kf bonds^ I think. 




651 

Q. Then if it cut no figure in it, doesn't it 
follow that it has not been paid, and that you 
ought to collect it now from the Northern Rail- 
way Company ? 

A. No, sir; on the contrary, 1 think it has 
l)een paid. 

Q. It was not paid before the letter of Feb- 
ruary, 1871), and you had the other bonds at 
• « 

that time? 

Mr. M(\Vllistkk. Investigate that, if you 
cannot answer accurately. 

Mh. IIayks. I omitted one (luestion in my 
rt -direct examination. 

tJ. You testified yesterday that on the :iOth 

*» ft. 

of April, 1879, that your judgment at that time 
was not that the assets of your company ex- 
ceeded its liabilities. The question was then put 
in this shap(»: **Your opinion was that the lia- 
'* bilities (exceeded the assets ?" 

*'A. Yes, sir, I belieyed that to be the fact." 
A. I said I belieyed that to be the case at 
that time. 

Q. In arriying at that judgment and that 
conclusion, might 1 ask you at what yalue you 

' CD %/ %/ 

put Southern Pacific Railroad bonds in the as- 
sets of the ccunpany ? 

A. My impression is, at 60 cents. 

Q. If they were put at 90 cents, or shown to 
be Avorth 90 cents, would your judgment still 



652 

l>e that tlie assets of the Western Development 
Company did not exceed its liabilities ? 

A. WelK it would depend entirely upon 
what vou rated the securities, as to whether the 
assets excee<led the liabilities. 

i^, I speak of the item of the Southern Pa- 
cific bonds. 

A. I don't know whether that one item 
alone would overcome the deficiencv or not. I 
have* not fijrurc^l to ascertain that fact. 



Kk-('uoss-Kxamixation of Fraxk S. Doi'TV. 

Mr. McAllistkk. Q. Have you ascertained 
ab:)ut this siding now, as to whether or not it 
was paid for ? 

A. Yes, sir. 

(2. State. 

A. Tlie voucher was chargi^l iWember .'ilst, 
187H, to the Northern Railway Company, and 
the voucher, thus charged, not only included 
the Berkel(*y siding, so called, but also the piece 
of track to the north line of Atlantic street, 
U(*arly a (|uarter of a mih^ 

Q. Have you got that voucher here? 

A. Y(»s, sir. 

C^. What is the number of the voucher? 

A. Journal voucher No. 3878. 

Mr. McAllister. I will put that in evi- 
dcMice, and have it marked "Defendants' Ex- 
hibit C— Doutv." 



658 

Said vouchor is aj^ follows : 

** Defendants' Exeiibit C — DorxY.'" 

'' 7-2.>-77. 1«7.... 

Northern Railway Co., 

To Westorn Development (*(>.. Dr. 
1878. 
Dee. 31. For eonij)lote(l road as 

follows : The second 
track from West Berke- 
ley to Oakland Point. 

4.6810 miles. 
Track to north line 
of Atlantic street .2413 " 

Total 4.9223 miles 

<& $40,000 per mile in 

stock $196,892 

and 
(g: $25,000 per mile 

in bonds 123,057 50—319,949 50 

lierk'v sidinc. Berk'v Contract. 

Stock 187,240 . 9.652 

Bonds 117.025 6.0.32 50 

304,265 15,(;84 50 

187 

Received from 

dollars, in full, for above acrcount. 



654 

JJnoineer Dep't C. p. R. R., > 
San Francisco, Feb. 20, 1879. ^ 

r^">n}rth of Northern Railway, etc., 

Between Oakhmd and Martinez. 

December 31st, 1878. 

From junction witli local line at* 
Oakland Point to junction with 
S. P. and T. R. R., near Mar- 
tinez, 1(53,802 feet 31 ,^ miles. 

Second track. West Iit*rk(»lev to 

Oakland Point 24 JIG feet 4 «JS, " 

Track to north line of Atlantic 
street, Oakland Point, 1,274 
fiH»t J^^^ '- 



Total 189.7<)2 feet 35 ."St '' 

F.S. I). 

Above |>ls. Htid statonwiit of Icngtii of track 

{main I on N. Rv. bctwocn W. Oakland and 

June, with S. I*, ct T. R. R., near Martinez. 

S. S. M. 
Feb. 20, 70. 

[En(l<wsefl.| 

"W. D.Co. 

J. Vo. No. .'W78 $310,9491 50 

FoHo 130. 

<'har<i(' Xorthern Rv. Co. 

For coin])lete<l rojul [copy inside]- 

Month of Dec. .'51rtt, '78. 

Entered IVc. .'Ust, 1878. 



655 

Credit. 

Berkeley siding $304,265.00 

Berkeley contract 15,684.50 

1 certify that the within a<3count, amounting 
to $319,949.50, is correct. 

Computations examined by D. 
Approved, F. S. Douty, President. 
Allowed, 

Q. This was included, then, the price of tliis 
stock, in the 2500 bonds expressed in ^'Exhibit 
E.'' A portion of it, and the balance of it in 
what was due and payable in bonds? 

A. Yes, sir. 

Q. Then this siding was paid for in the two 
items of Northern Railway bond expressed in 
-Exhibit E"? 

A. Yes, sir. 

i}. How did you come to write that hotter, 
then, in February, 1879? 

A. I don't know. I would have to put on 
my thinking cap to go back there and figure it 
up. 

Q. I suppose you have forgotten it. Is that 
it? 

A. I know of no other solution to the mat- 
ter than my lapse of memory. 

Mr. , Hayes. I will now offer and read in 
evidence the deposition of 



656 



James Whitely. 

( Mr. ILiy(»s thou read in evidence interroga- 
tories and tlie answers thereto from 1 to 4, in- 
clusive, and interrogatory No. 5.] 

Mh. McAllister. The witness in his answer 
to the fiftli interrogatory goes on to state the 
vahie in January, 1880, of the Southern Pacific 
Railroad stock. We object to their proving the 
value in January, 1880. He has been asked as 
to a period of time covered by this settlement, 
and he says he does not know the prices, but 
proposes to give them in Januar}^ 1880. We 
do not think the price in January, 1880, throws 
any light upon the value of these stocks on the 
27th of August, 1879. We object to it as too 
remote, and as incompetent and irrelevant tes- 

• 

timonv; that is to all of the answer to the fifth 
interrogatory which relates to the value in 
January, 1880. 

Mr. Mayes. That is within five months of 
this settlement, and W(» will show in the course 
of the case that that was t\w first time that 
these d(»f(Midants had allowed the sto(*k to go on 
the market, or had placcMl it on the market. It 
is the first market value, the m^an^st j)()int of 
time to it, and it is not so v(m*v remote und(*rthe 
circunistanc<'s. 

The CoiKT. 1 will l(?t that e(nne in. 



637 

Mh. MoALLrsTfiR. We will take an exce[)tion 
on behalf of the defendants. 

[Mr. Hayes then read the answer to the fifth 
interrogatory and tlie sixth interrogatory and 
the answer thereto.] 
* Mr. Hayes. I will here offer in evidenc^e the 
book which is annexed to this deposition. It is 
the quotations for the whole of the year, which 
was sent from here. 

Mr. McAllister. Do you offer that book? 

Mr. Hayes. Yes, sir; I propose to read from 
it the quotations for the year 1880. 

Mr. M(^Allister. We object to this book. 
This is a book prepared to show prices at the 
Stock Exchange in New York; and we object to 
tlie book itself as evidence of value; and we ob- 
ject to the proof of any value by this book, sub- 
sequent to the month of August, 1870. We say 
that the book itself is not competent evidence 
of value. It appears that in New York it i? a 
common practice to make what they call "wash'' 
sales: the laundrv business I believe thev 
call it. 

Mr. Hayes. Where is that? 

Mr. McAllister. That is common knowl- 
edge, that those sales in the Stock Kxchange 
are not evi<ience of value. Thev are not accu- 
rate* evidence. We object to this book on those 
various grounds. 

Mr. Hayes. The answer of the witness brings 



658 

the ]xy(>k within all of tlie decisions as to the 
i-onipetency of prices current in newspapers and 
journals, when he says it is. a book compiled 
from the official lists of the Xew York Stock 
Exchange, and is generally accepte<l and acted 
upon by brokers as correct. i* 

Mu. McAluster. There is another objection 
suggested by Colonel Hoge that I will state: 
Thitit isals> a question whether the market 
of New York can be consulted, it being a dis- 
trint market, whether that is not a grnxl objec- 
tion to this tiistimonv. 

Tick (^oriir. The Civil Code has something 
un that sul)je<'t, hasn't it, which would a{)ply? 

Mh Havk.s. Under all of the decisicms, anr 
publication in a journal or newspaper or other 
publication, of pric(»s current, connected with 
a sp<»cific commodity^ being encjuireil about,, 
which is usually n»li(»d and acted upon, is admis' 
siblc as (^videnciMvf the market value. 



Tmk ('(Mkt. As to commoditit^, 1 think the 
i'ivil Code lays down the rule of the price where 
the articK* is, or the* nearest place where there 
is a markc^t. 

Mk. Havks. In that connection we will show 
that tli^re was no ntarket on the Pacific coast. 

Mr. McAllistku. Mr. Hoge hands ni? a slip, 
which reads as follows: 



.659 



''EviDENCK OK Wages — When too Remote. 

'*In an action for wages of a carpenter per day, 
plaintiff offered evidence as to what carpenters' 
wages were in other towns in the State. //rW, 
that this evidence was too remote. It stands 
on no stronger gronnd than the rule that dis- 
tant markets cannot be consulted in proof of 
values unless the markets are in some wav 
inter-dependent or sympathetic. 2. Whart., § 
1290; Rice r.^. Manhj, 00 N. Y. 82. Prices in 
same vicinity may he shown — TV/ax r.**. Downer, 
21 Vt. 419; followed in Sfanfon vs. Emhn/Ay-i 
r. S. ooT. In Benluim rx. Dinihar, 108 Mass. 
809, it is said that if the value of a town lot 
wa^ in question, evidence as to the value of 
other lots should l)e confined to sales of com- 
paratively recent dat(^ and of lots in the near 
vicinity, \offes rs, Fifz(fer(fIfl,()\)\u\on hv Row- 
ell, J., Vermont Supreme ('ourt, Jainiarv Term, 
1888 (to ap[)ear in 55 Vt. R.)" 

The evidence in this case — perhaps not at this 
point — shows that all of the values of this stock 
in New Y(n'k were created l)v a syndicate, 
formed in the latter part of January, 1880, and 
that that syndicate, by its manipulation and 
management, gave a peculiar value to this stock, 
and that without the operations of that syndi- 
cate it would not have had any market value, 
or any such value as they enabled it by their 



660 

ntaua<roni(*nt to attain. This whole sviidicate 
arrangfMiuMit was formed after this compromise: 
and the question is, whether, that value heing 
attained in that wav, and bein^^ made some five 
months aftt^^r this compromise, and in reference 
to a matter of such fluctuating value as rail- 
road stocks, whether the eWdence at this point 
is competent to illustrate the value at the tin e 
this compromise was made. Those are the 
general objections that we have to it. 

Thk Couirr. The authoritv furnished is noth- 
ing more than an announcement of the princi- 
ple that we enforce almost, every day in the 
trial of cases, in which we refuse to allow San 
Francisco prices unless there is corroborative 
evidence that San Francisco prices fit the prices, 
here. 1 suppose the same principle would ap- 
ply to the market in Xew York. There must 
l)e something to show that the prices obtained 
in New York fit the pricvs in San Francisco. 

Mk. Hayhs. It is proven by depositions^ 

ailreadv taken in the case* bvtlie defendants, that 

you could not makc^amarket for this kin<l of prop- 

ertv anvwhen* until vou had first made it in 
• • •' 

New York, and forn^ed a market price there. 
The defendants prove that. 

TuK CoruT. 'Hiat is not in vet. 

Mr. 11 avks. No, sir: but that is a (juestion 
o ' order of proof. 



661 

Mr. McAllistkr. Perhaps you can road our 
depositions upon that subject. 

Mr. Hayes. We will read one or two of them 
for you in due time. We expect to show that 
the market here and in New York is inter-depc^n- 
dent and sympathetic. 

The Court. With that understanding, that 
that will be furnished, I will admit this for a 
period — say for twelve months. 

Mr. Hayes. I only want it for the year 
1880. The (juestion is confined to that. 

The Court. Twelve months after the coni- 
promise would be a reasonable rule, j)robably. 

Mr. Mr a luster. Not reasonable in a mat- 
ter of stock of this kind which varies 20 to 50 
per cent, in a month. 

The Coi'KT. I know it does; that must 
be taken in considiTation, of course, and very 

• 

likely you will show that the evidence is of very 
.. .. fc 

little value. 

Mr. Hayes. Hut this stock did not do any- 
thiuf^ of the kind. 

^Fr. McAllister. We take an exception to 
your Honor's ruling. 

Mr. Hayes. Then vour Honor rules these 
quotations in, to and including August, 1880, 
and rules them out after that? 

The Court. Within twelve months of the 
time of the compromise. 



662 

Mr, Hayes. That is, the 27th of August^ 
1871)? So that vour Honor will admit all to 
and including August, 1880, and rule out all 
after that? 

Thk f \)rRT, Yes, sir. 

Mh. Hayics. Tlion I will reserve an exception 
to th(» ruling mit of that portion after August 
1880. 

Recess until 2 o'clock p. m. 



APrKRNOOX SKSSIOX. 

Mr, Hayks. This l)ook referred to is a little 
hook which we could not have printed, attached 
to th(» deposition, and 1 A\nll read the quotationi* 
for th(>s(» six n>()nths. TheCVntral Pacific Hail- 
road Company^ st(K*k in this lMK)k is quoted, 
for January, 1880, the highest at 87, the lowest 
at 81i. 

Mr. McAli>istkr. What is the date in Jan- 
uary? 

Mu. Hayks. These are the hii^rhest and low- 
est (piotations in each month. In January the 
highest price at which this stock was sold was 
87 and the lowest 81]. 

Mr. M('Allist::r. That d(K?s not show the 
dat(» it was sold. It may haye l>een the first or 

the last day of .lanuarv. 

«. • 

Ml^ Uavks. It may haye K'en. It giyes tho 



663 

highest and lowest quotations that the stock has 
touched in each month. 



February, 


Highest, 


, 85 


Lowest, 80i 


March 


u 


SSh 


" 7G 


April, 


a 


m 


" 7U 


May, 


<4 


72 


" G3 


June, 


t t 


73^ 


" <Jo 


July. 

• 


it 


'H 


" . Gi) 


August, 


i t 


78 i 


73 i 



There, 1 understand, under the ruling of 
the Court, I must stop. 

Mr. M<'Allistkk. The interrogatory to 
which that applied is the sixth. 

Mr. Havks. Yes, sir — the seyenth relates to 
bonds. 

The seyenth Direct Interrogatory is as fol- 
lows: ** Please state the highest and lowest 
market prices in each of the seyenteen months, 
from August, 1879, to December, 18SI), both 
inclusiye, at which the first mortgage bonds of 
the Southern Pacific Railroad were sold in New 
York.'' 

Mk. McAllister. We will object to the 
seyenth interrogatory on the ground that the 
eyidence is incompetent, immaterial and irrele- 
vant; that it is too remote from the time of this 
transaction, and that it is a mere recital by the 
witness of what appoars upon the official list of 
the New York Stock Exchange. It does not i)ro- 



664 

ceoi from any personal knowledge of his at all; 
and wo also object on the ground that it is a 
distant market. 

Mr. Hayhs. The deposition shows that the 
New York Stock Exchange official list is ac~ 
cepted here,' and is commonly accepted by 
brokers. I presume the ruling of the Court is 
tlie same — to the effect that I cannot g(x beyond 
August, 1880? 

TuK CorRT. Tliere is an additional objection- 
that the witni^ss is reciting what he saw in thi> 
book. 

>[r. Hayk-^. a witness is always permitted 
to testify from a list or whatever is nn'oijrnized 
as authority. It is a price current account. Hi^ 
is not supposed to carry these things in his 
head, but he is allowed to look at that and state 
from it. There is no conflict in the authoritv 
upon that [)roposition. 

TiiK CoiRT. If h(» r(»fresh(»s his meniorv bv 

* ». 

it, it ought to b(^ j>roduc(Ml, I sup|)()se. 

Mr. IIavks. If it was called for bv cross- 

.. 

examination, uncfuesticmably it would be. 

The CorRT. Put it in, with a like limita- 
tion. 

Mr. McAllistkr. 1 take an exception on 
behalf of thed(»fendants, to vour Honor's ruliuir 
:;d'nitting the evidence. 

Mr. IIayks. And we will take an exception 



665 

to your Honor's ruling out that portion •subse- 
quent to August, 1880. 

[Mr. Hayes tluMi read the answer to the sev- 
enth int(»rrogatorv down to and inchiding the 
tlie (luotation of August 26th, 1880, and, under 
the ruHng of the Court, omitting the cjuotations 
after that date, and also continued and concluded 
the reading of the deposition.] 

Mr. Haves then offered and read in evidence 
the deposition of 

Harry Allen, 

Taken on behalf of plaintiff, omitting there- 
from in the answer to the third interrogatory, 
the quotations given after August, 1880.] 

Mr. McAllistkr. We make the same objec- 
tion to this testimonv as to Mr. WhiUdv's. I 
suppose the same ruling, and we take the same 
exception. 

Thk CoruT. By both si<les, I suppose. 

Mr. Havks. Yes, sir; bv both sides. 

Mr. Hayks. [To Mr. McAllister |. I served 
notice upon you for the production of copies of 
each of the bonds and mortgages. 

Mr. McAllister. I don't know that I have 
the mortgages. Here are the bonds. 

Mr. Hayes. I will next read in evidence one 
of th(» bonds of the Northern Kailwav Com 
I)any, marked **Plaintiff 's Exhibit 45,'' which is 
as follows: 



£66 



- Pr^VINTIFF 8 EXHIBIT 45/' 

*'$1,()(M) $1,000. 

rnited States of America, 
State of California. 
Number ITOf). Number 1766. 

Northern Railway Company. 
The Northern Railway Company acknowledg- 
es itself indebted to Mark Hopkins of the City 
and County of San Franciseo,or the holder there- 
of, in the sum of one thousand dollars, gold coin 
of the United States of America^ which sum it 
promises to pay to the holder hereof, at the 
City of New York, on the first day of January, 
A. I). 1907, with interest thereon at the rat^ of 
s?ix i)er (n:»ntum per annum, payable semi-an- 
nuallv, on the first day of July, A. 1). 1877, and 

on the first day of January and July of each 

*- • • 

year thereafter, at the City of Ntnv York, upon 
the surrtMider of the annextMl coup )ns, b )th 
principal and inteivst payable in gold coin of 
the UnitiMl Staters of America Tliis bond is out*- 
of six tlionsand an<l three hundriMl, numl)ered 
from one to six thousand and tlm^^ hun- 
drecl, inehisiye, each of wliicli is a copy hen^of, 
and ail of which are scu-unMl V)y a first mortgage 
on the railroad, rollinir stock, fixtures and fran- 
ehises of said Northern Railway Company. 
Said railroad is situatecl in the City and County 
of San Francisco, the counties of Alame la. 



.6&7 

Contra Costa, Solano, Yolo, Sacramento, Colusa 
and Tehama, in the State of California, and 
commences in the first-named county and ter- 
minates in the la^t-named county, being two 
hundred and ten miles in length. Said mort- 
gage is made to Eugene Kelly and Henry B. 
Laidlaw, of the City of New York, as trustees 
for the holders of said V)onds. The payment of 
said bonds is also further secured by setting 
apart in the year 1886 and each year thereafter, 
from the net income of said road, the sum of 
fort}' thousand dollars, which fund, with the in- 
terest and increase thereof, is irreyocably 
pledged to the redemption and payment of said 
bonds. 

In testimony whereof, pursuant to an order of 

its Board of Directors, said Northern Railway 

Company has caused these presents to be signed 

l)y its Presi<lent, countersigned by its Secretary 

and s(»aUMl with its corporate seal on the first 

day of January, A. 1). 1877. 

|skal] 
Northern Railway^ Leland Staxfokd, 

Company . ^ Pn^sident. 

E. H. MiLLKH, Jn., 

Secretary. 

Attached are such coupons as haye not been 
paid. 

[Endorsed.] Number 1706. 
Northern Railway Company. 



668 

First Mortgage, six per cent, gold bon<I. 
$1000. 

Principal due Jany. 1st, 1*.)07. 

Interest payable January 1st and July 1st, in 
the City of New York. 

Trustees' Certificate. 
We hereby certify that the within bond is 
one of the bonds secured by the mortgage or 
deed of trust therein mentioned and deliyered 
to us as trustees, whicli has been duly recorded 
in each of the counties in which the railroad 
therein nuntioned, or any part thereof, i& 

situated. 

Eugene Kelly,) rr 4. 
Tj 15 T .,^ . } Irustees. 
H. B. Laidlaw.^ 

Mr. Hayes. I will next read in evidence 
one of the l>onds of the San Pablo and Tulare 
Railroad Company, which is as follows 
(Marked Plaintirs Exhibit 4(5): 

PLAINTIFF'S EXITIPIT 40. 
First Mortgage Bond. 

Fnited States of America. 

In United Static (Jold (^)in. 

No. 1 

In rnitiMl States (lold Coin. 

No. 1. 
San Pablo and Tulare Railroad Company of 
California. 



669 

Promises to pay to Edgar Mills, or bearer, 
for value received, one thousand dollars, in gold 
coin of the United States of America, in 
the city of San Francisco, on the first day of 
April, one tliousand nine hundred and eight, 
witli interest thereon at the rate of six per 
centum per annum from the first days of April 
one thousand eight hundred and seventy-eight, 
payable semi-annually, on the first days of Oc- 
t()l)er and April in each year, after the date 
hereof, in the city of San Francisco, on presen- 
tation and surrender of the respective coupons 
hereunto annexed, both principal and interest 
payable in United States gold coin at par 
dollar for dollar. This bond is one of three 
thousand seven hundred and fiftv bonds for the 
sum of one thousand dollars each, numbered 
from one to thrte thousand seven hundred and 
fifty, inclusive, said l)onds amounting in the 
ijggregate to three million, seven hundred and 
fiftv thousand dollars, authorized bv law and 
secured by a mortgage or deed of trust, bearing 
date September 2d, 1878, duly executed by said 
company to Albert Gallatin, of the city of Sac- 
ramento, and Charles Miller of the city of San 
Francisco, as Trustees, upon its railroad line in 
the State of California, from a point at or near 
Martinez, in the county of Contra (-osta, 
through the counties of Contra (.'osta, San 
Joaquin, Stanislaus, Merced and Fresno, to a 



b'7Q 

point at or near Los Gatos creek, a distance erf 
one hundred and fiftv miles, as near as may be, 
connecting with the Southern Pacific Rail- 
road, being all in said State, with all the 
rolling stock, stations, fixtures and fran- 
chises, for the permanent use thereof, and the 
appurtenance&theretonowownedorheld, and all 
that may be hereafter acquired for the perman- 
ent use of said company's said line of railroad. 
The payment of said bonds is also further 
secured by a sinking fund, to be created by set- 
ting apart on the first day of January, 1883, and 
the first dav of January of each year thereafter^ 
a sum etjual to one {x^r cent on all bonds then 
outstanding, which fund, with the interest 
thereon, is irreyocably pledged to the redemp- 
tion and i)a3'ment of said bonds; said lx>nds not 
to be issued in adyance of the construction of 
the road; that is to say: for each lot of twenty- 
fiyi» bonds issued one mile of road shall hayi.' 
been first constructc^d. 

In witness whereof, the San Pablo andTuUire 
Railroad has (*aus(Ml its corporate seal to be 
hereunto aftixed, and these presents to be signe<l 
l)y its President and 8(H*retary, this first day of 
Aj)nK in the yi^ar one thousand eight hundred 
and sey(*nty-<»ight. 

[sEAL.J Lelaxd Stanford, President. 

J AS. (J. B. (jrREEN, Secretary. 



671 

[With unpaid coupons attached.] 
[Endorsed.] No. 1. 

San Pablo and Tulare Railroad Company of 
California. $1000. 
First Mortgage Bond. 

Principal payable in gold, April 1st, 1908. In- 
terest payable in U. S. Gold Coin, October 1 st, 
and April 1st, in the city of San Francisco. 

Trustees' Certificate. 
We hereby certify that the within bond is one 
of the series of bonds secured by the mortgage 
or deed of trust mentioned therein and delivered 
to us as Trustees, which has been duly recorded 
in the proper counties of the State. 

Albert (tallatin 



' > i ri 



., xr / *i-ustees. 

Charles Miller, 



Mr. Hayes. It is admitted that all of the 
bonds of all these companies are like those that 
we read. 

Mr. McAllister. Yes, sir. 

Mr. Hayes. 1 will now read in evidence one 
of the bonds of the Berkeley Branch Railroad 
Company, marked ^Tlaintift^'s Exhibit 47,'' 
which is as follows: 



672 



^PLAINTIFF'S EXHIBIT 47."^ 

United States of America. 

Number 1. 

1000 1000 

First Mortgage (iold Bond, 

State of ( ■alifornia. 

The B(»rkelev Branch Railroad Company 
acknowledges itself indebted to Mark Hopkins^ 
of the ( 'itv and County of San Francisco, or to 
the holder hereof, in the sum of one tliousand 
ilollars, gold coin of the United States of 
America, which sum it promises to pay to the 
holder hereof, at the city of New York, on the 
first day of January, A. D. 1907, with interest 
ther(»on at the* nite of six per centum per an- 
num, ])ayal)l(» semi-annually on the first dav 
of July. A. 1>.1(S77, and on the first day of Janu- 
ary and July of each year thereafter, at the City 

of New^ York, upon the surrender of the an- 
nexe 1 coupons; both principal and interest pay- 
able in gold coin of the United States of 
America. 

Tills \yyi\d is one of one hundred, each of 
which is a copy hereof and all of w^hich are se- 
rured by a first mortgage on the railroad, rolling 
stocky fixtures and franchises of said Berkeley 
Branch Railroad Company. All of said rail- 
road is situated in the county of AlauKHla, in 



6T3 

the State of California, and eommonees at a 
point on the line of the Northern Railway, at 
or near Temescal Creek, and runs tlience to the' 
town of l-Jerkelev, a distance of three and one- 
tenth miles. Said mortgage is made to E. H. 
Miller, Jr.and J. L. Willeutt of the (Mtv of San 
Francisco, as Trnstees for the holders of said 
bonds. The payment of said bonds is also 
further secured by a sinking fund, to be created 
by setting apart, in the year 1881, and each year 
thereafter, from the net income of said road, 
the sum of two thousand dollars, which fund, 
with the interest and increase thereof, is irre- 
vocably pledged to the redemption of said 
bonds. 

In testimony whereof, pursuant to an order 
of its Board of Directors, said Berkeley Branch 
Railroad Company has caused these presents to 
l>e signed by its President, countersigned by its 
Secretary, and sealed with its corporate seal, on 
this the first dav of January, A. D. 1877. 

[Seal] 

Berkeley Branch^ Lki.and Staxforo, 

R. R. Co. ^ President. 

E. H. Miller, Jr., Secretary. 
[With unpaid coupons attached.] 
[Endorsed.] 



674 

No. 1. 
The Bv>rkeley Branch Railroad Company- 
First Mortgage Gold Bond. 
1000 ( Jold Dollars. 

Principal payable January 1st, 1907. Inter- 
est payable January 1st and July 1st, at the citv 
of New York. 

Trus-tees' Oertificate. 

We h(M-el>y c^M'tify that the within bond is one 
of the bonds secured by the mortgage or trust 
deed thenMn mentioned, and deliyered to us as 
trustees, \yhich has been duly recorded in the 
county in which the railroad therein mentioned 

is situated. 

K. H. MiLLKR, Jr., ) rp 

r I XI' > 1 rustees. 

J. I^ U FLU V n\ ^ 

Mr. Hayks/ I will next ivad in eyidence one 
of the bonds of tlie San Francisco, Oakland and 
Alameda Kaih-oad Company, niarked, '* Plain- 
tiff's Ivxhibit 48," whicli is as follows: 

PLAINTIFFS EXHIBIT 48. 

State of (yalifornia. 
KKX). 1000. 

San Francisc-o. Oakland and Alameda Railroad 
Company. 

Bond No. 837. 

The San Francisco, Oakland and Alameda 
Railroad Company acknowledges itself to be in* 



6:79 

d^^bted t) A. S. Hatch, of th3 city of X.nv York, 
or to the holder hereof, in the sum of one thou- 
sand dollars, in gold coin of the Unitod States 
of America, of the present standard value, which 
said company promise to pay to the holder 
hereof at the city of New York, on th? first day 
of July in the year one thousand eight hundred 
and ninetv\ with interest thereon at t'le rate of 
eight per cent, per annum, pa^^able SLmii-an- 
nually in like gold coin, in the said city of New 
York, on the first days of January an 1 July of 
each year, upon surrender of the annex.^d cou- 
j.ons therefor respectively. 

This b;)nd being one i)f fifteen hundred of 
same tenor, amount and date of first mortgage 
bonds of said company, the payment of all of 
which, and of the coupons attacherl hereto, is 
secured by a mortgage executed and delivered 
bv the said the San Francisco, Oakland and 
Alameda Railroad Company, of all its corpor- 
ate property and franchises to D. O. Mills and 
William H. Tillinghast of the said City and 
Countv of San Francisco, trustees for the holders 
of said bonds. 

In testimonv whereof, the said the San Fran- 
cisco, Oakland and Alameda Railroad (com- 
pany have, by a resolution to that effect, passed 
bv a unanimous vote of its Board of Directors 
and entered at length in the record of the proceed- 
ings of said Board caused these presents to be 



signed l>v its* President and Secretary and the 
coupons hereto annexed to be signed by its Sec- 
Tv^tary and its corporate seal to b? affixed at its 
%>ffice in the City and County of San Francisco, 
an the first day of July A. D. one thousand 
eight hunch'ed and seventy. 

Alf. a. ('ohrn. President. 
H. Lacy. Secretary. 

[seal] 

San Francisco, Oakland and Alameda Rail- 
road Company. 

[U. S. Inter. Rev. stamp. One dollar, cancelled. J 

[With unpaid coupons attached.] 

[Kndorsed.] No. 237. 

First mortj»:afj:e lK>nd of the San Francisco, 
Oakland and Alameda Railroad Company. 

\V(^ h(*rel>v eertifv that this lH>nd is one ot* 

* t. 

fifteen hundnMl of same tenor, amount and dat^^ 
secured Uv a mortgage exe(*uted and delivered 
to us. 



I>. (). Mills,) ^ 
\\- TT '^r r 1 rustees. 

NAM. H. riLLIN(iHAST, j^ 



Mr. Havhs. 1 will m^xX read in evidence one 
of the l>on(ls of tlie Los Angeh^s and San Diego 
Uaih-oad Company, marked '' Plaintiff's Ex- 
hibit 41)," wliich is as follows: 



677 



'* PLAINTIFFS EXHIBIT 49/' 

$1000. 

United States of America. 

First Mortgage Bond. 
Number 301. In United States Gold Coin. 

$1000. 

The Los Angeles & San Diego Railroad Com- 
pany, of California, promises to pay to Eugene 
Kelly, or bearer, for value received, Ofie ThoH" 
sand Dollar,^, in gold coin of the United States 
of America, in the Citv of New York, Thirtv 

vears from the date hereof, with interest there- 

•/ 

on, at the rate of six per centum per annum 
from said date, payable semi-annually, on the 
First day of January next ensuing, and on the 
First days of July and January in each year 
thereafter, in the City of New York, on presen- 
tation and surrender of the respective coupons 
hereunto annexed, both principal and interest 
payable in United States Gold Coin, at par, dol- 
lar for dollar. 

This bond is one of a series of two thousand 

m 

eight hundred bonds for one thousand dollars 
each, numbered respectively from number one 
to number two thousand eight hundred, inclu- 
sive; amounting in the aggregate to two million 
and eight hundred thousand dollars, authorized 
by law and secured by a mortgage or deed of 



678 

trust bearmg even date with said bonds duly 
executed by said company to S. T. Gage of the 
i.'itv of Oakhmd, Countv of ALimeda, State of 
California, and E, B. Rvan of the Citv and 
Countv of San Francisco, State aforesaid, as. 
Trustees, upon its railroad line in the State of 
California, fnini the City of Lis Angeles in a 
southerly direction to the City of San Diego, 
ill the s*^>uth\vestern part of the State,, with all 
rolling stock, stations, fixtures and franchises 
for the perniiinent use thereof, an<l the appur* 
tenances thereto, now ownied or held, and all 
that may he hert^after acquireil, for the perman- 
ent use of said company's said liive of railroad 
and telegraph. 

In witness where4>f, the Ijus Angeles and San 
l)iego Raih'oa 1 Comjxmy has caused its corpor- 
ate* seal to l>e hereunto affixed and these pre- 
sents to he siiriied hv its President and Secre- 
tarv. this first <lav of Julv. inthevearone thou- 

• • • « 

i^and eight hundrcil and eighty. 

Chxs F. Cr(X'KKK, President. 

J. L. WiLLx UTT. Secrt^tarv. 

Los Anjxi^les and San Die^jco R lilroad Com- 
pany. [stL\L2 

[With unpaid cu|x>ns attached.] 
[Endorsed.] 



679 



No. 301. 

United States of America. 

Six per cent Fiist Mortgage Bond. 

Los Angeles and San Diego Railroad Com- 
pany of California. 

$1000. 

Payable, principal and interest, in United 
States gold coin; principal due July 1st, 1910, 
interest payal)le January 1st and July 1st, in the 
city of New York. 



TRUSTEES' CERTIFICATE. 

We hereby certify that the within bond is one 
of the bonds secured by the mortgage or deed 
of trust therein mentioned and delivered to us 
as Trustees, which has been duly recorded in 
the proi)er counties of the State. 

S. T. Gage, 
E. B. Ryan, 

Trustees. 



Mr. Hayes. I will next read in evidence one 
of the bonds of the Central Pacific Railroad 
Company, marked ^* Plaintiff's Exhibit 50,'' 
which is as follows : 



680 



'' PLAINTIFFS EXHIBIT 50/" 

UxiTED States of America, > 

State of California. \ 

$1000. Central Pacific $1000. 

Railroad Company 

No. 1000. liond. No. 1000. 



The f/ontral Pacific Railroad ConipanN' ac- 
knowh^lges that it is indebted unto Eugene 
Kelly in the sum of one thousand dollars, for 
value received, which sum the said company 
promises to pay to him, or bearer, on the first 
dav of Mav, A. D. 1888. with interest thereon, 
from th(» first dav of Mav, A. I). 1878, inclusive, 
at the rat:^ of eight per cent, per annum, pava- 
bl(» on the first dav of November, 1878, and 

semi-aniuiallv on the first dav of Mav and 

* «• •^ 

November in each vear thereafter, in the city 

• ^- 

of Ni»w York, uj)on the surrendc^r of the an- 
nexed coupons, both {>rincipal and interest 
payable in United States gold coin at par. This 
bond is one of a series of bonds, five hundred 
of which an* for ten thousand dollars each, and 
one thousand of which are for one thousand 
dolhirseach, amounting in the aggregate to six 
millions of dollars, issued and to hv issued bv 
.said comj)any. And said company hereby 
agrees to set apart annually, commenc- 



681 

ing in the year 1879, as a sinking fund, the sum 
of six hundred thousand dollars, heing ten per 
cent upon the whole amount of said series, to 
be applied under the direction of the Board of 
Directors of said company to the purchase of 
said bonds at not exceeding par in gold, and if 
said bonds cannot be purchased at or under par 
in gold, said sum or the amount thereof not so 
applied is to be loaned out at interest upon, or 
invested in good interest paying securities, and 
used exclusively for such purchase of said 
bonds or for their final payment and redemp- 
tion. All bcmds purchased, paid or redeemed 
as aforesaid to be immediately cancelled. 

In Testimony Whereof, the said company has 
caused its corporate seal to be hereunto affixed, 
and this Ixmd to be signed by its President and 
Secretarv, at the city of San Francisco, in the 
State of California, on this first day of May, one 
thousand eight hundred and seventy-eight. 

Leland Stanford, 

[Seal.J President. 

E. H. Miller, Jr., Secretarv. 
[With unpaid coupons attached.] 

[Endorsed.] 

No. 1000. 

Central Pacific Railroad Company. 

Eight per cent. 

$1,000. 

Sinking fund bond. 



682 

Payal)k\ principal and interest, in United 
States gold coin, in the city of New York. 

Principal dne May 1st, 1888. 

Interest payable May 1st and November 1st. 

Mr. Hayf>s. I will next read in evidence 
one of the lK)nds of the Amador Branch Rail- 
road Company, marked ** PlaintifTs Exhibit 
51/' which is as follows: 

^•PLAINTIFFS EXHIBIT 51." 

'* Ignited States of America, State of Califor- 
nia. 

No. 4._|1000 

The Amador Branch Railroad Company. 

First Mortgage Gold Bond. 

The Amador Branch Railroad Company ac- 
knowledges itself indebted to Mark Hopkins^ 

of the the Citv and Conntv of San Fran- 

•/ %,■ 

cisco, or to the holder hereof, in the sum of 
one thofisand (iolhns,. gold coin of the United 
States of America, which sum it promises to 
nav to the holder hereof, at the Citv of New 
York, on the first dav of Januarv, A. I). 1907. 
with interest thiMVon at the rate of six per 
ceiituni per annum, payable semi-annually on 
the first dav of Julv, A. 1>. 1877, and on the 

first (lav of Januarv and Julv of (*ach vear 

• * • .' 

tliereaiT:er. at the City of New York, upon the^ 
surrcMider of the annex(»d coupons, both princi- 
pal and intfn^st j)ayal>le in gold coin of the 
Cnit(.Ml States of America. 



683 

This bond is one of six hundred and seventy- 
five, each of which is a copy hereof, and all of 
which are secured by a first mortgage on the 
railroad, rolling stock, fixtures and franchises of 
said Amador Branch Railroad Company. All 
of said railroa<l is situated in the counties of 
Sacramento and Amador, in the State of Cali- 
fornia, and commences at Gait, in said first 
named countv, where it connects with the Cen- 
tral Pacific Railroad, and runs thence through 
said counties to lone Citv, in said last named 
countv, a distance of twentv-six and seven- 
tenths miles. Said mortgage is made to E. H. 
Miller, Jr., and J. L. Willcutt, of the (Utv and 
County of Sjin Francisco, as Trustees for the 
holders of said bonds. 

The payment of said bonds is also further se- 
cured by a sinking fund to be created by setting 
apart in the year 188B, and each year thereafter, 
from the net income of said road, the sum of 
five thousand dollars, which fund, with the in- 
terest and incrccise thereof, is irrevocablv 
pledged to the redemption and payment of said 
bonds. 

In testimony whereof, pursuant to an order 
ofits Board of Directors, said Amador Branch 
Railroad Company has caused these presents to 
be signed by its President, countersigned by 
its Secretary, and sealed with its corporate 



684 

>eal on this the first clay of January A. D. 

1877. 

[seal] 

Amador Branch > Ijsland Stanford^ 

R. R. Co. J President. 

E. H. Miller, Jr., 

Secretary". 

[With unpaid coujhmis attached.] 
[Endorsed.] 

No. 1. 
Tiie Ania I >r Brancli Riilroal Company. 
First Mortjrajre <n>Id liond. 

Printup U Pavahle Januarv 1st, 11KJ7. 
Interest I^ivahU^ Januar\' 1st and July 1st, at 
the ritv of New York. 

TrusttH^s' (\M*tificate. 
Wi* hert^hv (*ertifv that the within lK>nd is one 
of the l>«>n<ls smnired hy the niortgap^ or deed 
i>f trust therein nivMitiontMl and delivered to us 
as trustet^s. whi(*h has Ihhmi <]ulv reiM>rde<l in 
lH>th i-ountit^s throuirh. or inti> which the rail- 

« 

road thtM*rin intMitioiu'd runs. 

K. H. MiLi-KR. Jr. ) rp 

I I ti- ; I nistees. 

Mk. Havks. [to Mr. Me.Vllister]: Is that all 
V >u hive ? 

Mr. McAli.istkr. What other Inrnds do vou 
want? 

Mr. HavH'^. We want the Southern Pacific 



685 

Railroad bonds and the Los Angeles Bridge 
bonds. 

Mr. Mc^Allister. We have not either of those 
here. 

Mr. Hayes. . I also want the mortgages. 

Mr. MeKrsicK. We will produce the origi- 
nals, if you want them. I don't think we have 
any Los Angeles Bridge bonds. 

Mr. Hayes. You did own them; you may 
have sold them. Will you let me have the leases 
to the Central Pacific Railroad Company of 
these various roads ? 

Mr. McAllister. Here is the lease of the 
Southern Pacific to the Central Pacific. I think 
that is the only lease that I have at present. 

Mr. Hayes. Will you have the others? 

Mr. McAllister. Yes, sir. 

Mr. Hayes. I also particularly want the 
leases existing in 1879, and also subsequent 
modifications to them, as I understand there 
have been. 

Mr. M(^\llister. Upon what road? 

Mr. Haves. All of them. 

[Mr. Stanley then offered and read in evi- 
dence the deposition of 

Edward W. Hopkins, 

Taken on behalf of the plaintiff in this case, to- 
gether with ^VExhibit A, E, S, B,'' attached 
thereto.] 



686 

Mr. Hayes. I will now read in evidence a 
stipulation entered into between counsel in the 
case, pending proceedings in New York, when 
taking testimony there, to be found on page 89 
of the se:*ond volume of proceedings before the 
(commissioner in New York. 

It is hereby admitted and agreed by and 

between counsel for the parties to this action,, 
that during the nine months from January,. 

1879, to Se{)tember 80th of that year, inclusive^ 
the printed sheets published daily,, purporting 
te be official lists of the New York Stock Kx- 
change, and containing reports of the transac- 
tions had in said Stock Exchange each day. 
contain records of sales of the first mortgiige 
bonds of the Southern Pacific Railroad Com- 
pany on tlie dates and at the prices at the end 
of this stipuhition set forth. 

The amount of bonds sold ]>eing stated at 
the fac(» vahu^ th(*reof, and the figures i^epresent- 
ing the prices being the percentage of such face 
value at which the transactions were made, 
this admission and stipulation may be used iu 
evidence on the trial of this cause bv either 
party, the same as though legal pr(X)f of said 
matters were had, but nothing in this stipula- 
tion is intended or shall be taken to l)e an ad- 
mission on the part of the defendants that such 
transactions as wei'e shown on said lists were 
hona-fifh sales. 



687 

Mr. Hayes. TFien follow the prices. 

Mr. McAllister. I do not understand that 
the effect of this stipulation is to obviate our 
objection to the admissibility of the evi- 
dence; but simply an admission that these 
printed sheets do show the official lists of the 
Stock Exchange. 

Mr. Hayes. The stipulation is that it may 
be used on the trial by either party. 

Mr. McAllister. I consider the stipulation 
to mean and to sav, that we admit that as le^al 
proof of the prices on this Stock Exchange. 

Mr. Hayes. If there is anv doubt about it 
we do not want to take any seeming advantage, 
but will waive any construction of stipulation, 
and if you want your objections and exceptions 
vou inav have them. 

Mr. M(\Vllister. We want the same oV)jec- 
tion made that we made before; that the sales 
in Januarv, 1879, are too remote from the date 
of this compromise of August 27th, 1879; that 
thev are sales made in a distant market; 
also that the book itself is not competent evi- 
dence to establish these facts — the same objec- 
tions we took before. 

The Court. Is it the same evidence you 
have already put in. 

Mr. Hayes. It covers a different period of 
time. It commences six months before the set- 
tlement, and extends a month after. 



688 

Thk Court. Ofwhat stock? 

Mr. Hayes. The Southern Pacific Railroad 
stock. 

Mr. McAllister. We will take our excep- 
tion. 

Mr. Hayhs. The stipulation is in the depos- 
ition of J. D. Probst, pages 89, 90, 91 and 92 of 
the printed copy. I will omit the reading of 
January and Februarj^ and we will offer in 
ev'idence the sales in March, April, May, June, 
July, August and September, 1879, under the 
stipulation; or if you insist upon the objection, 
I am willing to commence it on the 3d of 
March. I will commence it on March 3d. 
Mch. 3d, 1879, S. P. R. R 1st M. 2,000 at 94^ 

Ik O kk a 

Lk \ iL (.k 



() 



ik. 



ki "^ kk 



ki 1 1 4k 4k. 

kk 1 (^ *w kk 

.k l;^ 

4.. 1 1 kk. kC 

.k jV^ 

Apr. I 

k • •^ . k 

Ck •} %>. 

k. 4 kk 

4. 1 k^ 4 k. k.4. 



kk 



4 k 



1,000 


Ck 


95 


8,000 


4C 


1)4 


8,000 


4k 


94 


2,000 B.C 


4 k 

• 


94 


().0(>Oli.C 


44 


94 


1.000 


kk 


94 


:10(M) 


kk 


94i 


8,000 C- 


4k 


m 


1.000 


4k 


944 


2.000 


44 


94| 


1 ,(K)0 


kk 


94| 


4.000 


kk 


941 


500 


k< 


94i 


ii.OOO 


u 


95 


2.000 


if. 


95 



689 

Apr.l9th 1879, S. P. R'.R. 1st M. 5,000 at 96 

" 22 " " 10,000 6. 3," 96| 

" 23 

" 24 

" 26 

" 28 

" 29 

" 29 
Mav 1 



6 



" 8 
" 12 
" 13 
" 16 



" 14 

" 18 
" 18 



n a 

it i* 

it a 

n ^^ 

a it 

a it 



<« L* ii u 



*< 7 n it 



<» y ki n 



a T *< i* 



a t» 



a n 



(i <( 



(t n 



a 21 ** ** 

*i 28 ** ** 

June 6 

" 10 
" 13 
" 13 " 

(i ti 






<< (< 

<< <» 



6,000 


" 97 


5,000 


" 97i^ 


10,000 


" 97i 


5,000 


" 97i 


1 ,000 


" 97^ 


1,000 


" 97 


1 ,000 


" 97^ 


3,000 


" 98 


5,000 


•' 99 


5.(K)0 B.C 


. " 99i 


1, ()()() 


" 99 


5,000 


" 99| 


10,000 


" 99^ 


30,000 


•' 99| 


5,000 


" 99| 


9,000 


" 99| 


500 


*' 99i 


1,000 


"100 


1,000 


" 99i 


4,000 


" 99i 


11,000 


" 99i 


5,000 


" 99f 


10,000 


" 99i 


4,000 


" 99f 


1,000 


" 991 


3,500 


" 99J 


10,000 


" 100 


1,000 


" 100 



690 
J'ne 21st,1879,S. P.RR. 1st M. 4,000 B.C. at 100 



July 11 


(( 


<< 


10,000 


" 97i 


" 15 


U 


U 


2,000 


" 974 


" 24 


<4 


U 


5,006 


" 97i 


" 31 


iL 


n. 


5,000 


" 98 


Aug. 1 


kk 


M 


5,000 


" 98 


" 2 


iL 


C4. 


1,000 


" 98 


^ 4. 


(.* 


iL 


1 .000 


" 98 


" 15 


(k 


i.L 


10,000 


" 98 


^ 20 


k k 


LL 


2,000 


" 98 


" 21 


«i 


(i 


(>,000 


" 98 


Sept. 5 


i» 


iw 


1.000 


" 97 


" 5 


LL 


i.k 


2.000 


" 97 


" 19 


i.L 


Ck. 


3,000 B.C 


." JWf 


'• 25 


» h 


kk 


20,000 


" 98^ 



Mr. Hayks. f wnll next offt^r in evidence a 
in)ntract between Si>eyer &. Company and tlie 
Western IX^velopnuent Company and others, of 
January 28tlu 1880. [To Mr. McAllister.] Di> 
you admit the execution of this agreement be- 
tween the Southern Pacific Railroad Company^ 
the Western Development Company .and Speyer 
& Company ? 

Mu. McAllister. We admit the executian 
of it at the date stated in the paper. 

Mr. Havhs. It is found at the close of Wil- 
liam Solomon's deposition on page 90 of the 
book containing the depositions of Seligman^ 
Lloyd,. Solomon and others. We otter it sepa- 



691 

rately and independent of the deposition in this 
instance. I am not offering this paper in con- 
nection with this deposition now. It is only a 
substitute for the original, which the other side 
could not produce. Its execution is admitted. 

(A) 
Memorandum of agreement made and entered 

into this twentv-ei«;hth dav of January, in the 
year one thousand eight hundred and eighty, 
by and b^^twjen thy Sc)uthL*rn Paciifti^ R-iilroad 
C'Ompany, a railroad corporation duly incor- 
porated, organized and existing under and in 
pursuance of the laws of the State of (/.ilifornia, 
party of the first part, the Western D.n^elop- 
m3iit (yompany, a corporation duly incorpor- 
ated, organized and existing under and in pur- 
suance of the laws of the State of California, 
party of the s?3ond part, and Speyer & Com- 
pany, a firm doing business as bankers in the 
City of New York, parties of the third part. 

Witnksskth: That whereas, the party of the 
first part has heretofore issued certain First 
Mortgage Bonds secured by a First Mortgage 
between the said party of the first part, and D. 
O. Mills and Lloyd Tevis, of the City and Goun- 
ty of San Francisco, California, parties of the 
second part thereto, which mortgage is dated 
the first day of April, eighteen hundred and 
s3V3:ity-fiy3, an:l wa^ filei for rec^.irJ July 8th, 
A. D. 1875, at 5 o'clock p. m., and recorded in 



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693 

poration dulv incorporated and organized under 
the laws of the State of (Jalifornia; 

Now, therefore, the parties hereto have 
actually covenanted and agreed, and do hereby 
mutually covenant and agree together as fol- 
lows, each in consideration of the covenants and 
agreements of the others, and for other good 
and valuable considerations. 

The AW^stern l)eveloj)ment ('ompany, party 
of the second part, for itself and its as;f()ciates, 
hereto covenants and agrees with the said party 
of the third part, as follows: 

First. That it and its associates will sell and 
deliver unto the parties of the third |)art, within 
ten days from the date of this agreement, the 
said tirst mortgage bonds of the said Southern 
F^icific Kailroad (\)mpany to an amount ecjual 
to, at the par value thereof, to one million of 
dollars, on i)ayment tlu»r(*for to the party of the 
second part by said parties of the third part of 
the i)rice thereof, at the rate of eighty-six dol- 
lars for ea(*h and every hundred dollars yf the 
par value then^of, together with a sum equal to 
the accrued interest thereon from the date of 
the last coupon paid, at the time of each sale 
and deliviTv. 

Second. That at anv time within one vear from 
the date of this agreement, it and its associates 
will sell and deliver in parcels, as hereinafter 
specified, unto the parties of the third part, the 



694 

first mortgage bonds aforesaid, equal, at the par 
value thereof, to four millions of dollars, or such 
portion thereof as the parties of third part raa\' 
^le.*l to take under the option hereby given to 
th3m, hut not less than five hun Ir^d thousand 
dollars, on payment therefor to the party of the 
second part by said parties of the third part of 
the pric3 thereof, at the rateof eighty-s3Vv3n and 
fift-\^)n » bun Ire.lth-^ d )llars for eath an 1 everv 
hundred dollars of the par value thereof, to- 
g3thcr with a sum equal to the accrued interest 
thereon from the date of the last coupon paid^ 
at the time of such sale and delivery, in such 
parcels as the samo may be called for by the 
parties of the third part, to the amount of not 
less than one hundred thousand dollars,, at the 
par value tl ereof, at any one time. 

Third. That at anv time within one vear 
from the date* of this agreen;ient, it and its asso- 
4»iates will sell and deliver in parcels as herein- 
after specified, unto the parties of the third 
part a further anxmnt of the first mortgage 
bonds aforesaid, (Mjual, at the j)ar value th.TeotV 
to five millions of dollars or siich p)rtion thereof* 
as the parties of the third part miy t»Ie(*t to take 
nndvM* th 'Option hereby given, but nt)t less than 
live hunlrcMl thousand dollars, on paym?nt 
tluM'efor to th * i>n'ty of the second p.irt by said 
])arties of th ' third i)art of the |)riee th TeoF at 
the rate of ninety (UO) dollars f(U* each and 



695 : 

every hundred dollars of the par value thereof, 
together with a sum equal to the acn-ued inter- 
est thereon from the date of the last coupon 
jaid at the time of such sale and delivery, in 
such parcels as the sam » may b.^ called for by 
the parties of the thinl part, to th? auDunt of 
not less than one hundred thousand dollars at 
the par value thereof at any one time. 

Fourth. Th-it the parties of th? first an I 
recond parts and their assj?iates will, at n )time 
within one year from the date of this ag:ee- 
mei.t, sell, or offer in market to sell, any of the 
said bonds except to the parties of the thir 1 
part. It is understood, however, that th?re are 
now outstanding in the hands of other parties 
bonds of said Company to the amount of two 
millions of dollars not affected by this agree- 
ment. 

Fifth. The party of the first part agrees that 
it will not at any time sell, negotiate, or put in 
circulation, an}' of said bonds secured by the 
trust mortgage hereinbefore mentioned, to any 
s ich amount, as that the whole amount of said 
bonds issued and outstanding and entitkMl to the 
security of said trust mortgage shall exceed in 
the aggregate, at the par value thereof, the rate 
of forty thousand dollars per mile or there- 
aVjouts, estimated on the length of railroad actu- 
ally completed and in running order at the 
time. 



^93 

* 

Sixth. Tlie party of the first part agrees that 
it will, within three months from the execution 
f>f this agreement, obtain from the Central Pa- 
eific* Railroad Company, instead of the leaso 
now existing, the acceptance and execution of a 
lease which,, among other things, shall contain 
provisions as follows: 

(a) A provision that the said lease shall con- 
tinue for five vears from the first dav of Mav^ 
I<S71), and cannot be sooner terminated or mod- 
ified in respect to the amount,, manner or terms 
of th(» payment of the rent therein, or the obli- 
gation for the payment of such riMit. 

(b) A provision that if a railroad is iy)tcom- 
pl(»ted in five years from the date of said lease,. 
so that there is a connection of tlie railroad of 
the party of thi^ first |>art with thc,^ eastern sys- 
tem of railroads on what is known as the 82d 
fKirall(*l line, the l(*as(» shall ]>e extendecl until 
5*uch (*oiincH*ti<>n is made, provide<l such exten- 
sion doi^s not exciHHl five^ years longer, or ten 
vears in all, from the first dav of Mav, 1871). 

(c) A provision that the net rfMital agreed 
to be paid in said l(nis<.» during tlie continuance 
thereof shall 1:k^ three thousand (hilars a mile,, 
and, if for anv cause it shall Ik^ re<luced bv mu- 
tual consent of the parties, that the annual 
amount of such rental, as reduced, shall at 
least be sufficient to pay all the interest that 
has been or may be agreed to be paid in any 



697 

one year on any bonds of the party of the first 
part herein outstanding during the continuance 
of this lease. 

Seventh. The party of the first part agrees 
that if at any time before the expiration of nine 
years from the date of said lease, a railroad 
should be extended so as to connect the railroad 
of the party of tlie first part with the eastern 
system of roads, and the Central Pacific Rail- 
road Company shall refuse to prorate with the 
j)arty of the first part, then the part}- of the 
first part will, before the expiration of one year 
from the date of such refusal, fill up or cause to* 
be filled up one of the two gaps now unfinished 
between Tres Pinos and Huron, and between 
Soledad and n(»ar Lerdo, whichever it mav 
choose to b:uild. 

Eighth. The party of the first part agrees that 
it will furnish to the parties of the third part 
herein, within ninety days from the execution 
of this agreement, the written opinion and cer- 
tificate of the chief engineer of said party of the 
first part, that the line of road either between 
Tres Pinos and Huron, or between Soledad and . 
near Lerdo, can one of them be completed and 
put in running order within twelve months from 
the commencement of work thereon, and can 
be constructed for the bonds reserved per mile, 
it being the cheaper portion of the line. 

Ninth. The party of the first part agrees that 



G9S 

it Trill promptly pay all the taxes, local and fed- 
deral, that may be assessed or imposed upon its- 
property, mortgaged to secure said bonds. 

Tenth. The party of the first part agrees that 
within six months from the execution of this- 
agreement, it will take all such steps as may be 
necessary under the advice of its counsel, so- 
that the aforesaid D. O. Mills and LJovd Tevis^ 
parties of the second part in said trust mortgage^ 
shall, one^ or both of them, if necessary, resign, 
and cease to be Trustees thereunder, and the va- 
cancy or x-^icjincies so existing, and any future- 
vacancies, shall be filled in the manner pro- 
vided for in said trust mortgage by two persons 
not citizens of California. 

Eleventh. That said 8peyer cfe Company, 
parties of the thinl part, covenant and agree 
with the party of the second part, as follows: 

That (>n receipt ^vithin ten days from the 
executioTi hereof from the party of the second 
part of the bonds of the s^iid Southern Pacific 
Railn)ad Company, to an amount equal at the 
par value then^of ta one n^illion dollars, they 
will at cHice pay therefor in cash unto the 
parties of the si^cond part at the office of C. P. 
Huntington, \) Xassjui stnn^t, New York, the 
price theretif, at the rate of eighty-six dollars 
for each and every hundred dollars of the par 
value th(»re()f, together with a sum (H|ual to the 
accrued interest tlierean from the date of the 



699 

last coupon, paid at the time of such sale and 
delivery. 

And it is expressly understood and agreed 
in respect of the two parcels of four millions and 
five millions of bonds mentioned in the second 
and third articles hereof, that the parties of 
the third part do not hereby obligate them- 
selves to purchase such bonds, but that the 
party of the second part hereto hereby grants 
to them the option of purchasing the same, or 
any portion or portions thereof, if they so 
choose, but not less than five hundred thousand 
dollars at any time within one year, at the 
prices and on the terms and conditions speci- 
fied in said second and third articles respect- 
ively, and that if they elect to take any part of 
either of said two parcels of two millions or five 
millions respectively, they shall take at least five 
hundred thousand dollars of said parcel at the 
price and terms above mentioned, and pay for 
the same in cash on delivery, but that no part 
of said option given by this agreement shall be 
deemed to extend beyond one year from the date 
hereof. 

In witness whereof, the parties hereto of the 
first and second parts, have caused these pres- 
ents to be signed by C, P. Huntington, their 
attorney. And the said parties of the third 



700 

part have- hereunto set their hands the day 
and year first ahove written. 

The Southern Pacifie 



Signed and deUvered 
in the presence of 
(s"gd) J as. H. Storrs 



Railroad Company. 
' By (s'gd) C. P. Hunt- 
ington, Attorney. 



The Western Development Comoany. 
By (s'gd) C. P. HiTNTiNGTO^, Attorney. 
Identified by W. Solomon. 

(Sg\l) Speyer & Co.  

At the i-e(iuest of Messrs. Speyer & Company^ 
by mutual a<i:reement made by and between the 
parties to the alx)ve agreement at New York,, 
this 14th day of February, 1880, the date of the- 
lease to be ol)taineil in the sixth section thereof^ 
juid also n^erred to in the seventh section 
thereof, is fixed and agreed to be of the first day 
of January, 1880, and the pro\nsioiis in said 
sixth and seventh sections of said agreement, 
with refc^rencc* to the termination and extensioni 
^)f said lease, shall l>e considered as referring ta 
a leas(3 of the date of 1st January, 1880, instead 
of to a lease of any other date, ami the date of 
May 1st, 1871), as s[x.*cified iji said sixth section,, 
shall be considered as stricken out therefrom^ 
and the date of January 1st, 1880, is inserted in 
lieu thereof. 

In witness whereof, the parties hereto have 
signed this supplement to said agree- 
ment- 



701 

The Southern Pacific Raih'oad Company, 
By (S'gd) C. P. HrxTiNdTox, 

Attorney. 
The Western Development Company, 
By (^'gci) C. P. HuNTixrjTox, 

Attorney. 

(8'g(l) Sl'EYER & Co. 

Identified bv 

ft. 

W. Soi.OMON." 

Mk. IIayks. I will next r^ad in evidence the 
agreement of the 27th day of January, 18S(), be- 
tween C. P. Huntington, K. P. Flower, J. 1). 
Prince, and J. I). Probst. 

Mr. McAllister. You mav read it from the 

ft/ 

deposition of (\ P. Huntington. 

Mr. Havks. The execution of the paper is 
admitted, then ? 

Mr. McAllister. Yes, sir. 

Mr. Hayes then read in evidence the agree- 
ment, which is as follows: 

**This agreement, made this twenty-seventh 
day of January, one thousand eight hundred 
and eighty, 

Witnesseth. — 

First. In consideration of the sum of one 
dollar, and other valuable considerations paid 
to me the undersigned, by Roswell P. Flower, 
John D. Prince, and John Daniel Probst, the 
rec'vMpt whereof is hereby acknowledged, I agree 



702 

to sell and deliver to the said Roswiell P. Flower^ 
John D. Prince and John Daniel Probst, at m^' 
office in the citv^ of New York, at such time 
on or before the thirtv-first dav of January r 
eighteen hundi-ed and eighty, as they may 
tleniand the same, fifty thousand (50,000) 
shares of the capital stock of the Central 
Pacific Railroad Company, atand for tho 
price of seventy-five per cent, of the par 
value of such stock, in case the same 
be delivered, so as to carry and include the last 
dividend of three per cent, declared thereon,, 
on or al>out the first day of January, eighteen 
hundred aild eighty, or at and for the price of 
seventy-two per cent, of the par value of said 
stock, in case the same be delivere<i so as not 
to carry and include said dividend, said price 
to be paid to me in cash at my office in the citv 

of New York, at the time of the delivery of the 

* 

said stock. 

Second. And in case the said Roswell P. 
Flower, John D. Prince and John Daniel Probst 
shall e](»ct to purchase the said fifty thousand 
sliares of stock mentioned in the first clause of 
this agreiMuent, and shall (UMnand the same and 
shall pay or offer to j)ay therefor in the time and 
nuvnner in said first claus(» providc^l, then, and 
in such cas(\ and in consideration thereof, and 
for the furthcM* eonsideration of one* dollar to me 
in hand pai<K the receipt whereof is hereby ac- 



703 

knowledged, I do further agree that at any time 
or times within six months from the (late of this 
agreement, but not afterwards, the said Koswell 
P. Flower, John I). Prince and John Daniel 
Probst may, at their option, call upon me in my 
office, in the City of New York, by demand in 
writing, left at such office, with the person in 
charge thereof, between 10 A. m. and li v. m., of 
any business day upon which said demand is 
made, for the delivery to them at said office, 
twenty days after the date of the said calls, re- 
spectively, of additional shares of the capital 
stock of said company, in lots of five thousand 
(5,000) shares each, and not exceeding in the 
aggregate of such calls fifty thousand (50,000) 
shares (ex said January dividend, but carrying 
any subsequent dividend or dividends that may 
be declared thereon within said six months), at 
and for a price payable in cash on delivery, 
which shall be seventy-seven per cent of the 
par value i)f said stock, together with interest 
at the rate of six per cent per annum, on the 
amount of such percentage of such par value 
from the date of this agreement to the said 
dates provided for the delivery of smth stock, in 
such calls, respectively, and I agree that at and 
upon the expiration of the twenty days after the 
making of any such call, I will deliver at my 
office in the City of New York, to the said Ros- 
well P. Flower, John 1). Prince and John 



j»^ 



704 

Daniel Probst, the number of shares demanded 
by said call for tlie said price (induding inter- 
est as aforesaid) payable in cash on delivery, as 
hereinbefore in this second clause of this agree- 
ment set forth; provided, however, that the 
amount of stock called for under this second 
clause of this agreement shall not exceed in the 
aggreji^ate fifty tliousand (50,000) shares, and 
shall be called for in lots of five thousand 
(oOOO) shares each. 

Third. And in case the said Ros\vx41 P. Flow- 
er, John T>. Prince, an<l John I>aniel Probst 
shall (»lect to purchase the said fifty thousand 
(50,000) shares of stock nuMitionc^l in the first 
clause of this agreement, and shall d<^mand the 
s.ime, and shall pay, or offer to pay therefor, in 
the time and manner in said clause provided, 
then and in such case, and in consideration 
th(M*(M>f, and for the further consideration of one 
dollar, to m? in hand paid by tlu* said Roswell 
P. Flower, John D. Princ(\ and John Daniel 
Prol)st, 1 agre(> with the said Roswell P. Flower^ 
John D. Prince, and John Diuiiel Probst, that 
none of the cai)ital stock of the Central Pacific 
Railroad Company, with the exception of stock 
thereof amounting in the aggivgate to forty 
thousand (40,000) shar(\s, and with the excep-^ 
tion of such stock as mav be actuallv received 
bv the said Roswell P. Flower, John 1). Prince^ 
and John Daniel Probst, under the first and 



7Q5 

second clauses of this agreement, shall be sold 
or offered for sale in any market or markets 
whatsoever by any person or persons, corpora- 
tion or corporations whatsoever, for a period of 
seven months from the date of this agreement. 
But this clause of this agreement shall not ap- 
ply, or be deemed to apply, to sales or re-sales 
of the forty thousand shares above mentioned, 
or sales or re-sales of stock delivered under this 
agreement. 

In witness whereof, I have hereunto set my 
hand and seal on the day and in the year 
first above writtt^n. 

(Signed) C. P. Huntincjton, 

[seal.] 

In the presence of 

(Signed) E. R. Robinson, 

J AS. H. Storrs. 

C. P. H. 

It is understood and a^^jreed between the par- 
ties to the above contract, that the first fifty 
thousand shares of stock therein shall be deliv- 
ered in one hundred-share certificates, and the 
second fifty thousand shares so far as they may 
be called for, as therein provided, shall be de- 
livered in one hundred-share certificates to the 
extent that the said C. P. Huntington shall have 
certificates of that denomination in New York, 
at the time of the maturity of the calls respec- 



tivcly, mid that all of t^e balance of said last 
fifty thousand shares called for may be deliv- 
ered in one thousand- share certificates, or cer- 
tificates of such other denomination as the said 
C P. Huntington n>ay elect. 

Witness our hands and seals this twenty- 
eighth day of January, 1880t 

(Signed) C. P. Huntington, [seal} 
(Signed) R. P. Flower. [sealJ 

(Signed) J. D. Prince. [sealJ 

(Signed) J. D. Probst. [sealJ 

In the presence of — 

(Signed) E. R. Robinson. 
(Signed) Jas. H. Storrs. 



Here the further hearing of the case was 
continued until Tuesday,. Deeeniber 4th, at 

to A. M. 



NINTH DAY. 



TUESDAY, DECEMBKH 4tli, 188.S. 

Mr. Hayes. I will road in evidoncc tlie dep- 
osition of 

WILLI A.M SOLOMON. 

Taken bv and on lu^half of the defendants. 

t 

Mr. Havos thou read in evicleneo all of the 

(lireet interrofijatories and answers thereto and 
down to the third cross-interrogatory. 

Mr. McAlltstkr. I ohjeet to the third cross- 
interrogatory and to the answer tlu^reto. It 
do(»s not appear to be founded upon knowledge. 
He does not know anything about it at all, ap- 
parently. 

Mr. IIayks. Yes, sir; apparently lu» does. 
He is conncH'tinl with the house. 

Mr. ^[('Allistkr. We obj(»ct to it on the 
ground that he seiMus to have no knowlcMlgis 
but simply e.xpn^sses a belief. 

Mil. Hayks. He has already shown in his 
direct examination that he luid knowledge of 
the negotiations, and when he sa3\^ in this an- 



710 

•swor, ^* I holiovo tliey wore," referring to tlio 
point of time they commenced, that he is J2:ivinjj 
liis recollection. 

Mk. MrALLTSTER. He says in the answer to 

* 

the second (»ross-interrogatory, that he does not 
know. 

Mr. Hayks. But now he is asked a different 
question. Were they not commenced prior to a 
certain point of time? 

The (-OURT. I think that is cross-examina- 
tion as to the last direct interrogatory. 

Mr. McAllister. I do not ohject to the 
cross-examination, hut I object to the witness 
expressing any belief without knowing any- 
thing about it. That is my point. He says 
that he knows nothing about the dates and 
times, and when the question is jmt, '*Wer(» 
they not commenced prior to August 1879?'' ]\v 

has already stated that he does not know the 

» 

time, and he says, *' I belieye they were.'' 
The CoiRT. He says, ''I cannot remember." 

It is a matter of memory and belief. But that 

is a matt(»r of argument, what the (»ff*ect of it 

maybe. 

Mr. ]\[('Allister'. Our proposition is that 

that is simply an expn^ssion of opinion of tbe 

witn(»ss — witbout knowledge. 

Mr. Haves. He has testified that he kn(»w 

of tbe negotiations. By beli(»f, be means bis 

n^'olleetion. He might not remember when 



712 

tin* prices a!i(l salos after tlio lapse of one y(»ar 
from the inaking of the eoniproinise and tlu* 
agreement of August 27th, 1879, that we must 
objeet.to sales made subsequent to a year from 
that date. Of eours(^ we claim that the Court 
should fix a much closer time to this transac- 

r 

tion than one year. Hut that is what Your 
Honor has fixed u[)on, and in ()l)edience to that 
ruHng W(^ object to any sales IxMUg proved aftiM^ 
August 27th, 1880. 

. yin. Hayks. Th(»se are reallv the dates of the* 
d(4iveries. The ccmtract is of the 28th of Janu- 
ary; 1880, giving the i>arties the right within 
twelve m;)nths thereaftiM* to call for this amount 
oP)onds at those prices. This is merely a list 
of delivc^ric»s, not of sales made on that dati^ 

A[r. McAij.istkr. What is the (pK^stion ,to 
wliicli he is answering ? 

Mn. II vvKs. The question is: *' Did Spever 
*' etc.). actually purchase all of the bonds dinn't- 
" ed to be purchased,()r of which they had tlu^ 
" option ? If vi^a, giv(^ the actual dat(*s of deliv- 
'* ei'v and i)avm(Mit of said bonds." 

Tmk CorRT. Is there any other puri);)S(» ex- 
cept tf) sh )\v the ])rice t]i;'V brought ? 

Mr. IIavhs. Tliere is onr other [>urpose, to 
sliowthat tlr.'V avail(Ml tbcmsi'lves of the* o|)tion. 
Tbev made a contract in .lanuarv, 1880, and 
tliev availeil themselves of it in full. 

Mr. M "A IJJSTKR. ()f course it was amen* 



18 



option, and until tlu\v c*X(M'cisc»(l tho option tliorc 
AV'ns no sal(\ 

jMr. Hayks. Wo submit to your ITonor's 
ruling. 

The CoriiT. I'nk^ss there is some other ])ur- 
])ose, you had l)etter ibilow the ruliu}^ made. 

Mn. Hayks. That exeludes all after Auj>;ust 
27th. W(» will save an exec^ption to your Hon- 
or's rulinji:. 

TiiK CoruT. That rulin**; is on the hyi)othesis 
of thg purpose for \vhieh they are ottered. 

Mk. Hayes. Y(»s, sir; if \vv deem it mnu^s- 
:-ary, we may ask for another purj)ose at a later 
staji:e to introduce the halanee. 

I Mr. Haves then eontiiUKul the reading of th(^ 
(•ross-int(*rrofz;atories down to and ineludinji: the 
tw(Mitv-Hrst cross-in t(»rro^atorv, and the follow- 
injj: portion of the*answ(»r thcM'cto. '' I hav(* no 
knowled}2:e that he did.''] 

Mr. Hayes.. T1u» balance of the an^w(M\ on 
the {^rounds proposes! by Mr. McAllist(M', W(M)b- 
je<*t to. 

Mr. McAllister. Under tlu* ridinjj; of tlu» 
Court, I think that whol(» answc^r is admissible*. 
. Mr. JTayes. No, sir; because h(» do(»s not 
hav(» any knowle(ljjjc of that niattcM*. 

yin. McAllister. Tnder the rulinj^pn^viously 
made W(^ submit that this is admissible on our 
belialf. We object to taking one* part and not 
taking the otluT. 



714 

Thk Court. Let it be read. I think it is a 
little different, though. 

Mr. Hayes. I except. 

[Mr. Haves then continued and conchuknl the 
Heading of the deposition.] 

Mr. Hayks. Then follows the agreement, 
which we will put in again in connection with 
the deposition, although we have read it. We 
will re-read it now. 

[Reads.] 

Mr. Hayks. We will next offer and read in 
evidence the deposition of 

WHJJAM E. BONN, 

Which is as follows : 

First interrogatorv. What is vour name, 
age, residence* and occupation ? 

Answer to first interrogatorv: Mv name 
is William H. Bonn, agc^l 40 years. 1 reside 
at No. 41 West o8th strcnH, X(»w York Citv, 
New York. 1 am hy occupation a hanker, 
at 52 Exchange Place, New York City. 

Sc»cr>nd interrogatorv. Do vou know the 
house of Sp(»yer & Co? If yea, how long have 
vou known that house, and in what husiness is 
it and has it het^n (Migaged and where? 

Answ(»r: I do know the house of Speyer ct 
i\). I have known it since it existed under 
that name, which mav he since the vear 



716 

writt(Mi eoiitraet dated the 28th dav of January 
1880. 

Sixth interrogatory. If you answer the hist 
(juestion in the affirmative, state who were the 
purehasors and who were the sellers of said 
honds. 

Answer. Speyer & Co. were the purchasers. 
The Western Development Company sold the 
hon<ls. 

Seventh interrogatory. Did those negotia- 
tions commence prior to July, 1879? 

Answer. I do not remember whether those 
conv(n'sati(ms were had prior to or after July, 

1871). 

Kighth interrogator}'. Wh(»n W(»re thos(* 
UL^gotiations commimced, and how? 

Answer. I do not remiMuh.M* liow and when 
tlies:» conversations commcMiced, exci^pt that it 
was sometime in 1870. 

Ninth intiMTogatory. At wliat jM'ice did said 
Huntington first offer those* l)on(ls, and wlien 
was such offer made? 

AnswiM'. I do not remc^ndxM' either. 

Tenth int(?rrogatorv. Did you not employ 
Mr. Soutlimavd, an attornev and counselor do- 
i ig ])usin(»ss in tlu* State* of New York, to ex- 
annne on behalf of the purchasers into the 
validitv of those bonds? If vea, when did vou 
s) (Muploy him? If you do not know precisely, 
state* to th(* lK*st (>f ve)ur re^collection. 



717 

Answor. I <li(l (Muploy Mr. Soutliniayd. I 
<lon't recollect wlien it was. I can };ive no idc^a 
ahont the time. 

Eleventh interrogatory. How lonjij had the 
negotiations for tin purehas:* heen i)en(ling 
when you so eni[)loye(l Mr. Southni lyd ? 

Answ(*r. T do not renienilx^r. 

Twelfth intr»r rogatory. At what price had 
Mr. Huntington offered the honds when Vi)U 
(Mn|)loved Mr. Southmavd? 

Answer. I do not renieniher. 

Thirteenth interrogatory. WIkmi was the 
purchase* finally agreenl upon? How long hefore 
the date of the written agreement? 

Answ(»r. I <1() not remomher. 

FourtiHMith interrogatory. Do you rememh;»r 
th(» fact that ^^r. Huntington visitx^l California 
in July and August, 1871)? If wm, state how 
long h(»for(» h(* left New York for that visit the 
negv)tiations l):»twee:i vou concerning said honds 
had commen(*ed. 

A. I do not r(Mn?mher the fact that Mr. 
Huntington w(Mit to California in 1871). 

Fifteenth int<M*rogatorv. What was the* first 
]>ric(» off.*red hy you on hehalf of the purchasers 
for said honds, and when was such off(»r macfe? 

Answ(»r. I do not rememher. 

Sixte(»nth interrogati)rv. What an* and have 
1) H'U your personal relations with said Hunting- 
ton — friendlv or otherwise? 



718 

Aiiswcr. Fricmllv. 

Seventeenth i liter roffatorv. Has not the* 
house of Spever & Co. had e-xtensive busines.s 
rehitions witli C. P. Huntington and the com- 
panies represented hy him, and have they not 

still sueh Halations? 

Answer. The house of Spe3'er & Co. has 

had extensive business relations with C. P. 

Huntinjrton, and still has sueh Halations with 

hin). 

First eross-interrojjjatorv. Was there anv 
ai:;reenient lx^tween th(» house of Sp(\ver & 
Co. and (\ P. Huntington and his asso- 
ciates as ^o the purchase or sale of any of th(^ 
first mortgage l>on<ls of the Southern Paeitie 
Hiilroad (N>mpanv, previous to th(» written con- 
tract of the 2Sth of Januarv, 1880, n^ferred to 
in vour dir(»(*t t(»stimonv? 

Answ(»r. I do not n^'olUn't of anv. 

Second cross-interrogatory. Was not the 
writtiMi contract of th(» 28th of Januarv. 1880, 
as to tlu* purchase^ and sale of the first mort- 
gage l)onds of th(» Southern Pacific Railroad, n^- 
ferred to in vour direct testimonv, made imm:'- 
diat'v»ly after an agreemiMit had been n^acluMl as 
to th(* sale and purchase of said bonds between 
the hous(» of Speyer it Co. and (\ P. 
Huntington and his associate's? 

A. 1 do not rem(»niber. 

Third cross-interrogatory. W(»re not thi^ 



719 

nt'jjcotiations hotwoon Speyor & Co. an<l (\ P. 
Huntington; acting for himself and his asso- 
ciates as to tlio ])iirchase and sale of the fir t 
mortgage honds of the Southern Pacific Hail- 
road Company, commenced subsetjuent to the 
(Miiplovment of Mr. Southmavd as attorney and 
(counselor to examino into the validity of said 

honds? 

Answer. I spok(» to Mr. Huntington about 

those bonds, I do not doubt, befon* I employt»d 

Mr. South mayd, but I do not remember. 

Fourth (*ross-interrogatory. Wen* not the 
actual negotiations between the house of Speyer 
ct Co. an<l C. P. Huntington, acting for himself 
and his associates as to the purchase* and sale of 
the* first mortgage bonds -of the Southern Pacific 
Railroad Company, sul)se(|uent to the visit of 
Huntington to California, in July and August, 
187t)? 

Answer. 1 do not nMuiMuber the fact that Mr. 
Huntington w(Mit to California in 1871), and 
hav(» no remembrance of the exact time wIkmi 
the actual negotiations were begun. 

Mh. Havks. We will next read in (»videnc(» 

th(» disposition of 

MH. JAMES SELKiMAX, 

Taken on behalf of the defendants. 
[Hc^ads.] 
Mr. McAllistkh. We object to the answ(»r 



I 



720 

to the sevcutli intermgatorv, .Mr. Haves. Tlu^ 
witness sliows he knows nothing ahout it. He 
is merely expressinjj; his opinion. 

Mr. Hayks. He lias already shown that lu^ 
knew they were large owners of the stocks and 
bonds, and Directors of the companies. 

Mr. McAllister. If he had stated what his 
knowledge was on the subject, perhaps his opin- 
ion might have been of some vahie, but his 
mere opinion, not based upon any facts, does 
not amount to anything. We object to it as 
uot founded upon personal knowledge and as 
inadmissible — ^liis opinion as to whether or not 
the defendants controlled this stock. 

Mr. Hayks. I think the answer to the fourtli 
cross-intc^rrogatory entitles him to answer from 
his ac|ii liiitanc* with these men for 25 viMrs, 
and with th.» cori)orations whosi* s:^curiti(*s Wv'^ 
an* iiKpiiring about. 

TiiK (V)i':?T. I look at tlu» answ.M' an 1 I s m-^ 
t'lat it is a nuM'e matter of opinion. I thinlc it 
is not w»)rth while to put that in. 

M:{. Havk>. Well, \\\y will savo an exc(^;)tion. 

Mr. McAllistkr. We ol)je(*t to thi^ au-^w.M* t > 
the thirt(»enth interrogatory. 1 do not think that 
tlu' wiUu' nf tlu» Tnioii Pacific U lilroa 1 sto/k 
should constitute a value by which to compan* 
tbe-valui* of tlu' (\Mitral Pac'itic road. Th(? (N)n- 
vlitions arc very ditfenMit. The roil is very 
(litfcrcnt. I1u» country through whicli it i)asses 



721 

is very different. I therefore object to tliis 
testimony as immaterial, ineomp^t.^nt and ir- 
relevant. 

Thk CoriiT. Ff that is the purpose for whieli 
it is put in I suppos.* it would he irrelevant. 

Mr. Haves. It was elaimed hv the defend- 
ants that, owing to the passage in 1878 of the 
Thurman Act and its affirmance in the latter 
part of that year or the beginning of 1871), of 
its validity or constitutionality, that thv?s.» 
s »eurities were V(»rv mucli depreciated in value. 
Your Honor is aware that the Thurmm Bill 
applied exactly alike to both the Central Pacific 
and the other company. 

Thk CoriiT. I Vemember it was mentioned 
in the deposition of Mr. Crocker. 

Mr, Hayes. Now that Thurman Bill applied 
t^qually to tlie Union and the Central Pacific* 
Kailroads, and tlie object is to sliow that not- 
withstanding the existence of this fact or sup- 
j)Osed fac^ of the diminishing value of the stock, 
that this other was on the market — the Central 
not being on the market at that tinu» — and that 
the other one, which was equally affected by the 
Act, and which was on the market, contiruuMl 
steadilv to rise in value. That is the o])ject 

of it. 

Mr. McAllister. I think it would be in- 
iv)mj>etent evi<lenc(» ev(Mi in that point of view. 
But the difficulty is, this (juestion does not ask 



722 



for the value of the Union Pacific prior to 
thi^ passajje of the Thurman Act and then sul)- 
s:»:|uent to the Thurman Act, but it asks 
only as to a period subsequent to the Thurman 
Act. ( >f course if thev wanted to show that tlu' 
Thurman Act had had no influence on the 
I'uion Pivcific st(>ck tlu» question shouM have 
been framed as to the value of the stock before 
the passage of the Act and then the value, of the 
stock after the passage of the Act; whereas the 
wliol(» of this question relates to a period of time 
sub.se(|uent to the passage of the Act. So that 
I do not see that it throws any light on that 
pro[)osition, and therefore we object to the testi- 
mony as incompetent and as remote and as ir- 
n^levant and as relating to another stock than 
th(» stor'k in qu(*stion in this cas(\ 

TuK CoiRT. I do not rem(»mber the date of 
that Act. 

Mr. MtAllistku. Th(» act was passed in 
187S, vour Honor. 

Mr. Havks. May, 187H. 1 think the oi)in- 
ion was not handed down till Januarv, 1871). 

TuK CorRT. Well 1 think 1 will have to sus- 
t:un that o])i(M*tio]i as it looks to mi» now. 

^^R. Havks. We will r(\s(M've an (exception. 

\yiv. Hay(*s r(»ads the* ni^xt intiu'rogatory.] 

Mr. ^TcAllistkr. That comes under thi^ 
same obj(H*tioii, I suppose. 



t t 



723 



TiiK CoiRT. Unless tluMV is soiui^ otlior t(*S- 
tiinoiiy to gi\'(» {)oint to it. 

^Fr. Hayks. Thore is no othor testinionv to 
ji;ive point to it. 

Mr. McAllistkr. I liavo no objcH'tion to 
that (juc^stion its(»lf. 

^Fr. Hayks. I suppose it f^oos under the 
same rulinjx. 

TiiK ('OiRT. Very well. It Nvould not neeos- 
sarily go under tlu^ same ruling if you had other 
t(»stimony whieh would give i)oint to it. 

Mr. Hayks. \V(»11, T will not eonscMit to its 
going out. 

The Court. If you haye no otlu^r t(»stimony 
it might as w(»ll go out. 

Mi?. FIayfs. Xo, sir. 

TuK CorRT. Le*t it go out. 

Mr. Hayks. Yrmr Honor rul(»s it out then? 

TriK CoTRT. Yes, unless you hayt» some* 
other testimony to giy(» some point to it that 
would (Mititle it to he let in. 

Mr. Hayks. I do not rememher any iust 
now. Wi» res(»rve an exoi^ption to that also. 

Mr. ]\F('Allister. Well, w(^ do not ohj(H*t to 
that fourteenth, standing there by itself. 

TukCotrt. If you do not ohieet to it, let 



it go in. 



Mr. Hayks. All right. 

|\Fr. PFayes eontinues to n^ad th(» deposition.] 

Mr. MeAujsTKR. [deferring to the answer to 



724 

tho nineteenth interrogatory.] 80 far as the 
months of September, October, Noveml)er and 
• December, 1880, are concerned, under the rulinp; 
of the Court, those would l>e excluded. So let 
that portion of tlie answ(T be stricken out. 

Mr. Hayks. You n^new your ol»jection? 

Mr. AIc\\ luster. I will first ask to have that 
portion of the answer stricken out on the 
jrround that it does not come within the rulinj:: 
i)f the Court, values after August, 1880. 

TiiK CorRT. Verv well. 

Mr. Hayks. Your Honor rules it out an<l wo 
reserve our exception. 

Mk. McAllister. So far as the balance of 
th(» answer is concerned we have already except- 
ed to that, but we consider this period of time 
that has been selected bv the Court as rather a 
long timc^ We do not waive our obje(*tion in 
that respect wbich W(» have heretofori* taken. 

Mr. Hayks. 1 do not know how that would 
api)ly to a settled interrogatory. The def(»nd- 
ants a|)i)eared and settled these* interrogatories 
l)(»f()r(» a judge* of the Superior Court in which 
the action was pending. They contested them. 
If tlu»v d(»sired to except wluMi the rulings wen* 
made on the intcM'rogatorii^s, they had a right 
to sul)mit a l)ill of (*xc(»ptions; that was the time 
to take tbeir exceptions. 

Mr. McAlllstkr. Not under tbe Code of 
Civil Procedure. It allows you to object to any 



725 

(luostion and answer except as to form, wlien 
the deposition is offered in evidence. 

Mk. Hayes. I wonld like* to find the section 
that will give yon the right as to this deposi- 
tion. 

Mr. M<^\lustkh. Section 3():J2 of the Code 
of (Mvil IVocednre, speaking of the taking of a 
deposition, says: After it has been taken it may 
1k» nsed bv either i)artv on the trial or other 
j)rocee(ling against any party giving or receiv- 
ing the notices It is snbject to all legal excep- 
tions, hnt if the |)arties attend at the examina- 
tion no objection to th(» . form of an interroga- 
torv shall be made at the trial, nnless the same 
was stated at the time of the examination. 

^[k. Haves. That relates to depositions 
taken in this State. It has no application to 
this dej)osition. 

Mr. McAluster. I do not know that the 
same ruk^ was prescribed for depositions taken 
ont of the State, l)ut T claim the same rnle ap- 
plies. 

^Fr. Hayes. No, yon have got to settle inter- 
rogatories in advance for depositions taken ont 
of the State. Then is the time to challenge the 
rel(»vancv or comj)etency of the interrogatories. 

Mr. McAllister. Ofconrse we claim a right 
to object, and we will renew our objection to 
this nin(»teenth interrogatory. We suppose in the 
matter of these fluctuating stocks tliat a period 



726 

of 00 (lays before and after this eonipromisc 
wouldbe (jiiite remote enough. Yonr Honor has 
allowed them the period of a year before and ix 
year after. I have examined the authorities verv 
earefully, and I can find no case in England or 
America where such a long period of time has 
been taken in reference to the fluctuating value 
of an article like stocks. We think that in this 
countrv — and thei'e are some ol)servations bv 
our Supreme Court on this subject — that in this 
countrv periods of time are particularly short in 
matters of this kind. Our Supreme Court has 
called attention to the fact that our statutes of 
limitations are much shorter here than in anv 
other Stat(s that business transactions proceed 
with much greater rapidity, that the fluctua- 
tions in value as to certain arti(*les is much 
greater in this State than in most other Statics, 
or in England; and all our business pajxM' is on 
V(»rv short time. You never hear of business 
paj)(*r (>v(»r sixty days in commercial markets; 
and all those considerations have Ikh'u advertiMl 
to by our Supreme Court, in s(»veral decisions. 
Now, we have in tlu^ disposition of Mr. Selig- 
man b(»re, which has just becMi read, a stat(»- 
mt'ut showing the variation in the value of C. 
V. stock of some 25 i)er cent, within a fi»w 
months; and our idea is that sixtv davs b(»fore 
and aft(»r this compromise would Ix^ a vc^ry fair 
time within which to look at the _value of this 



727 

j)roporty at tlio time this eompromiso was 
mado. We have already made our ol)jeetions 
on this point to your Honor, and we now iv- 
])(*at tliem — to the answer to this nineteenth in- 
t(Trogatory. We ohjeet to any vahies not witliin 
sixty days of the time of this compromise. 

Mr. Hayes. We have already given our 
views on the general proposition, and in addi- 
tion we claim that it is not applicahle to this in- 
terrogatory or the answer to it, for the n^asons I 
have already stated, that the time to have oh- 
ject(Hl to this interrogatory has passed. The in- 
t(U*rogatory itself calls for the values during 
every month of 1880. 

TuK ToTRT. It had Imhmi s(»ttl(Ml hy the* 
CNmrt? 

Mr. Hayks. Yes, sir. 

Tfik Court. No ohjection can Ix* made at 
this time. 

Mr. Hayks. That is mv position, if your 
Honor please. 

TnK(-orRT. I ai)prehend that must he th(» 
rule. 1 do not s(»e any other, so I think W(* will 
withdraw that ruling in this case. 

Mr. McAllister. We wish to except, your 
Honor, on the ground, in the first j)lace, that 
tli(» period called for in this interrogatory is too 
HMUote from the time of this compromise, and 
that the evid(Mic(» is immaterial and irrelevant, 
and that the* men* fact that an interrogatory 



728 

lias boon franiod and has not l>oon <)hj(»cto(l 
U) — 

Mh. Havks [interrupting]. It was. 

Mr. MoAllistkr. Woll, T do not rooollo(»t 
how that was. 

Mr. Havks. It was as a rnattor of fa(*t. 

Mr. AFcAllistkr. In stating this objootion 
that (loos not appear hon* at ])rosont ; but the 
nioro faot that it has boon settled does not out 
us (^ft* at tho trial from making objection to the 
answ(T to that intorrogatorv and taking an o.x- 
o-option on behalf of tho dofondants; and I 
would liko to know if vour Honor rulos in tlu^ 
whol(» answ(»r. 

TifK CoiRT. Of oourso th(» (»ttoot of tlio 
ruling, as \ intimatod, was that your tim ' to 
oxoopt was whon th(\v woro sotth^d. 

Mm. Mc.Vlijstkr. That is what I undtM-- 
stood. 

TuK ( 'oiRT. Tliat would of oourso imply that 
vou oould not mako anv obji^otion on that 
ground now. 

Mr. ^[(^VLLISTHR. Th(»rofor(^ tlu* whoh^ of 
that answoi* would bo tho samo. 

TuK (Joi'RT. Of oourso, mv o]>inion would 
b;' tho samo, as to tlu^ (|U(^stion boforo m(\ as it 
has boon. 

^^R. Hayks. So far as T am oono(»rnod. W(* 
will not read aftor August, anvhow. 



''1"^ 



fiiK ( 'oTRT. \^M*v woll; that gots rid of that. 



729 

Mr. Hayks. W(» do not abandon our propo- 
sition — that thoy have no right to mak(» tlu» 
<)hj(»(*tion. 

^Fr. McAllister. I nnd(»rstand tliat. Wo 
will rosorvo our (»xc(»ptions on tli » various 
fXrounds stated. 

[Mr. Hayes eontinues to r(»ad from the dispo- 
sition.] 

We ol)jeet to the answer to thetwenty-seviMith 
interrogatory on the ground that it is not n*- 
s|)onsive to the* (piestion. The witness is asked 
to giv(» the highest and lowest value during 
each of the* months of 1880. He has alreadv 
stated that there was no vahu* to thes(» Southern 
Paeitie honds until Mareh, 1880, and now ]w 
utterly fails to answer the (piestion. He givers 
us two figures there, and shows hy his own tes- 
timony that they don't apply to each month of 
the year. If wt» are cut off* from ohj(»cting to 
the (piestion hi^cause it was allow(»d to pass 
when it was framed, W(* certainly can object to 
the answcM' if the* witness does not answer the 
V (|U(»stion and he answ(»rs it in such a way that it 
is impossible* for us to see what it means. 

TiiK CoTRT. Perhaps I was a little* hasty in 
th(» intimation. Perhaps you might move to 
strike* out. You (*an alwavs move to strike out 
an answ(M\ 

Mr. Havks. Yes, I think if the answer is 
not called for l)v the cjuestion I think you can, 



730 

l)ut if tlio answer is directly pertinent and re- 
si)()nsive to the question, I presume they can 
not move to strike it out. 

Mr. MrALLisTER. Well, he is here asked to 
state the hijrhest and lowest values of those honds, 
that is, of the Southern Pacific during eacli of 
the months of 1880, answer separately to each 
month; instead of doing that, he gives us two 
figures. He has giviMi us the figures at the be- 
ginning of the year and end of the year; he can 
not possibly tell, and the answer is not respon- 
sive*. 

Mr. Havks. The onlv trouble al>out the an- 
swer is that it does not go far enough. He is 
their witness, and he does not comply with our 
([uestion and give us all wo ask for. 

Mr. ]\r<\\F.LisTKR. He is not our witness. He 
is vour witiu^ss now. H(» is vour witnt^ss at this 
tinu*. 

Mn. Havks. I am i*ross-e-\amining him any- 
how. The answer givers the* highest and gives 
tin* lowest values, and I think w(^ are entitled to 
have it. It is only partially res])onsiv(s that is 
tru(»: that is, it dcK^s not fully answer the question. 
It is partially responsive however, and it does 
uive the lowest values. 

Mr. McAllistkr. It is also within the ob- 
jection that it go(*s Ixn'ond the piM'iod of time 
allowed l)y the Court, to wit: The* piM'iod of oiu^ 
year, au<l we do not know whetluM* perhaps both 



731 

of those fijijuros arc not after tlio ox[)iratioii of 
that voar. 

 

yiu, Hayks. Oh, no, l)ocaus(» it is tlio lowosl 
valnc* in tlnit year pvon. H(» lias takiMi the 
h)\vost vahio at anv time of tlio year. 

The CoruT. Th(»v first sold in M-irch. It 

« 

is trno tlu^ Jo'.Vv»st and hig]u*st price niij^ht h:)t!i 
have heen after Anjrnst. 

Mn. Hayks. Well, wo will not claim that 
th(»v \V(Te, if your Honor please. 

Thk roruT. I think that prohahly yon ha 1 
hetter keej) that out. It (loos not aj)pe:ir thaf 
it was within the period that I have limited you 
to. 

Mk. Hayks. Well, Wv' will reserv(» an excerp- 
tion. 

I Mr. Hayes continues to r(»ad froin the dej);)- 
sition and proce(»(ls as far as tlie thirty-sev(Mith 
int(M'ro<ratory. I 

Mk. McAli.istkk. We ohj(»ct to the words 
'^•ommon n^port'' as cviihMice, your Honor. 

Mr. Hayks. You can strik » th ' '*comm )n 

I'eport" out. 

Mr. McAlijstkr. No: we ohj(»et to the 
answer as not found(»rl u|)on personal knowhMltje. 

Thk CorRT. (\M-tainly; l(»t it fjjo out. 

Mr. Hayks. We resiTve an exception. 

I Mr. Hay(*s continues to n*ad from th(» <h*|)o- 
sition. 

Mr. Hayks. We will not read the (piestions 



732 

?«ii(I ans\n»rs followhi}:: thv forty-third and down 
to and includinj^ the sixtietli; tliat is, I omit 
from and includinji: the forty-fourth down to 
and inchidinji^ the sixtieth. 

Mr. McAujstkr. Vou do not omit it from 
tlie deposition; you omit tlie reading. 

Mr. Hayks. T omit it from tlio deposition. 

Mr. MrALLfSTKR. You can not omit it from 
th(» d(»position. 

^Fr. Hayks. Why not? 

>[r. M(\\LLrsTKR. The d(*p:)sition has to he 
n»a<l entin^ly, not partially. 

Mr. Hayks. I do not admit that proposition. 
I will not stop to argue it now. 1 may, later, 
hut this is simply answers he makes on eross- 
examination in reply to the direct (examination. 
II(» states his means of knowledgi^ and as Ik* 
t )ld vou h(* didn't know anything ahout the 
vahi(\ so he ti^lls us he do(\s not know anything 
ahout the data on which he forms his judgment. 
1 do not cans on my part, wh(4her it is left in 
t»r out; 1 do not pro|)ose to n^ad it.. 

Mr. M('Ai.ijstki{. How is that? 

Mi{. Havks. Vou can haye it if you want it. 

I do not c )nciMl(' tlu* proposition that we art* 

(•onipell(*d to read the whoU* d(»positi(»n. Wh(»n 

we vend a de]>ositiou taken 1)V you, we haye a 

I • • 

r'.glit to read such ])ai't as we consider applica- 
hlc to the case. 

Mi{. McAr.LisTKR. That is a new idea. 



733 

Mh. Hayks. Is it? 

Mr. McAllistkk. Yos, sir. 

Mr. Hayks. Well, it is not vorx iu*\v. 

Mh. McAli.istfh. Well, it is now to ns? 

AFr. Hayks. It niav ho. 

« 

Mr. McAlijstkr. That is what I ini^ant to 
sav. 

Mr. HAYK-i. I now oft\»r this inv(»nt )rv in 
(^vidiMi'.'o, if th » Court ploaso. 

Mr. McAllistkr. Just t(»ll th(» Court what 
it is. 

AFr. Hayks. It is tho invontorv and appraiso- 
in:Mit filod in th(» (»stato of Afark Hopkins, do- 
ooasod, oontaininji: among other things st<K*ks 
and honds, and tho invontorv is tho ono roforrod 
to in tho depositions of AFr. Hopkins roa<l in 
ovidiMioo h(»ro tlu» other dav, and in oonnoetion 
with that <l(»position we now offer it. Tho ap- 
praisers (jualiHcMl on the KJth of May, 1879. 
Th(» invontorv is sworn to hv the administratrix 
<m the loth of Mav. 1H70. 

AFr. McAi.listkr. Vou nr\in thi' disposition 
of K. \V. Hookins? 

y\n, Hayks. Yes, sir. And tlr.» return of 
tht» appraisers is dated Juno 27th, 1(S71). 

Mr. McAllistkr. Well, we shall ol)jo:*t to 
this inv(»ntorv. Your Honor understands that 
this is an inv<»ntorv made* hy eertain ai)prais- 
e:-s appointed hy the Prohati* Court, Sau Fran- 
eiseo, in the matt(»r of the estat(* of AFark Hop- 



M 



kins. Wc siij)i)<)Si' that that is a matter (Mitirely 
forcijj:!! to this suit, just as much as any ovi- 
(l(»n('0 ill th(» prococHliufjjs of that ostato arc for- 
ci}i:n to t!iis case. The inventory is not made* 
1)V tlie defendants or ]>v anv of them. It is 
made l)y appraisers ap|)oint(»dl)y the Court who 
hav(» no conne(*tion with tliissuit. It is a mut- 
ter entirc^lv /vs iuffr aliffx arfff, and we ohi(»:*t 
to it on tliat jrround. \Veol)jectto it as immater- 
ial, and as incompetent an 1 irrelevant evidence. 
I cannot c:>nceiv(» wliat placc^ it will have in 

this cas(». 

yiu. Havks. It can havi* a variety of plac(»s 

in the casc^; probably will. It is the paper and 

th(» invontorv refiM'red to bv Mr. Hopkins as hav- 

iuix been in his custodvand havin*j:b(M»n bv him 

submittcMl to ( JovcMMior Stanford, to biM^xamincil 

by (iov(M*noi' Stanford. It is the pap(*r, concern- 

inji* which it is allc^j^ed in the complaint in this 

action th:it the defendants had it in tht'ir |)os- 

session: knew of the infoi'mation it containcMl 

as to the vahie of these stocks and l>onds: had 

it undtM' th Av (v>ntrol, and prev.Mit'.'d it or its 

a')])rais('meiit eomiim* to the knowledge of the 

|)laintit1'. 

Mix*. MrAL!.isTKiv\ The testinionv of Mr. 

Ilopkin<, your Honor, shows that it lu^vcr 

was in th" possession of the defendants. 

This testimonv, I believe, lias been 

 

re. id. The testimonv shows that Mr. Kd- 



735 

ward W. Hopkins was a nephew of Mr. Mark 
Hopkins and one of the heirs of Ids estate, and 
was the ajijent of Mrs. Hopkins, and that as the 
agcMit of Mrs. Hopkins this inventory cani(» into 
his hands and lie kept it in a hex entirely (h*- 
voted to tlie papers of the estate; tliat it was 
never in the possession of the defen^hmts; that 
they had notlunfj; to do with it: he did not own 
it as tho agent of th(* defenchmts, hut lield it as 
the agent of Mrs. Hopkins, and tlie oidy eon- 
neetion tliat the defenihmts, or the defendants' 
huilding, liad witli it was tliat ^Fr. Hopkins 
ehos(» to keej) it in one of their vaults, in a pri- 
vat(» hox devote(l to the papers of this estate. 
He savs distinctlv that h(» did not hold 
it as th:* agent of the defendants in any 
way, shape or manner. Then so far as the eon- 
sultation with (JoviM'iior Stanford is eone(»rne<l, 
he said that on oiu* oeeasion he showe<l this in- 
veiitorv to (fovernor Stanford, to look at the 
vahi(» of a })ieee of real (»stat(^ Now, tlu^ propo- 
sition is this: That lu^cause* (fOV(»rnor Stanfonl 
on one oeeasion looki^d at this invcMitorv to s(»(» 
what th(» vahi(» of a jiartieular pi(»ce of real 
estate was, that that hinds (lovernor Stanford 
and eoniinits him to (everything said in that iii- 
viMitorv as to the value of stoeks and honds. 

Mr. Havks. That is not the proposition we 
put forward. 

Mr. McAllistkh. Well, how can it he eom- 



73G 

jK^cnt hocause ( Jovornor Stanford simply Iook(»(I 
at this oil one occasion ? And we show your 
Honor precMsely what lie says on that i)oint. 

Thk CorHT. I remember that [ supposi^d 
that was nK^relv to claim that (lovernor Stan- 
ford had it under his control to some extent. 

Mr. Hayks. And ha<l knowledge of it. 

Thk Court. Could get it when ho wantcMl it, 
and so on. 

Mr. Hayes. And we do not propose to con- 
fine the proof to ( Jovernor Stanfonl. We i)rop(>S(* 
to connect each of the defendants before we g(»t 
through with this case, with that inventory, with 
having had it in their manual possession, an<l 
with having IxH'ome fanuliar with the stocks in 
it, and having faih^l to disclose to th(»ir rcsfid 
f/ttf trust tlie information it gave. 

Mr. McAllister. Wo do not understand. 
(^V(Mi if counsel could pi*ov(^ this invcMitorv had 
been in the* poss(»ssion of Mr. Crock(M\ 
})oou in the possession of < fovernoi* Stanfonl, 
and liad Iummi in tlu* possession of Mr. 
Huntington, an<l Ihhmi entirely read through 
l)V them, that that connnits them to anvthing. 
Thev mav from motives of curiositv — although 

ft * 

1 understand tlu^ testimonv to be ditferent — thev 
mav from various motiv(»s hav(» looked at this 
invcntorv, but to commit them to the values 
('Xpr('ss(Ml in tliis inventory re(|uires some af- 
lirmative action on tlieir [)art. They never 



iot 



sij^nod th(» invontorv; tliev iievcM' swon* to the 
inventory; tlu^v never endorsed it in anv wav, 
shape or manner. How, therefore, is it eonipe- 
ti^nt ? Is a man to ])e bound bv the eontents 
of a i)aper wldeli he looked at and read ? Were 
thev bound because thev had seen tliat inven- 
tory ? Ev(»n assuminj^; every i)roposition upon 
the other side to l)e eorn^cft, that tliis was a 
partnersliij), and tluit they were survivinjj; part- 
ncM-s, wen* tliev bound to tell Mrs. Colton and 
Mr. T(»vis and Mr. Wilson that tlu^v had seen 
the inventory? 

Mr. Hayks Yes^ sir. 

Mu. ^FoAlmstkr. Mr. Wilson savs in his 
deposition that he did see it, and Mr. Frank 
Smith showed it to him. 

Mr. Hayks. No, sir^ \ bejj; your pardon. 

Mr. ^rcAiJJSTKR. That is th(» wav \ read his 
t(*stimonv, but irr(»sp(»etiv(» of that, that does not 
matter what AFr. Wilson says, but the question 
is, are ( Jovt^rnor Stanford and Mr. (^roeker and 
Mr. FIuntin<'ton to be bound bv an inventorv 
made by outside ])arties in another suit simply 
b(*cause one* or two or more* occasions thev saw 
that inv(»ntorv? Now, it s(»ems to me that tlu* 
proposition is a very strange one, your Flonor, 
that thev are to be b()un<l bv the contents of 
that inv(»ntorv, and it is to be claimecl that be- 

ft. 

c:uis(» th(\v saw it, perhaps read it, p(»rhaps had 
it in th(Mr office, although the testimony of Mr. 



738 

Hopkins shows dearly how it was there, in liis 
hands as a^ent of Mrs. Hopkins — that they are 
to he hound hy the contents of that inventory, 
and that it is to he imputi^l to them as a fraud 
that they did not disclose what they knew of 
that inventory to Mrs. Colton in the course of 
this compromise. Now that proposition seems 
to me to he one that (*annot he sustained. 

Thk Court. It seems to me quite ohvious 
that so far as statements in the inventory are 
concerned, thc^y do not hind these defendants. 
It is not admissil)le for any purpose of that 
kind. So far as there heing any evidence that 
they c(>nc(Ml(Hl it, is it understood that all of 
the evidence^ on that is now in? 

Mr. Havks. No, sir; it is not. We clain). if 
your Honor ph»ase, at least tliis nuicli in con- 
nection witli this (l(^]>ositi(vn. We claim in th(* 
first place that \vv have aln^aily hcfore the Coui't 
not all the evidiMice we [)rop()se to introduce, hut 
evidence tendinji; to (^stahlish tiduciarv relations 
Uetweeii these defendants and l\rrs. ('olton. We 
have evidence, we claim, aln^aflv in, havintr that 
t^H'e(*t and t.Midencv. W(^ propose to put in mt>re 
i^videnc(^ estaMishinu* thosi* fiduciai'v relations. 
We claim that in dealin;:: with their ccsfni (jttf 
trust, for such we sav she was, that not only 

• • • 

were tliev hound to (»xercise the utm )st u'ood 
laith in all statemcMits which tlu^v made to htM*, 
Uut that thev were Ivound to communicate to her 



739 

any kiio\vlo(lj»:o or means of knowlojlgc wliioli 
liad to eonie to their own knowledge to expose* 
it to her, to phic^e her on tlie sani? phme with 
themselves, to proteet her from tli'vMns;*lves. 
To sueh an extent is that rule carrie I out that I 
do not i)ropose to stop now and ent;»r into adis- 
cnssion of it. 

TnK CoiRT. In other words, von ehiim there 
an* some faets wliich thev did not com:nunicat(* 
to Tevis or Wilson or Mrs. Colton which are 
contained in this inventory and wliieli th:*v 
knew at tint tims fi:*ts wiiich t!i s' did n )t 
comnnniieate? 

Mk. IIavks. We claim, for instaiic*:*, tliis, 
t'l it in t!i ^ s»v ).M a*) ).Mis.Mn »;i' mil* bv s.v ).m 
ap|)raisers of the Probate* Court that the sto'/ks 
and bonds about which thev were d(*alin*j: with 
th 'ir rr^fiti tiir trust an I \y?T.^ a'):):Misvl a*^ 
about double the valuxtions tli:»v wu\» claim- 
in;x t ) her t!iey [) :)ss3ssad. They w.»re b )und 
t ) give her that means of knowledge, to 
give her that mi^ans of ascertaining wlu^ther or 
not their representations W(»re trm*. And to 
such an extent I was proeeiMling to say, had 
that rule been carri(»d, that even a transae- 
tion of that kind has been si^t aside b(»caiis(» a 
trustee fail(Ml to communicate to a (r.^fid (jttc 
trust a n(»wspaper ([notation ])ul)lished in a nc^ws- 
l);iper circulated in their own city, where* he and 
X\w r(\^fKi qifc tniM rc^sided; because lie had read 



740 

a quotation showinij: the value there of a stoek, 
a miuinjj: stoek, to ho mueh greater than tht^ 
i-rsfiti qnr trust luid any idea tliat it was; ho- 
cause \w failed to mention that fact to her or to 
thos(» with wlioni he was negotiating, and he was 
n(*gotiating then* with lier father, a husiness 
man of intelligence; and hecause he failed to 
convey that information that lie had seen this 
(|Uotation in the nc^wspaper, the (V)urt set the^ 
transaction asid(\ 

y\\i. ^rr'Ai.rjsTKH. Mv ol>jec*tio]i, vour Honor, 
is this: tluit th(»s(» (h^fenchmts an* simply 
answvM'ahle for tluMr own con(hict and thi^r own 
dcv-Iaration^. Tlu^v are not answerahle for the 
conttMits of pap(*rs provi^l to he in tlu» possess- 
sionofMr. Kdward IIo|)kins as the agent of 
Mrs. I[()])kins and which havi^ heiMi hantled to 
tlu'Ui and thcv have lookecl at. Tliev are not 
rcsp:)nsil>l(* for the contents of those pap:M*s, 
Thev have e)itir(»lv disa'j!:r(UMl with th(^^e valua- 
lions. TIh^v never committed thems;»lv(*s to 
tli'S'.' valuations in anv wav, sliap:* or mannei*. 
Now it <loes s(H»m to me that und(M* this testimony 
th:it (!.)vernor Stanford — and that is the whole 
scop(» of this testimony — simply l(H>k(Ml at this 
inventorv once to sec the valu(» of a 
certain piec(» of real (*stat(»: that lu^ 
w IS not hound to disclose that item 
to Mrs. ('olton. Neither was he Ix^und to 
li'l Mrs. Colton that tluTc^ was such an estate* 



741 

as th(» Mark Hopkins (*stat(\an(l that tliat (^statc 
luul an invontorv, and that Mr. Wilson had 
secMi that inv(»ntorv. He was not hounrl to }»; > 
into all of those matters. They hrinji: in this 
inventory now and s(»(»k now, realiv — that is the 
point of it — to eliar^e us with knowledj^e and 
to hind us bv th(» contents of that inventory and 
to sav that we won' l^ound to disclose to Mrs. 
Colton t\w contents of that inv(»ntorv, as to the 

« 

contents of which we ourselv(»s w(»re not n^allv 
inforuKMl, as the (»vid(»nc(» up to this time has 
sli:)\vn. Thi're is no prettMise, no showinji: up 
to this time* that these* d(»fendants had knowl- 
e l«!:e of the* contents of that invi^ntorv. I oh- 
ject to the testimony alto}i;ether, and then I oh- 
j(»ct if it is a nu»re order of j)roof. If the Court 
is a;j:ainst us on the* proj)osition that an inv(Mi- 
torv thus situat(Ml ean he evidcMice against the 
(h'fendants, I ol)j(»ct to the order of |)roof and 
ask your Honor to hold that tlu^v must first i)ut 
h 'fore the Court how far th(»s(» d(»fendants have 
h 'en (*ommitted to this inventory, their evidence 
u])on that point first l)efor(» this vast mass of 
pa|)ers is thrown before the Court. That, how- 
ever, is in the discn^tion of the (\)urt; but the 
Court should exercise, it seems to m(% a discn*- 
tion in the matter, Ix^cause all through this casi^ 
extraneous matters an* broufrht in under an 
i lea or under a su<j:fi:estion that they will h(»re- 
after, by proof, make the matt^'r n^levant. 



742 

\Vlum(»v(M* tlu»v (*jinii(>t get in the \>u\'v of t(»sti- 
inony that suggestion is made. 

Tftk CorRT. I do not tliink that it is true to 
any great (»xtent tliey luive introduced a mass 
of testimony on sueli conditions as that. There 
are one* or two instancies \vh(M\» th(»v have acted 
upon that princii)h» prohahly. 

Mr. McAlustku. I forget the instance. 

Tmk CoiRT. Tliere lias he(»n no very large 
amount considering the an^ount of evidence 
that has hecMi put in, it seems to m(^ 

Mr. McAi.ustkr. Thev went. into those Ari- 
zona contracts on the |)romis(» that they would 
show hcreaftc^r that the \V(\^tern I)(»v(»lopment 
Company had a contract to build a road from 
Arizona, which contract W(» have never h(»ard of. 

Tmk CoiRT. It was jmt in on that ground. 

Mr. Havks. Th(» promise we madi* and the 
[)romisc which we made wc will k(»ep; W(» ])ro- 
[)ose to show that it was cont(Mnplat(»d lu^twcH^n 
these parties that tlu* \\'(»st(»rn Devi^lopnuMit 
Company sliould huild that road: that |)romise^ 
we pro]>ose to ke(*p. 

TuK CoruT. It was jnit in then heeausiMt 
might he inconvenii^nt to ]>ut it in at anotlu»r 
lime. If it had Ikmmi uiateriaK 1 should havi^ 
held them to th(^ order of ])roof. It does not 
s'.rike m;' that tlu^ ([notations, as to values, in- 
volve all the counsel, for j)laintiff seems to think 
in conn(»ctiun with that inviMitorv. It doi»s not 



743 

strike my mind so now; it is not like a quota- 
tion of the sales in a market in a newspaper — a 
published market report; it does not strike me 
so. Two thoughts have occurred to me about 
this; if in connection with it there is an actual 
effort, something actually done to keep away 
from the knowledge of this plaintiff — that would 
l)e one thing; that might be material. Next, if 
there are such assets there as shown bv other 
testimony to be assets of the Western Develop- 
ment Company, or in which Colton's estate had 
an interest, and thev were not in this exhibit 
shown, or were not shown in some way to Mrs. 
Colton or her agents, it might be material in 
that resj)(»ct. 

Mr. Hayks. We do not claim it in that res- 
pect, if your Honor please, that it shows any 
new assets. 

Thk Court. If any assets were mentioned in 
the inventorv which were not in the exhibits 
shown to Wilson and Tevis. 

Mr. Hayks. That we do not claim. It is the 
failure to give the appraisement. I have not 
observed that in one of the oldest English cases 
on the subject that was the verv fact that ha<l 
b(»en kept away. An apprais(»ment by a man of 
a piece of property. 

Thk Court. Well, I think I will let vou offer 
it again then, when you bring in that authoritv 
that vou have. 



744 

Mr. IIayks. We think it is alsr> necessary, 
if your Honor ploaso, to render tliat deposition 
of Mr. Hopkins' intelligible. This paper is 
what he was testifying to, and all he was testi- 
fying to. Now, the testimony can have no in- 
telligent understanding without the presence of 
this pai)er. 

Thk CorRT. That does not make it admissi- 
ble. If he testified about a pap(T that is not 
admissible, whv, the testimony would be of no 
value. I do not wish to make this a finality 
now. If you have authorities, I would like to 
Hear th(»m. 

Mr. Havks. We will take the opportunity 
tluMi of |>resenting it later. 

Thk C'oruT. It does not strike wiK' at this 
time* that that appraisemcMit would hav(^ any- 
thing lik(» th(^ vahu* of the stock (piotations in a 
^itoek report. 

Mr. Havks. I will submit that authority. 

TiiK CoTRT. I would like to see it. 

Mr. Havks. If your Hcmor please, we will 
1(4 that matter stand for the pn^sent. 

Thk CorRT. Very well. L(4 it beunch^stood 

• - 

th(Mi that \\\" ruling is rest^rved on that. 

DiRKCT KxAMIXATroX OK X. T. SmITH. 

Called for plaintiff*. Sworn. 

Mr. Havks. (). What is your business? 

A. 1 am Treasurer of the Southern Pacific. 



745 

Q. How long have you oceiipiod tliat posi- 
tion? 

A. About eight or ten years. 

Q. Are you a Director of the Soutliern Pa- 
cific Railroa<l (V>mpany ? 

A. Yes, sir. 

Q. How long have you been such I)irect^)r ? 

A.. I tliink about the same length of time. 

Q. About eight or t^Mi years? 

A. Yes, sir; ov(»r eight. 

Q. Do you own any stock of the Southern 
Pacific Railroad Company? 

A. Yes, sir.  

(^. How much ? 

A. I own one share*. 

(I. WhcMi and from whom did you ac(|uire it? 

A. 1 have had it for about <Mght y(*ars. 
The Socretarv delivered it to me. 

(I. What did you pay for it? 

A. r have not paid anything for it. 

Q. D.) you own it, or is it simply standing 
in vour name ? 

A. 1 own it. 

Q. How did you com? to got it from thc^ Soc- 
n^arv? 

A. It was pres(»nted to me. T don't know 
who it came from. 

il. You don't know who the present was 
from, but only know the hand that gave it to 
vou ? 



746 

A. r iiTKlorstootl at the time that it caiiH* 
from Stanford. I did not know pD?5itively. 

Q. Did you ovor pay any a^sessm^nt on that 
sto(»k ? 

A. It lias never Ihmmi ass(\^sed. 

Q. Hiv(* you ever paid any sui>-^eripti()n 
upon it? 

A. Th.»r(» has h??n no suhsc^ription eaUe.l for 
on it. 

Q. Is it fully j)aid st^H'k? 

A. I think it is. 

(2. !>.> y.>u know? 

A. I l):>li(^ve it is fully paid stock. 

Q. Do you know? 

A. Xo, sir; I don't know. 

(^. Wherv^ is the eertifieate*' 

A. I havv» it at honi '. Ft is tli'» sani? *d< all 
of the stoek. 

Q. Wh(Mi did you n^eeive it? 

A. Kiglit or ten years a*!jo. 

(I. Can you eoin? any closer than that to it? 

A. I know it in eight years; over eijijht year s, 
I siiould think. 

V^. How lonjx had you heiMi a Dir(H*tor of the* 
ronir)anv hcfore vou riH^eiviMl it? 

A. l>ut a short time*. 

(^. Were you a Director, then, for a short 
t'lnc h(» fore vou rec(Mvcd the ccrtiticati*? 

.V. I wa-; (^liv't "1 Dircc'lor h.'fort^ 1 re:'(*ivt»d 
it: vcs, sir. 



747 

(). Had vou aot:^(l at auv of the mo 'tings? 

A. That I don't remember. 

Q. Is the certificate in your name? 

A. Yes, sir. 

Q. Transferrer! to you on th(» books? 

A. It is absohitelv mine. 

I. 

Q. Who told you that it was pn^sented to 
you by Mr. Stanford ? 

A. I didn't say that I was told. I j^ot that 
impression. 

(I. How did you get the impression? 

A. Because he had presented mi» with other 
things. He had presented me with other stock 
at differiMit times. 

(). What was said to you when this certifi- 
cat(» was handed to you, and l)y whom? 

A. Tt was handed to me by the Secretary, 
and I supposed it was mine; I thought it be- 
longed to me. 

Q. You supposed it was yours? 

A. Xo, sir; I said I was told it was mine. 

Q. You were told it was yours? 

A. Y(»s, sir. 

Q. Can you remember his language in con- 
y(»ying that information to ycm? 

A. He said: ''Here is a share of stock that 
l)elongs to you. It is yours absolutely." 

(2. Did you haye curiosity enough to inquire 
liow it came to belong to you. Had yim sub- 
scrib(»d for it before that? 



748 

A. No, sir; I had not subseribod. 

Q. Did you have curiosity enough to inquire* 
how it l)olonged to you; if you had not sul>- 
seribed for it? 

A. No, sir. If a man presents me a thinjr, 

I do not have mueli euriositv as to wliv he d(H»s 

• • 

it. 
Q. You did not understand that tlie Seen- 

tary was presenting it to you? He only deliv- 

en^l it to vou? 

A. Yes, sir. I did not believe that he pre- 
sent'i'd it to m(\ 

Q. Didn't you inquire how he eame to give** 
or d(»Iiv(»r it to you? Wlio was the generous 
man making tlie present? 

A. No, sir. 

Q. Had vou anv euriositv on that subject? 

A. No, sir. 

il. You t(K)k the goods the (Jods provided? 

A. I took the stock that was lianded to me. 
Tlien* wcM'e not shanks enough to excite* nuuOi 
euriositv. 

(^. You did not think the pn^s(»nt was a val- 
ual)lc one, then? 

A. It had Sonne vahie. 1 took it as (piite a 
complinuMit. 

(^. How long had you btn^n acting as a 
I)irector bc»for(» this sliar(> was presentc^l to you? 

A. But a short time. 

(I. Sonu» peM)ple liave different idcnis of sliort 



749 

times from others, (live it to us in months and 
years. I have known people to call years a 
short time. 

A. Well, I cannot tell. All that T know is 
what I rememher; the stock is dated in 1877. 
It was made a present to me. How long I had 
been a Director before that time I don't remem- 
l)er. I could tell by looking back at my books. 

Q. Are you familiar with the records of the 
Southern Pacific Railroad ('ompany, of whi(Oi 
vou are a Director or stockholder? 

A. I am quite familiar. I atten<l nearly all 
the meetings. 

Q. Please turn to the record book and tell 
me when vou first became a Director. The 
r(HM)rd book is here. 

Mr. McKisk'k. I do not think the record 
b:>ok of the Southern Pacific was called for. 

Mr. Havks. Yes, sir. I served a notice on 

you to produce it, dated November 2d, 1883. 

I do not think I can examine the witness 

without that. 

Q. You say this certificate is dated when? 

A. In 1877. 

(I What time in 1877? 

A. That I don't remember. 

Q. Was it a Christmas present, do you 

think, in 1877? 

A. No, sir. 

Q. It Avas earlier than that? 



750 

A. Yes, sir. 

Q. In the spring, summer or fall? 
A. ^[y impression is that it Avas some time 
during tlie latter part of the summer. 

Q. And you were acting as Director for a 
short time hefore that? 
A. Yes, sir. 

Q. What is your idea of a short time ? two 

or three hours or two or thre^ davs, or two or 

*. 

three w(»eks ? 

A. Or mcmths, perhaps. 

<2. Two or three months ? 
A. Yes, sir. 

Q. How about two or three years? 

A. It could imt have Ikhmi two or three 
years because I do not think I was Treasurer as 
long as that. 1 was a Director at the time I 
was elected TreasurcM*. 1 was cashier of the com- 
pany for some time before I was el(H*t(Ml Treas- 
urer, but 1 cannot locate the tu\\i\ 

(^. B(»for(* you received the present of this 
one share of Southern Pacific* .Stock had vou 
ev(M* ()wn(»d anv of it? 

A. No, sir. 

(^. That was your first coniKVtion as a stock 
holdcM' with the company? 

A. Yes, sir: that is the first I reallv owninl. 



'1'^ 



There was st(K*k standing in my name l)efon^ 
that. 



751 

Q. How much stock was thero standing in 
vonr name ))efore that? 

A. I don't romemher — sovoral sliaros. 

(). Al)out how many? 

A. Five or ten; I don't n^memher. 

(^. Who owned them? 

A. Thev stood in mv name and T had en- 
dorsed the stock, and the stock was out of my 
])Ossession. \ considered, inasmuch as it was 
out of my possc^ssion, that I was not the ahso- 
hite owner of it. 

Q. Who did own it? was my question. 

A. I was not the al)sohite owner. It stood 
in mv name. 

(\, T ask you now, wlio in fact did own it? 

A. I don't know. 

<\, How did you }?et it? 

A. It was put in my name on tlie hooks of 
th(» (M)m|)any when I was made Director. 

(^. Who put it in your name? 

A. 1 don't know, 

(2. How do you know it was ])ut in your 
name ? 

A. Because I saw it in the hooks of tlu» 
( ■ompanv in mv name. The S;»cretarv also in- 
foruKHl m(» of that fact. I voted thi» stock 
rej^uhirly at the stockholders' meetings. 

Q. Wk} did not allow you to retain tlie certi- 
iicat(» in ycmr possession, did lie? 

A. Xo, sir. 



752 

Q, D.) you know wiiiMi you got that ? 

A. That was put in my name b^fon* I was 
c»l(»ete(l as a Dirootor. 

(i. H(nv long l>oforo that ? 

A. That I don't know. 

Q. How long before you were appohited or 
i^locted a Director did you ev(»r know there waj< 
any in vour name ? 

A. I don't know that I undei'stand vour 

•piestion. 

Q. How l<mg l)efore you were ekn^ted a Di- 
rector did vou know there was anv stock stand- 
in<i: in vour name? When did vou first hear 
there was stock standing in your name? 

A. \Vh(*n 1 was asked to b:^come a Di ret*. tor. 

Q. Wh(Mi you ])eeame a Director? 

A. Yes, sir. 

(^. That is th(» first knowledge you liad ot* 
anv stock? 

A. When I wa^ asked to become a Dire<*tor. 

Q. When Avas that? 

A. I cannot locate the time. 

(I. How long l)efore you did actually become 
a Din^ctor? How long was that Ix^fon* you 
actuallv did become a Director? 

A. A few days; perhaps one. two or three 
davs. 1 don't rememb(»r. 

(^. P(»rha])s the same day? 

A. NO, sir. I think it was a dav l^eforc. at 
anv rate. 



753 

Q. Who askod you to boeomo a Director ? 

A. I think the Secretary first awked mi*. 

(I Who was tliat ? 

A. • Mr. Willcntt. 

il. Who next asked you ? 

A. There was no one asked m^ after that. 

(}, You say he first asked you. I suppose 

soniehodv else asked vou? 

. •' 

A. You asked me who first asked me. I am 
repeating the hinguage of your question. 

(). I asked vou wdio asked vou to beconu» a 

Director, and vou said the Secretary first asked 

• •• 

vou. Had vou any conversation with any one 
as to l)eing a Director before you were a Direc- 
tor ex(M»pt the vS»cr(»tary? 

A. I don't remember of any. 

(2- Was the Secretary a hirge stockholder in 
that corporation? 

A. I do not think ho was. 

Q. About what st^ck did he own, if any ? 
Do vou know if he owned anv? 

A. Yes, sir; he owned stock. 

Q. Owned it, or had it standing in his 
name ? 

A. Both. 

(^. How much did he own? 

A. That I don't know. I cannot say. 

t^. Have you any idea, at the time he asked 
vou to })ecome a Director; not since* then? 

A. No, sir; I don't remember. 



754 

Q- Do y(ni know whether he OAnieJ any at 
that time, when he asked you to hecome a Di- 
rector? 

A. Yes. sir. 

i^. He owned sonn* at tliat time? 

A. It stoixl in liis name. 

Q. That is not the question. You are quite 
well aware — a'ou have knowledge and experi- 
ence enough to know that there is a difference 
between stock standing in a person's name, and 
the [K»rson owning it. Did he own any stock 
when he asked vou to become a Director? 

A. I cannot sav AX'hether the stock was in 
his possession or not. I don't know. All I 
know is that it was standing in his name. 

(^. Then» were certificates standing in liis 
name ? 

A. Yes, sir. 

(^. For liow many shan-s? 

A. That I cannot tell vou. 

(). What was vonr busin(»ss at the time vou 

^ • • 

were aske<l to U^come a Director of the South- 
ern Pacific Railroad (.'ompany? 

A. I was cashier an<l paymaster (►!' the same 
road, the Southern Pacific. 

(^. How long have you been in th(» (»mplov 
i>( the railroa<l companies controlled by Stan- 
ford, Huntington, Oocker and Hopkins in his 
lifetime*? 

A. Since bSTl. 



iOO 

Q. Wvre you at that time in the employ of, 
or acting as an officer in other companies than 
the Southern Pacific? 

A. No, sir; I tliink not. Very sliortly after 
that time 1 was. 

Q. Did you receive any salary as a Director of 
the Southern Pacific Railroad ('Ompany ? 

A. No, sir; it does not pay salaries. It pays 
a certain amount for attendance at each meet- 
ino;. 

{}. How nnich? 

A. Five dollars. 

(2- Don't you know that youhecamea Direc- 
tor after the resignation of Mr. C. V, Hunting- 
ton in Decemher, 1874? 

A. No, sir; I don't rememher. 

(). Don't vou know thatvou hecamea Direc- 

*• . t' 

tor to fill the vacancy caused l)y his resignation ? 

A. No, sir; I don't rememher. 

(^. Who w^ere the other Directors at the time 
vou entered that hoard ? 

A. That r don't rememl)er. 

Q. W(»r(» they not David D. (>olton, Robert 
Rohinson, Charles Crocker, S. T. (rage, E, H. 
Miller, Jr. and J. L. Willcutt? 

A. I think I was a Director before all of 
those came in. There might have been some of 
them in wh(»n I was first Director. 

Q. Who do you think, of those that I have 
named, came into the Board later than you? 



756 

A. Robert Robinson for one, and my improj^- 
«ion is tbat Mr. Colton came in after I did. 

(I, Inasmuch as he was a Director in 1873» 
I tliink vou are in error. 

A. I am not certain about it, but that is mv 
impression. 

Q. What was the first imuortant action you 
took as I)ir(»ctor of that (yompany? 
A. To attend tlie meetings. 

(2- To attend the meetings and (h-aw your 
fiv(» dolbirs? 

A. No, sir. I attended the meetings and 
<lid Avhat a man sliould do as Director, I sujv 
pose. 

(i. 1 )id you make any cimtracts, on belialf of 
thi' Southern Pacific Railroad Company with 
any persons or corporations? 

A. At ditterent times; yes, sir. 

(^ Witb wbom? 

A. We made contracts with tbi^ Western De- 
velopment Company, I think, and the l^lcific 
ImprovenuMit ( 'ompany. 

(^ Wh(^n? 

A. That I don't remember. 

(). Wbat was tlu^ contract that vou madt* 
witb tb(* W(»st(Tn Dev(4opm(»nt Company? 

Mn. McAlustkh. Tbat is in writing. Tbat 
is in evidence*. Wc* object to it be(*aus(» tbat is 
ah'cadv before the Court. 



Mr. Hayks. Tliere is a contract in evidence 
here. I don't know how many he made. 

i^. What Avas the contract you made with 
the Western Development Company? 

A. 1 cannot tell without reference to tlu» 
re(»ords. I cannot rememher. 

Q. Was it an important or an unimportant 
matter? 

A. I think it was an important matter. 

(I What did it relate to? 

A. The huilding of roads. 

(l. With whom did you negotiate* th(» pre- 
liminaries of that contract? Did you negotiate 
with any person prior t^) the presentation of 
that (M)ntract in the Board room alre<adv drawn? 
Had you (*onducted any negotiations with any 
person upon the sul)ject? 

A. \o, sir — hut I think tlie contract had 
heen read ovov and shown to nu^, and that I 
discuss(»d it quite familiarly with the Secretary. 

l^. With any one else? 

A. No, sir — 1 think not. 

t^. Did not th(» Secretary give you some in- 
formation as to its heing desired hv certain 
parties that that contract should he passed hy 
Xho Board ? 

A. We understood that it was for the inter- 
(»st of the railroad company t'O make this con- 
tract for the huilding of the road. 

Q. That is not an answer to my (piestion. 



758 

Did not von understand that it was the <lesirc* 
or wish of Messrs. Stanford, Huntington, Hop- 
kins and Crocker that that contract should ho 
adopted In' the Board of Directors, and were 
you not gr>v^erned hy that desire or wish of 
those genthMnen, in voting for its adoption? 

A. No, sir; there was no sucli information 
as that given to me. 

Q, You hi\(\ no sucli understanding? 

A. NO, sir. 

(}. How long had you stuched over the de- 
tails Of that contract? 

A. I cannot rememher now. 

t^. (live us your l>est judgment. 

A. Tliose important ccm tracts were gener- 
allv handed to me and read over, and talked 
overcaiite freelv hetween mvself and Mr. Will- 
cutt, who was the Secretary. We were acting 
for the interests of the railroad company. 

Q. \ did not ask von that. Please confine 
your answ(M-s to my questions. Where was that 
contra/t with the \VOsteri\ I>(»velopm(Mit Com- 
pany hanrled to you first? 

A. 1 think it was in mv ofti'/(». 

il. Wh'n* was your office^ ?  

A. At the (M>rn(M- of Fourth and Townsend 
streets, up stairs, room .32. 

Q. What office^ was that ? 

A. Till' Treasur(M*'s office* of the Southern 
Pacific. 



759 

Q. Where is the Secretary's of1ie(»? 

A. Acljoiiiin}? mine. 

(I, Where <lo(»s tlie Board of Din^etors meet? 

A. They meet {jenerally in the room ealled 
the Oireetors' room. 

(I When*? 

A. On the other side of the huildinj!;. 

(I. The same huildinj^? 

A. Y(^<, sir. 

(I. Th(* sanu* Hoor? 

A. On the sanu* Hoor. 

Q. Mr. Willentt, tlu» Secretary, had the eon- 
tract in his possession already drawn, liadn't 
lie? He had it in his possession already drawn, 
when lie sj)ok(» to yon first ahont it, didn't he ? 

A. I don't reniemher. Those contracts were 
fre(|nently amended and alten^d. 

(I. Was the contract with the Western 1K»- 
V(»lopm(Mit ('om|)anv ever amended or altered? 

A. I think prohahly it was, from the first 
original design. 

t^. I ask yon for the fact. 

A. I don't rememher that fact. 

(J. Did yon evi*r snggest a (diange, or alt(»ra- 
tion, or modification in that contract as it was 
presiMited to von hv the Secretarv? 

A. Y(»s, sir. 

Q. What was its character ? 

A. I don't rememher. 

i^. Who had the contract? 



760 

A. I (IcMi't know. 

i^. 1) )irt you know th:\t tint cMitraet wms 
•Irawn hv th(* law (U*partm?nt of the Central 
Pacific R lilroad X 'ompanv, and pass3d exactly 
as it w.i-* diMWM l>y th^m. a:i I hinbl t) tho 
Sec notary? 

A. I don't know: I don't heliove it was. I 
don't l>c^liov(» it wa^ passed as first handed to the 
Secretary. 

Q. Can you fcive me any idea of any sug- 
gestion or alteration that you eyer n^ade in 
it? 

A. I did not say that I made any altera- 
tions. 

(}. Tliat you sufrvT^^ti^l ? 

A. I know those contracts w(»n* always 
talk(Ml oyer fre(|uently. 

(^. Can you }riy(* nu» any idea of the suic- 
«iC(»stion of any altt^ation that you n>:ide to it ? 

A. No, sir. 

(l. Did you su*«:^*st any altiTation to lu* n>a<le 
in it? 

A. Th(M'(» W(M*e some* jH)ints tliat I ol>j(*cte<l 
to. 

(). What W(»re they ? 

A. I don't renieniher. • 

(^. How many of them? 

A. r don't HMniMnher. 

i^. What was it, as to prici^ or what? 

A. I cann<>t rememhc^r. 



761 

Q. How hmp: was that contract (liscussed in 
the hoard room? 

A. That I (*annot t^ll you. 

i}. Were any of your sugorestions or advice 
followed ? 

A. No, sir; I don't think they were. Thev 
might have heen in regard to some little amend- 
ments perhaps in the contract hefore it was 
finally hrought hefore the Board. 

Q. How often did you consult with Mr. Will- 
cutt on the suhject hefore the contra(*t was 
lu'ought before th(» Hoard? 

A. Well, we consulted very freely togeth<»r 
on all important matters. 

(^. About this one? 

A. I don't remember. 

t). Did you ever see it b(»fon» the day it was 
l)rought up to be passed by the Board? Did 
you ever see anything of the contract befon* 
that day? 

A. Yes, sir. \ told you I did, and I say so 
now? 

(I, How long before ? 

A. I don't remember. 

t^. One day? 

A. r cannot tell. It could not have been 
long. 

il. Who (h*d pn»pan» the contract or write it 
out ? 

A. I do not know. 



762 

Q. Was it ill tlu* handwriting of the Sec- 

n»tarv? 

•/' 

A. r cannot toll voii. 

Q. Do you know his haivlwriting? 

A. No, sir. 

Q. Did you s(h» the contract? 

A. Y(*s, sir. 

(I. Th(»n didn't you know whothiM' it was in 

his handwriting or not? 

A. No, sir: I cannot rcincnihor. 

(). Did vou have anv convt»^rsation with anv 
*< • ». • 

representative of the Western IVvelopnient 
('onipany with regard to that contract? 

A. I don't think I did. 

(). Did vou have anv conv^erstition with anv 
rej)res(Mitati ve of the Western I )evelopnient 
('oni|)any oth(»r than Afr. Mill(*r, the Secretary, 
with r(»gard to that ? 

A. I hil no conversation witli Mr. Miller 
al)out it that I reniemluM*. 

Q. Mr. WiUcutt? 

A. V(»s, sir. 

(). What do vou sav? 

*• • • 

A. Yes, sir. 

Q. Who else? 

A. 1 don't renuMnlxM* of anv one. 

i). I askiMl vou if vou had anv conv(*rsation 

with anv oiUM^lse otlu^* than Mr. Willcutt? 

A. Vou said other than Mr. Miller? 

(^. 1 chang(Hl th<' ([uestion to Mr. WillcutU 



763 

A. I don't remember having any conversa- 
tion with anv one besides Mr. Willcutt. 

(). Wliere was the conversation that von had 
upon that particuhir subject ? 

A. It was in his office. 

Q. The adjoining room to yours ? 

A. Yes, sir. 

Q. You don't know liow long before th(» 
lioard met? 

A. No, sir, 

C^. Was there more than one conversation ? 

A. l^robably not more than one general con- 
versation. Ft may have been interrupted, and 
I think it was. 

Q. How long did it last? 

A. Different times during the day. 

Q. About how long did it last ? 

A. I don't know; 1 cannot tell. 

Q. II;iV(» v<m anv definite recollection about 
it? 

A. I have no means of telling how long the 
conversations did last. 

Q. Have you any definite n^collection of 
anything connected with it? 

A. Yes, sir: I told you I have this remem- 
brance of it; that I recollect it, that I looked it 
over and criticised it and made suggestions in 
regard to it. 

Q. Did you nev.^r ascertain whether you 
could find any other person or corporation who 



764 

\voiil<I takt* tliat contract on more favoniblo 
t *rms t^) the railroad company than the West- 
cm I)evelo{)ment (Nimpany? 

A. No, sir. 

Q. Why (lid you s^'lect the Western I^eveloj)- 
nicnt Company as a corporation to make that 
contract with? 

A. I understand thev were the (Mil v ones 
that made the offer. 

il. Had offers been advertised for, and I)ids 
he(»n nH|U(^ste<l? 

A. No, sir; I don't think there had. 

Q. Did the Western l>evelopment (\)mpany 
make an offer, or did the Southern Pacific Rail- 
road Company ask the Western FK-vc^opment 
(*om[)any to take the contract? 

A. I und(Tstood that thev made this offer 
and a,*5r(\'d to huild it for a c(M'tain [>ri(*e. 

(}, Who made the offer? 

A. The Western D(*velo|)ment Company. 

Q. Was it in writing? 

A. Xo, sir: 1 don't think it was. I doift 
know. 

il. Who did they make it to ? 

A. I don't know. 

(J. Who told von thev had made the offer ? 

A. Thi^ S(H:'r(»tarv, I Wieve, was the one 
that told me that th(» offer had heen made in 
ronformanco with this contract — that the offer 
had IxHMi made on the same conditions as W(M'e 



765 

(MTibodied in the contract; that the mo:^tin^ was 
to ho called, to either accept or reject that con- 
tract. 

Q. He liad the contract already prepareil 
wlien he told you he had made the offer? 

A. Yes, sir. I think so. 

Q. Didn't you, in niakinp; the suti;ji:estions ti> 
him in your capacity as Director, suj^jjest that 
it would he well to see if thev could not fin<l 
somehody who would jrive a mon* favorahle con- 
tract than that? 

A. No, sir: that would have se^m vl ridicul- 
ous to have made that suggestion. We <lid 
not know of anv one else who would take the 
contract. 

C^. Did you make any attempt to ascertain 
if there was anvhodv else? 

A. No, sir; it seemed to he useless. 

Q. Had there not heen other railroads huilt 
in the State of California previous to the South- 
ern Pacific? 

A. Yes, sir. 

(I. Did the Western Development Tompany 
huild them all? 

A. I don't think thev did. 

(). Don't von know thev did not ? 

A. No, sir; I have no means of knowing 
whether he did or not. 

il. When did you first hear of the W(»stern 
Develoj)ment ( V)mpany ? 



766 

A. I <Ioii*t know the exU-iit of the \V»^tfni 
I>e\vIo[iiiient Company** FHi?«ine?*>i. 

il. When did you first liear nf the Wt-stt*rii 
I K'Vflopnif-nt Company ? 
A. A inimlKT of yc-ars ajro. 

i^- How many ? 

A. I <lon't riMneniVHT. 

(^. Ha<l you not U-en in tlie employ of thes^^ 
railroail eoq^fratifms for several years Wfon* 
you ever lieanl of the Western I^velopment 
Company: and rlidn't you hear that such c<mi- 
pany was orjranizeil after ymi had !>een several 
y»*ars in the employ of the railroad eom[>anies ? 

A. Yes, sir. 

ii. Tlien don't y«ni know that there weri- 
iith'T raiIro!i«N }>uilt lonir l^i^fore the Western 
l>i'.'e|r>pnient Conifjany was in existence, in this 
Stato? 

A. Yes, sir: hut liow do I know what thev 
huilt. <»r what thev did not huild ? I have nt> 

m 

ni"uns of knowing: what thev did or did not. 

(^. l>(Mrt you know that l>ef(>r(* the Western 
I)(*velo])ni(»iit C()ni|)any existed there were rail- 
roads hnilt in this State? 

A. ('ertaiiilv there wen*. 

(^. Th^Mi when I ask(*d you if the Western 
development ( 'oni|)any had built all of the rail- 
roads in this State, whv did von not sav that 
vou knew it had not? 



707 

A. I tell vou only what 1 know. I am not 
telling you what I guess. 

Q. It could not have huilt the roads that 
were l)uilt before it was in existence, could it? 

A. No, sir, I su|)|)ose not. 

(i. Then why didn't you answer the ques- 
tion, no, wluMi r asked you if that (*onipany had 
huilt all the railroads in this State, that there 
were railrr)ads built before it exist(Ml? Are vou 
inclined to b(» entirelv frank and candid with 
me in answering my (|uestions? 

A. V(*s, sir; I am telling you just what I 
know. What I have to guess at, or what I 
don't know, I tell vou 1 <lon't know. If I have 
t) hesitate and guess and figure as to how long 
a (Mmipany has b(»en in (existence, to answer 
your (|uestions, I tell you I don't know. 

i^. Do you think it would tak(» any great 
amount of guessing to discover the fact that 
there were railroa(is built in this State for years 
before the Western Development Company was 
in existence*? 

A. I didn't suppose* you wanted mi» to gut»ss 
at it, do vou? 

Q. I want you to end(»avor ti answer my 
<|U(»stions candidly, as a truthful man. 

A. I will, if you will put them to me so I 
can answer them. T will answ(T vou truly and 
as well as I can. 

(I, There wiTe other railroads built in this 



7G8 

Stat/* before tlu^ Wostern Development (%)ni- 
ijanv was in existence, were there not? 

A. Yes, sir. 

Q. Why (lid you not ascertain of the people 
who huilt those railroads if they would not give 
vou a more favorable contract to build the 
Southern I\acitic Railroad than the \Vest<M'n De- 
A'eloj)ment Company ? 

A. 1 suppose the reason was be(*ause we had 
no encouragement. 

(}. H(»cause you had no encouragement fnun 
whom? 

A. From any oth(»r companies. As far as I 
am conc(»rned, 1 did not know of anv other 
company that was prepared to build the rail- 
road. We wore compelled to take that contract 
to luiild tliat railroad. W(» didn't know anv 

• 

<)thi»r c(mipany equi|)j)(Hl and ready to do it. 
and that had the means to do it. That is whv 
we were willing to ac^cept their offer. 

(2- l>i<hrt you understand if that was not 
the only reason, the leading reason, inducing 
vou to enter into that ccmtraet; that it was tlu^ 
wish of Stanford, Huntington, Hopkins an<l 
Crocker that that company should build th^*' 
road and have that contract? Isn't that the 
fact ? 

A. That would hav(» an iuHuenc^*. 

il. Is it not the fact that it had; not what it 
wouhl be? Did vou not in fact, in vour action 



769 

as Director, feol controlled by that knowle<ljijc 
and understanding? 

A. Certainly, I felt influenced and controlled 
l.v it. 

Q. Why didn't you say so before? 
• *, « 

A. You di<ln't ask nie. 

il. You and I differ in our recollections. 

A. You did not jnit that question to nu». 

(^. Did you undertake to exercise any sepa- 
arate and independent judgment opposed to the 
yiews or wishes of Stanford, Huntington, Hop- 
kins and Crocker, in your yotes as Director in 
that Hoard? 

A. Y(»s, sir: I was always influenced by 
what I belieyed was for the benefit of th(» Kail- 
road Company. 

C^. Did you undertake to exercise any separ- 
ate and inde[)endent judgment opposed to the 
yiews and wishes of Stanford, Huntington, 
Hopkins and Crocker, in your yotes as Director 
in that Hoard ? 

A. Yes, sir; most assuredly I did. I exer- 
cised judgment of my own. 

il. As opposed the wishes of Stanford, 
Huntington, Hopkins and (Jrocker, I mean; did 
you eyer cast a yot(» that was opposed to their 
wishes, so far as you understood them ? 

A. 1 refus(»<l to yote. 

(^. Have you ey(»r casta yot<* that was oj - 
j)osed to their wishes as you understood them ? 



i i 



n 



A. I doirt remember of ever havinji: done if. 

Q. When (lid you refuse to vote and on wlmt 
subjeets? 

A. I don't remember the partieuhir subje(*ts. 

(^. How often ? 

A. I don't remember. 

Q. When hist? 

A. I don't remember. 

(). Within two or three vears, or a vear, have 
you refuscnl to vote on any subject in opi>osi- 
tion to the wishes of Stanfonl, Huntington or 
Crocker? 

A. No, sir. I tliink not. 

(). Within two vears, have vou ? 

A. No, sir, I think not. I <lon't renuMiiber. 

il. Within tiv(» years? 

A. I don't rt^membei'. 

i^. Within t(»n years? 

A. I don't n^member any partieuhir tim(*. 

(^. What actuated you in refusing to vote? 
What was your motive and n^ason for ivfusing 
to vot(» un<ler those circumstances? 

A. H(»cause it did not miH»t with mv wislies 

«. 

or approval. 

(^. It did meet with the approval of Stan- 
ford, Huntingt4>n, Hopkins an<l ("rocker, did it ? 

A. I don't know; I sui)pose it did. 

(^. What was it that did not meet with your 
a|)proval ? 

A. ^fy impn^ssion is that tlu^ on(» that I re- 



771 

moinl)or most particiilarh^ was tbo electing of 
Mr. Colton as Financial Agent. 

il. Yon say you did not vote on that })rop()- 
sition ? 

A. I did not vote on that projmsition. 

Q. Were you present at the nie(»ting ? 

A. Not at the first meeting. 

(I. Were you i)resent at the meeting when 
the office was created and he was elected? 

A. Not the first meeting. 

Q. Were you present at the meeting when he 
was elected Financial Director? 

A. First? He was elected at ditterent 
timers. 

il The first time? 

A. No, sir. 

(). W(»re vou (consulted ahout whether there 

** .. 

should he anv such office (*reated? 

A. No. sir: 1 was out of the State. 

(^. W(^re you ask(Hl to att^md the meeting? 

A. I was ahsent. 

(I. Where were you? 

A. I was Fast. 

Q. What vear was that ? 

A. 1870 or 77, I think. 

Q. Which ? 

A. 1 don't remember; one oY the other. 

Q. What part of the year ? 

A. Towards the fall of the vear. No, sir, it 
was not; it was in the spring of the year. 



772 

Q. How early in the spring ? 

A. That I don't romember. I think some- 
where^ about Febmary, March or April. 

Q. What is your calculation of the end of 
spring? What month ends spring in your 
judgment? 

A. What do you mean ? 

il. What is the last month of spring? When 
you sp?;ik of the season of spring, what months, 
ilo vou include in them ? 

A. I iudsce that Mav is the last month of 
s{)ring. 

Q. Th(»n it was a meeting in May, 187(5 or - 
1877? 

A. N<>, sir. I siiid Februarv or Marclu 
didn't 1? 

<2. Then it was a meeting in February, 
March, April or May, was it? 

A. V(^^, sir; onc^ of those months. 

(J. An* vou entin^lv sure about that? 

A. Vt»s, sir; 1 am (juite confident of that, 
IxM'ause it occurred wlu»n I was Fast, and \ was 
Fast in th(» winter or spring of the year. 

(). WhcMi did vou ic^ave this State to ^o 
Fast? 

A. [ was abs(M>t alnuita month, a little over 
n month. 

Q. When — in what month did you Ic^ave tlu* 
Stat(* to go Fast? 

A. It was in tlu* s{)ring (if the year, in tlu*- 



773 

last of winter or the spring of the year. I 
tliink it was in March. 

(2. Have you any means of ascertaining? 
A. No, sir; not without consulting my 
hooks. 

Q. How often havt» you been Kast within 
the last six years ? 

A. I have not been East at all within six 
vears. 

Q. How oft^^n have you bei»n East within 
eight years ? 

A. I have not been East since that time of 
which F have been speaking — say in 1870 or 

1877. 

(2. You cannot riH'ollect which it was? 
A. No, sir. 

C^. How long (lid you remain East? 
A. J was absent about five wepks. 

Q. And then returned to California? 
A. Yes, sir. 

il. Your entire absence would be about 
seven weeks then, would it? 
A. No, sir; about fiv(^ weeks. 

Q. You did not remain there tiv(» weeks, 
then, but only three w'eeks? 

A. I was absent about five weeks. 

Q. And that was in the spring of the year, 
and it is your understanding that that time was 
the first time that (Jeneral Colton was elected 



Financial Director of the Southern Pacific Rail- 
road ? 

A. Yes, sir. 

Q. Had he been the Financial Director of 
any of the other companies prior to that ? 
A. 1 don't know. 

Q. Had you anv connection with the Central 
Pacific Railroad Companv ? 
A. No, sir. 

Q. Did you express your disapprolmtio'i of 
the selection of Mr. Colton as Financial Direc- 
tor of the Southern Pacific Railroad ? 

A. As s(M)n as I returned home. Yes, sir: 
most emphatically. 

(^ To whom? 

A. To ^fr. Willcutt, and afterwards to Mr, 
Stanford. 

<). To anvlxnlv else? 
A. Yes. sir. 

(I Wliom? 

A. Mv. Kdward Hopkins and Stephen (Jage. 

(). Anvhodv else? 
A. I doiTt remember. 

i). You don't ivmember anvb<Klv else? 

A. Xo, sir. 

(^. Wlien did you expn^ss that dissatisfac- 
tion to (Governor Stanford? 

A. A tew davs after mv ivturn from the 
East. 



775 

Q. Did you make a special visit to him for 
that purpose? 

A. Yes, sir. 

Q. Where did you see him? 

A. In hi*? office. 

Q. Did you remonstrate very strongly 
against it? 

A. I did. 

il. Did you stat^ to him the ground of your 
objection? 

A. Yes, sir. 

C^. Did you t<^ll him you thought it would 
he prejudicial to your int<^rest as a stockholder 
that Mr. Colton should be in that Board as Fi- 
nancial Director? 

A. I objected to it on the ground — 

l^. [Interrupting.! Did you hear my (jues- 
tion? 

A. T did not (^\j)r(»ss it in your words. 

(l. Answer my (juestion. It was disagre(»a- 
l)le t^) you to be in the Hoanl with Mr. Colton, 
wasn't it ? 

A. Xo, sir. 

il. That was not tlu* reason of vour remon- 
stranc(» and objection? 

A. No, sir. 

C^. You failed to attend the ne.xt meeting 
held to elect Financial Director, did von? 
A. No, sir. 
Q. Were you at the next meeting ? 



776 

A. Yc^, sir. 

i^. How (lid \'ou vote? 

A. I (lid not vot^ on the proj>ositi(m. 

Q. You remained in the room ? 

A. I (l(m't remember whether I did or not. 

(). Was vonr name called, and did vou de- 
dine to vote ? 

A. Xo, sir; mv name was not called. 

(I. Were yon ask(»(l t^) vot^» ? 

A. No. 

(I. How was th(^(iU(»stion |>ut and (*arri(Ml, if 
it was carried? 

A. I don't remember now. All that [ re- 
member is that 1 did not voU', 

(I. l>i>(»s the record of that mee^tin^ show 
that vou faihnl or refused to vot(»? 

A. That 1 don't know. 

(I. As r)ir(H^»tor of that comi)any did you 
never (»xanikine the* n^cords of it? 

A. Y(»s, sir; I frin^juently did (\xamine the 
n*cords. 

Q. Hid you (*xamin(» the* n^cord of that par- 
ticular matter? Wen^ vou not inten^sted in 
sc^cMUii: that vour acti(ms and voti^s as a Director 
W(MV |)ro]>erly r(H*orded? 

A. No, sir; F had no (^uriositv and no inter- 
est in (examining it. 

(I. You do not care how they put y<uir votes 
down in th(» record l>ook ? 

A. Certainlv I (h\. 



777 

Q. Didn't you ever examine to sec^ if yon were 
eorrectly reported? 

A. I did not examine them. 

Q. Did you ever examine the records? 

A. Frequently. 

Q. To se(» that vonr votes were eorrectly re- 
corded ? 

A. No, sir; not in reference to that. 

Recess until 2 P. M. 



AFTERNOON SESSION. 

Direct Examination of 
N. T. Smith — Resumed. 

Mr. Havks. Q. Were you consuhed as to 
when and how far the Southern Pacific Railroad 
should he huilt? 

A. No, sir; I d(m't know of anv consultation 
further than what transpired in the Hoard of 
Directors. 

(i- Was action had cm that suhject in the 
Board of Din^ctors; I mean apart from this con- 
tra(»t of the Western Development Company? 

A. No, sir; I don't think it was. I don't 
rcMuemher anything about it. 

C^. <reneral Colton was a Director of the 
Southern Pacific Railroad Company, was he not, 



778 

for more tlinn a voar before voii •\rent into the 
Board ? 

A. I do not remember. I don't think lio 
was. My impression is that I was an older 
Director tlian he, but I am not certain about 
that. I cannot answer about that. liut I am 
under the impression that T was in tlie Board 
before lie came in. 

Q. Were you also a Direc^tor of the lios An- 
{Teles and San IMego Railroad (\)n^panv? 

A. Yes. sir. 

(i. When were you elect^^l a Dinvtor of that 
i'ompany? 

A. I don't remember. 

il. About when? 

A. A number of years ap>. F think ])erhaps 
about th(» same time that I was elected Tn^as- 
urer of the Southern Pacific Kaih'oad Company? 

(2- W(MV you a stockholder in tlu» I^)s An- 
jreles and San l)iejr<> Railroad Company? 

A. Th(» stock was standinfr in my name. 1 
had no stock in my poss(*ssion. 

(). I>i<l vou own, or hav(^ vou ev(»r owuimI 
any st<H*k in the Los Anp^les an<l San Die^o 
l\ailroad Company? 

A. No; I don't think I have*; not in niv 
poss(»ssion. 

Q. At wliose n>((uest did you Ih^'ouk* a 
Director of that comi)any? 

A. 1 don't n^niember. Then* was so little 



i i 



9 



doing ill the company it was seldom we had 
a meeting. We merely kept the organization. 
It is very seldom we have a meeting of that 
company. 1 don't rememher much about it. 

Q. You don't know who requested you to 
act as Director there? 

A. \(), sir. 

Q. How as to the California Pacific? Were 
von a Director there? 

A. Yes, sir. 

(). Do vou own anv stock in that road? 

^ •- • 

A. Yes, sir. 

Q. How much do you own? 

A. Fourttjen shares. 

(2- How long have you owihmI it? 

A. Since 1H71. 

(I. When did you become a Director? 

A. I don't remember; probably 1872 or 
1873, along there som(»where. 

il. Flow, and from whom did you acquire 
thos(» 14 shares of stock in the California Pa- 
cific Railroad? 

A. I bought them fnmi a nnm that was 
broutcht into mv office bv a broker who had the 
stock for sale. 

q. When ? 

A. In, I think, 1871. 

Q. What was the man's name? 

A. lilack Kyan brought the man in. 

Q. Is lilack Ryan a broker? 



780 

A. He was ncting as broker then, selling that 
stock. 

Q. Was not lie generally employed in those 

« 

matters there by StanforcU Huntington ancl 
Hopkins? 

A. He is now, hut I didn't know him then.' 

Q. He was then, wasn't he? 

A. I think probably he was; I don't know. 
H(» had the stock for sale. 

Q. And lu» brought this maji in to you? 

A. Yes, sir. 

(^. Who was the man? 

A. That I dont know. 

(^. Had you been looking for an investment 
in California Pacific prior to that? 

A. No, sir. I bought the stock and paid njy 
own money for it^ and [)aid moit^ than it has 
cv(»r been worth since. 

i^. Were you looking for such an inv(^tm<»nt 
at that times when Bhick Ryan brought this 
\\M\n into von? Fiad vou l>c*i^n ? 

A. No, sir, I had not. He r(*comm(»nded it 
to uw as being a good purchase, and said the 
man wanted to sell. 

i}. How long hav(* you Ihhmi a Dirc^'tor of 
tli(» California Pacific Railroad Connpany? 

A. Since — 1 don^t know; iK^rha[)s 1<S72 or 
'7.*5. I am not ccM'tain as to the dati* — (piit^* a 
number of ye^ars. It might havi^ Ihhmi before 
that. 



^ 



81 



Q. Wliat other roads are you a Director of? 
A. I am a Director in the Market-street 
cahle road, and the Potrero and Bav V^iew — 

Q. I don't care ahout those strec>t railroads. 
What others? 

A. I l)elieve I am a Direct4)r in the Tkiah 
road, not huilt, but organized. I am a Director 
in the Ix)mo Prieata Railroad, and the Santa 
(Jrnz Railroad and in the Monterey Railroad. 

Q. Th(» Monterey and Salinas Vallev Rail- 
road, do vou mean? 
A. Y(»s, sir. 

^\, Do you own stock in that? 
A. It stands in mv name. 

(^. Do you own stock in that? 

A. Not ahsolutelv, no, sir. 

(J. You sav vou undertake to be candid and 

*" ... 

frank with me. You know the m?aninj( of the 
words **own(»tl stock '' ? 

A. You made the distinction yourself. You 
haye got nu* into making this qualified statement 
ey(»ry time you asked the quastion because you 
took m(» up on my replying to you in regard to 
my owning stock in the Southern Pacific Rail- 
roac'; that is the reas(m I make the (jualification 
eyery tim;' that you ask tluMiuostio:!, s.) that I 
may not b.MuisunderstD ) 1, airl v.)a m\v n )t 
LCet mixed. 

Q. When I ask you if you owned stock, isn't 



782 

it a trnthf'ul answei* to toll inc, *' Xo, T <li<l 
not ? 

A. That <lepouds on how you construe it. I 
would tell vou the sU)ek stood in mv name. 

Q. I asked vou if vou owned it. 

A. It is for vou to decide*. 

(i. You know the nie:ininj^ of the word 
^' owned/' whether v(>u owned stcK^k or not. You 
know it is quite common for a man to have 
stock standinjx in his nan^s that he does not 
i)wn. The ([uestion was, '* Did you own stock 
in that road." 

A. I answered, too, that the stock was 
standinjij in my name, hut I had not j)ossession 

of it, that I did not ahsohitelv own it. 

»■ 

(). Do vou own stock? Do vou know 
the meaninjr of owninjj: stock? 

Mk. ^[cAi.listkh. Me savs tlu» stock stands 
in liis name, hut that he do(»s not own it. 

Mr. ]Iavks. Q. Do you own that stock at 
all ? 

A. 1 won't }?ive you any other answer hut 
that unless the Court dircH'ts me to. 

Mk. H.vvks. 1 ask the Court to direct the 
witn(»ss to answer the (juestion, yes or no. 

TuK WrrxKss. I am tc^llinj; you tlu* ti'uth, 

fullv. 

y\n. Havhs. I think I am entitk^l to an an- 
SiVer to the (juestion, yes or no. 

Mr. McVllistku. I tliink ncit. He* savs the* 



783 

stock stands in liis nanus an<l that lio <l()os not 
own it. 

T.iK WrrxK-^-*. I cm i )!: answer it, Vv^s o; n ). 
I do not know whether this stock is intended to 
he (hdivered to nie or not. 

TiTK CoritT. The (juestion is how the witness 
understands tlie word, I suppose. 

Thk WfTNKss. A great deal of sto:»k lias heen 
*!:iven to nie at different times. 

Mr. M( Allistkr. He mav he said to own 
stoc^k in his name. He has the legal title, l)ut 
he may not absohitely own it. 

Thk Witnkss. There has heen stock giv(»n 
to me in different companies. I have sold it, 
and it was mine absolutely. I don't know 
whether this is intended for mo or not. I can- 
not answer the (piestion. 

Thk ('orRT. i^. Then you don't know 

whether it is vour own or not? 

», 

A. No, sir. 

^[r. Hayks. Q. Where is the certificate? 
A. I don't know that I luive got it. 
(X Did you (»yer hayc* it? 
A. No, sir. 
i^. You nc^yer had it? 
A. I haye prohahly secMi it. 
(^. Didn't you endorse it ? 
A. I think i)erhaps I did, hut I am not cer- 
tain al)out it. I don't remember. 



'84 



(). Do vf>u know the numl»er of vcmrot'i'tifT- 



4-nto? 



In what road do voii roftM- to? 

riic Mont(MW and Sjiliuas Valli'v Rail- 



A. 

road. 

A. No, sir. 

i^. How many others *::' 

A. 1 don't know. 

Mh. Hayk.^. [To Mr. McAllistt-r. [ W(* will 
nsk you to prcKluco that certificate. 

i^. Who did you give it to? 

A. I don't ren^eniber. It is not an active^ 
road. 

Q, Who was the Secretary of that company? 

A. 1 tliink Mr. Willcutt is. I think he is, 
hut I am not certain. 

(). Fron> wliom did vou r(^*eiv(» Uw stock \ 

A. I don't rem(Mnh(»r. 

Q. J low is it witli tlu» St<K*kton and (*op|)(»r- 
npolis Kaih'oad ? 

A. I was a Din^ctor of that road at onetimt*. 
I don't know whetlier T am now or not. 

t^. I>id you (»V(»r own — and F use tht» word 

" own " as c )ntra listingiiished from sto/lc m »re- 

Iv sLindin»* in vournani \ and n )[ ]yAo\vn\\'x, in 

fact, to vou — lid vou (»ver own anv stock of 
• .. . 

that roa<l? 

A. No, sir, 1 don't think I did. 

(^. Was th(» stock standing in vour name? 

.V. I am not (*ertain al)out that. 1 d(ui't 



785 

know anytliing about that road any inon* than 
that I was made at onetime a Director. 

i}. How as to the Stockton and Visalia Kail- 
road? 

A. I <lon't know anything about that 

(}. Were you a Director of that ? 

A. I don't remember that I was. 

il. Did you ever liave stock standing in your 
namt» on the books of that company ? 

A. I don't know. 

Q, Did vou ever own stock in that com- 
])any ? 

A. Not that I know of. 

Q. Have you r(»ad any of tin* (h^positions in 
this case? 

A. No, sir: nothing that I could rely upon. 

Q. Hav(» you soon (rovernor Stanford's 
<U»position? 

A. No, sir. All that I have seen was wliat [ 
saw in the Chronicle; sonu* bri(»f notic(»s, and I 
have not rea<l but very little in that. 

Q. I am not referring to newspap(»r re|)orts. 
Have you seen any depositions printed in 
[)ami)hlet form, such as this. (Showing.) 
A. Not ouk\ sir. 

(I. When did you first become a stockholder 
of the* Los Angel(»s and San Diego Railroad? 

A. That is a good many years ago. I iloiTt 
renuMnber. Ft is not an active company. 
<i. Are you still a Director in it? 



780 

A. Y(S» sir. 

C^. Tho road is iK^iu*:: oj>orat(^I Uy the ('(Mi- 
tral Pacific, isn't it. 

A. It is leased now. 

(2- 1M<1 you condu(*t any negotiatons which 
\{h\ to tlu» making of that least^? 

A. Y(»s, sir; I agreed to it, I guess. I agnvd 
to the making of the lease. 

Q, Was there any cori>orat(^ action had in 
regard to making this lease? Was there ever 
any meeting nf Directors held upon the sul)ject ? 

A. I don't rememher; I think so. 

Mr. II.WKS. [To Mr. McAllister.] }Tav(^ you 
\\\o record hook of that company here? 

Mr. McAujstkr. Has that Ix^on called 
for? 

yin. Havks. Yc^s, sir; and w;^ cannot exam- 
ine tliis witui'ss witliout the aid of tlu» rec'ord 
hook. It was calli^d for ov(»r a m')nth ago in the 

lirsi' notice*. 

(2. Do you recoll(»ct tlu^ suhj(»ct of that h^ase- 

coming hi^on* th(» lioard of Dinn'tors of thi* Los 

Ang(»l(\> and San Dii^go' Company at all? 

A. I don't nMuemhtM' much al):)ut it (^\cept- 
ing that f c:)llect ea(*lnnonth thr^ am')nnt of n»nt 
lh:it is due — I^he amount of the 1(MS(\ 

C^. D.) you hold any othiM* |>:>sitiou tliiu Di- 
n*ctnr of that roacl ? 

A. 1 am the Treasurer. 

i). Is \vA that the oulv wav vouhave knowl- 



787 

elgo of the existence of that lease that you ooll(u*t 
the rent from the (central Pacific? 

A. That I don't know. I niu^t hvve ha 1 
some knowledfije of the amount heing corn^ct. 

(I, From vvliom and how did you accjuire 
tliat knowledge? 

A. I could only acquire it from th:» |)ro[);.M' 
ource. 

Q. From whom? 

A. It would come from the* SiH*retary, from 
the hooks. 

(2. Who is the Secretar^^? 

A. I think Mr. Willcutt is the Secretary. 

(^. Did you ever examine the hooks to as- 
ci^rtain? 
A. I don't think T did for that purpose*. 

(>. Have vou ever s(»en that l(»asi» in vour 

*' • •■ 

life? 

A. 1 don't rememher it. 

(^. Did you (^ver se(^ it or read its provisions 
hefore it was executed? 

A. If I had never seem it, I could not have 
r(»ad it certainlv. 

<). I did not understand vou to sav vou had 
not s »en it, hut that you did not renumber. You 
do not undertake to say that vou were consulted 
as to to the making of that leases or took any 
action as a Director in regard to the miking of 
it? 



788 

A. Xo, sir. [ haw no ivnu»inl)ranciM>f it ??(> 
far l)ack. 

(^. How far back is it? 

A. T hav(» Ihhmi colkn'tiiig tlio ront for si^^voral 
V(»ars. 

il. How many? 

A. I <lon't rom(Mnl)(»r. 

il T(Mi ? 

A. I cannot toll^ and I am not going^tojniess 
at it. 

i^. Fiftcc^n, 

A. I liavo not Ikhmi in the employ of tlie 
company fifteen years. 

(I. T want yonr Ix^st recollection. 

A. I don't know; I cannot tell yonanythiii": 
mon* than 1 know. 

(I. I don't want yon U> j^iiess at it, hut I 
want your best recoll(H*tion on tlu» sul>j(>ct. How 
many yc^ars is it sinc(» the lease was first made ? 

A. I don't r(Mii(Mnl)(»r; I cannot remi^mher. 

i^. Vou haye no nvi^llcction on that subject, 
hayi* you? 

A. No. sir: I haye no n»coll(H'tion. 

(^. Hay(» th(» tei*ms of the 1(nis(^ cy(»r Ixh'U 
rhan«::<Hl? 

A. I <lon't rem(^mb(»r. 

(2. Wlio built Xhv road? 

A. I don't know. 

(^. As 1 «rath(4* th(» information from the^ 
stat<Muent furnislu^d inv from tlu* Railroad ( )ttice. 



789 

>rr. Smith, vou were elected a Direetor of that 
road on Julv .*ilst, 1878. Was tho road l)uilt at 
tliat time ? 

A. I cannot answ(»r positively. I have n(»ver 
s(»tMi the road. 

Q. Do you know if th(»re is any road then*? 

A. Not from my own ohservation. I sup- 
])os(» — I have (»verv n^ason to suppos(^ th(M*(^ is a 
road. 

i^. Yon don't know who the contractor was,' 
if tlien* was on(», wlio huilt it? 

A. No, sir. 

t^. Do you know an^'thiufj: ahout what com- 
l)ensation the contractor, or whoev(»r it was 
that huilt that road, if it was l)uilt, r(»(»(Mved ? 

A. No, sir. 

(^. I do not su|)|)ose th(*re is any use of ask- 
iu^ if you know of any change* in th(» terms of 
the contract; if vou do not know of anv con- 
tract, or anything ahout the huilding of it? 

A. No, sir; I don't know much ahout the* 
road, only 1 am collecting n»nt for it every 
month. 

C^. You have h(»(Mi a Director of that roa<l 
continuouslv since Julv .'{1st, 1878, hiiven't 
vou ? 

A. From tin* time I was first (»lected I have 
Ikhmi a Director contiiuiouslv. 

t^. No, sir; I think that is a mistake. From 
August, 1880, to November, 1880, you do not 



790 



seem to have Ikhmi a Director. Thero seems to 
have been two months during that year that you 
were not a Director ? 

A. I think not; I don't remember anything 
( f that kind. 

Q. Notwithstanding you are a Director (^f 
that road, you know nothing about who built it 
or what compensation was paid; what changes, 
if anv, W(»re made in the terms; wheth(»r th(^ 
contract prict^ for the Iniilding has ever beiMi 
paid or not. You have no knowledge upon any 
of tlu»s(» subj(H*ts? 

A. No, sir. I think that road was built 
when I cam:» in as Dire(*tor, and that all the" 
business w(» have had to <lo has Ikhmi to lease 
the road. 

(I. That is your Iw^st r(HMjI(H*tion up(^n that 
subj(^ct? 

A. That is mv In^st r(^*oll(»ction. 
<2. Von took no[)art in the ni^gotiations that 
1(m1 to the making of the h^asc^? 
A. I don't r(»miMnb(»r about it. 



Choss-Examinatiox of X. T. Smith. 

Mil. M:\Vllistkk. .(>. You sav vou calliMl 
upon (Jov(M*nor Stanford and made some objec- 
tion t) tlie (^l(M'tion of ^^r. ('olton as Financial 
l)Irc:'t;)r of tlie company — .)f the Central Pacific* 
ur the South(»rn Pacilic^? 



791 

A. (^r the Southern Pacific. 

(I. Was he the Financial Director of both 
companies — the ('(Mitral Pacific and the South- 
ern Pacific? 

A. I (lon*t know anvthinjr about the Central 
Pacific, (excepting from hearsay. 

(2. Do you know that he was elected Finan- 
cial Director of the Southern Pacific K.xilroad 
Company? 

A. Yes, sir. 

C^. KI(H*ted more than ()nc(»? 

A. Yes, sir. 

(). You say you went to (Joyernor Stanford 
and objected to his election? 

A. Yes, sir; when I roturn(»d from the East 
and found he had been elected, I went to Ooy- 
ernor Stanford an<l protested ajjainst his elec- 
tion. 

Q. What was the fi:round of your ol)j(H*tion? 

Mr. Havks. I object t^) that question as irn»l- 
eyant and immat(»rial. 

Mr. McAllistkr. We think, as they hay(* 
broufijht out this objection, we haye the rij^ht 
to know the character of it. Th(»y aske^l what 
the objection was. 

Mr. Havks. Xo, sir: W(» did not. 

Mr. ^FcAllistkr. They wanted to know 
whether he objected to Mr. Colton's luMng a 
Financial Director, because of his inten^st in 



792 

tlis stcK'k and hc^ said no; that was not the 
roason. 

Mr. Havks. That is true. 

Mr. McAlijstkr. Tlien thev \v(Miton to ask 
wliat tho roason was. We think that, they hav- 
ing got a part of the conversation, we are en- 
titled to th(» halanei* of it according to the ordin- 
ary rules. 

Mr. FIavks. I do not think we have had anv 
part of it. I asked him if he had said one- 
thing, whicli he said he di(hi*t recollect. I did 
not ask him what his objection was. 

Mr. M(\Vllistkr. They have prov^en that hc^ 
w(Mit to (}overnor Stanford and objected. That 
brings in a i>art of the conversation, and ac- 
cording to familiar ndes we an^ entitled to tlK*- 
balanc(» of it. 

ThkCoirt. On that subject vou mav ask 
Iiim. 

Mr. Havks. W(^ take an exception. 

Mr. McAm.istkr. Q. What was your ol)- 
jection to (J()V(»rnor Stanford to tlu* election of 
(Jeneral Colton as Financial Director of the 
SoutluMMi Pacific Railroad Company? 

TuK ( 'orirr. As statc^d at that time ? 

Mr. McAli.istkr. Q. V(»s, sir: at the time 
r)t' this (conversation with (lovernor Stanford re- 
ferred to in voiu* contract ? 

A. I obj(H't(M^l on the ground of its IxMUg* 
dange-rous to put so much powtM* in the hands 



793 



of ono man, and that I had not full confidiMioe 
in the* integrity of Mr. Tolton. 

Q. Von spoke of your hoing a Director of 
some street railroads. Is that eorn^et — the 
Market Stre(»t Railroad? 

A. Yes, sir. 

Q. Were you a I)irect^)r on the* Markt»t Street 
1 {ail road ? 
A. Yes, sir. 

Q. In any other street railroa<ls hesides 
that ? 

A. In th(^ Potrero and Hav Yiew. 

(>. Did vou own stock in that, road, or was 
the stock of those roads simply standing in your 
name? 

A. The stock was standing in my nami^ I 
was not the ahsolute owner of it. 

Q. You did not reallv own the stock? 
A. No, sir; I did not. 

Q. You had stock standing in your name in 
the Market Street cahle road? 
A. Yes, sir. 

Q. In the Pi)trero and Bay Yiew roa 1? 
A. Yes, sir; and the Mission Rav Bridaje 
('ompan3\ 

C^. Hut you did not own those stocks? 

A. I did not have it in my possession. 

i}. You were not the real owner ? 

A. Yes, sir. 



^94 



Re-t)irkct Examination ok X. T. Smith. 

Mr. Hayes. Q. How long before this eonvor- 
sation that vou had \vith (lov^ernor Stanford in 
which you objoctcMl or ^'protested/' I believe i>^ 
your language, against General Colton beinjc 
(*lected Financial Director of the Southern Pa- 
cific Riilroad, had (leneral Colton h?en con- 
nected with the road? 

A. I don't know. 

Q. Welly give us your best idea alK>ut it. 

A. My impression is somewhere near two 
years; j)erhaps more, i>erhaps less. 

Q. After he had l>een a Director in that 
road ? 

A. Yes, sir. 

Q. Th(^ President of the road? 

A. V(»s, sir. 

Mr. M(.'Ali>istkr. C^. Of th(^ Southern Pa- 
cific liailroad ? 

Mr. Havks. Y(»s, sir. 

Ml?. McAllister. Q. He was Pr(\si(UMil of 
the SouthcM'n Pacific Raih'oad? 

A. No, sir. 1 didn't sav so. The tawvcr 
said so. 

Mr. Haves. I ask you the cpu^stion: Was 
\w tlu^ President of th(^ road ? 

A. 1 don't think he was President of the 
road. 

(2- What office other than Director, if any. 



795 

(lid he hold in the road, prior to that time? 

A. I l)elieve at one time lie was tlie Vice- 
President. 

Q. Did he not give more orders or directions, 
and did he not have the general management of 
the road more immediatelv under his direction 
and control than anv other man in that huild- 
ing? 

A. I don't know. He was mon* active; hut 
I don't think his authoritv was ahead of other 
men in the huilding. 

(I, Did you ev^er protest against his heing a 
Director, and having so much authoritv and so 
much to sav and do ahout the road hefon* that 
time? 

A. No, sir. 

(), What did (rovernor Stanford sav to v<>u 
when vou made this ohjection? 

A. \V(41, he said that thev must trust som^- 
l)odv, hut he was not aware until I relat(Ml the 
circumstances to him, that he had boon invested 
with so much power, and he said that he would 
think the matter over; and was glad that I had 
spoken to him ahout it and called his attfMition 
to it. 

(^. (Jovernor Stanford told you that, until 
vou called his attention to it, he was not aware 
that General Oolton had been invested with so 
much power? 

A. Yes, sir. 



796 

Mk. Havks. We will offer in evidence* this 
mortgage from the Southern Pacific Railroad 
Co npany to D^O. Mills and IJovd Tevis, dated 
April 1st, 1875. It is made to secure 48,00; > 
bonds, aggregating th(» sum of forty-six million 
dollarSy and is a lien upon th.^ fallowing de- 
scribed property: 

'" Til? whole of the railroad and t'cOegrapli lin:-- 
'* of the said company, running from the city of 
** San Francisco in the State of California, in a 
** southerly and southeasterly dir(»ction by wav 
'* of Carnalero Junction, Salinas Valley and 
" Polonio Pass to the ( Colorado Riyer at or near 
** the ' Needles '; also from Carnadero Junction 
** to San Benito; also from Los (Jatos Creek 
'^ yia (}()shen to the junction with the first nu»n- 
*' tioned line betw(*en Poso Creek and KtM'ii 
"' Hiy(»r; also from thejunction near Tehachapi 
'' Pass yia Los Ang(»les to the T(»xas 
" Pacific Railroad near Fort Yuma and from 
'* Los Angel(»s to Wihnington on San Pedro Pay, 
" agj^n'giting eleye-n hundrcMl and tif\y miles ot 
*• railroad and telegra])h V\Ui\ including all the 
•• rijilits of way, roadway, track and tracks, to- 
'' gethcM* with all the superstructures, <le|>ots, dc- 
•' |) )t gi'oiin Is, station house's, watering phic(»s, 
'* work sli(>;)s, macliinc^ sho|)s, machin(»ry, Kidi- 
" tracks, turn-outs, turn-tables, W(Mghing scales, 
•' loconiotiyes, tenders, cars, rolling stock of all 
" kinds, full e(|ui[)ments, fixtures, tools, and all 



797 

" otluT i)i'«)portv wliicli msiv ho nocossarilv or or- 
'* dinarily used in operating or repairing th? said 
*' railroad, including all of the said propc»rty which 
** is now or may hereafter in whole or in part 
** ht^ constructed or completed, purchased, ac- 
** (juired, held or owned hy the said ('.)m- 
'* piny pertaining to said railroad and all 
'' till* corporate rights, privileges and fran?his(M 
'' of said company pertaining to said road, 
'* together with all and singular the tenements, 
*• herodit-imimt-^ and appurtenances thereunto 
**hdonging and appertaining, and th * rever- 
*' sion and reversions, remainder a:i 1 remain- 
'* ders, rents, incomes, issues and proH^s t}i:M\?:)f, 
'• with all the rights, titles, interv^st^ estatv»s, 
** property, succession, claim and demand, in 
'' law or ecpiity of the said party of th? first 
** part, of, in and to th> sam\ or any part and 
** [)arc(»l thereof." Duly signed hy Charles 
Crocker, as President, and J. L. Willcutt, as 
S.H*retarv of the S(mthern ' Pacific Railroa 1 
Company, with (•ori):>rate seal attached; aiid 
als) hv I). (). Mills and Llovd Tevis, as Trus- 
tc»(»s. 

The a'*:*:»pl:a'i v of th » tra-^t hy th j TiMsi ».»-; 
is on the .'M of Julv, IHTo. Ft is recorded in 
all of the counties through which the roa<l 
runs. 

Mh. Havks. 1 will next offer and read in 
evidence one of the honds of the Southern Paci- 



798 

fie, attached to tliis mortgagf*. It n»a(Is as fol- 
lows: 

''TlTK rXITKI> StATKS OF AmKRI(^\. 

«innn ^ ^" United Stntee In United States ) *iiwia 
^^^^^^* \ (ioldCToin. [Vignette.] Gold Coin, p^^'^ 

First Mortgage* liond. 
Xo S<»rio8 **A.'' 

Th(* S;>iith(»ru Pacific Railroad (of ( 'alifornia.) 
For valu(» n^coived, promises to pay one thou- 
sand dollars to Mark Hopkins, or hearer, in the 
citv of New York, thirty years from the dati*- 
henM^f, with inti^n^t th(»reon, at tlu» rate of six 
j)er centum per annum from sai<l date, payahlo 
scMui-aniuially. on tlu* first day of OctoluM* next 
ensuing, and on the first (hiy of April and Oc- 
toI>er in such year ther(»aft(»r, in tlu* city of New 
^^>rk, on presentation and surrcMider of the n*- 
spectiycM'Oupons luMHuinto annexed, hoth princi- 
pal and interest payahle in United States gohT 
coin, at par, dollar for dollar. Thishond is one of 
seri(»s'\\''of th(» first mortgage honds, issued and 
tol)i» issu.' 1, hy tlu^ said Snithorn Pa^'ific Railroad 
('om])any in sc^yiMi series, designated r(»sp(H'- 
tively hy thi' lettcM's of th(» alphaln^t, commiMic- 
ing with " A" and ending with *MJ,^' hoth in- 
elusive^ Series '* A," consisting of thirt(»en 
tli:)usand Ixmds, for on(» thousand dollars (»aclu 
iiumhenMl from one to thirteen thousand, hoth 
inclusive, and four thousand IxMidsfor fiye hun- 



799 

(Irod dollars ea?li, nuiiiV>ere.l from thirti^.Mi thou- 
sand and one to seventeen thousand, hoth in- 
(*1usive. S(»ries 'Mi" to " F/' hoth inclusive, 
eonsistinjj: (»ach of five thousand honds, for one 
thousand dollars eaeh, numbered from seven- 
te(»n thousand and one to fortv-two thousand, 
hoth inclusive, and s?ries ** (r," consisting of six 
thousand honds for one thousand dollars each, 
numln»red from fortv-two thousand and one to 
fi)rtv-eij^ht thousand, b:)th inclusive. All of 
said honds heing payable thirty years after their 
resp:H'tiv(» date, with the interest at the rate of 
six p(»r centum per annum, payable semi-annu- 
al 1 v. 

The said si»ries '*A'' to bear date April first, 
eighteen hundn^d anrl seventy-five, and the said 
stneral succeeding series to bear such dates re- 
spectively as the Hoard of Directors of said 
companv mav direc*t; all of said b:)nds agii:re- 
gating the sum of forty-six millions of dollars. 

Till* hold(^r of any such bonds is to have no 
l)r(»ference ov(»r any other hold(»r of any of said 
b()!ids by reason of any priority in di\U\ or the 
tim? of issuing*the sam(», or otherwise. 

All of said bonds are secured by a mortgage 
or d 'imI of trust, bearing even dat;^ with tin* 
bonds constituting series '*A,'' dulv executed 
by said company to I). (). Mills and Lloy<l 
T(»vis, San Francisco, ('alifornia, as Trustei's, 
upon its railroad and telegraph lines in th(» 



800 

pStat(* of (California, runiiing from tho city of 
San Francisco in a southerly and southeasterlv 
direction hy wav of Oarnadero Junction, Salinas 
A'alloy and Polonio Pass to the Colorado Riv(M* 
at or near the*' Needles ''; also fn)m ('arnader<> 
Junction to San Benito: also from the rx)s(fatos 
l.'reek via (foshen to the Junction with the first 
mentiontnl line hetween Poso Creek and Kern 
River: also from the Junction near Tehachapi 
Pass via Los Anp^eles to the Texas Pacific Rail- 
road neir Fort Yuma, and also from L')s Angeles 
to AVilmington on San Pedro Bay, aggregating 
eleven hundred and fiftv utiles of railroad antl 
telegraph lincN with all the rolling stock, stations, 
fixtures and franchise for the permanent use 
thereof, and the appurtenances thereto now 
own(»d or h(»ld or that may he hen^aftcM" ac(juire<l 
1)V said Company for the permani^nt use (^f said 
railroad an<l telegraph lines. 

Also, up )n all the lands gTant(sl to said (*om- 
[)any hy the Congn^ss of the Uniti^l Staters to 
aid it in the construction of saitl railroad ami 
t(»l(»graph liui^s, not sold or otlu^rwise disposiMl 
t>f prior to th(^ (»X(»cution of said mortgage, ag- 
gn^gating, as ni^ir as can lu* estimated, eh^vcMi 
millions of acres. 

In testimonv wh(»r(M>f, the Soutlu^rn Pacific 
Railroad (-ompany has (*ause(l its corj)()rat(^ seal 
to he luM'eunto attixed and these presents to he 
sii^ned hv its Pns^ident and Secn^tarv this fir,"<t 



801 

(lay of April in the year of our Lord oiio thou 
sand eight* luindred and soventy-fivo. 



Pn^sidont. 



Socr(»tarv. 



1* 



Mr. Hayks. Tho signatures of the President 
and Seeretarv are omitted here. Mr. Willeutt 
was Seeretarv, and who was President ? 

Mr. McAllistkr. Charles Ooeker, I think. 

Mr. Hayks. To thishond is attached the in- 
terest coui)ons for the thirty rears. Tho hond 
and mortgage are hoth considered in evidence*. 

Mr. McAllistkr. Yes, sir; you have* got 
what you want. There are one or two provis- 
ions that we mav want. 

Mr. Hayks. I mav want som(»thing further 
from it at a hiter time*. 

Mr. McAlustkr. VVi* wouhl like tohav(»the 
following : 

** WuKRKAs, hy an Act of Congn^ss of the* 
" I nited States of Am;'rica, approved on the 
'' 27th (lav of July, A. 1). 18(50, entitlcMl * An 
" Act granting lands to aid in the construction 
*• of a railroad and telegraph line from tin* 
*' State of Missouri and Arkansas to the Pacifi(* 
** Coast/ th(»re was granted to tlu* said South- 
** ern Pacific Railroad Company, party of tin* 
'* first part, a large hody of puhlic lands of the 



802 

•' rnitcil Stiites. to wit: everv jiltcraatc soctnui 
** of public lands, designated by odd numbers, 
'* to tb(» amount of ten alternate sections per 
'^ mil(» on eaeb side of tbe raih'oad and teb»- 
'' grai)b line* of said Company running'' in tb'> 
rout(» read ])V Mr. Haves. T want a reference to 
tbat particubir Act of. Congress. I .also want 
tli(» following: 

'' WuKKKAs, bv an Act of Con<!:ress. of tbe 
''^Unitefl States of America, approve! on tbe 
^'tbird day of Marcb, oigbteon bundred and 
**s(»venty-one^ entitled ' An Act to incorptirate 
"til* Tex IS l^lcitic• Hiilroal Coni[)any 
**and to aid in tbe construction of its Road, and 
'*for otluM* jnirposes/ tbere was granted to tbe 
'^-^ai 1 Sv)iitb:»rn Pacific Riiilroad C;)inj>anv tin- 
•*ant'i')ritv t') construct a liiu* of H iilro;rl from 
*';i J) )int nearT(»bacbai)i Pass, l)y way of L)s An- 
"^'gi^les, to tbi»T(»xas Pacific RailrcKid, at or near 
"tli:M'olorado Riv(M*, witb tbe same* rigbts, land 
'•grants, and privileges, and sul)ject to tb(» same 
"limitations, restrictions and cJMiditions as w»m\' 
'•gr<int ' 1 t ) and iiup^s ^l up )\\ tb » said S nitluM-n 
**P<r.*ili • R lib'oad Companv of ( 'alifornia. bv tbe 
"aforesaid Act of. Inly 27tb, eigbt(»en bundred 
"and sixtv-six, b:'fore re-ited, subj(H*t tc) tb<- 
"riglits, pn^scnt antLrprospectivc, of tbe Atlantic 
'an I Pi'ltic R iilr.>rl rV)iupany, wlii(*b said last 
"lin:^ i)f R )a(l is of tbe liMigtb of tbree hundred 
'*a rl H!'tv six and seven oiic-bundredtbs miles.'* 



804 

^* Also, thv railroad eoinnuMirinf^ at a point 

'* on said main line at or near Davisville, in th(* 

*' County of Yolo, thence runninj^ throufjh 

** said ( -onnty of Yolo, and into the Countv 

** of Saerumento to the* Oitv of Sacramento. 

^' in the State of- California, said railn)ads heing; 

*' in the ajrgregate 210 niiles in length, as near as 

*' may h{\ including all the rights of wav, road- 

*' way and tracks, together with all the super- 

** structures, de{x>ts, dei^ot gi'ounds, station 

'* houses, watering places, work shops, repair 

" shops, machine shops, machinery, ^^ide tracks,. 

*^ turn-outs, tuni-tahles, weighing scaler, loco- 

'* motives, tenders, cars, rolling stock of all 

"' kinds, fu(^l, (H]uipnients, fixtures, tools and all 

'' other property which may he necessary or 

'' ordinarily us(m1 in o;x»ratlng or rt»pairing tlic^ 

'' said railroads, including all of said property 

'' which is now^ or mav luMvaftc^r, in whole- 

"' or in part, he constmctcNl or coni- 
'* |)let(Ml, |)ur(*has(Ml, ac(|uired, h(»ld in 

^' ])oss(»ssioii or owikhI hv sai<l company p;M'- 

'* tainingto said railroads, and all the corporate 

" rights, privil(»g»s and francliisi\^ oftli.'said 

"' company [)ertaining to said roads, tog(*th(»r 

*' with all and singular, tlu^ tenem.Mits, hercdit- 

'• aments an 1 appurtennnc(>^s tluMHunito aj)p;»r- 

*• taining and lu^longing, and the r(*V(*rsion 

'' and rcwrsions, r(Mn:iin:ler and rcmund(»rs, 

"• nMits, incomes, issuers and [)rofits thcn^of, with 



8.)5 

** all the right, title and iiiterc^st, (v^t.ite, proj)- 
'• orty, possessions, chiim and demand, in law 
" and in e:|nity, of the said party of the firs. 
'* part, of, in, and to the sam * or any part or 
*• parcel thereof, to have and to hold th:» ahovc* 
" grante 1 and des:u'ih.»d premises, property an I 
'' franchises, with the appurtenances, unto the 
'• said parties of thi» s:HM)nd part, a!rl tf) the 
" survivor of them, and to their suc(*ess()rs dulv 

• 

'• appDinte 1, up )n trust, and for th? use and 
'' IxMiefit of the p(»rson or p:»rsv)ns, h ) ly or 
'' 1) ) lie^, p )litie or c )rp:)rate, who shiU l)\*)m.» 
" or he, from time to time, holders of said first 
'' mortjjjaj:.* b )nd^, or a^iv thr^re:)f." 

It is ex »cate I on th.» dav it h^ars di!; » hv l^i*- 
Ian 1 Stanford, Pi\»si(hMit, and K. H. Miller, Jr., 
S »cMvtary, with the orp )rate s;vd att i 'h^ 1. It is 
also sijj:. led hy Eaji:MvM\dly and H. H. Liid- 
hiw, Trus!:ees. It is acknowle Ij^ed and recordcvl 
in all the counties throuj^h which th » road 
passes. Ft is avkn )wle ln;j 1 April 2 5, 1877. It 
is a?knowle lix^d hv the Trust:r:»s on th » 7th of 
Mav, 1H77. 

I riu* pap »r w.is th'Mi m irkivl ** IMaintitt*s Ex- 
hibit o.*i.'' I 

Mi:. Havks. I will now otter in (»videnc:» the 
m ortpip' of the San Pahlo and Tulare Railroa<l 
Company to Albert (rallatin and Charles Miller, 
Trustees, matle and entonnl into th ^ 2d dav of 
September, lS7cS, to senire :{750 bonds at |100:) 



S 



806 

oivAx, ])eariii*r <ljito the 1st day of ApriK I<S78, 
payal>l(» on the 1st day of April, 1908, bearinjic 
interest at the rate of (5 per cent, per annum, 
payable semi-annually » on the 1st days of Octo- 
l).M" and April in each year, after the datc^ thert^ 
of It is a li(M\ uix)n the following deseril>od 
property: 

*' Tlu» whole of the railroad line of the sai<l 
company, commencing at a point at or near 
Martinez, in the C'Ounty of Contra Costa, in the 
State of (California, and running thence through 
the counties of (.*ontra Costa, San Joaquin, 
Stanislaus, Merced and Fresno to a point at or 
11 Mr Los (latos Cre?k, a distance of loO miles, 
as near as may he, connecting with the South- 
ern Pacific Railroad, being all in said State, 
including all the rights of way, roa Iway, track 
and tracks to^jjether with all the superstructures, 
depots, d(»p()t grounds, station houses, watering 
p!a.\*s, workshops, machine shops, ma(*hinerv, 
side tracks, turnouts, turn tables, weighing scales, 
loi'omotive^, t(Mi(UM\<. cars, rolli,ng stock of all 
kinds, fuel, e(|uii)ments, fixtun^s, tools and all 
ot'ier |)n)])i'rty which may b(» necessarily or or- 
dinarily usiul in operating or repairing the said 
raih*.>ad, in/Uiding all of the said i>n>j)(M'ty which 
is n:)\v o:* m ly her^'aftM*, in wliole or in part, !)(»> 
c )nstruct(»d or complet(ML ])urchas(MK 

ac;|uire.l, lu^ld ov owiiel by th." 

said ('(Hui)any |)ertaining Ui said 



807 

railroad, and all the corporate riglits, privileges 
r.nd franehisps of said company pertaining to 
Slid railroad, together with all a!id singular 
the teneni3nts, hereditamonts and appurten- 
;;nces thereunto appertaining and belonging, 
and the reversion and reversions, remainder 
and remainders, rents, incomes, issues and 
profits thereof, with all the rights, titles, inter- 
(\st, estate, j)ropertv, possession, claim and de- 
mand, in law or equitv of the said parties of 
the first part of, in and to the same, or any 
j)art and parcel thereof." 

Signcul by Leland Stanford as President and 
J. O, B. (runn as Secretarv of the San Pablo 
and Tulare Railroad Co., with corporate^ seal at- 
tached; and by Albert (rallatin and Charles 
Miller, Trustees, and duly acknowledged by the 
President and Secretarv and also bv the Trus- 
tees on the oth of September, 1878. 

It is recorded in the various counties through 
which the road runs. Th(» first record is on 
July IDth, 187i), in Contra Costa ounty, in Au- 
gust in San Joacpiin, September in Stanislaus, 
Merced and Fresno. 

[Said m )rtgag.^ is markel " Plaintiff Kxhibit 
r)4."l 

Mr. Hayk>. W(» will consider this wliole in- 
strument in. 

Mii. M^'Allistkr. It should appear that all 
these mortgages have been delivered to the 



808 

Trustees, and pnx'ured from the Trustees, fi)r 
t!ie purposes of this trial. It looks as if we 
had thiMu in our possess-ion, l)ut tliey are in 
th(* possi^ssion of the Trustees. 

Mr. H ayhs. r thou^^ht thoy were all at tlie 
eorner of Fourth and Townsend ^^treets. 

Mr. M(\Vllister. Th'»y ware kept in the- 
vault th(»re, hut thev were in the custody of the 
Trustees there. We want to show that thev 
liavii been delivered. 

Mr. Hayrs. We eoneiMle that thev have. I 
now otter in eviden(fe the mortgage of the 
Lis Angeles and San Diego Railroad Company 
t > S. T. (lAge and E. H. Ryan, Trust^^s, dated 
December 2d, 1880. 

>[r. McAllistkr. We supi)<>s(>' that is not 
eompc^tent; it is so long after tlu^se transactions. 

Mi{. Havks. The bonds which it was given to 
s.Hnu\MV'i\^ for tht' buildini^of th:^ rojl, wliicli 
was done* long b;»fon» this scttlcMuent. 

Mr. ^[('Ai.LrsTER. I do not think that anv 
Act trans[)iring in Dccembi^-, 1881^, can atti'ct u 
trans-u'tion had on Augu-it 27th, 1871). 

Mr. Havks. The sim|>le object of this 
mirtgag.' is: Wv» hiv sh')w.i th:it th:»si^ 
gcntlcMucMi n^ccMved, in |)ayment of tln*^ 
work don(» by th(^ West(»rn Dtn'elop- 
ment ('om[)any ])rior to January, 1871). 
inst(»a(l of* .fS:i2,()()() of worthless stock, as s(»t 
iorth in "Kxhibit E/' 41(i b;)nds of this com-^ 



800 

])any. \V(» have* sliowii that i\w roatl was huilt 
1)V this eompany without a contraot; that no- 
l)0(lv know at the time it was built wliat tho 
con t met price was; that even at the time of this 
SL»tth>nient it reste 1 presumptively, from th(» 
(evidence alone, in the breasts of theses defen- 
dants, w!nit consideration would be j^iven to tlu* 
West(»rn Development Company for the amount 
expended by it and bibor in building that road. 
W(» have shown that they did {:iv(» 411) bonds 
and a (juantity of stock in payment for that 
work. We now, to secure a basis to show that 
these* bonds were worth something, desire* to 
put in evidence the mortgage by which th(»v 
W(»n» secured. 

y\n, McAllister. The only point legitimate- 
ly to be raised about this road is whether it is 
proj)erly valued, or whethor the prop:»r amount 
of stock is stated, because it aj)p:»ars in our 
** Exhibit " to have Ikhmi of no value. The fact 
that some vears after those transactions a mort- 
gag(» was made and bonds were issued upon it, 
it s{»ems to me can throw no light upon the 
value of this road at the time of this transac- 
tion. We object to the evidence as incomjx*- 
tcMit and too n^moto. It is a transaction which 
transpired more than a y(*ar after this com- 
jiromise. ( )f course they have a right to show 
:;nything that applies to the value of this roa b 
as to its length, capacity, running, etc. Hut a 



810 

niortfijage made can throw no light upon that 
suhject, and it does not come within the period 
«)f time which your Honor has fixed in this 
case. It does not come within a year after 
tlie com])romise. 

Thk CorjiT. Tliis is a diften»nt question, 
thougli, from tlie vahie of lK)nds and stocks. 
The phiintiffs chiim this to he an admission on 
the part of tliese parties as. to the vahie of tht*- 
work done hy the Western Dc^velopment Com- 
[)any? 

Mr. Hayks. Y(»s, sir; and asa security which 
was given to the Western Development Tom- 
l)any for the payment of its compensation. As 
l understand it, all of the honds wen* issued to 
the Western IVvelo[)ment Company f(u* work 
done |)ri(>r to January, 1871), and |>rior to tin* 
settlement, and this was the first time thoy 
were paid. The account for that work is set 
do.vn in tlie stat(»m(Mit as pavahl(M)nlv in stock, 
and 'that worthle«#i. We hav(* shown that in- 
stead of rec(Mving that stock they rcH*eived four 
hundnMl and sixteen bonds and a (luantity of 
stock. In order to show that tlu^sc honds an*- 
worth s:)mething, w(* want to show t\w\v si*- 
t'uritv. 

Mij. McAi.LisTKi^ The road is there; wc* 

> imply call it stock, and they call it lM>nds. Wr 

sav the stock had no value: of course thev can 
«. • 

show thev did have value, hut how a mortgagi* • 



811 
oxccuted more than a vear after tliis tini >, or 

 

tho bonds issued more than a vear after this tini(\ 
can affect tlie vahie of the road I cannot conceive. 
They have jijot the asset mentioned in our Kx- 
liihit; they have ^ot what we understood to he 
the par vahu* stock, and now they want to show 
suhsecjuent transactions. This transaction oc- 
currinji: in Au}j:ust,1879, and this mortgage heinj!; 
made in I)ec(»ml)er, 1880, about sixteen months 
after th(* compromise — we think that is too 
remoter ( )ur issuing lK>n<ls does not affect tin* 
vahu» of th(» road. 

Mr. Havp:s. We are not claiming the road, 
l)Ut we an* chiiming the amount du(» to tlie W(»st- 
ern Dev(»loi>ment Company. 

TiFK CoiRT. The Western D.^velopment 
Company owned the entire road? 

Mh. Havks. That 1 don't know. 

Mr. McAllistkr. It is put down so. 

Mr. Havks. I beg })ardon, it is not. It is 
]>ut down as a certain amtmnt of sto(*k. Whetli- 
vv or not that is the whole, I hav^e no idea. It is 
l)ut down at $882,800. I don't know whether 
that is th(» whoh» stock of the road or not. 

Mr. McAllistkr. That is the wav we under- 
stand it, tliat W(* have put down in this exliibit 
the entire stock of this road as ouo of the as- 
sets of the Western Development Company. 
You cannot change that asset by two or three* 
years after putting bonds on the road. 



812 

^Fr. Hayks. We would like to show \v1h'!i 
this road paid th(» Western Development Coni- 
l)any it paid it, as it did, in lx>nds; and we have 
a ri}j;}it to show the character of those bonds. 

Trk CoiKT. I think I will let it in. The 
l)oint is to show ex«icth'' what they did jret, an<I 
what thev were (entitled to. I don't know as 
thev can show it in anv other wav, if there was 
no contract. ]*ossiV)lv it amounts to the same 
thing, if it should appear that that was all of 
th(» stock. 

Mr. McAi-mstkr. I think Mr. Doutv's testi- 
monv was vi^rv full alnnit this whole transac- 
tion. We will ohject to the evidence, that is 
the n^ortjijajre and Uonds, as immaterial and 
irrel(»vant, and as throwiufj^ no light up:)ii the 
com|)n)mise of August 27th, 1S71), and take* an 
i^KCv^ption to your Hf)n()r's ruling. 

Mr. Havk>. The mortgage is from tlu» Los 

Angeles and San l)iego Railroad ('omi)any t<> 

S. T. (lage and H. H. Ryan, TrustcH\s. It is 

datcvl DircMuluM- 2(1, I'-^HO; is to S(»cure 2H(M) of 

ils l)on(ls at .^KHH) each, all hearing date on tin* 

1st (lav of .lulv, IHSO, p:ival)l(^ on th(* 1st dav of 

.hiiuiarv, 11)10, Ixsiring inten^st at the rate of 

six i)er cent, ive^r annum, from the 1st day of 

.lulv, A. I>. 1S(S(>, ]>aval)Ie semi-aniuiallv on the 

1st (lav of Jamiarv following, and on the 1st 

(lavs of .lulv and .lanuarv in (nich V(*ar there- 
. • • • 

after. 



813 

It is a lion up:)!! the follo\viii,ii^(l(»s':'riI> »(1 [)n)j)- 
(*rtv: 

'* Tho wliolo of tho railroad lino of the sai<l 
(V)ini)anv, comnionciiio; at thi» Citv and Countv 
of Los Angeles, in the State of faliforniaj and 
extcMiding through said city and county and 
tliL^ Countv of San Diego, to the City of San 
Diego, in tlu^ southwestern part of said %Stat(^ of 
California, a distance* of one hundred and forty 
miles, as near as may he, including all the rights 
of wav, r»)i Iway, tra:*k and traek-^, to;i:.»th(M- 
with all thj superstructure, depots, depot 
grounds, station-houses, watering-places, work 
shops, nnichine shops, machinery, side tracks, 
turn-outs, turn-tahles, weighing scales, loco- 
motiv(»s, tend(»rs, cars, rolling stock of all 
kinds, fu»l, (Hpiipm.Mits, tixturvjs, to )ls and all 
olI) u' property whicli m ly b:» niV'^H-Jiirily or or- 
<lin:irily Uv» I in op.^rating or repairinj: th:> said 
r.iilroad, including all of the said pn)p:^rty which 
i-; n )W or may hcTeafter, in whoh? or in part, 
h(» constru(*ted or (M>ni])leted, purch:is;>d, at*- 
<|uired, held or owned hy th:» said company, 
pertainin:^ in sail railro.i 1 an I all t'lM* )ri)irat » 
rights, privileg.vs and franchises of said Com- 
])any pertaining to said road, together with all 
and singular the ten€*nients, hereditaments and 
appurtenances thereunto appertaining and be- 
longing, and th(» reversion and reversions, r »- 
mainder and remainders, rents, incomes, issues 



«I4 

and pro S ti* th woof, with all tlto^rigiitK, titles, in- 

t;^ro^t^ o.st:\t:s property, possession, claim and 

deni-md, in law or equity, of the said party of 

the first part of, in and to the same, or any part 

.or parcjl th(M'(M>fV' 

Executed untler the corporate seal hy Charleys. 

F. Crocker, as Pn^sidcMit, and J. I^ Willcutt, as 

Secret irv, of the r/)s Angeles and San I>iegc> 

Railroafl Company, and UyS. T. (Jage and K. 

H. Rvan as Trustees. 

Ackn )wledj»:ed on th(» 2d day (►f IK»c(»n^l)er» 
1880. 

Recor le 1 in I^)S Anj^.des I>.\*emhi»r (>th, 18S(K 
cMind in Sri J>iei'> IXn^Mnb^r 21st, 18S<). 

This n^ )rt!jjagi» is considered all in, and either 
party can use such pf)rtions as he may dc^sin*. 

Mh. Hayk-;. I will put in c^videncv' a leas;- 
from th.' S>'ith(»rn Pa'dfic Riilri)il C.)m')anv 
to thi^ ( V'utril Pacific Railroad Company, dat(Ml 
S»')^em^:M• 1st, 187r). 

Th" liM-;:* wa^ th'^n m:irkerl *' Plaintitt^'s VZk- 
hihit 5 ) " au I i\':v\ in evid(»nc:^, a< follows; 

Pi>aixtikfV ExnnuT 5(V. 

This i.i 1 ':it;ire. n> i I ' th:* first d.iy of S.'p' »m- 
Kt. a. 1>. 1S7(), l)V a!id h^tww^n t!i » Southern 
Pa 'ifi • K lilrn 1 C )in;).iuv, a c)r|>)ration duly 
in v)rp ):m' ' I an 1 ()r;z.iniz:>d und/r tlr* laws of' 
tlu* Stat' of California, the i)arty of tlu* first 
part, an I tlic^ (/entral Pacific Kailroa<l Company. 



815 

a (M)rj)onition duly incorporated an<l orgaiiizi^d 
under the laws of the State of Califorina, the* 
])arty of the second part, 

WiTXKssKTH, That the said party of the first 
part for and in consideration of the rent herein- 
aft(»r mentioned on the part and behalf of the* 
said party of th(» siK»ond part, its successors 
and assigns, to he i)aid, hath granted, demised 
and letten, and by thes(» presents doth grant, 
demise and let unto the said party of the second 
])art, its successors and assigns, all of that por- 
tion of this railroad and brandies thereof, of the 
said party of the first part, situate, lying and 
being south of the station thereon, known and 

• 

designated as ^'(}osh(»n," now constructed, and 
to b(» hereafter constructed, together with its 
rolling stock, telegraph lines, tools and f)roperty 
of every kind and nature* whatsoever now in use 
therewith. 

And tlu» said party of the first part hereby 
cove»nants and agn*es to allow the said i)arty of 
the second part the sum of ,$250 \n'v mile j)er 
m )nth out of th » sum of money hen»inafter 
cxpr(»sse<l as rent for the said biased railroad, as 
and for operating expemsesof the* road leased as 
aforesaid. 

And the said party of the second part for and 

in consideration of the lease of the aforesai<l 

railroad and other [)roperty as aforesaid, 
hereby covenants and agrees to operate the said 



816 

railroad and to pay to the said party of the 
first part the monthl}^ rental, or sum of five 
hundred dollars per mile, less the sum of 
money allowed for operating expenses as 
aforesaid, in j2^>ld coin of the United 
States of Ameriea, payable monthly until 
t'le termination of this indenture, and it 
is expressly understood and agreed by and Ik- 
• tween the said pjirties of the first and second 
parts hereto, that this lease shall be termi- 
nated and ended sixtv days after written notice 
, from either of the said parties to the other of 
said parties of a desii-e to so terminate and end 
the same. 

In testimony whereof, th(^ said j>arti(^ have 
I>v order of their r(»sj>ectiv(» Hoards of DinH'tors 
r:uis(Ml their resjx>ctive PresidcMvts to sign these 
prescMits. and their S(MTetaries to countersign 
the sami», and their n^sjx^ctive cor|>orate seals to 
he hiTiHinto affixed, as the act and (UhmI of the 
said cor]>orations. 

Signed, sealed and delivered in the pn»s(»nce 
i>f 

Southern PaciHc Kailroad ('om[)any, 

Bv ('mas. (*rockki{, 

Pn^sident. 

J. \a. WlLLClTT, 

[Seal S. l\ R. K. Co.] Secretary. 



818 

#fuin' 21 f)(>ti(MM>f twelve months iustoiul of sixty 
•lavs. 

Now, tlicrcfon*, in consideration of the prem- 
is(»s, the said (M)nipanies do li(»rebv nintuallv 
|)roniis(» and ajfnns eaeh with the other, that 
sai<l Ieas(» shall 1h» anKMidiMl in the ivarticvilar 
refiM'rtMJ to, so as to read as follows: 

** TInit this l(*as(^ shall 1m^ terminated anci 
endetl tw(»lv(» months after written notice from 
tMtlu»r of said parties to the other of said parties 
of a <l(»sin» to so t^^rminate and end the same. 

In t(»stimony whereof the said partiejfi have. 
I)V or(U»r of their res{>ective Board of Directors, 
caused tluMr n*s{H>ctive Presidents to sijjn these 
presents, and thiMr Secn^taries to countersign 
the same, and their rt^jnvtive cor{>orate steals 
to he hereunto attixed as the actinjr^leed of said 
corporations. 

Sis::niMl, si^aliMl and ilelivenMl on the dav and 
vcar aUne mentiontMl. 

S>uthen\ Pai-itic Kailnvatl (%>.. 

Uv fUAS. Ckimkkr. 
[Seal S. W H. K.( o.j I^vsi<ltnt. 

.1. H. WlLUlTT. 

SnTrtarv. 
i'cutral l^\oitic Kailn>;id Company. 

Uv LkLAM* STANFt»RI». 

Pn-sident. 
K- H. Mii.i.KK. .Tr.. 

S-.ivtar\-. 



811) 

\\y a iniitual agrcuMiieiit the loasc luToto an- 
iioxed, l)(»arin^ date of the first day of Septem- 
l)er, A. I). 1870, between the Southern Paeifis' 
Railroad Company and the Central l^leific 
Railroad ( -onipanv is herehv annulled and ean- 

la t. 

c('l('<l. said {•ancclation to take cfl'cct on tho 
first (lav of Mav, A. 1). 1871). 

In testimony whereof, these presents havi* 
luMMi signed by the President and Seeretary of 
the Southern Pacific Railroad Companv and th(» 
Pr(*sident and Secn^tarv of the Central Pacific 
Raih'oad Company, and the corporate seals of 
each of said com])ani(»s have been hereto aftixed 
on this, th(» sixteenth day of April, 1871), {mr- 
suant to the order of the Board of Directors of 
said Companies respectively. 

Chas. Crockkh, 
President South(»rn Pacific R. R. Co. 

J. L. WiLLcrrr, 
S(»crc»tarv, Southern Pacific R. R. Co. 
[Seal S. P. K. H. (V).] 

Central Pacific H. H. Co. 
Hv Lkl.axi) St.vS'ford. 

Pr(»sident. 

K. H. MiLLKR, Jr., 

S(»cr(»tarv. 
I Seal C. P. R. R. (\).| 

Mr. Havks. I next ofter in evidence a lease 
from the Southern Pacific Railroad Company 



820 

(o the (Vntral Pacific Railroad Company dated 
April Kith, 1879, for a term of five years from the 
1st davof Mav, 187t). 

The lease was then marked '* Plaintiffs Ex- 
Iiihit 57 " and read in eWdence as follows: 

- PLAIXTrFFS EXHIBIT 57/' 

This indenture, made on the Ifith dav of 
April, A. I>. 1R70, hy nnd Ixetween the Southern 
Pacific Railroad Company, a corporation duly 
incorporated and organized under the laws of 
the 8tat<» of California, party of the first part, 
and the Central Pacific Railroad Company, a 
corporation dul)' incorj>onited and organized 
under the laws of the State of (California, party 
of the second part. 

Witnesseth. that the i>arty ai' the first i)art, 
for and in coiisid(»ration of the rcMit hereinafter 
mentioniMl to he paid hy t\w party of the s(H*ond 
j)art, its successors and assigns, hath grantt^l 
demised and letten, and 1)V these i)res(Mits dotli 
grant, demis(» and let unto the said party of the 
second part, its succi^ssors and assigns for 
till* full term 4)f five (o) yi^ars from and 
after the first dav of Mav, A. D. l(S7l), all of that 
l)ortion of the railroad and branches thereof, of 
the said party of the first [)art, situate, lying and 
heing south of the station ther(M)n, kno\yn and 
(l(»signated as (ioshen, now constructed i\u(\ to 
he hereafter constructel, together with its roll- 



821 

iiiji; stock, telegraph lines, tools an<l pro[)orty of 

(»vorv kind and nature whatsoever now in use 

therewitli. 

And the said part}' of the second part, for 

and in consideration of tlie aforesaid leasi*; for 

itself, its successors and assigns, covenants and 

agr;»es to and with tlie said party of the first 

party to pay to it at the expiration of eac*h and 

every month of said term of five (o) years th(* 

jiionthly rental of two hundred and fifty dolhirs 

($250) per mile of said railroad and hranches 

thereof in gold coin of the United States. 

It is mutually agreed aiul understood b(»- 

tween said i>artie^ of the first and second part 
that said railroad and other property shall b(^ 
k(»j)t and maintained in good repair hv the said 
party of tlu» s(»cond part at its own separate cost 
and exi>ense, during the c(mtinuance of this 
leas(», and that the same shall he returned by 
the said party of the second part to the said 
j)arty of the first i)art, at the expiration of this 
lease, in as good condition as the same wjis at 
tlu» (hite thereof. 

It is further mutually understood and agreed 
by and betwcHMi the parties hereto, that the said 
lease shall and mav continue l)evond said term 
of fiv(» (o) years, unless either party shall have, 
previous to the expiration of said term, given 
the otluT party twelvi* (12) months' written no- 
tice of its intention to terminate said least* at tlie 



822 

I'XpiniliiUi of siii<l t(»riii, upon X\w sani(» fcrins 
iunl coiulitions lioreinbefore |)rc)vi(le<l. 

It is further mutually understood and agreed 
that unl(»ss this lease he terminated at the expi- 
ration of said tern\ of five (o) years, as hen^in- 
hefore provid(»d, then the same shall continue 
upon the same terms and conditions, until eith- 
vr party^at its option, shall have given the other 
party, at least twelve (12) months notice in 
writing, of its intention to terminate the same. 

It is further mutually agreed and understoo<l 
that th(^ rental herein reserve<l shall he subject 
to readjustment hv tlie mutual consent of the 
parties h(»r(»to, j)rovi(le(l, however, that th(^ 
ivntal to Im^ paid shall nevcM- he less than tlu*- 
sum of two thousand seven hundred dollars, 
($270(1) p(»r mil(» p(*r annum. 

In testimony wlu»r(»of said f)arti(»s havc^ causiMl 
tlu»se presiMits to he signed hv their Presid(»nts 
aiul countcM'signed hv their S(*cr(»tari(»s n^spec- 
tively, and their resp(H*tiv(» cori)orate s(»als to he^ 
h(»r(»unto aftix(»d, jmrsuant to ordiM's of tluMr re- 
spective* Hoanls of l)ire(*tors her(»tofonMna<l(» on 
the (lav and vt^ar first above* writttMi. 

[sKAL.I (^HAS. ('H()(M\KH, 

President of S<nithern Pacific K. H. Co. 
.1. L. \ViLi>crri\ 

Si'cretarv 

S. V. R. H. Co. 



823 

('(Mitral Pacific Railroad Co., 
|sKAL. 1 By Lkland Stanford, l^rcsidont, 

E. H. MiLLKK, Jr., S(HT(»tarv. 

• 

** By a mutual agreement the lease hen^to an- 
nexed, bearing date of the sixteenth <lay of 
April, A. D. 1879, between tlie Southern Pacific 
Kaih'oad Company and the Central Pacific 
Kaih-oad Company is hereby annulled and 
canceled, said cancelation to take (»fft»ct on the 
first <lay of January, A. I). 1880. 

" In t(»stimony whereof, these presents hayi* 
becMi signed by the President and S(H*retary of 
tlu* Southern Pacific Railroad Company and 
the President and Secretary of the ( 'entral Paci- 
fie Raih'oad Company, and the corporate seals 
of each of said companies have Ixhmi hen^to 
aftix(Ml on this the 18th <l:iy of F'ebruary, A. D. 
1880, pursuant to tlie order of th(* Boards or 
Directors of said com[)ani(»s respectively. 

Southern Pacific Railroad Company. 

By CiiAs. Crockkr, 
I Ska L. I ' President. 

J. L. \VlLL( UTT, 

Secretary. 
Central Pacific Railroad ('ompany. 

By Lkland Stanford, 
[Skal.] President. 

E. H. Miller, Jr., 

Secretary. 



824 

AFk. Hayks. I will offer in evidence the lea.sc 
from the Southern Pacific Railroad Company to 
the Central Pacific Railroad C'ompany, dated 
January 1, 1880. 

The lease was then marked ''Plaintiffs Ex- 
hibit 58/' and read in evidence as follows: 

PLAINTIFF'S EXHIBIT 58. 

This indenture made on this the first day of 
January, A. D. 1880, by and l>et ween the South- 
ern Pacific Railroad ( 'ompany, a corporation 
duly incorporate^} and orjj^anized under the laws, 
of the State of California, party of the first part, 
and the ( Vntral Pacific Railroad Company, a 
i'or[M)rati(m duly incorporate<l and orpmizcMl 
under tlu» laws of the State of (California, party 
of i\w s(K*ond part, 

\Vitn(»sseth: That tlu^ party of the first part 
for and in c^>nsideration of the rent h(»reinafter 
mentioned to \ve |)aid by the party of tlu^ sec()n<l 
[)art, its successors and assijijns, hath jj:rante(K 
demised and Iett<Mi, and by these presents doth 
trrant, (Unnise and 1(4 unto the said nartv of th*" 
second i)art its succ(»ssors and assiji^ns for the 
term of five (5) yt»ars from and after t\w date 
h(MH»of, all of that jK)rtion of tlu^ railroad and 
bran(*lu*> thi»r(M)f of the said party of the first 
part, situate, lyin*;- and luMiig south of the sta- 
tion thereon* known and (h^si^nated as (Josiu^n. 
"istru'v*te(l and to lu' luM'eafter eon- 



825 

strutted, togotlier with its rolling stork, tele- 
graph lines, tools and property of every kind 
and nature whatsoever, now in use therewith. 
And the said pirtv of the se.^ond part, for and 
in consideration of the aforesaid lease, for itself, 
its successors and assigns, covenants and agrees 
t ) and with tlie said party of the first part to 
pay to it at the expiration of each and every 
ni )nth of said term of five (5) years the 
inonthlv rental of two hundred and fiftv dollars 
($250) p?r mile of said railroad and branches 
thereof, in gold coin of the United States. 

It is mutually agreed and understof)d between 
said parti(»s of the first and second parts, that 
said railroad and other property shall l)e kept 
and maintained in good repair by the said party 
of th' second part at its separate cost and ex- 
pvMise during thi» continuance of this lease, and 
tluit till* sami» shall be returned by the said 
party of the second part to the said party of the 
first part at the expiration of this lease in as 
good c;)ndition as the same was at the date 
her(M)f. 

It is further mutually understood and agreed 
l)y and between the parties hereto, that this 

h»ase shall continue for five vears from the date 

f. 

h:?re )f, and cannot be sooner terminated or 
modified in respect to the amount, manner or 
t vrms of the {)aympnt of the rent luTein, or tlie 
obligation for the payment of such rent. 



82fJ 

"ft is farther ntutuallv uiulcrstocMl and ajcreod 
I)y aiul Ix^twoen said parties hereto, that if a 
. railroad is not completed in five years from 
the date h M'e:>f, so that there is a connection of 
Vie hiilroad of the party of the first part witli 
the EastiM'n system of railroads on what is 
known as the thirty-second (82d) parallel lin^ ^ 
this lease shall he* extended nntil such connec- 
ti>.i i^ ^lll^ i>r>vld»l such ext.Mi-iion d'),s njt 
excecMl five years longer, or ten years in all from 
the date hereof. 

It is further nnd(^rst<K)d and agi^eiMl that the 
net rental aj^reed to Ik> paid during the contin- 
uance of this lease and anv extension thereof, 
shall he two hundred and fifty dollars a month, 
or t!u\^^ t!i)a^ril d)llars a y.Mr, pcM- 
mile, and if for anv caus(» it sliall 
he r(Hlu(*(»d hy mutual consent (vf the parties^ 
that the annual amount of such rental as re- 
duced shall at least he* sufficient to pay all tlu^ 
int(»r(»st that has Ihhmi or may he agnuvl to he 
i);iid in a:\v one ve.ir on anv honds of tht» T)artv 
of the first part luMvin outstanding during tin* 
4-ontinuance of t]w h^asi*. 

In ti^stimony wher(M)f said ]>arties have causi^l 
th(*se pn^siMits to Ix^ signed hy tlunr Presidents 
and countersigned hy their S<HTetari(*s respcjc- 
tively, and thcMr I'e^spcH'tive cor|)orate seals to he 
hcnnmto attixcnl, pursuant to orders of th(»ir re- 
s] e -tivc Hoards of Directors heretofore made. 



827 

on tlio (lay and year first above written, in dupli- 
cate. 

Chas. Crcm^kek. 

President S. P. R. R. ( "o. 
[Seal of the S. P. R. R. Co.] 

.]. L. WlLLCrTT. 

Secretary S. V. R. R. Co. 

Lrlani> Stanford, 
President V. P. R. R. Co. 

[Seal of the C. P. R. R. Co.] 
K. H. Miller, Jr., 

Secretary C. P. R. R. ( 'o. 

Mr. Hayks. I will next offer in evidence a 
lease from the San Pablo and Tulare Railroa<l 
Company to the Northern Railway Company, 
dated September 4th, 1879. 

[The lease was then marked *' Plaintiff's Ex- 
hibit 59/' and read in evidence as follows:] 

PLAINTIFFS EXHIBIT No. 59. 

This indenture made and ent(Ted into this 
fourth day of September, A. T). 1879, by and 
between the San Pablo and Tulare Railroad 
(company, a corporation organize<l and incor- 
porated under the laws of the State of California, 
party of the first part, and the Northern Rail- 
way Company, a corporation organized and in- 
corjKvrated under the laws of said State, of the 
second part, 



831 

outs, switches, liridges, turn-ta])los, wharves, 

ferrv-slips, structures and appurtenances of every 

name and nature thereunto belonging, or in 

anywise ap{>ertaining — 'for th^ term of five (5) 

vears from the (hite hereof, at the monthly 
• •' 

rental of F'ortv^-seven thousand five hundred 
<iollars ($47,500), pay-able on the last day 
of each ^month in gold coin of tlie Unite<l 
States. 

And the said party of the second part agrees 
to pay said monthly rental as hereinbefore re- 
served, and will at the expiration of said term 
re-deliver th(^ possession of the property to the 
j)artvofthe first part in as full and complete 
order and repair as it now is. All costs of 
renewals and repair during the continuance of 
this lease, shall be borne by the party of the sec- 
on<l part. 

And it is hereby further agre(Hl that one 
month's notice in writing from eith.^r of the 
parties hereto t^ the other, will terminate. this 
leas(» and make it of no effect bevond the <late 
fixed bv said written notice. 

In witness wheret)f, the parties hereto have 
causiul these pre.**ents to be signed by their re- 
spective Presidents, and countersigned by their 
Secretaries, and their corporate seals to be at- 
tached thereto on the day and year first above 
written. 



832 

Xortherii Railway CotQ?pam% 

By W. V. HuxTiNOT(>N% 
[Seal Northern R y Co.] President, 

And by Jas. O. B. Guxx, 

Secretarv. 
0<3ntral Pacific Railroad Co. 

By INLAND Stanford, 
[Seal C. P. R. R. Co.] President. 

And bv E. H. Millek, Jr. 

Secretarv. 



Direct Examixatiox of l>. T. Phiu.ips. 

('ailed for plaintiff — ^Sworn. 

Mr. Hayks. Q. What is your business?' 

A. I am in the employ of the Central Paci- 
fic Railroad ( -ompany, in the Freif2:ht Auditor's 
office. 

Q. How lon^ have you Ikh^u (Mnployed 
theie? 

A. Five vears the first dav of last ( K*tol>er. 

Q. Prior to that wliat was your em|)l(>y- 
nient? 

A. 1 was with Mr. (*rfH*ker, as his Private 
Secretarv. 

(i. How long were you with Mr. CnK^kcn', as 
liis Private Secretarv? 

A. The ()th of March, 1875, 1 believe, Mon- 
day. A little wbile l>efore that in the employ 
of the company otherwise. 



834 

A. Mv iTPcollection is that it waa either on(» 
thousand or one million dollars, I don't know 
which. I understcxKl, and am satisfied, that 
there were five Directors, and that the stock in 
mv name was onc^fifth. That ij* mv ri^ollec- 
tion. 

Q. When did you s(*e a oi^rtificate in your 
name first? 

, A. I think either Mr. Colton or Mr. Doutv 
pn^sentiMl it to me about the time of mv notifi- 
cation of election as a Director. 

(}. A (certificate of st^K^k and your notifica- 
tion of election as a Director were ahout simul- 
taniM)us? 

A. 1 think so. 

(^. What did you do with the certificate? 

A. It was handed to me with no instruc- 
tions whatever. I think hv Mr. Colton. I 
know h(» informed n^(* 1 was elected and wished 
m(» to act. I had the ciTtificate in my [)osses- 
sion perhaps a day or two, an<l I think 1 (mi- 
<lorsed it and hand(Ml it to ^Fr. (.nH'ker, |>ossi- 
Ulv. 1 think so, hut 1 am not sure. 

O. You think vou endors(»d ft. Don't vou 
•• • • 

know as a fa(*t that vou did endorse it? 

A. 1 don't know it ahsolutelv, hut it is a 
very strong impression ujX)!! my mind that 1 
di<l; ves, sir. 1 knew it was not mine, and 
that 1 ou<::ht not to retain it any lon}z:er than 
was nec-essary to use it properly. 



835 

Q. To enable vou to act as Director? 

A. That is all, sir. 

(i- And vou think vou delivered it to Mr. 
(^' rocker? 

A. I think I did. 

(}. Who owne<l those shares ? 

A. At that time I . don^t know.. I have 
learned a good deal since this^ suit was l>ejj:un 
that I did not take much noteof hefore. 

Q. You did not? 

A. T was satisfied that it* belonged to ^^r. 
Hopkins some years ago.; 

Q. You did not own those shares or anv of 
them ? 

A. No. sir; I never had anv information 

upon the subject whatever. I did not buy it, 

or ask for it, but it was given to me, or handed 

to me. There wa.s no bargain or words. 

Q. You did not think any body was making 

vou a i)resent, did vou ? 

A. I had hardlv the faintest horx^ that thev 
wen*. 

Q. Sinc(* that time, as far as vou know, vou 

think vou hav(? still remained a Director ever 

*■ 

since? 

A. 1 have had no notice of my being ousted. 

Q. Have you taken any active part in the 
management of the company as DinnUor? 

A. I took a tolerably active part from the 
time that I was notifiedofmv election. A verv 



836 

few (lays or a sliort time after iny election I was 
also advised tliat I was elected or appointed the 
85uccessor of one John Miller, as Secretary of the- 
ronipany, and for a few days I served in that 
vaj)acity. 

(^. How long did you serve in that capacity ? 

A. A few days. 1 don't know how long. 

The record will show hetter than I can tell you. 

•- 

I don't think to exceed a week. 

Q. At the same time you still remained the 
Private Secretary of Mr. Crocker ? 

A. I believe \ told you that I was with him 
from one dato to another. Yes, sir. 

(J. I have not got the date^ of your secre- 
taryship? 

A.' I told you in the first place from the Hth 
of Marc*h, I b(4ievn% until the 1st day of Octo- 

 

her, 1875. I think the n*cord will show the 
ilate. 

t^. According to your records, you seem to 
hav(» resigni^'d as S(>cretary July .'iil, 1875 ? 

A. As S(»cretarv. . Yes, sir. 

Q- So you wen^ al)Out one weok Secretary ? 

A. That is my recollection. y 

(^. What part, as l>ir(H*tor, have? you taken 
in managing and dinn^ting the affairs of that 
company ? 

A. Soon after mv election ( nMieral Colton 
came to m(» and told mi^ h(» wanted certain 
things (loiii* by the c ompany, and for me to no- 



837 

tify the officers wlio were in the building gener- 
ally, excepting one, I believe? and call a Board 
nie(»ting and pass certain resolutions and transact 
certain business, whatever it might be. I con- 
tinued to clo that from time to time, as long as I 
was with Mr. ( -rocker. Sometimes Mr. Douty, as 
l^resident, whose duties were the same as the 
Secr'etarv's had been, in addition to that of Presi- 
<lent, called the meeting to order. 

(I, The business that was transacted, then, 

« 

at thos(» meetings of the Directors, was pre- 
, pared Ix^forehand and the Directors were simply 
called together to pass certain resolutions that 
were pre])ared. 

A. Yes, sir; nearly everything was done by 
Geiu^ral Colton. Oftentimes he handed to me 
verbal instructions, sometimes with })apers, to go 
down and see what was to be dcme. Sometimes 
the Law Department would send down similar 
instructions. Mr. Robinson would. 

Q. The Board of Directors, then, did not ex- 
ercise* — 

^Ir. M(^\llistrr. r object to the form of the 
question as heading. 

Mr. Havks. Q. Did the Board of Din^ctors ex- 
ercise* anv deliberation or individual or inde- 
I)endent judgment of their own as to what 
should or should not be done at the meetings? 
I )id they get up projects and discuss the propriety 
and advisability of them at the meeting, or 



^25^ 






^W* 



pnvpri^Ky .t- .-t^nuim ^iunv^. oar trhe pc^jecc.* 

that riuty vm^t^ is^m^f^kHy .um^i xp^Hi tuvijci^hiv.- 
♦^, W-te*- it bt?tfani*- d^ pc^ntHMii «r«M]:i{uefii-^{ 

th.- rKr*-i*r*^ri'. .ir.*r "r .*t>rrr^-^ ii*' .%'tiat wjl^ th^ 
 j[. V\l\«» ^T^-rv rhi»^ -^ipr-^si-^i ^• ?♦- tht^ i>-al 

» 

A. Bjv-*^1 apwxi my «^>nEiei^i«wi with th^ oni- 
r-ri-f. I •Tifr^wrif^l that Mr. •'•4t.»a was a >trvk- 
h »M#-r an»l ^ v«-r\' A«"tivr- ni«-mF»t^r »^' tht- o>n- 
r>rx.. And Mr. Cpx-ker an4 •it^wriv^r Stanfonl 



839 

sind Hopkins and Huntington. But none of 
them excepting General Colton ever gave me 
anv instructions what to do.. 

Q. You have said that once or twice. 

A. I thought vou said vour memorv was a 
little defective. 

(^. We have got that down now. 

A. Mv memorv is not clear sometimes, and 
I repeat. 

C^. Did you ever attempt to make any con- 
tracts on hehalf of the Western Development 
Company for the doing of any work, with an}" 
other person or corporation ? 

A. My imi)ression is, that there was work 
done hy the Western Development (-ompany, 
(either directlv done hy the members of the Hoard 
of Directors or approved l)y them afterwards. 
I will say this: that I have not thought of these 
things for years, and they are not fresh in my 
min<l. I have been very busy in other matters. 

Q. liut those contracts made for the build- 
ing of railroads and other work 

A. [interrupting.] Specifv any one* you 
wish. 

(^. The San Pablo and Tulare Railroad; was 
not that contract executtMl simply on the direc- 
tions of the Law Department of the Central Pa- 
cific Railroad Company, or of Crocker, Hunt- 
ington or Stanford? 
. A. I only have a very vague recollection of 



842 

Mr. AfrAu^rsTER. We object to the answers 
to Questions 11, 12, 18, 14, 15 and 10. They all 
relate to the same matter. It is not the ordi- 
nary mode of proving vahie; but th^y asked 
him, assuming that a certain bond was worth 
so much, What do you think*, upon that 
assumption, a certain bond would be worth? T 
don't think it is a proper mode of examining an 
exipert. It leads to conjecture, and is really 
founded on no real calculation or opinion as to 
the market value. 

Mr. Hayks. In reference to ascertaining 
the market value of the lK>nds, we 
do not undertake to put this in 
as evidenct* of market value because thev were 
not i)ut on the market. So far as the assump 
tion is contained in the question with regard to 
t!ie valu(* of the bonds n^ferred to we propose to 
prove the truthfulness of that assumption. We 
are driven to this method of showing the value 
of tliesc^ lv>n(ls, which the j>artii^ do not s<»(» fit 
to |)ut up )n th(» market. 

Tmk CoiKT. It is a rather novi^l i)ro(x>sition. 
hut 1 will admit the (evidence. 

yin. McAllister. We will noteour objec- 
tions an 1 cxreptions to the (fuestions and an- 
swers. W(» will also ol)j(»ct to the 12th (piestion, 
tJK* 14th (|uestion and the 17th riuestion. Thev 
all Tv^lat / t :► the sami' matter. ( hir objtx-tion 



843 

is that it is not a proper mode of proving val- 
ue; that the evidence is irrelevant, immaterial 
and too remote, and we take an exception to 
your Honor's ruling. 

[Mr. Hayes then continued and concluded 
the reading of the deposition.] 

Mr. Haves. [To Mr. McAllister.] Will you 
admit that *' Exhihit E '' is a copy of the state- 
ment of assets and liahilities of the Western 
Development Company, furnished hy the de- 
fendants to Mr. Wilson; that it is a true copy? 

Mr. McAllister. If we have '* Exhihit E '' 
we will produce it. 

Mr. Hayes. I have notified the i)arties to 
j)ro(luce it, and have asked you for it during the 
trial. 

Mr. Mi Allister. My understanding is that 
the answer does not deny it. 

Mr. Hayes. I do not want an admission that 
it is not denied. I want the paper. 

Mr. Hayes. I will now offer in evidence an 
agreement made and entered into hetween C P. 
Huntington, Charles Oocker and Leland Stan- 
ford, stockholders of the Western Development 
('ompany, a corporation, parties of the first 
l)art, and Mary F. S. Hopkins, Samuel F, Hoj)- 
kins, hy his attorney-in-fact, William S. Hop- 
kins, and Moses Hopkins, also stockholders in 
said corporation, parties of the second part, 
dated SejHember 5th, 1871). 



844 

Mr. Mc Alustkr. This agreoment is dat^I tFie 
r>th of September, 1879, between (\ P. Hunt- 
ington, Inland Stanford, Charles Crocker an<l 
the stockholders of the Western Developmeut 
Company and Mrs. Mary F. S. Hopkins and 
Samuel F. Hopkins, by his attorney-in-fact^ 
AVilliam S. Hopkins, and Moses Hopkins. \W 
object to it as immaterial and irrelevant here. 
It is subsequent in point of date. It i?? an 
arrangement by which they come to participate^ 
in the results of the Colton compromise. We 
submit that it is not admissible here as as^ainst 
us as evidence in this case. 

« 

Mr. Hayks. We offer it as a declaration of 
the party signing the papc^r of (t>rtain facts re- 
citiMl in it; for instance, that in and bx-'this com- 
promise contract with Mrs. ('olton they ac- 
iiuin»d great advantages to th(»mselv(^s; some- 
thing which is forbidden to the Trustee to do in 
ilealing with a (rsftii (jtir trust. It is signed by 
{\\{' (lef(Mi<lants here, and recitt^-i that fa(*t among 
*)tbers. 

Thk (*(>ruT. Showing certain facts, a.s 
facts? 

Mi{. Havks. Ves, sir. 

TiiK (.'oruT. 1 will h(\ar it in (*vid(Mice. 

Mr. Mc.VrjJSTKK. We reserve an exception 
to your Honor's i-uling. 

Mr. Havms. 1 understand the irenuinene^ 



^^ vSS 



845 

of the sij^natuivs aiul the execution of this pap:*:* 
is admitted. 

Mr. MrALLiSTER. Yes, sir. 

[Mr. Haves then read in evidence the agree- 
ment which is marked ''Plaintiffs Exhihit OT' 
and is as •follows:] 

PLAINTIFFS EXHIBIT (>1. 

This Ajjcreement made and enteri3j into this 
the fifth day of September, 1879, by and h(»- 
tween Collis P. Huntington, Charles Crocker 
and Leland Stanford, stockholders of the West- 
ern Development Company, a corporation, par- 
ties of the first part, and Mary F. S. Hopkins, 
Samuel F. Hopkins, by his attorney-in-fact, 
William S. Hopkins, and Moses Hopkins, also 
stockholders in said corporation, pirtie-* of th » 
second part, 

Witnesseth: That, whereas heretofore, oni» 
David D. Colton, deceased, did in his lifetime, 
while a stockholder in said corporation, by cer- 
tain ways, (»om(» into the possession of a larg ^ 
amount of the assets of said corporation, consist- 
ing of th(» bonds and stocks of divers railroad 
and otber corporations: — 

And where.is, after the death of said Colton, 
questions of difteronci^ aro.^(» between said West- 
<»rn Development Company and Ellen M. Col- 
ton, th(» widow, executrix and sole devisee of 
said D. I). Colton, in resj)ect to said assets and 



846 

tFie» rights of said corporation and said FTIIon ^L 
(^olton thereto: — 

And whereas, said parties of the first 
part, acting on their own l^ehalf and 
on l>ehalf of snch other stockhoklers 
of said cor}>oration as might elec*t to 
nnite with them, did on the 27th dav of An- 
gust, 1871), make and enter into a \NTitten con- 
tract of tliat date with said Ellen M. Colton, in 
her personal as well as representative^ capacity^ 
wherebv said matters of difference were amic- 
ahly settled and adjusted to the great advantage 
of said cor{>orati<m and its stockholders, as will 
more fully appear l>y referring to said contract. 

And when^as, said parties of the first part, in 
order to cffK't sjiid settlcMnent, were ohligiMl t<> 
ai:r(H» in their jx^rsonal (»apaciti(*s, and not as 
stockholders, to n^lease and indemnify the es- 
\:\tv of said David l>. (*olton and the said £llen 
M. Colton against certain jxvssihle claims and li- 
nl)ilities as j>rovided in said contract; 

And wluM-eas, said parties of the first and 
s:\v)iid p:irtsarethe st(K*kholdei*s and only stiH'k- 
hold(M's of said cor|>oration and scn'crally own 
and hold tht*^ (*a]>ital st(K'k of said corfM>ration 
as follows: (»a(*h of said parties of the first part 
niu'-fourth of said ca|>ital stock: said Marv F. 
S. Hopkins thi*ee-sixt(»enths(:^-l())of said (*apital 
stock, and siiid Samu(4 F. Hopkins an<l said 



-848 

|)letoIy ill nU n^jXH'tjs as if tlu»v, the sai<l parties 
nf the swoncl p.art, liad united with said parties 
oftho first part in makiiifi: and ex(M*uting said 
eontract of st^ttleniont. 

It is further mutually ajijreed that this agree- 
ment shall hind tlie heirs, assigns and j>ersonal 
n^presentatives of each and every of th(» parties 
liereto. 

in witness whereof, th(^ said sevenil parties 
have hereunto set their hands and seals the dav 
and year first ahove written in duf)lieato. 

(\ P. IlrXTlXfiTOX. 

TiTAs. Crockkr. [skal] 

Lklaxi) Staxford. [seal] 

M. F. S. Hopkins. [skal| 

 Samtkl F. Hopkixs. [skal[ 

Vov \Vm. S. Hopkins, his Attonu^y-in- 

facl, MosKs JIopKixs. |seal[ 



The Court h(»n» adjourned until to-morrow 
morning at ten o'clock. 



TENTH DAY 



WEDNESDAY, DECEMBER 5TH, 1883. 

Mr. Hayks. I have already read in evidence 
one of the honds, or the form of the honds, of 
the Southern Pacific Railroad Company, hut, 
having received one of the bonds itself, I will 
read in addition the Trustees' certificate en- 
dorsed on the hack. 

'' Trustees' Certificate. 

'*We hereby certify that the within bond is one 
of the series of bonds secured by the mortgage 
or deed of trust mentioned therein, and deliv- 
ered to us as Trustees, which has been dulv re- 
corded in the proper counties of the State. 

[Signed:] D. O. MILLS, 

LLOYD TEMS. 

Trustees.'' 

Mr. McAllistkr. Do vou call that bond an 
exhil)it? 

A. Yes, sir. T will put this l)ond in, in 
place of the one we read from the mortgage, and 
have it marked '' Plaintiff's Exhibit 02." 

Mr. Hayes. I will next read in evidence (me 



oftlic lirst mortjxajrc l)()n(ls of tlio Central Pa- 
cific Railroad Co. 

[Sai(ll)oii<l was then inark(»(l '* Plaintiff's Ex- 
hibit ().*)," and road in evidence, as follows:] 

" Plaintiff's Exhtbtt 03." 

1000. 
Central Pacific Railroad Company of Cali- 
fornia. 

Series II. No 

The Central Pacitic Railroad Company of 
California acknowledge themselves to owe to 
luiirene Kellv, of the Citv of New York, or to 
the holder hereof, tlu^ snm of one thonsand dol- 
hirs, which snm they promise to pay to th(^ 
holder hereof, at the Citv of New York, thirtv 
vears from tjic date liereof, with inten^st tluM'e- 
oil at th<' rate of six per ciMit. ])er aiinnm from 
tlie lirst da\' of Januarv, lS(iS, pavahle scMni- 
aiinuallv on the lirst (hi\' of dulw ISfiS, and on 
the first (lavs of Jaiiiiarv and Jnlv of each 
years thereafter, in the ('ity of Ninv York, upon 
the surrender of the annexed coupons, both 
princi])al and iiiU*rest pavahle in Cniti^d 
States i^old (M)in, at ])ar, dollar for dollar. 
This hoiid. heiuii" one of the series "11"' of first 
inortuaiie honds, which the said com])anv is 
a;itliori/e(I to issue upon that portion of their 
iailroa<l line Ivinu eastwardlv of the eastern 
lioundai'N' line of the State of* California, in ac- 



853 

(»ordanco with the provisions of an Act of the 

Congress of the United States, approved July 

2d, 1804, entitled *'An Act to amend an Act 
(entitled an Act to aid in the construction of a 

raih-oad and telegra[)h line from the Missouri 
riviT to the Pacific Ocean, and to secure to the 
(fovernment the use of the same for postal, mil- 
itary and other purposes, approved July 1st, 
18(52, and the Act amendatorv of the said Acts 
approved ^^arch 3d, 18(55, hy the provisions of 
which Act the said company is authorize 1 to 
issue its **first mortgage six* per cent, thirty- 
year honds/' on its line of railroad, pay ahle in any 
lawful monev of the United States to an 
amount not exceeding the amount of the honds 
of the United States, provided to he issued to 
said company, and hy which also the lien of the 
United States honds on the railroad property 
and ecjuipments of the said company is made 
suhordinate to that of the said first mortgage 
honds. The holder of anv of the said honds to 
have no preference over any other of said hond- 
holders hy reascm of priority in thetimeof issu-. 
ing the same, or otherwise. The said series **H" 
consisting of 4,000 h(mds of $1 ,000 each. The 
l)ayment of the principal and interest of this 
and th(» others of said first mortgage honds is 
se(*ured 1)V a first mortgage executed hy the said 
company upon the whole of their railroad lying 
eastwardlv of the (»astern houndarv line of th(» 



854 

Stato of California, and all the rollinj:!: 
stock, fixtures and franchises thereof to 
D. O. Mills and William K. Barron, of 
San Francisco, as Trustees for the holders of 
such First Mortgage Bonds. And it is herein' 
stipulat<?d and conditioned that the City and 
County of San Francisco, and the Counties of 
Sacramento and Placer, in the State of Califor- 
nia, shall not he liahle for any of the dehts or 
liabilities of said company to an amount be- 
yond or exceeding tlie amount of the capital 
stock of said company suhscrihe<l, or which 
hereafter may he subscribed by them, or either 
of them, upon the books of said company. 

In testimony whereof, the said company haye 
caused their corporate seal to be hereunto affixed 
and the sanu* to bi^ signed l)y their President 

and Secn^tary this 1st day of January, A. 1). 

• • • • 

18()8. 

President. 

Secretary. 

[( 'orporato Seal.] 

I With coupons attached.j 
[Kn(l()rs(Ml.| 

- H. ' 
No. 14J:J(). 

(\mU\\\ Pacific K. K. (%>. 

of California. 

Six p(T (HMit. oO yearliold Bond. 

$1,(XJ0. 



855 

Wo horeb}^ certify that this bond is one of the 
within described Series *^H" of four thousand of 
the like date, secured by a mortgaj?e executed 
and delivered to us. 

> Trust^^es. 
[Canceled.] 



-o- 



DiRECT Examination of J. L. WiLLrrrr. 
Called for plaintiff — sworn. 

^Fr. Hayes. Q. Where do you reside? 

A. In Oakland. 

(i. What is your business? 

A. Secretary of the Southern Pacific Rail- 
road Com[)any, and of the liOs Angeles and San 
Diego Railroad Company, and oth?r railroad 
(companies. 

Q. What other railroad companies are you 
Secretary of; not street railroad companies? 

A. The Monterey Railroad Company, th(* 
Santa Cruz Railroad (Jompany, the Ix)ma 
Prieata Railroad Company. ] think that takes 
them all. 

Q. How long have you been Secretary of tlu* 
Southern Pacific Railroad Company? 

A. Since its consolidation in 1870. 

Q. Have you been a Director of that com- 
pany during all of that time? 



856 

A. I «Ion*t think coiitinuoiislv. hut somo- 
where since the early <h\ys; j>erhaps 1871 or 
1872. I cannot say without rcferrinjr to tho 
minutes. 

Q. Aujnis^t, 1871. it seems you were first 
•»h*cte<l. 

A. Continuouslv, I think, since then. 

« 

(^. Have you heen a I>irector <vf the (Com- 
pany continuously?^ 

A. Yes. .s.ir. 

Q. In Aujrust, 1871, was there any stock of 
tlu* Southern Pacific liiiilroivl ("onipany staiul- 
injr in your name on the U>oks? 

A. Yes, sir. 

(^. How nuich? 

.V. 1 cannot sav ln>w much. 

Q. Hav(* you the hooks ? 

A. Y^»s. sir. Th(» sto(»k liMliier will show 
more <lir(H*tlv. 

C^. H M'l^ is the *' liook of Sti>ckhol«lers." Is. 
that what von want? 

A. Yes. sir. Fivt* shares wert» in mv nanii- 
at tliat time. 

Mr. M<'Amjstkr. i^. Wiiat <lati' was that? 

A. .lulv 1st. 1S71. 

Mr. Havi-,s. That was tlie tin\e when voii 
wen» first elcM'tetl Director? 

A. 1 think it was at the Julv meeting. Julv 

• • • 

or August. 

Q. l>i<l v<Hi own thosi* five shanks? 



857 

A. No, sir. 

Q. Who (lid? 

A. I don't know who did own thorn. 

(). At that date how many stookliolders 
weiv there in the Soutliern Paeifie Raih-oad; 
Jvilv 1st, 1871?' 

A. 1 think there has heen an ahstraet mad(» 
that will show; that was furnished you. 

Mr. Air a luster. Here it is. ("Producing it.] 

The Witness. This statement is Oetoher 
12th, 1870, the date of the consolidation. It 
<loes not show the stockholders on July 1st, 1871. 

Q. The next one in order is August 12th, 
1883. 

A. This information asked to he furnished 
was the numher of shares held hy certain par- 
ties, Charles Crocker, C P. Huntington, Mark 
Hoj)kins and Iceland Stanford. That is all those 
statements show. For the full numher of 
shanks I would have to go through the hooks 
and s(H» who the stockholders were. 

Q. How many shares of stock were issued of 
the Southern Pacific Railroad Company at that 
date; — that is, Jul}', 1871 — at the time of the 
Din^ctors' meeting at which you were elected a 
Director; 1 don't know on what dav of the 
month it was held? 

A. 1 can refer to th(^ minutes and 1 mav 
(ind it there. 

Q. Will 3''ou find the total numher of shares 



858 

c>f stock issued there? How much stock, had 
been issued at that date ? 

A. [Referring.] 1 16,340 shares. 

Q. Who lield that .stock, and in what pro- 
])ortions? 

A. Leland Stanford^ (54,415 ^liares; tlie Con- 
tract and Finance Company, 50,000 shares; 
Llovd Tevis, 20 shares; Peter Djnahue, 10 
shares; J. L. Willcutt, 5 shares; and there wero 
1800 that I have not the names of the stock- 
holders. Those were not voted at that meeting. 
I liave not the list of the stockholders. 

Q. There was none of that stock voted at 
that m9(»tinjj^. You are reading from the list of 
stock voted at the meeting? 

A. Yes, sir. 

Q. No st(x*k was voted by Charies Crocker 
or (\ P. Huntington or Mark Hopkins? 

A. No, sir. 

Q. Thev were stockholders, were thev not, at 
that time? 

A. Yes, sir. 

(^. Thev were all Directors at that time, wero 
thev not? 

f - 

A. Mr. CrocktT was not a Director. Ho 
owned fiftv shares of stock at that time. 

(}. >[r. Huntington was a Dirwtor, was ho 
not? 

A. He was. 

(I. And owikmI stock; and the same is truo 



859 

as to Mark Hopkins; lie was a Director, and 
owned stock ? 

A. Yes, sir; C, P. Huntington and Mark 
Hopkins owned fifty shares each. 

Q. Wlio were the Contract and Finance 
Company, that held that number of shares? 

A. I know nothing about that corporation, 
other than the name. 

Q. Do you not know who were the owners 
of it? 

A. Xo, sir. 

Q. You never liad any connection with the 
('ontract and Finance Company? 

A. I had with the officers of that company. 

Q. Were you in that company at all? 
A. No, sir. 

Q. Were you notified before the holding of 
that meeting, that you would be elected a Direct- 
or, or were you requested to serve as such? 

A. I have no recollection now. Reference 
was made to it probablv in some wav bv some 
parties interested. 

(i. Who would they be ? 

A. ^Fr. Stanford, probably; possibly, Mr. 
Huntington, who was President of the com- 
pany at that time. 

Q. You have remained continuously a Di- 
rector of that company ever since? 
A. 1 think I have. 



860 

Q. Have you acquired any additional f^tock 
isineo? 

A. Yes, sir. 

Q. Wlien? 

A. In April, 187G. 

Q. How many shares did you acquire ? 

A. One share. 

Q. Did you lose the five at the'tin^e you ac- 
quired the one? 

A. I will look at the hooks and see. [Ex- 
amines the hooks.] No, sir; not for three year s^ 
afterwards. 

Q. Then for three wars from 1876 there 
were six shares of stock standing in your 
name? 

A. Yes, sir; since 1871, T think. You 
asked me if at the tinu^ I acquired the one I lost 
the five. 

Q. Tlierc* were five shares in vour name 
then, in 1876, when you acquirel another 
share ? 

A. 1 liad in the^ UK^antime, hc^ides that five 
shanks, five shares in August, 1874, and five in 

I )(H*emV)er,. 1874, makinj:^ up to that time eleven 
shares; and in ApriU 1876^ five shai\^^. I seenii 
to hive had sixteen sliares prior to the acquisi- 
tion of tlie one. 

Q. What was the total numil)er oi* shares iu 

II at eomj)any ? 

A. On what date?" 



861 

Q. At any date. What is tlio total capital 
stock authorized? 

A. In October, 1870, by the Articles of Con- 
solidation, I think $40,000,000. 

Q. That would be how many shares? 

Mr. McAllistek. 400,000 shares ? 

A. Yes, sir. 

Mr. Haves. Q. How was it when you ac- 
(juired your other stock? 

A. I think the capital stock was increased 
from 40,00.0,000 to 60,000,000, and from 
60,000,000 to 70,000,000 and from 70,000,000 to 
1)0,000,000. 

Q. That would be 900,000 shares? 

A. Yes, sir. 

Q. And all that there was standing in your 
name on the books was sixteen shares? 

A. Yes, sir; at one time. 

Q. Were you the owner of those sixteen 
shares ? 

A. No, sir. 

Q. Had you the certificates in your {)osses- 
sion? 

A. A portion of the time I had. 

(). What did vou do with them? 

A . I delivered them to either Governor Stan- 
ford or Mr. Huntington, or whoever transferred 
the stock to me at the time. 

Q. You endorsed it and delivered it back t > 
the owner, who was one of those gentlemen ? 



»52 

/ 

A. Yesy sir. 

Q. Have you, in your action in the Board 
of Directors, acted in obedience — in casting your 
votes upon propositions that came up, not merely 
routine business, but in important matters, 
such as making contracts for building the road, 
and matters of that kind — ^acted in ol>e<lience to 
the wishes of Staiiford, Huntington, Hopkins 
and Croc»ker? 

A. I believe their views have ahvavs coin- 
cided Avith mine. I think I hav^ actefl, there- 
fore, according to their wishes. 

Q. Did you, at any time, undertake to set up 
your views in opposition to theirs, and act con- 
trary to their wishes and judgment? 

A. I don't remember any occasion for it, or 
that I ever did it. 

(}. At whose instigation, if at any j>er- 
siii's, was the contract made for the building of 
th ' Southern Pacific Railroad? 

A. The stockholders at that time. 

Q. Wlio wen* — ? 

A. What was the date? 

Q. Tht^ date was January 1st, 1875^ 1 
think. 

\Ih. McAmjstkr. I know it was in 1875. 
Fel)ruary 2d, 1H75, the Southern l^a(*ific main 
c )ntrac'. 

Mr. Havks. il. Who \v(»re the stockholders. 



863 

at that time? Stanford, Hiintinf];ton, Hopkins 
and Crocker? 

A. Suhstantiallv. 

i^. And Mr. ( -olton at that time liad ae- 
quire<l the 20,000 shares. Who oommnnioated 
to vou the views <if the stoekhol(U»rs on tliat 
snl)jeet ? 

A. I cannot sav now; I was hack and forth 
to their offices every dav. 

Q. At whose offices? 

A. (fcneral Colton's, and Mr. Crocker's, if 
lie was here, and (Jovernor Stanford's. 

Q. Then it was one of those gentlemen? 

A. Principally; yes, sir; Mr. (^rocker was 
President of the company at that time, I think. 

Q I will except the stock held in 1871, or 
at the time of the consolidation hv those gen- 
tlemen; isn't it the fact that all of the stock 
suhsequently issued hy that company was issued 
in payment of the contracts made hv it for the 
construction of its road, down to 1870, sav? 

« 

A. It was. 

Q. To whom was it issued? The stock was 
issued in payment of 

A. [Interrupting.) To whoever the con- 
tractors were, the* Contract and Finance Com- 
j)any, or the Western Development Company. 

Q. Those two companies? 

A. Yes, sir. 

Q. The 50,000 shares, I presumes that you 



864 

mentioned as belonging to the Contract and 
Finance Company was the stock issued to it in 
payment for building the roa<l? 

A. Yes, sir. 

(I. Did it receive any additional number of 
j^hares except the 50,000? 

A. As the work progressed and their bills 
were rendered. 

(2- How many shares of stock did the Con- 
tract and Finance Company get altogether? 

A. [After referring.] The Stock Ijedger ac- 
count foots up 180,162 shares, but I would have 
to g:) through to see if any p:>rtion of that was. 
transferred. 

Q. I>i<l the Contra(*t and Finance Company 
acquire any of the stock otherwise than as pay- 
m Mit for the work done bv it? 

A. Xo, sir. 

(). Then, altlioudi that niav have Ix^^ii 
tnnsferred awav, still it did receive all that 
st()(*k? 

A. I tlionght |>()ssibly a certificate might 
have been sent in to have it subdivided, and in 
tbat (*as(^ [ make an original entry of it, show- 
ing it on both sid(^ of the account. That would 
show the increase of the sto(»k, Ix^cause I wouhl 
charge the old c(M*tificat(* and cnnlit the new 
one. 

(I. Who negotiated tht^ contract that was 
mide betwecMi the SoutluM'n Pacific Railroad 



865 

Company and the Contract and Finanoo Com- 
pany? 

A. I think there was a committee ai)pointod 
for making that contract. M\' impression is 
that Mr. Huntington and Tevis, and others — 

Q. [Interrupting.] Wlien was tlie contract 
made? 

A. [After referring.] It was chxted May 1st, 
1871. 

(}. W(»re you a Director at that time? I 
think not. You were not elected until Julv, 
1871. Have you then any personal knowledge 
in relation to the making of that contract? 

A. Xo personal knowledge of it. 

Q. Have you the contract in existence now 
— the original contract with the Contract and 
Finance Company? 

A. Yes, sir; Mr. McAllister has it. 

Q. I would like to have it? 

[Mr. McAllister then produced the contract 
between the Southern Pacific and the Contract 
and Finance Company.] 

Mr. Havks. I will offer this contract 
between the Southern Pacific and the Contract 
and Finance ('cmipany in evidence. I will not 
stop to read it now. It is dated May 1st, 1871. 
Mr. McAllister. We would like to have 
it read for information, because* none of us 
have ever r(»ad it. 

[Mr. Hayes then read the contract in 



sm 

e\'i(I'*nco, wliich was afterwards marked '* Plain 
tiffs Exhibit 64/' and is as follows:] 



(i 



PLATNTIFF^S EXHIBIT (U." 



Articli^ of agreement made this first da\' of 
May, 1H71, between the Southern Pacific Rail- 
road Company, a corporation duly organized 
under the laws of the State of California, party 
of the first part, and the Contract and Finance- 
Company, a corporation also duly organized 
under the laws of said frvtate, party of the second 
part. 

ARTICLE FfRST. 

The said party of the second part hereby cove- 
nants and a;i:r(^s to and with the said party of 
V\o first part, its successors and assigns, that it 
will in a gcKxl workmanlike manner construct* 
finish, furnish and complete the railroad and 
ti»l:\j:raph line of the said party of the first 
p.vrt, up m thc' routes seUx^trnl by said party of 

the first part, Ix^ginning at the town of (Jilroy^ 
in the county of Santa (Mara, thence to the east- 
ern boundary of tlu* State of California, <at or 
near Fort MohaycN together with the rolling 
st;){'k, buildings, instruuKMits and fixtures there- 

f )r; that is to say, to construct, furnish, finish. 

« 

d) and complete all the clearing, grading, exca- 
ya'ions, embankments, ditches, drains, masonry, 
rujyerts. bi'idgt^s and tn-stling; furnish all tho 



807 

ties, tinibor, rails, iron of all kinds for l>ri(l;j;os 
and other purposes; all the chairs, fish plates, 
spikes, fro}^s and switches; lay and complete all 
the main line of track, and all the side tracks, 
spur tracks and turn-outs necessary, usual an<l 
])roper for a single track railroad. 

Also all necessary and proper buildings and 
erections for stations, freight and passenger de- 
pots, water tanks, turn tables, engine houses, 
work and repair shops, with all the tools, furni- 
ture and implements necessary, or proper there- 
for; also to furnish and place on said railroad 
all necessary and proper rolling sto:*k, instru- 
ments and (Hjuipments, including locomotives, 
|)assenger, box, freight, baggage, platform, 
dump and hand cars for the proper and success- 
ful working, operating and repairing of said 
railroad and telegraph line; such rolling stock 
to be furnished and delivered as may be re- 
(juired by the said party of the first part, not to 
(exceed the following quantity and proportion, 
viz: One locomotive for every five miles of 
road constructed under this contract; one pas- 
senger (»ar for every twenty railes of road; three* 
box and fiat cars for (»verv mile of road; the 
proportion of each to be determined by the soid 
p.irty of the first part; one hand car for every 
six miles of road; such number of dump cars 
as may be required for maintaining the line. 

Twenty miles of railroad and telegraph line 



868 

to 1)0 oonstnict^l and oquippcxl each year, and 
an additional twenty miles a year if the same 
be required by the said party of the first part» 
until the whole is completed. First twenty 
miles to h:^ completed on or l>efore Jul^^ 1st, 
1871, and the whole to be complete<i within the 
time which now is or may hereafter be limited 
by Act of (^^ngress. 

AiirrcLK sKCoxn. 

And the said party of the second part hereby 
further coyenants and agreesthatit will furnish 
and provide and jxiy for all the engineer service 
necessary or ^requisite for the location and con- 
struction of said railroad and its appurtenances; 
such location and construction to l>e subject to 
the approval of the President or chief engineer 
of said party of the first |>art, who may direct 
such chan«»;(^s to be made as th(»y may deen^ 
proper, the sahirv of the chief (Migineer of tlu^ 
said railroad company to \w paid l>y the said 
party of the first part. 

Th(^ saWl party of the second |)art also agrec^s 
to pay all the cost and expfMisc of tlu^ right 
of way, and of procuring the same for th(» por- 
tion of said railroad constructiMl under this con- 
tract. 

ARTI(M>K THIRD. 

And tlu^ said [>arty of th first part 
hen^by covenants and agrees to and with 



869 

tlie said party of the second part, its 
successors and assigns, tliat it will pay 
for the construction and equipment of said rail« 
road and telegraph line as aforesaid the sum of 
twenty-eight million dollars ($28,000,000) in first 
mortgage honds of the said Southern Pacific 
Railroad Company and all of the capital stock 
of said company nor heretofore suhscrihed for 
or issued; and the said party of the second part 
shall suhscrihe for all said capital stock as afore- 
said and shall receive certificates of stock there- 
fore pro rata as hereinafter providi* 1. And th:> 
said party of the first part further agrees to d(»- 
liver to the said party of the second part upon 
th(» execution of this contract five million dol- 
lars of the ahove first mortgage honds and five 
million dollars of the capital stock of said rail- 
road company, and to deliver the remainder of 
said l)onds and st^)ck pro rata as the* construc- 
tion of the railroad and telegraph line progresses 
and is accepted hv the said party of the first 
part. 

AKTin.K FOI'RTH. 

And the said party of the first part herehy 
further cov(»nants and agrees to transport and 
convey over its railroad, free of charge, all 
agents, lahorers and employees, and all pro- 
visions, tools, iron and other materials, and all 
other property (employed or used or to he em- 



870 

ployed or uschI in and about the contract of sauI 
railroad an<l telegraph line and their appurte- 
nances V)y or for the said party of the second 
[)art. 

ARTICLE FIFTH. 

And it is further covenante<I and agree<l that 
this contract, or any part thereof, shall not he 
assigned or transferred by said party of the 
second part \vHthout the written consent of the 
said party of the first part being first had and 
obtained, and neither the said party of the 
second part nor any assignee or sub-c*ontractor» 
or any employee, laborer, or any person or cor- 
poration furnishing any material, or pt^rforming 
any lal>or or service upon the said railroad or 
^ ti^legraph line, or the (^juipments, fixtures or 
appurt(»naiices, or any [)art thereof, shall have, 
hold or enforce anv lien, incumbrance or claim 
against oi' upon the said party of the first i>art, 
their suc'C(*ss(>rs or assigns, or their railroad or 
telegraph line, or said er[ui])ments, fixtures or 
appurtenances, or any part ther(s>f, or any i)rop- 
erty of any kind of said partitas of the first part, 
or anv of {\w said work contracted to be doiu» 
hiMvin, either under the laws of tlu* Stat(* of 
California now in force, or which may hereafter 
b(» (»:iact(Ml or in anv other wav whats(K^ver. 

ARTICLK SIXTH. 

And it is herebv further aii:r(»(Ml that should 
till' said i>arty of tlu^ first part at any time In*- 



871 

come dissatisfied with the manner of the prose- 
cution of tlie work by the said party of the se:*- 
ond part, and if the said party of the second 
part shall fail, neglect, or refuse, when requested, 
to remove the cause of such dissatisfaction or 
to j)rosecute said work as required by said party 
of the first part, or to fully observe, perform and 
(execute its agreements as herein set forth, then 
and in such case the said party of the first part 
shall have the right to take possession of all the 
said work, whether finished or unfinished, as 
also of all the locomotives, cars and rolling stock, 
rails, ties, and all other railroad material; all the 
tools, hors(*s, carts, wagons, provisions, material 
and machinerv of all kinds used in the construe- 
tionofsaid railroad or telegraph line, or pur- 
<*has(Ml for that purpose, and may go on and 
(complete the said road and telegraph line at the 
(expense of the said party of the second {)art, the 
profit or loss, as the case may be, to be received 
or sustained by the said party of the second ])art. 

AUTTCLE SEVENTH. 

And it is hereby further stipulate 1 and agreed 
that no stockholder of the said Southern Pacific 
Railroad Company shall be individually or per- 
sonallv liable or bound bv the terms of this 
agreement, bt»yond or exceeding the actual 
amount of stock of said company lu^ld by him 
at the dat(» of the said agreement. 



872 

In tostimony whereof, the said parties ha\'e 
^caused these presents to be signed by their re- 
spective Presidents and Secretaries and their 
respective corporative seals to l>e heretic affixed 
tlie dav and vear aforesaid. 

Chas. Crcx'ker. 
[seal] president of the 

fc>onthern Pacific R. R. Oo. 

J. L. WrLLOl'TT, 

Sec re tan' of the 
Southern Pacific R. R. C/O^ 
Mark Hopkins, 
[seal I I^-esident of the 

(*on tract and Finance Oo. 
W. E. Brown, 
Socri^tarv of the Contraet and Finance Co. 

\Vh(M>*as, The annex(»d contract for the con- 
struction of the S<iutliern Pacific Raih'oad Com- 
[)anv's raih'oad has been only i>artially com- 
pleted, and the said Southern I^icific Railroad 
Coin[)any lias paid to said Contract and Finance 
Company all of the considerations to which it 
is pro rata entitle<l to reciMVc^ for the work done 
in accordance with said contract; and whereas, 
the WestcM'n l>evc^lopnuMit (yomi)any is desirous 
tvf purchasin*:: tlu* said contract of the said Con- 
tract i\u(\ Finance Company; 

Now, therefore, for a valuabU^ consideration 
in hand, paid by the Western 1 Vvc^lopment Com- 



873 

panv to Iho said Contract and Finance Company, 
the roc?ipt wh'^reof is herc*by acknowlolged, and 
for th(* further consideration that the said West- 
ern r)(»velopinent Company does hen^by cov(»- 
nant and [ifirec* to complete the said contract* to 
the (Ml tire satisfaction of the said Southern Pa- 
cific H:iilroad Company, and receive from said 
S )uth{Tn Pacific Railroad Company a full com- 
pcMisation, the rcMnainder of the compensation 
sp(H»ified in said contract not already {)aid, and 
the further consideration that it will hold the 
said Contra(*t and Finance Company harmless 
as to all matters providefl in said contract for it 
to do and perform, and pay all costs, damages 
and couns(»l fe.'^s which it mav he suh- 
ject to pay hv reason of any default 
after this date in the fulfiUmi^ntof the said con- 
tract, the said Contract and Finance Company 
has sold, a^sigruvl, set over and transferred, and 
hv thesi* j)r(»s(Mits does sell, assign, set over and 
transf(»r to tlu* Western Develo[)ment (^)mpany 
the contract annexed hereto, to have and to 
hold the same to the said Western Develop- 
ment (/ompany, its successors and assigns, 
forev(»r. 

In witni»ss whereof the said Contract and Fi- 
nance Companv has this dav of Janu- 

ary, A. I). ISTo, eaused this assignment to h(» 
signed hy its President and Secretary, and 



874 
sealed \ritli its s(»al as its corporate act and 

♦1(H'(1. 

Sam. a. Hopkins, 

President. 

[sKAL.f Jno. Miijj5:r, 

Sen^retarv. 

K(H*()rde<l l>o()k 1, contracts, [xifi^^ 8. 

Mil. Hayks. Q. The Southern Pacific Rail- 
n)ad Company consented formally to that . 
assignment to the Contract and Finance Com- 
pany of this contract to the Western Develop- 
ment Company, didn't it? 

A. Thev did, I think. 

(i. r think it is at i>age 271; in January or 
F(»l)ruarv. 

A. [After refcuTing. ] The answer was a))- 
proved •F(»l>ruary 2d, 1875. 

Mr. >r('AL[.isTF:R. Head the action had 
tlKTe. 

A. Do you want all of the pnxMH^dings? 

Mr. McAiJ.isTKR. Yes, sir. 

Mr. Havks. I have no objection. 

Mr. McAmjstkr. Put that in; what page is 
it on? 

A. On page 190 of the record hook of thc^ 
Southern Pacific Railroa<l (*ompanv, under 
(lute of Fi^hruarv 2d, 1875. 

« 

To the Pr(»sident and Dir(M:*tors of the ^vmtheru 
Pacific Railroad Company: 



876 

nTark(»(I '' A/' Wo believe tlie t^rms ^re nion* 
favorable tlian tbe work can be done bv several 
contrai^tors, or b}' any otiier eompanv. We n»- 
sp:^etfully ask you to consider the subj(^ct. 
West(»rn IXn'eloptuent Company. 

Hv J NO. MlLT^KH, 

Secretarv^ 

Wb(T(nipoi>, the followinjic i*esohition was of- 
fered bv Robert Robinson, and, beini; dulv se- 
tt)nded, was adopted by a unanimous vote: 

Whereas, on the first day of May, A. D. 187U 
tliis company entenvl into a contract \\nth tlit^ 
( 'ontra(*t and Finance (*ompany, a cor[)orati()n 
dulv oriranized under the laws of this State, l>v 
which said contract the said Contract it Finance- 
C()in|)any covenantcMl and a^n^ed to construct 
and e'|uip the railnvad of this company from 
(Jilrov, in the (^)untv of Santa Clara, to the^ 
f^i^terlv boundarv of tlu^ State of California 
near Fort Mohav(% as shown by said contract as 
spread u|)on the records of this com])any: 

And Whereas, tlu^ said (^)ntract and FinancM*- 
('onu)anv has bv an instrument in writinjr 
under itscor|w>rate stnil assij!;ned and transferr(*d 
Slid contract tothe Western Development Com- 
pany, a corporation duly incorj>orated and or- 
^uiizecl under th(^ laws of the State of Cali- 

Now, tlieretore, it is Resolved, that this com- 



877 

pany consents to and approves of said assign- 
ment and accepts the said Western Dvwelopment 
Tompany as contractor and party to said con- 
tract as fnllv, and in the same manner as the 
said Contract and Finance Company was before 
said assignment, and entitled to all the rights 
and i)rivileges of said Contract and Financi* 
( *ompanv before said assignment. 

Mr. McAllistkr. What date is that? 

A. The proceedings of February 2d, 187'"). 

Mr. Hayks. You were then a Director? 

A. I was at that time. 

Q. Before that meeting assembled had you 
been informal that th? object of it was, ti take 
that action, and that it was the desire of Stan- 
ford, Huntington, Hopkins, Crocker andColton 
that such a(*tion should be had? 

A. I don't remember in this particular mat- 
ter. Most matters coming before the meeting 
were presented to \ne before the meeting and 
talked ov(m\ 

Q. And the wishes of those gentlemen on th » 
subject conveyed to you? 

A. Mr. Crocker was President of the com- 
pany at that time, and he was about the only 
one that I consulted with while he was Presi- 
dent. 

Q. He conveyed the wishes of himself and 
associat(»s to \'ou befon* the meetings were held; 
and the action was had in harmony with and 



§78 

in ol)0(Ii(Mico to those wislios so eommimicatod 
to von? 

A. Yes, sir; certainly. 

Q. How niueli first niortgaji^e bonds has the 
South(»rn Pacific Railroad Company issued? 

]\[r. Ar<^\LusTKK. Up to what (htte do voir 
ni(»an ? 

>[r. Hayks. To now. 

A. That is a matter of record. I do not 
keep those things in my mind. The last an- 
nual report will. show what there was at the end 
of December. 

Mr. ^FcAllistkr. 1 have got those reports in 
niv room, and I will send for them. 

TuK WiTNF>s. Thev are a mattcM' of record. 
I do not ke(*j> those tilings in my mind. 

Mr. Havks. That I can V(M*v well under- 
stand. All tlu^ bonds that have Ihh'U issiu^d, 
have IxH'U issued to the persons, firms or corj)o- 
rations, as tlu* case mav be, who c(>nstruct(Ml 
the roa<l. 

A. And bv consolidation of the roads. TIhm'c^ 
Aven* some bonds paid on account of the consol- 
idation of tb(» roads. 

<2. What CDnsoh'dation callcMl for th(» issu- 
ance of l)onds? 

A. The consolidation did not call for it, but 
th.Tc wcn^ roads n^'onstructed, I mav sav, and 
a:Ta!igi* I t'> make a [>art of thi' Southern Pacific. 



879 

Q. The bonds wvre issued for tlu» work so 
doiK^? 

A. Y(»s, sir. 

Q. That is tlio f^enoral purport of my c|uos- 
tion. All of the bonds that have been issued 
liav(» l)0(»n issued for work done in building, 
eonstruetinp:, (^(luippinp; or repairinjj: the roads? 

A. Y(»s, sir. 

Q. The Contract and Finance (Jonipany was 
entitled to how nianv bonds when it went out 
of existence or ceased to perform that work, do 
vou know? 

 

yin, ]^^('ALLISTFJ^ For work doni*. 

Mr. Hayks. For work done. Yes, sir; it 
was undoubtedly for no other reason. 

A. I don't remember. I cannot sav with- 
out an examination of tho<'? b:)r>ks an I papers. 

Q. Th ^ date of this mortgage an 1 bind is in 
1875, I believe. R.^fore that time the Contract 
and Finance Company had practically gone 
out of business. I will ask vou if vou know to 
whom th(» bonds which the Contra;^t and 
Finance Company had earned from the South- 
(»rn Pacifi(^ Railroad Comi)any, were deliven^l? 

A. Xo, sir. 

i}. Who did the manual a:'t of d:^liVv'ring 
the b;)nds to the parties entitled to th?m ? 

A. I think I did. 

Q. Do you not kn )w t > wliom you give t'l*^ 



880 

londs tliat the Contract and Finanoo^Conipanv 
had earned ? 

A. I d(»livered them to the Secretarj' of the 
ompany. I don't understand your question. 

t^. Are you sure you d(»livered them t^) th(^ 
SeiM'etarv of th ^ (7.^ntra?t and Finance Com- 
pany? 

A. I am confident 1 did. 

(^. Were they not delivered aft(^r tlie Con- 
tra:*t and Finance Company had ceased to exist 
t ) til? representatives of S. H. H. & C? 

A. Xo, sir. 

(I. \VIi:mi did the ('0ntra'*t and Finance^ 
(*.)mpany cease to exist? 

A. I don't know anythin^ir al>tvat that. 

Sin. Havf-s. [To Mr. McAllister]. Have you 
»rot that dat(^? 

Mr. McAmjstkr. 1 have not. 

]\rR. Havi>\ (I. Have you j^-ot your lM>oks 
showin^ii: the issuance* of bonds and the (hites at 
which thev Wi'W issued? 

A. Ves. sir. 

(I. Turn to that and show when the (Con- 
tract an 1 Finance (\)m|)any's lu)nds wen* is- 
sued. 

A. I hav(* not that statemc^nt her(\ I have 
not thos(» hooks h(M*e. Th(*v will he here to-dav 
i)V to-ni<rht. 

Mk. ^[('Am.istkk. il. What l).:>oks an* those? 



}?81 

A. The gonoral ledger, the Journal and cash 
l)()()k. 

Q. Can't you answer from recollection? 

Mh. McAllister. I understand the Contract 
and Finance Company was disincorporated in 
IHTo; the })recise date I don't know. You can 
take that down as an admission if vou want it. 

Mr. Hayks. That is my understanding, also, 
and these honds were not printed until 1870. I 
\v\\\ take that admission and w(» will get th<» 
<late h\ter. 

(}. With that information, that the Contract 
and F'inance Company was disincorporated and 
ceased to (»xist in the year 1875, these honds hew- 
ing dated - 

A. [Interrupting. I I un<lerstand the ohject 
of vour iufiuirv now. I will sav that this is the 
second series of honds. There were honds issued 
in 1870, or 1871. 

Q. It was all withdrawn and canceled, and 
a new mortgage, made in 1875 and bonds 
issued in lieu of theni? 

A. Yes, sir. 

(^. I ask you now, to whom were the bonds 
that th(» ( ■(mtract and Finance Company were 
(entitled to, of the existing issue, delivered? 

A. I don't remember; I cannot sav who. 
The ex(*hange of bonds, you mean? 

Q. Yes, sir. 

A. Have no re-collect ion. 



882 

Q, Do you not know tliat you doliveivcl 
theiu oitlior to the individuals, or to their agent, 
or ropresontativi*, who are known as S., H., H. 

A. I do not. In fiic-t, I have no recollection now 
of the deliverv of the l>onds. It mav have been 
done l>v one of the clerks in the office. I sini- 
ply sent out the amount of bonda to be deliv- 
ered; sent them down to the office; that is mv 
impression or recollection of it. I have no rt»- 
collection of it. 

(^. None of those bonds that were issued 
have beiMi issued to any person other than the 
Western I>(?velopnient Company, the (N:>ntract 
and Finance Company, or S., H., H. ik (\? 

A. No, sir. 

(^. And tlu\v were issued, except as to this 

Tiiatt(»r of (^xchangiufz; the old fortlu* n(»w bonds: 

the bonds WiM'e issued as the road was ])uilt, and 

navniiMits made at the various stasc^'s of con- 

struction it had arrivt^d at? 
A. Yes, sir. 

(^. Who d(»termined upon the ccMisolidation 
of the South(M*n Pacific Railroad Company 
with tlie Iios An^zeles and San Pc^lro Railroad 
( 'o]n[)any ? 

A. The Directors at that tim(^ 

i^. Was it not deti'rmined for thr Directors 
bef)r(' th 'V took their action on it, 1)V Stanfonl, 
Huntin;iton, ll(){)kins and Cro(*k(^r, and wasn't 



883 

it in obedience to the wishes and directions of 
those {jjentlemen, that the consolirhition was 
carried out hv the Directors? 

A. You name the others. I had to do prin- 
cipally with Mr. Cro;^.kcM% as Presi(hMit of the 
company during that tim.^ It was undoubt(»d- 
Iv the wishes of those stated to him. I did my 
business with him as well as with them. I 
don't remember in that matter having talked 
with any one excepting him. 

Q. The action of the Board of Directors, 
then, was in obedience to his directions in mak- 
ing that consolidation? 

A. Yes, sir. 

C^. How was it as to the subsequent consoli- 
daticms? The consolidation in August, 1873, 
with the Southern Pacific Branch Railroad Com- 
pany, if that was prior to the Los Angeles and 
San Pedro? 

A. The Los Angeles and San Pedro was 
the last one, I think, in December, 1874. 

Q. Yes, sir. As to the consolidation with 
the Southern I^xcific Branch Railroad Com- 
l)anv, in August, 1873, was that the action of the 
Div(»:'tors had in the sam^ wav, in ob? lieii?..^ to 
the dir(»ctions of Mr. Crocker? 

A. It was. 

Q. It was not the subject of negotiations ])e- 
tween the Board of Directors, yourself include !, 
Aou l)eing a Director then, and the Directors or 



884 

stockholders of tlie other corporations. It \va< 
done* in obedience to the directions of ^fr. 
(■rocker, wasn't it? 

A. Well, r woiiM have to set^ who the r)ire<*- 
tors w(»r(» at that time. 

Q. The Directors at that time were (\ P. 
lluntinfxton, D. D. Colton, Robert Robinson, 
Charles Mayne, S. T. (Jajje, E. H. Miller, Jr. and 
J. L. Willcutt? 

A. I don't ren^ember now tlie cireun^stance- 
of tli(» subject beinji:' first brought up. But I 
presume it was deen^ed advisal)le to consoli<late 
those companies, and that the matter was talked 
4)V(»r among us all. 

i^. l)(»em(»d advisable by Crocker and his 
associates? 

A. Hv all of us. 

(2- Hid you yourself broach tlu» i>rop<>sition 
ill auv wav, or did v<^u not simplv concur in 
thc' vi(»ws (»x])rcsstMl to vou bv Mr. Crocker? 

A. As I sav, 1 was in dailv communication 

t t 

with Mr. Crocker and others, and the matter 
was talked ov(M* betW(MMi us. Kverything in tlu*^ 
Board was brought in — the trausactions of the 
Board were uot brought in dircH'tlv bv Mr. 
Crocker sayiug we will do so and so: I cannot 
sav who first start<'d it. 

(^. 1 understand there are many details that 
are left to the officers and Directors: but speak^ 
in«r of such matters as tliese consolidations ? 



885 

A. Their views coincided with ours. 

(^. Their views were the first expressed? 

A. Thev mav have heen, or luav not. It 
nia}' have heen some officer of the company. 

C^. Did you ever suggest a consolidation? 

A. I don't rememl)er that T did. But I 
liave suggested different actions in diffc^rent 
matters. 

Q. Of course there is a great deal of impor- 
tant business that must be left to the officers of 
the company, otherwise there would be no use 
in having officers. Were you a Director in the 
Los Angeles and San Pedro Railroad Co. ? 

A. I think I was. 

(I, Was there stock standing in the books of 
that company in your name*? 

A. If I was a Director, there was. 

(). ( -an vou inform vourself? I would like 
to g(»t rid of that '* ifV 

A. I hav(» not the books of that comi)any 
h(»r(». 

C^. I have a list here, furnished by your- 
selves. This is the r/)s Angeles and San IVdro 
Railroad Company. You seem to have been 
(»lected a Director of that company August 
14th, 1874? 

A. There was stock in my name. 

Q. Did you own it? 

A. No, sir. 

Q. Who did, do vou know ? 



886 

A. I (loirt know. 

Q. Was it not from Stanford, Hiintin«:ton, 
Hopkins and Crocker? 

A. The road was purchaserl, an<l was oper- 
ate<l at tliat time in tlieir interest, an<l it un- 
dou1>tedlv was. Thev were the owners of the 
road. % 

(). Was anvlKMlv else interested in that roa<I 
at that time ? 

A. Yes» sir; some few shan^ outstandinjr. 

Q. What stock ? 

A. I tliink (rovernor Downev, in I»s An- 
jreles, had some, and others; and I think they 
have never surrendered them. 

Q. Yon think they are >4ill mon^lx^rs of tliat 
corporation? 

A. Yes, sir. Th(»re an* somt* certificates of 
the corporation which nc^ver have Ihmmi sur- 
rend(M'C(l. 

il. 1) ) you know at whose rc^piest you ac- 
ccpte I th' s:oi-k and th(» p.)sition as Director in 
that (M)in|)any? 

A. No, sir: the hooks at that time were in 
Los An^^elcs and the transtiM* was madi* then*. 

<^. You wen* at the tinr* of the consolichi- 
tion a Director both of that company and of thi*- 
Southern Pacific l^aih'oad Company? 

A. Y(*s, sir. 

il. And in your action on t\w consoh'chition 
in Ivoth cai>aciti(*s, as a Din^'tor (vf (»acli com- 



887 

[)anv, you acted in obedieuco to tlio wislios of 
Mr. ('rocker and his associates? 

A. Yes, sir; there were no objections to it. 

Q. Yon were also a Director of the Los An- 
j»;eles and San I)ieji:o Railroad Company, were 
von not ? 

A. Y(»s, sir. 

Q. Was tliere stock standinf:^ in your name 
on th(* hooks of the company? 

A. Yes, sir. 

(^. Did you own it? 

A. Xo, sir. 

Q. At whose request did you ])ec )m? a Di- 
r(»ctor or accept stock in that company? 

A. 1 think I was one of the original suh- 
scrihers; never had any presented to me. 

Q. Have you the certificate of incorporation 
of that company here? Were you one of the 
incorporators of tliat company? 

A. I tliink so. 

Q. At whos(» suf^gestion or recpiest did you 
sign th(» certifi(*at(» of incorporation ? 

A. If 1 did, it was at tlie re(|uest of Mr. 
Stanford, iVfr. Crocker or Mr. Huntington, as he 
was hack and fortli then. 

Q. You did not personally undertake to or- 
ganize th(» railroad yourself there; it was in 
oh(Mli(Mice to their suggestion and request? 

A. I cannot sav now. That road was huiit 
originally un<ler the original contract with the 



888 

Contract a!i<I Pinance Company; and the cor- 
l>oration (letormine<l upon afterwards was a sep- 
arate* orjjcanization. 

Q. Deterniineil on by whom? By Mr. 
l*rocker and his associates? 

A. Yes. sir; it was determined on Hv them, 
hut I <*annot say how it was first suggeste^I. 

Q. And you sijrnefl the certificate of im^>r- 
I>f)ration at the refjuest of one of those gentle- 
men ? 

A. Well, there was an un<Ierstawlinir Ih^ 
twetMi us, if I was one of the im^>rpi>rat»>rs. and 
I tliink I was. 

QAnd vmi sav vou wi*re an ori^nal >ul>- 

.<cril>er for that st<K*k. I^> vt>u sav that v«xi 

« • • 

actiiallv and />/»/// fifh sulv^^ril*Hl tor st«X'k in 
that <nmp:iny for y«mrst*lf? 

A. I s:i!»-rrilK-d in tbj' int»''n*<t «>f th- <-«^r- 
[M)ratioii. 

(> In t!i- int M-e-it «^f S::inf«>rl. HintiiiLrt >:\^ 
Hopkins and < 'rocker, wasn't it? 

A. V»»-. <ir. 

O. And th»' stot-k whirh v«ki suh- -rilKvI t'.^r 
yoii r»N;»iniz»'d a- l^-iiii th-ir pr«»p.Tty. an I u*^ 
yf»Mr-"/ 

A. If t!i -v -i'> d -^in- 1. 

^l. Ir wa- n«»t an artual ffn.'ftr nJt <iil^-r{[— 
x'h*:\ **i\->\\r<. in lividtially? It wa-railt- in 
tiv- int»M>--t ^f 

A. [ Inrt-rruptinLr.| Thar w^iuld 1»- :L- 



889 

natural n»sult of it, I supp:)S(\ that it would jro 
to thoni. 

(I, You wero a Director in the L>s Anficol(»> 
and Tndependtnico Riilroad, wore you not? 

A. T think not. 

(I. You do not recollect all the companies 
von have heen a Director of? 

A. No, sir. 

Q. In this list furnished me from your of- 
fice, 1 find that vou were elected a Director of 

a. 

that company Novemher 21st, 1877. 

A. Of tin* Los Angeles and Independence 
Railroad ? 

Q. Y(»s, sir. A Directorship or two does 
not im|)ress itself very forcihly upon your 
memorv, does it? 

A. No, sir; it does not. 

(l. The Board at the time you were eltH»ted 
was I). D. (yolton, Charles Crocker, F. S. Doutv, 
Cratton Perrv, E. L. Sullivan and J. L. Will- 
cutt. The n(»xt year you were elected again, and 
rennuned in the next year, according to this 
list. Did vou own anv stock in that road? 

A. I did not. 

Mr. Hayks. [To Mr. McAllister.] This is a 
list furnished us l)y you gentlemen. I suppose 
vou will admit that he was a Director of that 
company at that time. 

Thk WitxK'^s. I presum.* that is one of t'v^ 
companies. 



890 

^[r. Haykk. The record stock hooks vou have 
.<fiit tor? 

y[\i, ^[('KisirK. I supi>oso Mr. Willeutt will 
rooopiizo the handwTitiiig. 

Mm, McAllister. [Shounng the list Uy the 
witness. I Whose handwrritiiijc is that;^ 

A. T don't know that handwriting. 

Mr. Hayf.s. [To Mr. McAllister.] Have 
you th(* stock recnvrd lv)oks of that company 
hen* ? 

Mr. McAllistkr. (tf the I^os Angeles and 
Independence* Railroad? 

AFr. Havks. Q. You do not undertake to 
trace the* handwriting of evervhodv in that 
luiilding, do you ? 

A. No, sir. 

Mr. McAllistkr. 'Hiat is all ri<iht. 

Mr. Hayks. Xow 1 hav(» got the hooks. I 
will turn to them and n^ake assurance douhlv 
sure. 1 Hill tlu^ nu'ords of this in noting in this 
l>:)()k, the re^'ord <vf the lu-.u^ting of Xovc^inher 
21st, 1S77: 

" ^. p. Ja 'ksoii then tendercMl his r(*si<ji;nation 
rts Din^ •t')r. On motion the sani? was aecep'- 
i-'l. It WIS then m[')V(Ml an 1 si^conde 1 that J. 
li. Willeutt 1>^ (M(* 't.'d to till tlv vaeur/v, wlii(»h 
was carried." 

Thati- XovMuSer 21st, 1S77. 

il. Were you a stcvkholdi^r in that onipany ? 



891 

A. I don't know that I was. The hooks will 
pro])ahly sliow. 

Q. Look at the stock ledger and see. 

A. [Referring]. There was stock in my 
name. 

C^. How nuich? 

A. One share. 

Q. Did you own it ? 

A. Xo, sir. 

Q. Have you any recollection ahout it? 

A. No, sir. 

Q. Did you ever have the certificate? 

A. I have no recollection of it. 

Q. In your action as a Director of tint ccmi- 
pany, I will a-^k you if you did not a:*t in ohedi- 
(»nce to tlu* wishes and requests of Mr. CrockcM- 
and his associates? 

A. I don't remember what came up at any 
of th^s.3 m3^tings — .vhat transactions. 

Q. T will see if I can find something. Yon 
vot(»d to elect Douty Secretary, for one thing? 

A. T shouldn't object to that. 

(2. Xo, sir; h(» is an excellent Secretary, I 

b(»lieve. Hvvv is a resolution which vou voti^l 

t. 

on, authorizing Mr. Huntington to collect from 
the Postoftice Dej)artment of the United States 
all mr)neys due or becoming duo to the L )s 
Angeles and Independence Railroad Company 
for mail service. 

A. That I should have approved of. 



892 

Q. You were also a FHroctor in the Califor- 
nia Pacitir, wero vou not? 

A. Yes, sir. 

Q. I)i<l you own stock in that roiid? 

A. I (lid not. 

(^. Was th(*n* any standinjjc in your name? 

A. Yes, sir. 

(I. How much? 

A. I cannot now state. 

(i. Who owned it? 

A. I cannot sav; I don't ivmemher. 

(2. You did not? 

A. I did not. 

Q. You W(»nt there «ind acce|>ted that stm^k 
and act(»d as a Director tlu^re, f()r the purposi*^ 
ivf s'M'vin^r th(* wishes and interej^s of Stanford, 
Huntin^t(Mi, Hopkins and ('r(K*k<M\ did you 
not ? 

A. .VctiujjT as a Din^-tr^r, in whatt»ver mat- 
teis mij^ht com(» up. 

(^. For them and in accordance* with tluMr 
wislies? 

A. f don't r(»mvmh(*r of anvthimr that th:»v 
»M)mmiinicated before the^ B:)ard. Xot tiiat [ 
went tlien* to do simply what they wanted nu^ 
t(». .\nythin<!: coming up wliich theiv was occa- 
sion to pass on, 1 n>i<rht hav(^ passenl on, hut I 
ilon't ren»einl)(»r of anythinji: in tliose nieetinji:s. 

(^. You went there 

A. I lnt(M*rui)tin<r.| At thc^r recpiest. 



893 

Q. And tliat Avas tlie case witli all of your 
Dinr tor ships ? 

A. With mine it was, through those gonth*- 
nien. I havo heon connoetod with them since* 
1870. Thev have asked me to act in various 
companies since that time. 

Q. You have at their request acteci as an in- 
corporator of companies and corporations. 

A. I hav(». 

(^. And as Director also? 

A. Y(*s, sir. 



-o- 



CUOSS-KXAMINATIOX OF J. L. WlLLClTT. 

Mr. M(\\llistkr. Q. You state that you, 
in Decemher, 1874, acquired one share of the 
capital stock of the Southern Pacific Railroad 
Company. Was that your own stock, or was 
that stock simply held in your name, th(» hene- 
ficMal int-CM'est heing in other people? 

A. Mv own stock. 

(>. That one share was vour own stock? 

A. Yes, sir. 

il. And you have held that one share* since 
Decemher, 1874? 

A. Yes, sir. 

il. And you hold it now? 

A. I do. 

(}. So you were then a lfo)Hi fide stockholder 
from th(* time of accjuiring that one share? 



894 

A. Y(»s, sir; T was, and luivo Ijeeii. 

i^. Was thero any of the stock of the South- 
i»rii Pacific Railroad Company that you owned 
a(*tually ycKirself, hann fide^ excepting that one 
si 1 a re? 

A. None other. 

(^. The rest simply stood in your name? 

A. Yes, sir. 

Q- Si>eaking aW>ut the number of shares of 
th(» Southern Pacific Railroad Company, will 
you look at your annual reports there, and per- 
haps you can answer my ([uestions hy reference 
to them? 

A. (>f what year? 

(). I want to find out whether yr>u wen*- 

^ »■ 

riglit as to the whole amount of capital stock 
Ikmuo; $4(),()00,()()()paryalue. 

A. That was at first; the orijrinal incorpor- 
ation. 

(^. 1 want t(Mni(l(»rstand about that. What 
was tlic ori^iinal incori>orati<>n of the Soutln^rn 
Pacific Raih'oad ('om|>any? Was the nanu' tlu- 
same? 

A. Th" name was tlic sani?. 

(^. Wliat was the first c>r^anization, and 
when "! 

A. I Af*t(M- reten'inu.| The (»arli(^t orjraniza- 
tion. I think, was in ISf)."). 

(^). After that what was tlie next organization 
o!'the S:)iith'rn Pacific Iviih*oad Company? 



895. 

A. Tlie consolidation in 1870. T think T can 
find the original. 

Q. What was the* next organization aft(»r 
that first one? 

A. Thev were consolidated under the name 
of the Southern Pacific Railroad Company. 
Th(»re were several organizations consolidated 
under the name of the Southern Pacific Rail- 
road Company. 

(^, When was that first consolidation? 

A. In Octoher, 1870. 

Q. Was there any other consolidation l>e- 
sides that of the Southern Pacific Railroad 
Company ? 

A. Since that dat(» it has consolidated with 
the Southern Pacific Branch Railroad Company 
and with the I>os Angel(*s and San Pedro Rail- 
road Company. 

Q. Wen* those two more consolidations? 

A. Thev were consolidations; and then*- 
upon amended certificates of incori)oration were 
filed also. 

Q. Wh(*n was the first of those con-^olida- 
tions? 

Mr. Hayks. With the Southern Pacific 
Branch Railroad Company, was August 10th, 
1873, with the Los Angeles and San Pedro, on 
Decemher 18th, 1874. 

Mr. McAllistku. Is that August 10th, 187'^, 
the date of tlu* consolitlation? 



8%- 



>[k. Havks. Tlie tirst et>n.si>Ii<Iatf«>ri w.ts 
O't >l>or ritli. 1<S7(>. He h;is tj^ven that al- 
nuulv. 

Mk. McAlustkr. Q. Wliat wiis tht^ <*tnis<)li- 
Nation of Aiijnist imh. ISTrJ? 

A. 'Hio iMHis4>li<latioa of the wSvuthera Pat'itii- 
Kailn>ad (^>tuparlv with the Snithera Pat*iri<- 
Uraru'h Railnnul i'ompanv. 

i^. Wlieii \ras the present •►nrjinizatioii 
tin l^? W^.i- it hr eiHisoliihitiori or ne\r eL^rtiti- 
i*:it'<: till* last v't>ris4>li4lati»Hi ? 

A. riie Uvs Aris£i4es ami >aii Pwlnv Riiil- 
!^>a» { ? 

M«. HvvKs. Tile hit^ etHij^>li«{atioii w:iif tlit* 
l. »s Ati;j?'les^ an*l >an P^<f^r^ RailnHuf <^.»-aipaiiv. 
P»'»*'mlH*r t^h. t^7k Vmi \v^I ! ^4^*^ hv \onr 






•J i-.^ ofe in»[ 



TMar 



•Mt 



•• » 



• !-< ».i«r:s[ t» HI "v:is. irtt*»^ i »e*— Mio^^r T^tii. 



\ ' • VL-- :\K »p-* ill **»Jil|Htll\" ^tl;;r 



 i  a 



t 



 » • . * ( ; 



 \ : ^ I I 



• I 



f \ • . • ►. .^ 



•\* •' »v ••U'^»ii<i:tCi«»ii *r 



"*•**. iL<ie«L i-fct.*»-*iii— 






897 

the bonds wliicli have been called here the 
Southern Pacific Railroad bonds? 

A. Y<»s, sir. 

Q. What was tlu» capital stock of that com- 
pany? 

A. Ninety million dollars. 

(^. Ninety million dollars called for in the 
certificate of incorporation or consolidation? 

A. Y(»s, sir. 

q. Is that rifrht? 

A. Yes, sir. 

(^. Is that the corporation that originally 
had 40(),0()i) shares, and then it increased its 
stock so as to hav(» i)()0,00()? 

A. No, sir. 

Q. That was originally organized, 'then, 
with 90(),()()0 shares, was it? 

A. This one. Yes, sir. 

Q. How much of that st()ck was snbscrlbed 
for — speaking now of the present Southern Paci- 
fic Railroad Company, as it existiuj in 1879? 

A. Subscribed for at that time? 

il. How much stock was subscribed for 
down to the 27th of August, 1879? Don't your 
annual report show ? 

A. They show the ^tock issued, but not sub- 
scribed. 

f 

Mh. McAllistkk. I thought that showed 
the stock subscribed. This subscription [re- 



898 

fcrriup: to rooonls] was a littU^ larger amount 
tliaii tlio stock issued. 

<2. How mucli of tliat st<K-k was sulisorilKMl 
for? 

A. I liavo not tlio n^cord of 1870 with uie 
luMv. I luiv(» it for 1H78 and 1880. 

i^. I have just handed it to you? 

A. Th(^ report for 1878 and 1880 is here, hut 
not for 1871). Tlie whole nuniher of shares is- 
su(»d at that tinv» was 237, 70H. 

Q. Vou are sjx^aking of previous to August 
27t]K 1870? 

A. Of hetween Decemher l!)th, 1874. I am 
going hack to IVeemher 19th, 1874. 

il. How many sliares were issue<l then? 

A. 2:57. 7o:{. 

i^. Did that rej>n'S(»nt tlie uun^luM* of shan^ 
issued down to tlic end of 1871)? 

A. No, sir. 

i^. I want to get the numlxM* of shares out- 
standing on tlu^ 27tli of August. 1870. How 
inanv shares wim'c issued at that time? 

I'riie witiu'ss rcfc^rs to thi^ rcH'onls.] 

(I. If you cannot find that, I will pass it. 

Mi{. Havks. Wlicn vou find it then I would 
like to liavc you get tlie nanu^s of the parties 
holdin^j; it and th(» numhi^r h(»ld Kv c^acdi. 

Mi{. ^^('AI.MSTKI^ \V(» will pass that now, as 
it creates delay. 

(^. You were s[)eaking of a certain part of 



899 

this Soutliorn Pacific Railroatl Nvhioli was built 
l)y tho Contract and Finance Company and a 
c(»rtain |)art built by the Western D(»V(»lopinent 
Company. What was the portion of it built by 
the ('ontract and Finance Company called? 
Was it not called the Northern Division? 

A. They built a portion of the Northern Di- 
vision. 

(I. What portion did the Contract and Fi- 
nance ('Ompany build of the North(»rn Division 
of the South(M-n Pacific Railroad? 

A. Th(n' built from (Jilrov to Tres l^inos, 
and from ('arnaderoto Soh^dad. 

(). How manv miles is that; do vou know? 

A. That would be, I think, about one hun- 
dr(»d mil(»s. 

(2. Do(»s one hundred miles represent what 
the Contract and Finance Company built of th(* 
Southern Pacific Railroad Company ? Is that 
correct ? 

Mr. Havks. 1 sufxgest that you can get that 
out of Mr. Hrown bettc^r. 

Mr. McAllistkr. Q. How is that? 

A. I think about one hundred miles. 

(^. And what length of road was built by the 
W(»stern D(»v(»lopment Company? 

A. It was built in detached portions. 

Q. Altog(»ther? I want the hMigtli of road. 

A. There wen* 140 miles l)uilt bv the Con- 
tract and Finance Company. 



900 

Q. Stato again what they huilt. 

A. Th(»v huilt froii) Clilrov to Tres Pinos^, 
and from (loshen to Tipton, au<l fron^ Tipton tr> 
Dolano. 

(). 'riion it was 14() miles? 

A . 1 4»jj04i. 

il. AVhat was tho lengtli of roarl Imilt hy tlie 
\V(»storn Dovolopment (7omixvny, of thi* South- 
i»rn i^icific H^ulroad? 

A. 404J1,. 

il. \V]^at wiiK tlie aiiipuntof l)omIs fHitstanJ- 
ing which had hoen issued hv the ?outliern Pa- 
fific Railroad Company on , the 27th of Aujrust, 
1879?' 

A. I hav(» not anv statement here, showin<r 

; > ' •  

those fifrun^s. 

(^. Then |Kass it. 

Mk. Havks. I tliiirk it is twentv-ni]>e and ;r 
half iiiillions. 

^^R. McALhisTKif. T tliink thi* annual report 
sliows it all. 

TuK WiTMCss. I have not the annual report 
of lS7i). If 1 had th(^ reiKHl for ^S71^ 1 eould 
det(']*!nin(* hettcr. 

(I. You wen' sj)eakin^" ahout your aetinj^as Di- 
rector at the rcHpK^t of those ^*entlenu'n — Stan- 
f >rd, ir\nitin;::ton. Hopkins and ('roek(T. Did 
vo;i, in the (^)urs(» of vour action as Director of 
the Southern Pacific Railroad Company, exer- 



901 

(*iso your own jud^jment on frequent occasions 
as to the operations of the company ? 
A. Yes, sir. 

(I, Did you ever oppose the views of any of 
those jjjentlemen — Huntington, or tlie others ? 

A. I don't rememher having any occasion to, 
ref(Tring now to Board meetings and tlie prep- 
aration of papers. 

(^. Were you ever requested hy tliem to do 
anything tliat you considered wrong? 

A. 1 never was. 

Q. You spoke of the exchange of honds in 
tlie Southern Pacific Railroa<l? Explain that 

matter a Httle more fuUv. 

• 

A. There was a mortgage, I think, date I 
April 1st; a mortgage made in the first consoli- 
dation of Oc'toher, 1870, or an issue of honds 
made 

(I. [Interrupting.] I want you to explain 
the transaction of this exchange of honds you 
speak of? You referred to it without explain- 
ing it. 

A. A mortgage was made from th(» road as 
it existed on the 1st of Octoher, 1870, at the 
consolidation. A certain numher of bonds had 
been issued on account of the construction of 
the road, and after the consolidation of 1874 a 
new mortgage* was made, and honds is^sued 
undiM* it, and the old mortgage was siirnMidered. 



902 

Q. Yon moan they wore siirronJenMl ]Hm(l 
for bond? 

A. Yos, sir. 

il. Any person, then, holding lx>nils issuihI 
for the first mortgage, surrendere<l those bond?^ 
and got th(» lw)nds issu(Ml under the new niort- 
gag(»? 

A. Y(»s, sir. 

(^. '^riiat is an (\^ehange of Ixmds, as you call 
it? 

A. Y<»s, sir. 

(I. At the time you were advising witli Mr. 
Crocker as to the eor[X)rate action of the Soutli- 
ern l^icifie Railroad Company, he was, (hiring 
all of that time, the President of that eor[)ora- 
tion, wasn't he? 

A. V(*s, sir. 

(). You sav that at the time of the eonsoli- 
ilation of th(» Southern Pacific liranch Railroad 
Company with thi^ Southern Pacific Railroad 
Company, and tlu* consolidation of th(» Los 
An;j;cl(»s anrl San Pedro Railroad (*ompany with 
the Southern Pacific Raih'oad (*ompany, tlu»rc 
were outstanding shares in that company hehl 
Uv (i)veri\)r I>.)\viu*v and others in L')s An- 

A. V(*s, sir. 

(^. That is, they wen* st(K*kholders in that 
f-ompany ? 



903 

A. Yes, sir; I can answer as to the out- 
standing l)on(ls of 1879 now. 

Q. That is what I wanted to get at, the 
bonds outstanding on the 27th of August, 1879, 
of the Southern Pacific Railroad Company. 

A. There had been issued 29,520,000; they 
redi^emed :i34,000; leaving 29,180,000 on 
I)ecend)er :nst, 1878. 

Q. What was the amount then a(*tually out- 
standing on the 27th of August, 1879; wdiat 
vou first stated there ? 

A. There may have been a change between 
that and August. 

Q. 29,18(>,00()? 

A. I cannot say as to August, 1879, but as to 
December 31st. 

AFr. Havks. $29,180,000? 

A. $29,180,000 was the amount issued at'tov 
taking off what had been redeemed outstanding 
on December 31st, 1878. 



■<> 



RK-mRKCT EXAMFNATIOX OF J. L. WiLUU'TT. 

Mr. Hayks. Q. Will you kindly make and 
send to us, to be accepted as a part of your tes- . 
timony, with consent of counsel, that state- 
ment of the stock that was issued and to whom, 
on August 27th, 1879, of the Southern Paciiu- 
Railroad Company? 



904 

A. Outstandinf;; stock at that timc^? 

il. Yos, sir, and the names of the stcK'khoId- 
f»rs {ind the shares held hy them. 

Mr. MrALLTSTKR. Better n^ake it and put it 
in wliile vou are here this afternoon. 

Mr. Hayes. Q. Was there ever any vory 
fierce diss(Mision in the P$oard of Dire(*tors of 
lh(» Southern Pacific Raih'oad (^onipanv on im- 
l)ortant husiness? 

A. No, sir; the dissensions always occur in 
t'l? settleni[>nts of accounts in the difTerent 
departments. 

Q. That was not in tlie lioanl of r>i rectors.* 
me(»tinf!:? 

A. No, sir. In the matter of accounts tliere- 
have heen some considerable diffc^rences som<*- 
times. 

<^. Itiit the l?()ard of I>irect(>i*s won* h;ir- 
monions ahvavs, wen^ tliev not? 

A. Yes, sir. 

(^. I>() you know at whos;^ diret^tion it was 
that tlie n(^w mortjra^jje was made in ISTo, and 
;nith<)riz(vl hv the Hoard of r>ire<"tors, wliich 
wn-j to take th(» phic(^ of thi^ old mortjjcajr^^. 

A. I don't r(Mneml)(M* just tin* circun^stanc^es: 
just wliat was said in (•(►nn'.n^tion with it. The 
Icnj^th of thi» road was increased, and a lar]Li:(U' 
luort^ratic made. 

(I. Hon't you know that the issue of that 
iu<u*tji:a,^e and the new honds in li(Ui of th(» old. 



eo5 



was a matter decided and deter mi nod upon l)y 
Stanford, Huntington, Hopkins, Crocker and 
the Directors of the Soutliern Pacific Railroad, 
in regard to the matter, in ohedience to their 
wishes conveyed to the Board? 

A. r don't know that anvhody heyond Mr. 

I • t 

Crocker conveyiMl their ideas. 



•(> 



Kk-Choss-P]xamixation of J. L. WiLLrrrr. 

Mr. McAllister. Q. You say, Mr. Will- 
cutt. that then* friMjuently was dissension as to 
accounts hetween the officers of the diff*crent 
corporations? 

A. Y(»s, sir. 

i^. How would those dissensions grow up; 
what was the nature and chara(*ter of them? 

A. The accounting department of each roa I 
d(»siring to do tlu* best tliey could for their own 
road, and (piestions would arise. 

Q. As to how matters slioidd hj c!i irg vl to 
<n fie rent roads ? 

A. Yes, sir. 

(I. And how th(*y should be credited, I sup- 
pose? Each Secretary, or each officer desiring 
that his road should be fairly dealt with as to ac- 
counts, is that it? 

A. Yes, sir. 



906 

Q. And ymi did have dissonsions of that 
kind? 

A. Yos, sir. 

Mr. Hayks. Each of them wanting to make* 
the l)est showing jKvssihle for tlie de|>artnient 
und(»r his control? 

A. Yes, sir. 

Q. And if he could get a little more than lu* 
I)erha{)s, might he strictly entitled to, he <lid 
not hesitate to do it, so as to make a gocxl show- 
ing for his own department; was not that the 
fact ? 

A. I sui>i>ose that was the fact; that was the 
ol)j(»ct of it, and the others looked to see that he 
flidn't do it. 

(). You will make that other list hefore voii 
}io, will you? 

A. Yes, sir. 



-o- 



I)n?K(T KXAMIXATION OF FuAXK ShAV. 

('all(Ml foi* plaintiff*. Sworn. 

Mk. Hayks. (^. What is your husiness ? 

A. I am in the employ of the (\Mitral Pa- 
cific Kaih'oad (\)m|)any. 

(^. How long have you been so (MUployed ? 

A. Sinc(» alwKit the middle of 1870. 

(2- You have hc^en (rOYernor Stanfonl's 
Private Secn-tarv, haven't vou? 



907 

A. Yes, sir. 

Q. How loiifj;? 

A. A little over four years. 

Q. And are now? 

A. No, sir. 

Q. You havc^ been relegated back to tlie cor- 
poration then, have 3'ou ? 

A. Yes, sir. 

Q. Do you know a corporation called the 
Occidental and Oriental Steamship Company? 

A. Yes, sir. 

Q. You have been a Director of that? 

A. Yes, sir. 

Q. I l)elieve you are not now, are you ? 

A. No, sir. 

Q. While you were a Director, was there any 
stock of that corporation standing in your name 
on the books? 

A. Y(»s, sir. 

(I. Did you own it? 

A. No, sir. 

(I Who did? 

A. (rovernor Stanford. 

Q. At whose recpiest did you receive that 
stock and act as a Director of that corporation? 

A. At tlie requ(»st of (Jovernor Stanford. 

Q. In vour action in that Board did vou act 
in acconhince with his wishes and those of his 
associates? 

A. Yes, sir. 



90S 



("'ross-Hxamixatiox of Frank Shav. 

By Mr. M(\\lli.stkr. Q. You did not ow?i 
any of the stock of that company, houft fide^ 
yourself? 

A. No, sir. 

Mi^ Havks. Q. You \roro a Din^etor about 

two v(»ars, wen* vou not ? 

• « 

A. Y(^s, sir. 

Mr. McAllister. Q. Wore you (lovernorStan- 
fonUs Private Secretary durin<ir tlie ye^ar 1874? 

A. Xo, sir; fiT>m Aprils 1878. T heji:an with 
Iiini in Ai)ril, 1878. 

Q. An<l continued to he his l^-ivatc^ Seen*- 
tary for liow long? 

A. Tp to June or July 1st, 1882. 

(2. You liave IxMMi r(M|uest:Ml to produce* Iumi- 
all letters writtiMi by d(»f(Midant (\ V, Hunting- 
ton to belaud Stanford during the months of 
Se,)cCinl)er, ( >ctolHM\ Noy(»n\l>er and I)(*C(MnbiM\ 
1874, ^[av, 1875, Xoy(Mnb(»r and December. 
1878, ,Iuiu\ 1878, February and June J 870. and 
also th(^ letters from said C V. Huntington to 
<i:)V(»rnor Stanford, numbers 41).*5, o()7, oiM), 510, 
')21. 520 and 501. Haye you searcluMl for tlios.^ 
letters? 

Mr. Havks. Is this cross-iwamination? 

Mr. McAllistkr. No, sir; 1 simply want t(v 
pr >v(^ this bi'fon* he goes away,^ to show that 
\v»* canno^t product* this^^i* letters^ that he has 



909 

searched for them and canaot find them. This 
is independent testimony of ours to account for 
the non-production of those letters that they 
liave asked us to produce. It is simply to prove 
the search for those letters. 

Mr. Hayks. I do not like to have vour case 
in with ours hut vou mav make him vour wit- 
ness for that purpose. 

Mr. McAllister. Q. Is Governor Stanford 
out of the State at this time? 

A. Yes, sir. 

Q. And has l)een for liow lonj^:? 

A. [ think ahout one vear. 

Q. Have you heen reciuested hy the c:)unsi>l 
here to search for those letters that I have just 
neumeratcd to you, from C. P. Huntington to 
( lovernor Stanford ? 

A. Yes, sir. 

(i. Have you found any of them? 

A. I hav(» found nrme at all. 

Q. Where have you searched for them? 

A. In (rovernor Stanford's office, and also at 
his house. 

C^. Have you made a careful, dili}ijent and 
hona fide searcdi? 

A. Yes, sir. 

Q. Have you heen ahle to find any of the 
letters that I have spoken of here in my ques- 
tion ? 

A. No, sir. 



910 

Q. Voii lia^I a ineniorandum of what wa^ 

a>k«Hl furnished vou? 

A. Yes. sir. 

il. And y«Hi have siRijdit fiir tliose letters? 

A. Y**s. sir. 

(^. And yiMi have nr>t finind any of them? 

A. No. sir. 

i). Did von niake this search recent I v? 

A. Y**s, sir: dav before vestenlav. 

 • * 

>[k. Havks. Q. Wliere is Cit>vernr>r Stan- 
fiird i 

A. Bv tlie last accmmts he was in < lernian v ? 

Q. When ? 

A. I think the last letter I saw from him 
was ahout thrcH* weeks ajco. 

Q. r>id ho announce his intention of return- 
in<r to th<* Tnitetl Stat^-s? 

A. H(* sai<l he would not 1h* out here as soon 
as h{' <»x]KM-ti*'l. Hi' sai<l that in his letter. Hi* 
was (*xj);*cted ahi»ut the 1st of Xoveniher. 

(I. I>i(l ln» say lu* was alwjut to return to th<^ 
rnit(Ml Statics? 

A. V«*s. sir. 

(I. Now. and at oncc^? 

A. Y(»s. sir. 

(I. And in accordance with that letter Ik* 
•>u<rht to hr in New York or Washinj^ton about 
this tiin •, carryinij: out his plans, as ex[)r(*ssed 
ill that letter? 

A. About this time: ves, sir. 



911 

Q. Where were those letters, that were re- 
ceived from Mr. Huntington in 1878 and 187t), 
jHit, at the time of their receipt? 

A. At the time of their receipt they were 
folded, endorsed and put in a pigeon hole in a 
(»ase in mv office at that time. 

(I, Where is that case ? 

A. That case is still there. 

1^. Were they taken out of that case? 

A. All of the letters up to ahout the middle 
of 1871), were taken out and folded into pack- 
ages and put into a hox and taken to Governor 
Stanford's house. 

Q. The letters that were so packed in the 
hox and taken to Governor Stanford's house 
would be the letters up to the time Mr. Hun- 
tington came out here in 1879 ? 

A. Yes, sir. 

Q. When* is that hox? 

A. That box was put in a case in (Jovernor 
Stanford's library, and I went there dav before 
vesterday to see if it was still there, but it was 
gone. 

Q. Don't you think it probable that if you 
(examined the basement and store-rooms of (Jov- 
ernor Stanford's house vou would find that 

1)0X? 

A. I don't know, ])()ssibly. 

Q. Did ycm make an examination there ? 

A. Yes, sir; I examined the library and then 



912 

lie room <lo\vii stairs where things of that kind 
ha<l hcen kept. 

Q. Do you think if you made a further ex- 
amination in the hasement and stare rooms of 
that house you might find tliat l^ax? 

A. I don't think so. 

(^. Have you examintMl all of the rooms 
wheie hoxes and old hooks and papers would he 
stowe<l or could he stowed in that house? 

A. 1 examined two rooms where thev lia<l 
l>een stowe<l and put away. 

(). That is not exactly an answer to mv 
question. Have ymi examined all of the roon>s 
in that house and in the hasement of it, when^ 
such hoxes wouhl he kept? 

A. NO, sir. I^ixes mifjht l>e kept in any of 
the rooms. 

(^. TluMi. for all you know, this hox and 
tliose hitters an" in (l.>verMor Stanford's house ':^ 
• A. 1 think so. 

il. You think so ? 

A. I think they oujrht to ho there, InH^ause 
there is wIkmv^ I last saw them. 

(). Don't vou think that if vou sent a teh*- 
^rani. to (iovtM'uor Stai^ford lit* mijjcht }dve you 
a little information as to where that l>ox ir^ 
stowed*'* 

A. He mijrht |>ossil>ly, if I knew when* to 
reMcli him. 

(I. Do you think Mr. Huntinj^ton could 



918 

reach him if yon telegraphed to. Mr. Huntiufi:- 
ton? 

A. I should think so. 

Mr. McAllister. Q. Yon were instructed 
to make a thorough and diligent search to find 
those letters if von could, were you not? 

A. Yes, sir. 

Q. Did you search where you thought you 
could find them? 

A. Yes, sir; I looked in every drawer in the 
lihrarv, and in the hoxes in the store room. 



•o- 



DiRKCT Examination of 8. T. Gaok. 

Called for plaintiff. Sworn. 

Mr. Hayes. Q. What is your husiness? 

A. I am in the employ of the Central Paci- 
fic Railroad Company. 

Q. In what capacity? 

A. In various capacities. 

Q. Such as ? 

A. Such as . Well, more recently, per- 
haps, my husiness is in the supplying of coal. 
Perhaps I devote more time to that than to any- 
thing else. 

Q. Take from 1874 to 1879, during that 
time? 

A. In various capacities. 

Q. Such as ? 



914 

A. T\\oy are so varied that T could hanllv 
•lesifxnato them. 

(2- You can cull a few out? 

A. Yes, sir. From 1874 to 1870. I think J 
was, during each winter of that time, lookinjr 
aftiT lejxislation, somewhat, in the States of Cal- 
ifornia and Nevada, and in various other capac- 
ities, from 1874 to 1879. 

Q. What company paid your salary ? 

A. I think the Central Pacific Railroad 
Company. 

Q. You think. Don't vou know»? 

A. 1 do know that I alwavs drew it from the 
Treasurer of the Central Pacific Railroad Com- 
pany. 

il. \V(*re you a Dinx^tor of the Central Pa- 
cific Kaih-<)a<l Company? 

A. Y(»>, sir: at one time. 

il When? 

A. I can hardly say: proUahly \\\ 1877, 187S 
and 1H70 — a portion of those* years, and per- 
haps 

(I. I Interruptin}::. I Was thiTc stock of that 
oonipaiiy standinj:: in your nanu* on its Itooks 
\vlnl(» vou were a Director? 

A. Yes, sir. 

Q. Did you own the stock? 

A. I did not. 

<l Who did? 

A. 1 don't know. 



915 

Q. Had you possession of the certificate? 

A. T think I had possession of the certifi- 
cate for a portion of the time, in the Central 
Pacific Railroad Company, a small amount of 
stock. 

Q. How many shares? 

A. Mv recollection is, ten or twenty shares. 

Q. What did you do with the certificate? 

A. After I ceased heing a Director in th(» 
Company, I signed the certificate, endorsed it 
over. 

Q. Did you not sign and deliver the certifi- 
cate over? 

A. I did not. 

Q. You retained the certificate all of the 
time you were a Director, then? 

A. Yes, sir; in my name. 

Q. It stood on the hooks of the company in 
your name; the actual piece of paper you had 
vourself? 

A. No, sir; f. think it was in the possession 
of the Secretary. 

Q. And endorsed hv vou? 

A. Suhsequent to my becoming a Director; 
subsequent to my Directorship I endorsed the 
certificate. 

Q. Did you not endorse the certificate before 
vou had ceaserl to be a Director? 

a.' 

A. I did not. 

Q. You were also a Director in the Southern 



9ie 

Parifio Hailmad Oompany, were j'on not ? 

A. Yes. sir. 

C^. Was there any stock standing on the 
liooks of that conijxiny in \'our name? 

A. I In^lieve so: but I am not certain. I 
lliink there must ha\"e l>een or I should not 
have Ikhmi a Director. 

Q. IHd yiHi own any stock in that com- 
pany ? 

A. I did not. 

Q. Who dirl n\v\\ tlie st^x^k that stoo<l in 
vour name? 

A. I don't know. 

C^. Had y<Hi {possession of the certificates ?" 

A. I am not certain that I liad. Mv re- 
memhrance upon tl>at is not as clear as upon 
thr Central I^l(•iti(^ Tliat ^\'^ls prior to mv l>e- 
in^ a I>in'ct<w in the CVntral Pjicific Railroad 
("onipaiiy. after 1 was a I>irector in the South- 
ei*n Pacific. 

Q. You wen* a l>i rector in the South(»^rii Pa- 
(mHc Railroa'l (^on^pany as f^rly as 187.*l, wen^ 
vou not? 

A. I sliould think in 187.'>. 

i^. At wliose rr^fuest did you accept the posi- 
tion of Director in these companies? 

A. I think at tlu» re(|uest of (Jovernor Stan- 
ford. 

Q. From whom did you r(*ceiv(* the st<K*k 
that was so [>lac*t?d in vour name ? 



917 

A. Tlio particular stock that I liavo roforrod 
to— 

Q. [Intorriiptinf];.! That is Central Pacific? 

A. Yes, sir. 

Q. You have no particular recollection of 
the Southern Pacific stock? 

A. No, sir; I think from the Secretaries of 
the company, of the Southern and Central Pa- 
cific Railroad Companies. 

Q. Were you also a Director in the lone Coal 
and Iron Company? 

A. Yes, sir; and am now. 

X^. Stock standing in your name ? 

A. A small amount. 

Q. Do you own it ? 

A. I do not. 

Q, From whom did you receive it? 

A. I don't remember. 

(I, At whos(» request did you accept the 
stock and accept the position of Director in 
that Company? 

A. I think at (lovernor Stanford's recpiest. 

Q. How many shares? 

A. Five. 

Q. You don't remember how many shares 
in the Southern Pacific? 

A. I do not. 

Q. In your action in the Board of Directors 
of the Southern Pacific Railroad Company and 
the Central Pacific Railroad Company, did you 



918 

iT«>t iHMiorallv at-t in olHHlieneo to \THir muror- 
standiiis: «^f the wnshesof Stanfonl. Hiintiiifrtoiu 
Hopkins and Cnx*kt*r? 

A. Tsuallv ti> a n>nsi<leral>Ie ext^^nt: and the 
sanu* as I have in all of thtM>ther orjranizations? 
t?ial I haw btvn in for the last t\\iMitv or thirty 
year>. \vht»re 1 owmnl a sn^ill |H>rtion of stock. 
1 was pl^^U^^ in disjuisitiiMi n^ually hv tlie 
lari^^r ^landholders. 

Mr, IIayks. I \\iH ask that all of that 
answer n^latinjr ti^ «uher cor|>orations niav l>e 
strieken out, and 1 ask Mr. tiiijji^ to answer 
t!ie tjnesti'Mi jmt to him, and tln^se only. 

Mr, Mt Aujstkr. I ohj^nt to tl%e answer Ik*- 
inc strii'krn iHIT, We think it is ijuitt* |ht- 

:i!-t vA !*♦ :h«- int^uirv. 

* « 

Tin. t\MKr. 1 M:jM».>>f it t*x} Jains his an- 
^wiv >«»int wliai. Hr -viii.i lu- «lid a> in otlu-r 

i •- :li:ii \"r; Innel'r n ;,>kt-i :T"i"»nt — \'<>u did not 
:i:i i '1 * Vi>* '^wp. -:'vk ::■ :h-- <\-nira] P.iriti.- 
Tiv': "Alt' > ^Mhi'Ti. V:\Artr Kailr^nd t\»rnj»anir> *2 

iy T.n: :< n »: :ri :in-\v:-r i » rny qui-iioiu 
•> n»»: ri-|»«»rj>iVt'V 



919 



^[h. MrALIJSTKR. I/ft it go out. 



Mr. Hayks. Q. You did not own stock in 
tlioso two companios? 

A. I did not. 

Q. And you went th(»re at tlie request of 
(fovernor Stanford? 

A. Yes, sir. 

Q. An<l in your action, without having your- 
self any bona p'de interest in the companies as 
stockholder, were you not acting, while acting 
as Director, under or in ohedience to th(^ wishes 
of Stanford and his associates? 

A. My former answer to that question would 
l)e th(» answer that I would give to this. 

il. In your action, without having yourself 
any hftftn fitle interest in the companies, as stock- 
holder, wen^ you not acting, while acting as 
Director, under or in ohedience to the wishes of 
Stanford and his associates? Please answer 
that question. That (piestion can he answered 
yes or no. Will you answer it, please? 

A. I don't understand what vou m(»an hv 

t. • 

"" ohedience.'' 

(J. I will suV)stitute '' compliance," if '' ohe- 
dience" is in any way offensive — in complianci* 
with the wishes and directions of Stanford and 
his associates. 

A. Usual Iv so. 



Me. M' Atxi'^TKt. Q. A*<iifcr *> Wrprtor tif 

Any tfitP-ivfifiiy fr»>oi wltat yv« wooki hawv«>tt^l 
it V'»n h*»{ fc«-«-fi th*- ft»w«i« li^ tiwiier •>!* the 

A- Nr-V>T- 

O. WVr- v»xi •rw-r sk!Ek«*i W « »>vem«>r Stan- 
f^rl- ►^r HtiQrin2!:*>a. H*>[»kin< ♦>r «'n^*ker. to 



-•►■ 



Mh. Havf>. <^- H'fcw h*wj: luiw v«hi n-<i«le«I 
in < alitoriiia? 

A. S-v»-n y»-ar< I t-anv- h»^r.' iii ISTT — r^ix 
v»;ir-. 

<2- Im what part *^f T^TT ? 

A. Ill t!i»- in«»nth of Jiilv. 1S77. 

m 

i). With whiuii rli«l vtKi o«»iiU'? 
A. I caiiir out hiTi" ill tiHupany with Mr. f*. 
I*. Hniitiiijzton. 

<l. With (\ P. Huntin^nn, one «>f thr <lo- 
ti'iMhints ill this actinii? 



921 

A. Yes, sir. 

(J. Is he a relative of yours? 

A. He is luv uncle. 

« 

Q. You eanie out here at his instance and 
request? 

A. Yes, sir. 

(}, Mtev coming here, wliat employ or husi- 
ness (lid vou enter into? 

A. My first position under the railroad 
people was clerk under Superintendent Bassett 
of the Southern Pacific Railroad Company. 

Q. Then what was your second position? 

A. From Mr. Bassett's office I went into Mr. 
A. X. Towne's office; the following year — Mr. 
A. X. Towne, ( Jeneral Manager of the Central 
Pacific. 

(^. What was your position in Mr. Towne's 
office? 

A. 1 was clerk under Mr. Towne. 

1^. Then you were elected what? 

A. Secretary of som(* of the minor com- 
panics. 

Q. Wh(»n you were elected Secretary of these 
minor companies, did you leave Mr. Towne's 
office ? 

A. Yes, sir; in part. I have a desk in Mr. 
Towne's office still, and I spend a part of my 
time there. 

il. You still discharge duties in his d(»|)art- 
ment? 



922 

A. Xot [mrticularly under him, hut I havo 
a (l(*sk in his office, which I use occasionallv. 

il. What companies did you iKvonie Secro- 
tarv of, and when? 

A. 'llw California Pacific. 

(I When was that? 

A. January 1st of tlie present yejir. 

Q, On January 1st of the present year you 
hecanu* S(»cretary of a number of these com- 
I)ani(»s? 

A. Yes, sir. 

Q. Prior to that, Jia'd you any eonn(»ction 
•)tlu»r than as (»lerk in the way vou have stated, 
in Mr. Bass(»tt's and Mr. Towne\s department, 
with any of tliese railroad corporations con- 
trolUnl hy Stanford, Fiuntinji^ton, Hopkins and 
( 'rocker? 

Mr. M('ALi.is'n:R. IVior to Januarv 1st, IcSs:]. 

Mh. Hayks. Yes, sir; wheth(»r lie had anv 
cinincction other than as ch^k in the^ two d(»- 
[)a]1nients he lias nuMition(»d? 

A. Yes, sir; [wasel(»cte<l Diref^tor of various 
(•oini)anies at vju'ious times. 

(^. Tell nie when you were first e-h^cted a I>i- 
reetoi*, and in what companies? 

A. I think 1 was i^lected a IWrector of the- 
San Pahlo and Tulan^ Raih'cmd (^>mpanvin 
1S77, the vear I came out here. 

(). At that time did v(^u own anv stock in 

• « 

the San V'AAii and Tulare RaihH)ad Company? 



923 

A. There was stock standing in mv name. 
Q. Were you really the owner of that stock? 
A. I cannot say that I was. 

Q. It was merely put in your name to (|ual 
ifv vou to act as Director, was it not ? 
A. Yes, sir; that is my impression. 

Q. Who did own it? 

A. T do not know who did. 

Q. Who did you get it from ? 

A. I never saw the stock anvwav; hut I 
must have hel<l it to have heen a Director. 

Q. Then you were not called upon to endorse 
it? 

A. 1 don't recollect endorsing it. 

Q. At whose requjpst did you take that posi- 
tion of Director? 

A. Mv uncle said hefore T came out that he 
designed putting me into several companies: 
and that is the first intimation T had of it, 
when T was elected a Director of the San Pahlo 
and Tulare Railroad Company. 

Q. That he designed putting you in as Di- 
rector of several companies? 
A. Yes, sir. 

Q. What other companies did you then he- 
come Director of? A nv other in that year? 

A. 1 don't think I did of anv other com- 
pany. that yoar. 

Q. How was it in 1878? 



924 

A. r \ra« ♦•Ipf-t^l a Wrer-tor of tlie .^>iitlu*rri 
Tarifir I{ailrf>ad Company in IHTm. 

Q. < >r wliat elsf-: an\'thin^ fls4>? 

A. I think of one or two other «*ompanii*s: 
hilt I am not sure aliout that. 

<2- Von haw not a verj- rli?<tinc-t ivci>lle<*tion 
c^t' how manycr>nipanif*s vfni haw Vieen IHnni'tor 
in — havf* von? 

A. No. sir: I dtmt think I can say p«>sitivcly 
fritfiont looking at the rfH-onl. 

(}. IHrl yon liaxT- any stoc-k standing in your 
name, of tho Southern Pacific Railroad Com- 
nanv. when vou were elected a IHrector ? 

A. Yes. sir. 

(^- Ifow much ? 

A. Sonif one hundre^l shares. 

i^. I)id \'(H\ o\ni tlu* stock? 

A. ^'^-s. sir. 

i^. It was your own |iro|M'rtv? 

A. Vrs. sir. 

i^. How did y<m acf|uire it? 

A. (\ V. Huntington g>ivc it to m«». 

<^. [fr made you a |>n's**ut of it ? 

.\. V<-s. sir. 

(I \\ whose HMjucst you act^nl as IKn^ctor 
of tin* Southern I*acific Raih'oad Con^pany ? 

A. I don't think I was consuhe<l in tlie mat- 
ter. 

(I. Vou W(»re simply put tliere. without Ik*- 
ing eousuhe<l? 



925 

A. Yes, sir. 

(2. And you went in there in order to com- 
ply with the wishes of your uncle and the gen- 
tlemen who wore associated with him in husi- 
ness? 

A. I helieve he intimated to me hefore the 
(*l(Htion that it was the intention to put me in 
as a meniher of that Board; that is my impres- 
sion. 

Q. And you simply went in in complianc(» 
with his wishes and of the gentlemen associ- 
ated with him there? 

A. Yes, sir. 

Q. You also became a Director in the North- 
ern Railway Company, did you not? 

A. That was the following year, 1871). 

(l In July, 1879? 

A. I think it was. 

Q. At that time was there any stock stan<l- 
ing in your name in the books of that com- 
pany? 

A. Yes, sir. 

Q. How many shares? 

A. Five shares. 

Q. I)i<l vou own it? 

A. It was the same with that as jvith the 
San Pablo and Tulare. I have no recollection 
of seeing that stock. 

(}. You did not own it, then ? It was put in 
your name simply to qualify you as a Director? 



926 

A. I <I«Hi*t kin>w whether I e\-er eiiJorseil it 
•iwr or not. It was nei-e^isan' to have it in luv 
name to enahle me to serve as a Director; hut I 
have no knowle^lge of having endorsee! it over, 
thither that or the- San Pahio and Tulare. 

il. Yon never ehiime<l to lie a true anil ac- 
tual owner of that st<x*k? 

A. If I «Ud not endorse' it o\"i^r, I am the 
owner. 

C^. .Vn*' \"iHi spejiking t^rf' it jv< a U^al |>ro|M>- 
<ition or as a niattcHT <^fact? 

A. As a matter of fact . 

C^. Vou an^ the owntM-? 

A. I don't know. I don't know wliether I 
tHidorse<l it over or not. 

(I. I>i<l yon pun^has**^ tliat st<K'k? 

A. No. sir. 

(.^. IH«1 anyU)dy omt make a |>i"es(Mit of it 
to vou? 

.\. I cannot sav that tliat was the case. 

(^. It was st<H^k U^lonjrinjr to som<»h<Mly (*lse 
that was jHit in your nan^e. simply to <|ualify 
von as l>irei'tor? 

A. I don't know whether it \n"jis simply to 
qualify m(» as a I>ir(H*tor. or \ntli the intentioi^ 
of inakin^r nu» thi* owner of it. I don't know 
how that was. If I evtM* (Midorstnl it ov(M" 1 
should think it was simply to qualify me as a 
director. 

A. Hut not haviuii: eiidors^Ml it. vtui think 



927 

some person may liave been generous enouj^h 
to make vou the owner of it? 

A. I thought that was possible; yes, sir. 

(). Would vou sav that would amount to a 

probabilit}'? 

A. No, sir; I cannot sav that it would. 

Q. You were a Director also in the Amador 
liranch Railroad Company? 

A. Yes, sir; I think I am a member of the 
Amador Branch Board. 

Q. Is there stock standing in your name on 
the books of that company? 

A. Yes, sir. 

Q. Do you own that st4)ck? 

A. It is the same with that as with the San 
Pablo and Tulare. 

il. You have no reason to believe that you 
do, in truth and in fact, beneficially own that 
stock, have vou? 

A. No. 

Q. Or any of the stock, except in the South- 
ern Pacific Railroad Company ? 

A. Except the Southern Pacific as far as 
mentioned. 

Q. How as to the California Pacific; are you 
a Director in that Company? 

A. Yes, sir. 

Q. Was then^ stock standing in your nam:* 
there? 

A. Yes, sir. 



92< 

i^. In th^- >ame way- 

A. No. >ir: tliat i< rav owii >t«iefc. 

il. In jroing into tho^e B«lanl^ you simply 
iTf-nt in. in «4ie<Iienee to the wishes and for thi*' 
[•urfNtse «if frsLTTvin^ TKit the wishes of y»>ur uncle 
an<I his a>s4jciate< in l»usinessT 

A. Y*->, sir. 

i^. And have lieen and arec^Hitrolled in your 
ffffirial actirm in th*^»?«^ Rianls l^v that ei>nsifier- 
ationT 

A. WVll. I d<m't know as I have l»een eon- 
trollf-<l anv further than due deference to their 
s:i|M-rior cxf>erienc-c and judgment. 

C^. I do not snijwest that yon would do any 
i\nllfnl wn»n*r. or a fraiKl fir anx-thinj: of thj?t 
kind in «ilH*<lifMic»' to th^-ir wishes: hut in the 
•►p;*ratioii< <rf thr n>a«l and in d«*t*'rniinin}x {\u^ 
|M)li«ii*> of th«' P>ads you woul<I act in oliedit*nc(» 
to their wislit-s and jud^rnient */ 

A. Y<*s. <ir: if it :i|>pt*aleil to my own juil^- 
nuMit iMitirnlv also. 

. i). I)o vou think that if vou were re- 
#|ueste(l to voti' in a certain nianm^r in 
• MW of thosi* K)anls in the Snithern Pacific 
tor instanc(\ «»n the matter of the jMilicy of the 
company as to huildinjr a new line or issuin*:: 
some a<lditional hon<ls. or makinjr new con- 
tracts, and vou W(*re instructed l>v C P. Hunt- 
in^ton and his associates, that it was their wish 
that vou should vote in a ct»rtain manner on 



929 

tliat proposition, that then, if you in your jivlg- 
nient thought it was not sound husiness policy, 
that you would oppose and vote jigainst it ? 

A. If they made a specific request of that 
sort, I suppose* I would conform to th-eir wishes. 

Q. Have you held any other office than Di- 
rector in any of those companies ? Were you 
not President of some of them ? 

A. Of the Nortliern Plailwav. 

Q. As President of that road did you exer- 
cise any practical or direct control over its husi- 
ness, make contracts for it, or anything of that 
kind? 

A. Onlv so far as the stock I held would en- 
title me to. 

Q. Did you make any contracts for that 
company? 

A. I do not have a recollection of anv at 
present. 

Q. While you were President and Mr. J. (). 
H. (funn was Secretary did not he practically 
manage the company so far as it required any 
management? Tt was heing operated hy the 
('Ontral Pacific at that time, wasn't it, under 
l(*ase to them ? 

A. Yes, sir. 

Q. You did not negotiate for the making of 

anv of those leases, did vou? 

• a. 

A. No, sir; I cannot say that I did. 

Q. Mr. (funn was practically the managing 



930 

man «»f tlio Xorthern Railwav wfiile he was 

Secretary an<l vou were President, wasn't he? 

• »■ 

A. I don't think «>. 

(I. I Hdn't he c*onduet all of tlie lursiriess with 
tlie Western Developnient Con^pany tluit \nis 
had hetween the two con^panies? 

A. He conducted all of the cleric*al Inisiness. 
«'< S.vret-irv, as a matter of cmirs(\ But in 
anything pc^rtaining to the policy of the ct)ni- 
piny I do not think he had any great voice. 

(2- WHiat matter of policy of the company 
did vou determine during- yinir term of office? 

A. I cannot sav that I exercised anv great 
degree of inffnence. 

(I. Stanford, Huntington, Hopkins and 
t'ro:k(»r detern^ined t\w iK>licy of tl^ con>pany. 
dicln't tliov? 

A. Th(»v certainly had a uiajority of th(- 
stock. 

i) I> ) vou kii )\y anvthin'j: alxnit thi* sto;-k 
of that company? 

A. ^^'s, sir. 

i^. Who owned stock? Was it i>(>t all (W- 
C(»|)t a f(»\v shares 

A. I lnt(M'nipting. I I rescind the answer to 
that (lucstion. The stock was held at tliat timi^ 
}yy OIK* of the contracting companies. 

(^. By the Western Di^velopment (A)mpany, 
wa-n't it? Didn't it own every share except a 
tVw shares [vlac^l in th(* names of the Directors 



931 

to qualify them? Did not the Western Devel- 
opment Company own every share •exeef)t 
those? 

A. Xo, sir. The Paeifie Improvement Com- 
l)any owns a portion of the stock. 

Q. When did it accjuire any stock ? Have 
you got the stock books of this Northern Rail- 
way Company here? 

A. The Pacific Improvement Company, I 
understand, owns a portion of it. 

Q. Have you got the stock record l)ook 
of the Northern Railway Company here? 

A. I think it is. 

Q. Will you get it, })lease''^ 

Rec(\ss \mtil 2 p. m. 



(V 



AFrERNOON SESSION. 

DiRKCT Examination of W. V. Hi ntinoton. 

Rksumeo. 

Mr. Havk:^. Q. Prior to August 27th, 1879, 
how much stock had heen issued hv the North- 
em Railway Company? 

A. I cannot tell without going through these 
accounts here in detail. 

Q. Is there any stock account that shows 
how much of the stock has been issued and how 
much has not ? 



-922 

A. Vos, sir: there slioiild be such an ac- 
count. 

Q. If th(*re shoiihl he, is there? 

A. I presume it is here iu* the book. 

(). Will vcHi kindly turn to it and tell me 
prior to Au}?ust 27th, 1879, how much stock of 
that company had boen issued; what was the 
t)tal amount authorized — the capital stock? 

A. ${>,8()0,000. 

(I. Stated in the ct^rtiftcate of incorjx> ration? 

A. Yes, sir. 

O. Have you the certificate? 

A. Yes, sir; it should Ix^ there anionor the 
[)ai>ers drawn uj>. 

Q. Tuni to that capital stock account, and 
see prior to Aufjust 27th, 1879, how much ha<l 
Immmi issuc^d? 

A. f Aft(n* referrinjj:. I I do not (h'scov(»r any 
such account here in the ledger. 

^^R. McAllistkk- I To Afr. Hayes.] Do you 
want the articU^s of incorporation of the Xorth- 
i-^i'H Railway Company? 

Ml?. Ha vies. Yes, sir. 

[Mr. ^[cAllistiM' pnHluci^s it.f 

Mk. Havks. Q. (^111 yon ascertain from the 
hooks ]\()\v much of that stock had l>een issue<l 
prior to Au<z:ust 27th, 1S79? 

A. It was my impression that the le<lj;er of 
t!iat company Avas lu^rc, Init it is not. Tln^ 



933 

I 

Icnlgor will show that account. I can give it to 
\\)u from the journal in a few minutes. 

Q. Well, give it to me. 

A. It will take a little time to do so. 

Q. Is it very long? 

A. It might take a quarter of an hour. T 
mi li> a mistak:* when I said tho authorized c.ip- 
tal stock was |;(),8(¥),()00.()(). That was the 
amount of honds. At least, the capital stock 
should have heen $8,400,000, and at this tim(» 
you speak of there was ahout $4,700,000 issued 
of the 8,000,000. 

Q. To whom had it heen issued ? 

A. 1 should judge from the stock ledger 
here, it was principally to the Western D.^velop- 
ment Company and the Pacific Improvement 
(yompany, hut not at that time; the Western 
Development Company at that time*. 

Q. August 27th, 1879? 

A. Yes, sir. 

Q. How much had heen issue I to the West- 
orn Development Company at that time, Au- 
gust 27th, 1870? 

A. I make it, on hasty calculation, th.» 
amount standing in the name of th3 We^t^rn 
Development Company, in August, 1879, was 
$4,5(M),000? 

Q. And there had heen in the neighhorhoo I 
of that amount then issued? 

A. Yes, sir. 



931 

Q. \Vh<^ wen* the other stockholders at that 
tiiiu*? Were there anv others than those com- 
|);)sinj; tlie liiard of fVirectors, at that tiiiK*? 

A. Yes, sir. 

(). Who were thev? WTio was then the 
Hoard of IHrect^^rs, at that time? 

I Witness refers to nvord l>ook.] 

Q. Is that the record book yoii have there? 

A. Yes, sir. . The Directors were I^elauil 
Stanfonl, (\ P. Huntington, W. V. Huntington. 
<Miarl(»s Crocker and J. O. B. Gunn. 

Q. How much sUx^k <lid e-ach of those gen- 
tlemen liave tliere? 

A. Dovou m(»an at the annual election in 
th(» summer of 1H70? 

(). That would he in Julv. Then* was no 
rhange, I suppose*. Tak(» it at the annual elec- 
tion, and tlien I will ask von to ascertain after- 

« 

wanls wli(*tli(»r then* was anychangtMifterwards. 
A. At the aiHuial election in the sumnu*r of 
1S71) 

(^). I Interrupting, f What was the (hite of itT 
A. July 2:i(K 1870, tluTc wen^ $<>S,(HM) of 
stock in Mr. StanfornVs name. 

i^. That is, 08 shanks T 
A. r)8() shares. 

(^ And ('. P. Huntington? 
A. 1 don't discov(M* anything standing in his 
luuiu* on that da v. 



935 

Q. He had oripnally, as had Oovornor Stan- 
ford, (590 shares? 

A. f]xcuse me. I am in error. I was look- 
ing at the assessment account instead of the 
stock account. There was $()7,r)0() standing in 
his name Julv 23d, 1879. 

i^. How many shares? 

A. That would he 075 shares. 

Q. How many in the name of Crocker? 

A. P^ive shares, $500. 

Q. Your own; that that is in your name, I 
mean ? 

Mr. McAlfjstkr. That is the Northern Rail- 
way ? 

Mh. Hayes. Yes, sir. 

A. There were five shares in mv name*. 

q. J. (). B. (hmn? 

A. There were five shares in his name. 

Q. What other stockholders than those five 

gentlemen of the Western Development Com- 

pany at that time had any shares in the North - 

(»rn Railway Company, and Mr. Hopkins, I 

helieve, at that time, or his estate. 

A. There were (580 shares in the name of 
Mark Hopkins. 

Q. What otluM- sto(*kholders, if any, were 
there? 

A. Then^ w(»rt! 5#shares in the* name of E. 
H. Miller, Jr., 5 shares in the name of H. I>. 
Redding, 5 shares in the name of (\ H. f-um- 



926 

min{r>, -1 sliare? in the name of K. S. Mi Flo r, 5 
>han-?» in thi* name of S. W. Sanden»on, and 5 
*Iian's in the name of AU>ert iiallatin. 

Q. That compIet(*s the roll, df>esn't it? 

A. Not vet. Oavid D. Cohon, 5 shares. 
Y<Mi an* asking for tiii>« information at the (lat<'' 
..f . Fill V 27th. IKTlr? 

Q. \i'>. sir. Thon I u-ant to see if there 
was any change bi-fore August 27th. I under- 
stand there was not. 

A. K. W. Hopkins, 5 shan»s, and R. P. 
Hiuirn >:i 1. K) shares: and that is all, I helieve. 

i), K. H. Miller, Jr., was the Secretary of 
th» S mt'iern Pacific Railroad Company, wasn't 
he? 

A. No, sir: not at that time. 

i^. What was his husiness at that tin^e? 

A. He was Secn*tarv of the (\Mitral Pacific 
Uaih'oad ( *(uii[)any. 

(I. He was Secretary of th(* (Vntral Pacific 
I{ailroa<l Company? 

A. Ves, sir. 

(^ Who is H. B. Redding? 

A. Mr. Reddini:: was the (Jenei-al Lan:<l 
Agetit of th(» Central Pacific Railroad Com- 
pany. 

(I. Who was C. II. (*ummings? 

A. lie is the ('ashi(?r of the Sacramento 
nnl IMac(»rvill(^ Raih'oad Company at Sacra- 
uieiito, and I think he was th(Mi also. 



937 

Q. Is not he tho assistant Troiisuror of tlio 
(Central Pacific Railroad Company? 

A. No, sir. 

Q. E. S. Miller: who is lie ? 

A. He is the assistant to E. H. Miller, the 
Secretary of the Central Pacific Railroad Com- 
pany. 

Q. W. R. S. Foye; who is he? 

A. A memher of the hardware firm of Hnn- 
tington, Hopkins & Co. 

Q. Originally composed of C. P. Huntington 
and Mark Hopkins? 

A. Yes, sir. 

Q. And now Mr. (Jallatin is -a memher of 
that firm? 

A. Yes, sir. 

Q, (i. W. Sanderson was one of the attor- 
neys and counsel of the Central Pacific Rail- 
roa<l Co.? 

A. Yes, sir. 

Q. E. W. Hopkins; who was he? 

A. The Treasurer of the Central Pacific 
Railroad Company at that tinu*. 

Q. R. P. Hammond? 

A. He was President of the California Pa- 
cific Railroad at that time*. 

Q. And was otherwise (employed in the same 
companies, wasn't he? 

A. I cannot say as to that. 

Q. Alhert (Jallatin? 



938. 

A. Ho was a member of the hardware firm 
«f Huntington,- Hopkins & Co. 

l^. That is the gentleman who brought an 
action agjiinst the Central Pacific Railroad 
Company to prevent its setting aside its sink- 
ing fun<l, isn't it? 

Mr. MrALLisTFU^. Tliat is entirely outside 
♦)f this eas(*. 

yin, Hayks. I mil withdraw it for the pres- 
•»nt. 

(I, Wiio owned the stock that stood in the 

names of E. H. Miller, Jr., B. B. Redding, E. S. 

Miller, Charles H. Cummings, W. R. S. Foye, S. 

W. Sanderson, E. W. Hopkins, R. P. Ham^ 

mond, and D. I>. Colton? 
A. I don't know. 



■o- 



Ckoss-Kxamixatiox of \V. v. Hf'\TTX(rrox. 

Hv Mr. M('Aijjsti:r. i). l>id your uncle, 
(\ V. Huntington, when he i*equesttHl you to 
act as a l)inM*t4>r in thes(» various companies, 
jnakc you a present of a large amount of stock 
in thcs(^ various coin[)ani(^? 

A. Y(»s, sir. 

(^. The total amount was how much: in 
value. I mean; the par value? 

Mh. Havks. Which various companies? 

^[K. McAlijstkh. Those companies which 



939. . 

ho has l)oen speaking of in his direct examina- 
tion. 

Mr. Hayes. He has testified that in some of 
these he has been speaking of in his direct ex- 
amination he did not own anv stock. 

Mr. McAllister. T will ask you particularly 
al>out it. How much stock did vour uncle give* 
you altogether? 

A. About $100;0(X), 1 should judge. 

Mr. Hayes. Par value ? 

A. Yes, sir. 

Mr. McAllister. Q. Yoif were a honn fide 
stockholder in the stock of the Central l^acific 
Railroad? 

A. Yes, sir. 

(). Tn the California Pacific, were vou not*^ 

A. Yes, sir. 

Q. In the Sacramento and Placervillo Rail- 
road ? 

A. Yes, sir. 

Q. And th(^ Stockton and Copperopolis? 

A. Yes, sir. 

Q. The Monterey Railroad? 

A. Yes, sir. 

Mr. Hayes. I object to the questions, so far 
as they relate to the companies that are not 
concerned in this litigation, the Stockton and 
(yopperopolis and the Sacramento and Placer- 
ville. There is no evidence here as to them. 

Mr. McAllister. You have asked, yourself, 



94.0 

xFxHit tho Sacramento and Plaeerville, and ho 
has spoken aJKUit it and told you that Mr. Cuni- 
mings was an officer of that corporation. 

Mr. Hayes. I asked him who Mr. (Jum- 
mings was, but I did not ask him about the 
iH>rporation. 

Mh. M(\\LLisrKR. It has \yeen s[X)ken of, and 
so has tlie Stockton and Copperopolis Tom- 
pany Ikhmi mentioned half a dozen times. And 
it was fully gone into by Mr. Douty, and it was 
tentifiefl that (Jeneral OoUon owne^l no i^tockin 
that company, etc. 

Mr. Hayks. You asked him th<nt question: 
I did not. 

Mr. MrArjJSTKR. <i. Were you the owner 
of stock in the Monterey an<l Salinas Raih'oad? 

A. Yes, sir. 

i). All of this st(K*k vou owned, was it not 
nresciitf^l to vou l^v your unoh^ that you haye 
spoken of? 

A. Yes. sir. 

(I. The (•onip:inic»s in whicli you were a r>i- 
n»ctor wh(Mi th(» sto(*k stood in your name, and 
yoii had no knowledge that you ownecl it, wert' 
what corporations? 

A. The San Pal)loand Tuhiiv, th(» Xorthern 
Railway, and th(» Amador Branch. 

(I. Your uncle was Hying in New York dur- 
*ug all of the time* of your action; that was his 



941 

rosidenee during tlie time you wore acting as 
Director in these v^arious corporations ? 

A. Yes, sir; that was his place of residenc •. 

(I. He desired you to act as Director, and to 
look after his interest, didn't he? 

A. To a certain extent; yes, sir. 

Q. In voting in th3s:^ various c )rp^ratio:i-^, 
(hM vou vote accordini? to your h3-;t iul<;m>nt, 
for the interest of the particular corp )ration for 
which you were acting, or not ? 

A. Yes, sir; I did. 

Q. In many of those corporations were not 
Huntington, Stanford and Crocker, or som3 of 
them, Directors or officers; for instance, the 
companies that you have spoken of; the North- 
ern Railway Conipmy. 1 understood you that 
Mr. Stanford, C P. Huntington and C'has. 
Crocker were Directors, were they not? 

A. Yes, sir. 

Q. How many Directors Wv^re there of the 
Northern Railway Company? 

A. Five. 

Q. Then^ those three gentlemen constituted 
the majority of th^ B )ard of Directors? 

A. Yes, sir. 

Q. Did they ever request you in yourac.tion 
as Director to do anything that you considered 
wrong or improper? 

A. Never. 

i}. You said you did not know who Wv>re 



942 

thtp own *r-i of th • live share?* of stock in the 
name of J. i K B. <funn. ami tive in the name of 
K. H. Miller. Jr.: five shares in the name of 
K. S. Miller: five ••hares in the name of C. S. 
i 'iimniin^-i: five shares in the name of \V. R. S. 
F«ivr- in the Northern Riilwav, and five shares 
in the name of S. W. S.in«lers4)n, or Mr. Gallatin ; 
V m don't kn r%v \v!i*^th -r th *v o\v.i?l th-it stock 
i»rnot ? 

A. No. sir. 

H. You say then* were some companies in 
\vhi<-h von were a Dirtvtor. such as the North- 
ern Riilwav and the Amador Branch, where the 
stock was simply in your name, and that you 
had no kiiowletltje that you owntnl it? 

A. Y«'s. sir. 

i^. In a*-tiii;r a< I>invt«>r in these thrt»e com- 
panies, the Northern Railway Company, the 
Amador Branch and the San Pahlo and Tulan*. 
iia I vou hren a hnun tith own(»r of stock, 
would vou have takt*n anv dittercnt course of 
action, as Director, tlian vou did taki*? 

Mil. Mavks. I object to that as irrelevant 
and immaterial. 

.Mk. McAijjstkr. I simply want to show 
that his action, if he reallv did not own the 
stock, was really according to his l>est ju<lj<- 
mcnt, and that th(»r(* was nothing]: in it that he 
considcr(»(l unfavoraMe to the interests of the 
corporation. 



943 

The ('ourt. Botter ask liini the (juostioii 
diroctly, then. 

Mr. MrALLisTER. Q. In tlie action you 
took as Director in tlieso, three corporations in 
which the stock was in vour name, ])ut of whicli 
yoii were not the heneticial owner, to wit: the 
Northern Railway Company, the Amador 
liranch and the San Pahlo and Tulare Railroad 
<\)mpanv, did you vote as you regarded was for 
the best interests of those respective corpora- 
tions? 

A. Yes, sir; every time. 



■o- 



RK-niRK(T EXAMTNATION OF W. V. HrXTIXrj- 

TOX. 

Mr. Havks. Q. When you voted for the 
l)est interests of those corporations dichi't you 
also consider that you were voting for the best 
interests of Stanford, Huntington, Hopkins and 
< 'rocker? 

A. Considering that they were the i)rincipal 
H)nes interested, I should say, yes, sir. 

Q. In those three corporations I shoidd *ay 
t he v were practicallv andsubstantiallv the «ulv 
ones interested, were they not? 

A. No, sir. 1 cannot sav that. 

Q. They practically owned the W(»stern 3)r- 
velopment Company, didn^t *they.? 



944 

A. r cannot answer as t ) that. I never had 
any relati(Mis witli the Western Development 
(yninpany of any sort whatever, except 1,(XK> 
sliares of stock was placed in my name. 

(i- You have no knowledge or information 
as to whether or not they practically owned the 
\Vest4»rn I)(»velopment Company? 

Mu. McAij.isTKR. He is not tostifyin;; upon 
information, hut upon knowledge. He should 
t(»stifv from his knowledge and not from infor- 
nuition. If infornication is let in, we will have it 
on our sid(\ too. We are informed of a great 
many things. 

Mk. Havks. Q. Do vou not know hv infor- 
mation from your uncle and those other gentle- 
men that t\wy own(»d the Westc*rn D(»velopnient 
<'om|)any, its propeM'ty and assets? 

A. I don't know as 1 ("vtM* h(*ard tluMu sav 
anything about it. anvwav. 

(^). You don't know that you hav(»? 

A. No, sir: I cannot sav that I i^ver di<l. 

O. What aire are vou? 

A. •_>:. 

(). W'liat ajri' were vou when vou <-:im * to 
( 'alitornia? 

A. I wa- 21 the sam^ m )nth I arrive<l li(»n\ 

<^. Thi' s:unr m«)nth v<ui arrived h(»re v«)ii 
Were 21 ? 

A. ^^'s. sir. 

^^ Yon g.^t $1<HMM)0, vmi saw of st<K-k 



.945 

presented to you by your uncle, Mr. Huntinfr- 
ton; that was oar value? 

A. Yes, sir; par value. 

Q. How much of that was Southern Paeifio ? 

A. 100 shares. 

Q. That would he $10,000? 

A. Yes, sir; $10,000. 

(I, Was that worth in your judgment at that 
time $10,000. 

A. I did not attach any value to it, except 
onlv insomuch that it contributed that much 
towards the control of the company, only so far 
as it w(»nt. 

(^. Towards the control of the company by 
whom ? 

A. By tlie whole; that is, onlv so far as it 

•• • ' 

went to the control. 

Q. Do you think 100 shares of the Southern 
Pacific Railroad Company went far towards 
ciuitrollinji; it? 

A. A verv short wav. 

Mr. Havks. We have, if your Honor please, 
something like (Mght hundred and odd letters of 
Mr. Huntington's to (reneral Colton in his life- 
time, in our possession, and all, as we under- 
stand, showing the confidential relations that 
existed between them in accordance with the 
allegations made in the complaint and denied 
bv th(» answer that there did exist between (Jen- 
eral Colton and th(» defendants in his lifetime 



in n*jrarJ to tlic Ini.'fiiuess and proj>erty as to 
whirh thi'V were assoeiaterl, confidential an<l 
ptH-nliar. ronfi<UMitial relations, and we propost- 
to read a nunilier of them in evidence, niainlv 

• 

fi>r the purposi- of maintaining that allejration: 
most of them for that |Hirjx)sc and some special 
one< for other pur|M>ses. We will suhmit the 
letters to the insj>ection of the other side if they 
desire it. We do not intend to consnmethe time 
trf' the (^>llrt, or till np this n^cord hv rea^linjiC 
eijrht hinich-iMl letters. I propose t<> read, how- 
ever, in the neijjhhorhood of a hundred. I will 
n >w otter one written hv C P. Hnntinjzlon to 
Mr. Cohon, date<l ( Mol>er 8th, 1874. You ad- 
mit th(» handwriting of the letter which I 
have, Mr. M<-Allist(»r? 

Mi{. M '.ViJJsTKU. I want to s;m^ the letter 
tirst. 1 am satisfied that it is his haiidwritinii: 
iKHiiiise I cannnt read it. 

Mf{. IIavks. W(»1K do von make the a<l- 
mission f 

Mk. ^[♦^VLI.IsTl^l^ Yes, that is Mr. Hunting- 
t ms h in Iwritinu:, 1 will admit that. Xow as 
t > t!i * i» *rhn Mun» of this letter. This is a cor- 
n'-5|) )ii I'lK-vOx^twtMMi ^^^. Huntington and Mr. 
<*()lton as I und(»rstand it. 

Mk. Havks. Yes. sir. 

.^[|^ McALr.isTKij. This hotter is of\MHirsiMiot 
admissible as against tin* otluM- (h^fiMidants in 
this casv' at all. I do not sei* anything in that 



947 

letter }i;oing to establish a partnership and that 
I uiulerstand to be the case made by the bill. 
We object to the letter as being not pertinent to 
this suit. Ft simply seems to be, as far as I 
have read it, a private letter between Mr. Hun- 
tington and Mr. Colton, having no relation to 
anvthini' connected with this case. (Vrtainlv it 
is not evidence against other defendants and 
certainly not evidence* to prove a partnership or 
tending to prove it. 

Mr. Havks. The unsoundness of the objec- 
tion made by the counsel is apparent on its face*. 
Having just declared that he could not read 
the letter, he now declares that th(»re is nothing 
in it t(>ndingto prove a i)artnership. How he ac- 
(|uired that knowledge, not being able* to r(»ad 
the letter, I am unable to sav. 

Mr. McAllistkr. There* is soni;*thin' in 
that, but still we ask the Court to read the let- 
ter and see if h(» can find anything in it that is 
. relevant. 

Mr. Hayks. Do vou think the Court can read 
it? 

Tfie CorRT. I suppose I will have to hear it 
in or(h»r to pass upon the objection. 

Mr. McAllistkr. 1 submit this, that it be 
read for the information of the Court, there be- 
ing no jury here, first for information, and after 
tluit we can make our objections more perti- 
nent. 



94S 

Mr. Havks. fRoading letter.] " Xew York, 
(^)('tol>er 8th, 1874. Friend Colton: Yours of 
Septeinl>er .i^rth is receive<l. I am glad to hear 
of voiir safe arrival in California, and also that 
mv aswK'iates in (California, sts far as ' voii have*- 
seen, are j)lease<l with the conditional contract 
that von and I made when von were here.". 

The c(Mitract, vour Honor \nll remember, is 
annexed to the complaint in this ca**e, an<l l)ears 
date October oth, 1874. 

• 1 notice \y\n\t yon say of coal. I hojx^ 
yo!i will l^* able to finrl a good depiwit 
of ft. It is verv important to our interests. 
Hy the way, is the Ontral taking the- 
IThick Diamond to Oakland, and then hauling^ 
it back ov(M' the mountains to Stockton, as thev 

• 

<Ii(l wh(Mi I was last in Oalifornia. I hope to 
hear from vou on vour return from I>)s An- 
g 'les. Wc ought to g(*t a large amount of land 
an I other g xhI things from parties having in- 
terests along tlu* line l)i»tW(MMi Spa<Ira and San 
(!re<j:orio Pass, if W(» will build them a railroad 
t ) ii'A out on. I want vou to be sun» to get 
som • OD" to see Luttrell and Hager and g(*t 
thcMu to woi'k to change* the line of thi^ S. P. to 
t'u' Salinas X'allev, and giv(* the company more 
time to build that road than tlu^' now have. W(* 

« 

want th(» land grant(Ml to n^nain wh(»re it is: 
thit is, it was drawn on a (^(^rtain line. Now 
what we want, as 1 understand, is to remove 



949 

the line on which the road is to be 
huilt and let the land grant stay where 
it is. I would suggest that you get 
some Democrat thai is interested on 
the line of,our roads that can convince Luttrell 
that it is for his interest to work for the (\ P. 
and S. P. interests, for that would h:^ in the in- 
t(Tests of the whoU* people. Do attend to this, 
and let me know what has hoen don:». T wroti* 
Stanford, September 17th, in ndation to st^»am- 
(»rs on the l^icitic, calling for reply at once, 
l)ut have rec(»iv(Hl none, probably never shall, 
so I wish you and ('rocker and Hopkins anrl 
Stanford, if you can get him to think of it, to 
let him know what vour views are on this mat- 
ter and organize a comi)any there, if you want 
to <lo anything: as I expect to hear from Caj)- 

tain Bradburv verv soon, I would like to hear 

*  

your vi(»ws as (»arly as possible. 

*' Yours trulv, 

*'(\ P. HrXTTNOTON." 

Mk. McAlltstkil Here is a long correspon- 
dence hens vour Honor. This is the first letter 
which has been offered, and of courst* then* are 
v(»rv many things in that correspoiidence which 
hav(» no lu^aring upon the issues in this suit. 
Now, tlHM)nly point of view in which these let- 
t:»rs an* admissible, it occurs to my mind, is f ).• 
the purposi* of showing or tending to show a 



r.r 



fjn3<-}j ••! aijv .♦f i}j#->-^ It^lers as, in the opinion 
••f til*- < '**\irx. t*-!)^}- !-• ]»r»ivt- H jiartnership aiv 
arlTjii--ilJ*- ill 4-\i.i*-in>-. I «io n<»t think that a 
ijj*-T^ p!iras4-, ^u<-h ai- i> u*4-<l in this letter, and 
a- H13V !•*- f«Miij*l in a <rTvat manv of the other 
l»-tt'-r-. * niy ass*K-iate?*/' is an\*thin<r g^unj: to 
]»n»v<- a jiartnership. That is really simply 
adop!in;r the languajie -^f the statute, that parties 
riiay asj-ic-iate theniselv<-s t<»<!ether in a corpf>ra- 
tio:i. and the mere iis<* of that expression 
^ assoc-iat<->" <l«ie> not to mv miml even teml to 
i'-ta!»lis!i an\thin<r like a c^ •partnership. Ex- 
[nv^ssiiins of that kind pn»hal»ly will lie found 
all thnmjrli the eonvspjindt'nce. hut I do not 
think then* \rill U- f^HUHl in any sinjde letter of 
tlii> wlioli- <-^»rresjp«»ndfiH*e any siieh words as 
jturffif r or fHiiiH^-sht'jf. I do not thin*r that idea 
ever oecurn^l to tin* mind of (ieiienil (\>lton. 
I tliiiik it is an iden \vhi<-h has Ihmmi en*ate<f 
siiiee liis death. Xowanv part of thes<* Iett4*rs — 
and I am sp<*;ik{n;x now of tlu* whole hateh of 
iIh'Iii wliicli are to her^tten^l — so far as any part 
of tlicm in the o|>inion of tlic^ ( 'ourt tends to es- 
tablish a partnership Uy any 1<h)S(^ or ehan<*i^ 
i'X|>n*ssion. we suppose that they are et)m- 
|>et<*nt evidence. Hut w'r suppose that 
the rest of those hitters, in whieh the 
nirn*- of thin! [)arties an* montioniMl, wlio hav(»^ 
no connection with this litijration should not ]h^ 



951, 

juit hi ovidence in this easo. Now wo find in 
this letter the names of two gentlemen who an* 
known to all of us, Mr. Luttrell and Judg ' 
Hager. I do not see anything in that lett(*r 
which we need to fear to have made public, hut 
wo object to th^ mm ^ of Mr. L ittrell, to th:* 
nime of Mr. Hager, or to the nam3 of any 
other public man being brought forward in this 
contest in any way, shape or manner; and we 
ask to have simply such portions of these let- 
ters as in the opinion of the (^ourt relate to the 
matter in controversy here, put in evidence. 
We first submit that this letter, in no part of it, 
tends to prove a partnership, and then wo sub- 
mit that onlv so much of it — if the Court is 
against us on that [mint — that only so much of 
it is admissible as uses that expression, '' my 
associates," and ** we will build,'' those are 
about the only two expressions in this letter 
that can be tortured int<^ anvthinsj; lik(» a char- 
acterization of the* association in which th(»se 
parties were united; and therefore, we objt»ct to 
any part of this lett(»r. We first object to 
the whole letter, and then w(» specially object to 
any except thes(» two portions, if the Court is 
against us, upon the receiving of th(» whole 
letter. 

Thk Coi'RT. 1 should like verv much if that 
which might bo considered sensation d might 
be kept out if possible*. 



952 

Mh. Havks. Wi^ projxijM* to imrsiio that 
roiirsc. 

TiiK f'ocirr. I suggf'st in eas<*s where such 
thinjrs ocfim \vhen» those names are mentis meil 
that it U» merely sho\m to the other parties, 
and that unh*ss th<* parties or l)otli of tlieni de- 
sire it to h(* n*ad, thev he omittoil. 

« 

Mr. IIayks. I do not un<lerstiuid that there 
is anytliinfr in this letter refieetinjr on Mr. I^it- 
treli. 

Mk. MrAiJJsTKR. i^r anv other r>f*moerat, I 
suppose. 

Thk f Vm'kt. Some* such thinjc in this trial 
inifrht en»ate a sensation. 

.Mr. Hayf^s. W(» do not projM^se to make 
it so. 

Tin-: (\fc!'RT. As to tlic otluM* part. I supj)ost- 
it is v-TV <litii*iilt to in irk out \hv parts that 
iiii^ht Im' eonsi(l(»r(»d as liavinjr a heparin*:; upon 
this (putstion. I cannot take it and di^Hn/ what 
1 think nii^ht he so construed. To do so wouhl 
\)\ to som* extent, to^ive a vahu^ to th(» testi- 
luojiy inst(\ul of passing upon its admissihility . 
A iri'cat deal of latitude must he- allowiMJ, of 
r:)urse, in such a matter as that . It is imjxjs- 
sihle foi* a ('ourt to do othei'wise. 

Mu. .M( Almstku. We are |verfectly willinj:: 
to take those lett(M"s and mark such |)ortions as 
We ol>j •(•: to. and sulunit them to the Court. 

Tji: ('(KIM'. Perliaps that would he tln^ 



953 

better course; I(\t the other counsel see them 
first. 

Mr. Dklmas. Upon that proposition tlie 
learned counsel is in error in supposing that 
these letters are offered upon the single point 
of the partnership between these parties, and is 
e [.I illy in error, Wv? conceive, in assuming tlxat 
nothing but an express admission in words of 
a partnership between these parties can be given 
in evidence. 

Thk Court. Well, I supposed my remarks 
covered that. 1 did not propose to confine you 
to any such expression as that. 

Mr. Dklmas. No. 

The Oourt. The ma^nner of doing business 
may [)rove a partnership. 

Mr. Dklmas. That is what w^^ off.»r these 
letters for, to show the confidential relations. 

TnR CorRT. That is what I sav; 1 cannot 
take the lett^^rs and say what does or does not 
have that effect. That would be passing upon 
their value as testimony in advance rather than 
their admissibility. 1 suggest, thcmgh, if there 
is any way to keep out that which is not im- 
portant, that it be done. 

Mr. Havks. That course is alreadv deter- 
mined on by ourselves, if your Honor please. 
That we had already determined on witliout 
suggestion from either the f -ourt or counsel t > 
jmrsue that course. 



9at 



Mk. McAllistkk. To pursue what rrourso? 

Mr. Hayks. Of leaving out anv invidiou?* 
HMuarks concerning third i>ersons, or anvthinji: 
i>f that kind. 

TuK CoiHT. You can just show tliat to tlic* 
t)th(»r counsel, and indicate wliat is omitted. 

Mr. McAlustrr. I think, your Honor, tliere- 
is a very l)roa<l distinction as to the numner of 
iloing husiness as to a partnership or an alleged 
partnershi|>. Very frequently th(» manner of 
doing husinf*ss hy partners may make them 
IKirtiK^rs as to third parties, and that manner 
Ikhouu^s very in^portant in a suit Ix^tween thinl 
parties and the alleged partnership, hut where 
th{»reis a distinct written agreement l>etween A„li 
(' and D^estahlishing their rights, I conceive that 
ihcir n^iuiiHM* of doing Imsiness l)e'tween them- 
selves cannot (Mdarge or limit their rights un<ler 
that liinitcMl agivemcnt, and the p(*rtinenc(* ot" 
showing the mode* and n>anner in which an as- 
*i^)(*iation do:»s husiiu^ss for th(* pur[>ose^ of de- 
iUicin;;" there^froni the fa^*t that th(»v an* a 
partnei'ship, really only applies in ca<es 
where thirl j>ai*ti(»s are s(M»king to (^stahlish 
that reflation, and as hetwi^en the parti(»s tluMU- 
st'lves, when tlu\v have a writt<'n agreiMUCMit d(»- 
fining tlieir Hghts distinctly, an* wo to stei> 
outside of that written agnHMnent and to say 
tliat tlieii* mrwlc* and manner of doing husiness 
shall clLaract(n'i/.e tlu^r relations and estahlish 



955 

tlioir ri;i;hts or imp)se liabilitios up in tli.MU? 
Xow, it seems to me tliat that is a very far- 
fet(*he(l proposition, and it seem-^ to m:^ confus- 
ing the difference between rights of third par- 
ties who seek to establish a copartnership as 
against an alleged firm, and the rights of the par- 
ties l)etween themselv^es. All the hooks, text 
writers and reports draw the broa lest distinc- 
tion between these two kinds of proof and be- 
tween the mode and manner of estab- 
lishing a partnershi|) infer sn^r and establish- 
ing a partnership as to third parties, and I 
submit that where we have, as we have h(»re, the 
distinct and full written agreement that no evi- 
denc(» as to the mode of doing business wh(»n the 
(juestion is as to partnership between the parties 
to that agreement is relc^vant or comp:»tent in 
testimoify. Your Honor has notice 1 that agree- 
ment annexed to the complaint in this action; 
it is ^^ Exhibit A," I think/ 

Mr. Havks. I do not understand what coun- 
sel is addressing himself to just now. I undt»r- 
stood the letter which was offered had biHMi 
rulcjd on. 

Mr. AFcAllistkh. Well, 1 am addressing my- 
self to the letter, or rather I am a<ldiessing to 
the Court concerning the letter. 

Mr. Havks. T understood the hotter had betMi 
ruled in. 

Mr. McAli.istkr. As to ** Exhibit A," mv at- 



95ij 

fi^itioii \va- <IinH-it-<l to tliiit l>v the* ar;rii- 
iii«-iit nf tlie c-oiiclu<liiijr counsel. that 
it wf-iit to >liow the mode of ili>- 
iii;r hu^iiu*^>. and it set^m?? t^* nie that that 
in^Mh^of doinj: business cannot atfW-t this ques- 
tion of jKtrtnersliip where the parties formed 
that rehition and expresse^l their mutual rij^hts 
and oKlipitirnis in a \rritten ajrn*ement, and 
that it is ven* diffi^rent fr^im the case of a tliird 
party, who has no notice of a WTitten afrr<*<*- 
m:*nt. wlio is nr^t a [>arty to it. an<I who relies 
in trustin}? the firm ufHm their mode of doinjr 
hisiiies<. Xo'.v Mr. Colton was not rehnn^jc 
upon the uhkIc and manner in which they 
transact**! Inisiness to estahlish his rij^its or to 
define liis liaKilitif*s: hut he was relyinjr upon his 
written a<rrMMn<'nt. of wliich he luid full knowl- 
ed;^e. and of which lu* was a party. Xow, what 
is th<* us4* of a writt<Mi ap'eiMnent in matters of 
this kind if it can U* deviate<l from. <M)ntrolled 
;iii<l entirely (overridden Kv what is called the 
inudc of doiiijr Kusiness? 

Mi;. 1)i:l.mas. Well, if your lionor pl(*ase. 
that is a new ar<rMni(Mit which tlK^learnc^l coun- 
sel a'l\'aii(%^s, and thoii;;h, in ^MieraU I fe<*l in- 
(•IiiM*«l to ex|)i-ess liis ri«::ht to conchidc* the arjru- 
in 'lit in a ease wlnM'e he* mak(*s an ohjection* 
yet if* 1m» rcsc rves the point of his ohjtH^tion for 
a (• )nehi(lin^ argument, it is hut our rijrht as it 
is i\\\v (lutv t(k re|)lv to hinu Th(» l(»arnod couii- 



957 
st'l is entirely in error in assuming tliat the 

» 

written agreeiniMit to which he refers defines 
the rehition of these parties. Your Honor has 

# 

had that agreement hefore you, anci you are 
perfectly well aware that that agreement does 
not refer to the principal part of the Imsinessof 
these parties which was and is the conc(»rn 
(*Xilled the Western Dc^velopment Company. As 
to that agreement, or as to that concern, there 
has heen no written agreement whatev(»r he- 
tween these parties. The real relations of Stan- 
ford, Crocker, Huntington and Hopkins and 
('Olton to that corporation forms one of the im- 
portant branches of this cause, and nowh(»rt» 
hav(» I vet found anv written agrec^ment lu»- 
tween th(»se parties defining or undertaking to 
defines their relations to that cor[)oration. 
We chxim that the cor[)oration was a 
mere sham, a mere pretext, a mere mask hi»- 
hind which stood a concern, an asso Mation of 
individuals having certain rights and certain 
liabilities as betwtu^n themselves, which Wv>rc 
undertak(Mi to be enforc(*d and to be secured 
under a corporate guise. But I neiMl not refer 

vour Honor to tlu* authoriti(»s in this State 

• 

that it is in the power of a Court of 
Equity, when it comes to setth^ th'.> riglits 
of parties betweeu tluMUselves, to t?ar off 
the mask undc^r which th(?v mav have hi<l(lM 
and to see what before tlu* ChanceUor is their 



95S 

n*al ivlatiaii. Xow, we sav that tlio Western 
I)<»vol<)[)iiMMit Company was a partnersliip. Wi*- 
aro (*orrol)orato(l in that bv tlie statement of on<^ 
of tlu* (lefcMidants now present in Court, wh(> 
says tliat it was a partnorshij); we are eorrol>or- 
ate<l in that hy the statement of the chief ad- 
riser of tliose defendantri for the j>ast ten or 
twelv(» y(»ars, wlio says it was a partnership; wi»- 
an* corroborated in that bv the manner in 
wliich th<» coqH>rati(m trans^icteil its business,. 
th(» manner in which it acquired its capital 
stock to do business \nth, and bv num- 
heirless «rth(*r circumstances. We offer 
thes(^ h'tters as. corrol>orative of that 
tli(»orv to show that th(* Western IVvelop- 
nient Comnanv and these various sul)si<Harv 

la • 

••orpoi'ations W(M'e m(M'(» instruments by whidi 
this association of indivichials standin*^ back 
of thcni, and \vli<> were tlu^r n^al cremators, 
transacttMl \\w busin(*ss, and that in ord(»r !<► 
transact the business in tliis way these* parties 
were ()l>li<je(l to assum(» towards (*ach oth(»r the 
iit')-t iiitiiuit(* n^hitions, busin;*ss rehitio^ns and 
relations of |)(»rsonal contid(»n(*(* and trust; that 
their |)lans \v(»re coiuiuunicatcvl to (*ach othi»r; 
thit th 'ir modes of doinj:; business wi»re coni- 
muiiicated to each otlier, etc.; and all that ap- 
pe irs by the corr(»s|)ond(»nc(*, or W(» chiim it to aj)- 
[)e:n* by the correspondence*, whi(*h we now otter 
III evidence. Kntirely ind(*pendent, how(*ver. of 



959 

any partnorsliip rolatiou between tliese parties, 
your Honor will find that the complaint relies 
upon intimate business, confidential relations 
(existing between them, which is denied 
by the answ(M\ T refer vour Honor to 
an allegation found on the fourth 
p:ig.* of the complaint, in these words: ** That 
during and while the said Stanford, Hunting- 
ton and Crocker and Colton and said ]\Iark 
Hopkins were associated and carried on busi- 
ness together, and thereafter while said Stan- 
ford, Hunti^igton, Crocker and Colton w^ere so 
associated and carried on business together, 
th(»v assumed and sustained relations of inti- 
mate and pe(*uliar personal trust and confi- 
dences (*ach toward and with the others in re- 
gard to said business, and they acquired, ob- 
tained and had confidential information and 
(M)ntrol each conc(»rning and over the affairs, 
property and business of the others connected 
with, growing out of or accumulated by and 
through the said busiiu^ss in which they were 
so associated together." It is not indispnisable, 
if your Honor pleasis that tlu* plaintiff 
hen* should i)rove a strict partner- 
ship b(»twe(Mi these ])arties. It is 
sufficient for all jmrposes of this case, as wc^ 
conceive it, that it be shown that these parties 
sustained toward (»ach other intimate mutual 
relations of trust and confidence; and that bv 



rea^fU of tlu* lru«t n^p05*e<l l>y onf* in tlif other, 
tlie oiH* ill \vliom the trust was refKisfnl acquirfni 
kiiowlinlgi* of the hiisine.sHof the other which bv 
rea-i^ui of the trust it was his dutv not to ahiise 
1 1 the disalvantap* of tliat other. We projxise 
to show Uv these letters tliat that relation of eon- 
fidenee ainl mutual tnist existf^l lK*twe(*n these 
parties: that, hv n-ason of that eonfidenee ami 
iiiutual tnist, r^eh aerjuin^l an intimate knowl- 
e.lp* — ji s4H*ret knowUnlj^o, if you please — of the 
husiness inten*sts and Inisiness jxiJ^ition of the 
other. An<l theneewe infer that it was the <lutv 
of the [MTson in whom the eonfidenee was thus 
placed not to al>us<* it to the detriment of the 
one placing it. The Civil T'oile so (*.xpressly d<*- 
••hires. 

.Mi:. IIavks. iK^-lan-s he is a Trusts-** under 
>U(li (•ircimistanc(*s. 

y\\{. .Mc.\lljstkk. I think von r Honor should 
look cit tills (•()inplaiiit to scm* what really is the 
Ictadiii^ tlion*rht and idea which n\n<^ through 
tills foiiiplaint: It lH*<rins with statin}^ what we 
riiidcrstaiid to Im* entin»lv incorn*ct and untrue, 
that Stanford, lfuiitin<rtoii. Ili^pkins and 
Crocker w(*n' tor a lon^ tiuK* anteced(»nt to the 
a;::rccnK*nt of ( >ctol)(*r, 1H74, cnjra;::^^! as copart- 
ners In Imsiness. That is the initial statenu»nt of 
the coinphiint. Then t^cn^son to av(»r that they 
desired to liave another (*opartn(M', and that 
ihev look(»<l arouiul and s<deet(*<l i\\v that otlu^' 



961 

copartner the hitv David D. Colton, an<l that tlien, 
lor the purpose of carrying out the agreement of 
copartnership they executed the contract of 
Octoheroth, 1874. •* Exhihit A ''annexed to this 
coniphiint — that tliey call a contract of co- 
l)artnership, and tluit is really the founda- 
tion of their whole theory and their 
\vhol(» cas(». They l)egin hy stating that these 
nuMi whom \ will call Stanfonl & Company for 

(onvenience, l)ut thev were not a firm, Wv»re en- 

t. 

gaged as copartners; then they say they wanted 

another coi)artner; then they say they took 

1 • • • 

him in and formed a copartnership agreement 
an<l th(»y say that copartnership agreenient is 
expressed in '*Kxhihit A." Then they simply go 
on to state* that in carrying out that copartner- 
ship husiiu^ss they w(»n* associated together in 
intimate relations; not claiming any intimate 
relation outside of the relation of copartnership, 
hut sim|)ly characterizing the nature of their in- 
tercourse as copartn(»rs, the copartnership ])eing 
the heading thought and idea and this other 
simply sugg(»sting that they were |)roceeding to 
execute thcMr partnership l)Usiness in that ordi- 
nary and couHdiMitial mode in which copart- 
ners act. Now, to show that I am right ahout 
that I refer your Honor to the amended com- 
plaint. I H(»ads from tluMimended complaint. | Is 
your Honor familiar with the* contiMits of *'Kx- 
hihit A"? 



TffK <*)i'irr. [ have l<j*fke4 it «>vf*r «'n.-*?Tan\'- 

Mr. MrArxr.^TKR. L woixI«l likn tn «-alI vnnr 
H*>nt>r'.^ att4*riti«Hi tu it. l>e<'aiUH* [ rt^i^dt^r thi.-^ 
a:i inif^^rtanr p^nnt in tlii.^ r^a*^. 

The <'(M'rt. Wh. -j-ir. 

Mr. Mf;Au.rr*TKR- It i?* tm the :K^h pa;5ft '>f 
the aniftnfle<l (•»>mplaint. [ Kitai l»^ tht- a^rreenuMir. [ 
Now. voiir Honor will oh?*ervH. that i.^ about a.^ 
fcir from a pwrtnernhip :i^jcrr^nutnt ;l^ p«)?*frihlH^ 
and vonr HoQ«>r will furth*^ obs^f^rve that anv 
other (•♦impanv that thi^se parties <TTnite4 -Mil>?Ht- 
tfuent to thif* ;ijrrpt*nipnt. an<L in whi<*h F). E>. 
l*>lton lH*t^inif» an a.^^wwiate 7ft<M*khol<ler. was t«» 
ronie \n iimler thI^+ a^nftenient. This ;^rrpenient 
wa^* to rf**£nlafe the hi?* ri^rFits an<l hi> liabilities^ 
•»f all the parties. an«i ri;xht> an«l lial)ilitie-^ 
an<l olJiiirations. iMft only ^} far as rlu'^ '-tun- 
[>any oam«*<f in this airn^f^ueut was roii<-enuMi. 
hut -o far as any «rther ef)iii[>jinies in whirb 
tfi-s- pirtie- InM-ani- inten**^t<**i tlitM^^atter. 
aiul that -^erin to me t«» answer tlie anrunitMit of 
t!j»* learue'l foiuisel that there was no written 
airre^Mnent rontrollin^x tlie n*hition> ot* the-^» [>ar- 
tie*- -o far as rli»* \V»'>t<MMi I >evelf )pni«*nt < nni- 
[):in\ wa.^ ''oiieernefl. That <*oni[)any <'ann* !u 
«n«h'r thi- ;i'j:re#Mnent, ami yonr Honor will ^^f- 
l!iat rlii- au-'n-enient «**-tahlishes the liabilities of 
Tulton. ami niakt- tho.-e lial)ilities entirely «lif- 
fer.'iif from tlios<- of a <*o[>;n'tner: makt*s him 
Uahle -im[>l\ in [)ro[>ortion to the annamt of 



9(33 

st<K-k lie lielil. We say that tins ajriwinent 
means something. We say that thest* parties 
<li(l not desire either mv clients or I>. I>. Colton 
to trust their relations hv won! of mouth. Thev 
wantiMl to have some detintMl contract. Thev 
ma<le a defined contract. Thev carried on Imsi- 
ness under this defined contract. The word 
[lartnership is not used in the contract. The 
agreement does not look in any way, shape or 
manner to the existence of a copartnership: no 
lawver could read it and dream for one moment 
that a partnership was intended, and it was to 
emhrace all the companies therein named an<l 
all companies thereafter formed. Now, suj)pose 
for one moment that one of the creditors of the 
Ontral Pacific Railroad Company, or tht» 
Southern Pacific Railroad Company, should 
have attempted to hold (reneral Colton liahle as 
a partner for all the (lel)ts of that corporation. 
I can imaj^ine my learned friends u|)on tin* 
other side, when we attempted to enforce such 
a claim; I can imagine the scorn and contempt 
with which thev would meet such an accusation 
or claim on our part if we represented any such 
creditor, coming in here to claim that Mrs. Col- 
ton is to he liahle as a copartner, as if her hus- 
hand had hecMi a copartner and hound for all 
the dehts of this corporation. Why, her 
hushand was nothing in the world h\\{ 
a stockhold(»r; all her liabilities are 



934 

but tlios(* of a stf)ckh<)lder iu thosi* conjpaniesf, 
anrl so far as these rlefeiulant.s are concerned h(* 
had a distinct uTitten agreement with them that 
definc^s their riglits, tliat defines their h'ahihties, 
an<l what Court in tlie world haN^ing any judg- 
nuMit or legal sense would hold that Mrs. Coltou 
was lial)le or the estate was liable as being a co- 
partncM' in all these corporations? We certainly, 
voar Honor, would leave the Court-house utterlv 
ilefeated in any such claim. Now, that is just 
the claim that th(» other side is presenting, in a 
•lifierent sha|)e. They are claiming here, right in 
th(» face of this written agreement, which pro- 
vides for the corporations therein named, and 
for all others in which they might thereafter be 
intcn^stc^d; they are claiming that that made co- 
[)artn('rsliip, and <*()partnershi|) not only as to 
creditors, l>nt copartnership as lu^tween 
the partic^s th(»mselves to the agrei*- 
in 'lit. That wIkm'c men sit down and 
in writing dt^tinc* wbat their contract is, what 
their riglu- an\ what tluMr obligations are, that 
tlint c:in b/ varied th'.*reafter l)y word of moutb. 
by modi* of doing busin(^ss, by loose t»xpres- 
sioii-;, eith M- of a pirtnor, or of an attorney, that 
u\* u\'n» a iKirtncr of that p:irty: that that writ- 
t.'n contrai^t is to b(» swept away and that wc^ 
are to have the rights of these [xM'sons defined 
not bv their written agnnMuent. l)ut bv such 
|(M>se t(v-tim )nv a^ has Ikhui ottered here and as is 



965 

now sought to bo offered by the correspoiulencc* 
between Mr. Huntington and Mr. Colton. Now, 
I object to tliis, your Honor. We protest against 
it respectfully. We ask your Honor to enforce 
this written contract, and we ask your 'Honor 
not to wipe it out as if it never had anv exis- 
teUv^e. VW think it had some m.^aniuii;. Wv* 
think it ought to have a legal force. We think 
it ought to have a just and fair legal construc- 
tion. 

Mr. Dklmas. I would like, if your Honor 

please, that your Honor should not retin* from 
this argument with the impression tliat th(» 
l(»arn(Ml counsel has sought to make an imi>res- 
sion upon your Honor's'mind as to the mean- 
ing of this contract, '* Exhibit A." 

Mr. McAij.istkh. Now, one monuMit. I made 
an ol)jection, your Honor. The other sid(^ an- 
swered us. Thev then asked for a second ar^icu- 
ment, and I respectfully submit that they are 
not (Mititled to havt* thi» roplv to us alwavs. 

Mr. Delmas. W(» have not had the* benefit 
upon your former argunuMits of your construc- 
tion of *' Kxhibit A." That vou reserved for a 
closing argumiMit. It is not (\\utv. generous to 
say that W(? an* foreclosed from answering vour 
argument upon that point, (^specially when w(» 
conceive it to b(» a perversion of the term*^ of 
that instrum(»nt. 

Mr. MtAllister. I do not suppose* that any 



965 - 

arjoiiiK'nt \y^* niijrht make will ?5ati.-fv them at 
all. neitlier as to the matter of the argument or 
a?* tit the inrKle of the arjaimeiit, Imt I simply 
ask for the eiiforcenK-nt of the onlinarv' rule. 
t!iat when we make an olyection. ami the other 
>id<* reply to it, that we have the last arjnimr*nt 
lH*fore tlh* Court. 

.Mk. I>ei^as. That is unquestionahly true, 
if your Honor |>lease, |>n>vi<linjr that in making 
their ohjei-ti* HI the CMHinsel state their point, hut 
if they resf*r\'e their p^>int for the closinjr arjru- 
nient. we suhmit that it is hut just to the Court 
that that arpiment which ought to have lieeu 
the first, hut which now comes the last, shall l>e 
answcreil. 

Thk ( 'oi'irr. I un<l< rstan<l the ^oun<l taken 
to 1m* iiuirli l»roa<ler than tliat which was an- 
noiin(M*(| ill the Ix^jxinninfr: tlie <rn)un<l now 
talceii. if sustained, would call for the exclusion 
nf tile ;zreater part of the t(*stiniony which 
we have Im'cu taking in th<» <lays we 
Iiave s[)ent in this trial: it suggested 
itself to my niiinl in Xho first oj^cMiing stat(»- 
nient ot'counsel for plaintiff*. I heard no mon* 
nf it. and I sup|m»s(m1 tlu» |>oint was not to he 
urged at least on the trial: that the rights of 
I'le parti(*s and th-'ir r(»lations to each other 
WTeentirelv to he controlled hv th(* written 
;iiiieenient. If that is t4» ccMitrol the trial, wln\ 



967 - 

it seems to me that a good deal of the testi- 
mony taken lias no place in the Court at all. 

Mr. McAllister. I think we objeeted, your 
Honor, cjuite as oftiMi as we c mid 

TiiECorRT. You objeeted now as you did in 
the beginning, that it did not t^nd to prove 
partnership, but not that they could not iirovc^ 
]>artnershii) by the act — as I remember, at lea.st, 
your objections — not taking the broad ground 
as you do now in any of the previous positions, 
a^ I reniMuber it, and did not now in the first 
announcement of the objection. In fact, as [ 
understood, you consented that a j)ortion of 
tlu*se letters, which would speak of partnershij), 
if any there were, such portions wouhl be legi- 
timate and pro|)er testimony. 

Mh, McAllister. Xo; I said this, vour Hon- 
or: If your Honor should rule against me as to 
the whole letter, that then I would make a mod- 
itie 1 objection as to certain parts of it. 

The CorRT. Tlien I may have misunderstoofl 
vou — that is the wav I understood the objectioii 
in the first i)lac(». 

Mr. ^FcAllister. I think perhaps the ob- 
jection was broadened a little under tiie sug- 
gestion of my associates. 

The ( 'Oi'RT. I do not mean anv criticism on 
your right to make the* objection in my remarks 
at all. Tli'.^ (|uestioii is cjuite an im;))rt:int on* 
in the cas(», I can readilv si*e. I don't care, I 



968 

confoss, to pAss upon it with this little e()nsi<I- 
oration I can give to it now, altogether. 

Mr. >r<'ALLisTER. I am perf(L>etly willing to 
[)iirsue any er)urse your Honor may desire in 
the matter. We do not desire* to l>e iinderstoo'l 
as waiving anything. 

TuK fouRT. It may l>e that your position i?^ 
entirelv eorrei-t as to this. T understand, how- 
in'er, that eounsc^l (4aim that tliere are othi»r 
views in which this testimonv mav be adniis- 
sihle, as, for instance, whetht^r they were part- 
ners or not, showing that the relations between 
these* parties were confidential and quite inti- 
mate, and imder tlu^-C'ode thev claim that that 
will have the same efK^ct as to ne<*essitv of dis- 
closure, and all that. 

Mk. ^IcAiJ.isTKR. 1 simplv wish to state mv 
])oint about that. My |xMnt is this: That then- 
is no Halation alU^gi'd in the complaint, ex(*ept 
tin* Halation of (*opartu(^rship, and that the de- 
si*rij)tion of contidiMttial n»lations thercMu con- 
tain(Ml is a description of (MvntidcMitial ivlations 
under tluMr co|)artn(M'ship and as c(>|Kirtn(»rs: 
that is n>erely di^scriptive of that piv\nous rela- 
tion which has Ikh-u alU^'d in the* complaint. 

Tim: Conrr. It struck me as the^ com|)laint 
was ])eing read that while that was the ground 
ir.i which plaintiff* probably intendcnl to bas(* 
lii^r case, eounsc^l had lelt it rather undeter- 
uiinate^ on that[XMut — ^lia<t not ({uite endeavored 



-969 

at least, not to foreclose themselves from taking 
another position. 

Mr. McAllistkr, Xo (loul)t they allej^ed it 
it in the most artful manner possihle. 

Thk CorRT. Thev said, for instance, as von 
read here — I forget the exact language — the re- 
lation of pirtn^M'ship, or as asso.*iat/»s, it ap- 
pean»d that it contained language that was am- 
higuous somewhat. T am incline<l to admit the 
t(^stimonv at present. I do not wish any ruling 
I make, though, to hi* an intimation of what F 
shall finally hold (m the proposition. 

Mr. Wallack. If your Honor please, I would 
like to suggest that while, of course, we are not 
to be heard now, that it is not to be implied by 
our xsilence that we consent at all to the con- 
struction which the learned counsel puts upon 
that agreement, or anything he said in relation 
to that, our views are entirely diffei'ent. as will 
appear at the time we come to be heairdupon it. 
I hope they will nuik(» no lodgment in your 
Honor's mind on that proposition. 

Thk (!()rRT. We will not be likelv to under- 
stand you as consenting to anything of that 
kind. 

Mr. Wai.lack. No, sir. The proposition is 
stated here as b(»ing obviimsly clear by the other 
sid(^ while W(» are prepared to come in at any 
moment with a great arrav of authoritv, which 
is certainlv the other wav. 



Tkk Coritr. I am not likclv t<> make jinv 
t«uch mistake* as that. 

Mk. IIayfls. I understand then, if your 
Honor please, that the lettf»r which I have read 
is in (»videnc(». 

Mr. McAllister. Xo; I d(k not so under- 
stand it. I have not heard tlie ruling yet, first 
upon the whole letter. 

Thk CorRT. I said 1 would admit the letter, 
hut I n^tjuest counsel to look over and see them- 
selves, and cut out that part they do not deem 
mat(»rial. 

Mk. Havhs. We have already done so^sir. 

Thk CorRT. Ks[)ecially those portions where 
th(*re an* names of parties that <lo not seem 
to he conceriKMl in this suit. 

^^l^ H vvKs. As I said, \\\i did not await th* 
su*^j^(»stion of the Court or y(*t of counsel on tlu»^ 
other side. We havi* Ixhmi through the* letters 
with that ohject, and have abstracted the letters 
in a l)ook for that purpose, marking the por- 
tions \Vv' did not d(*em n(H*(»ssarv in the cast*. 

TiiK CorkT. ( )f (M)urs(% I don't mean to sav 
lliat all of the letters mav h(» received. Theiv 
u)av he some so manif(»stlv irrelevant that th(»v 
would not he admissihU*. 

Mil Havks. As a matt<M" of course, that will 
he met as the letters are prc^sented. 
TuK ('(Mirr. If vou will show them to the 



•971 

otlun' side and then say what you profxiso U) 
omit — 

Mr. Hayks. [Interrupting]. Th(» other side 
say tliey cannot read them. 

Mk. McAllistku. Well, we will try to. 

Mr. Hayks. I offer this letter of Oetoher 
8th, 1874. 

Mr. McAllister. We ohject in the first 
])laee to this whole lettt>r, and I desire to state 
my ohjeetions specifically. Which is the letter 
you offer now? 

Mr. Hayks. ()ctol)er 8th. 

Mr. McAlllstkr. We object to the whole of 
the letter of October 8th, 1874, from Mr. Huntinji;- 
ton to Mr. Colton, first, on the ground that it is not 
admissible under the pleadings; second, that it 
relates to no issue in this case or the pleadings; 
third, that it is irrelevant, incompetent and in- 
admissible, and we mak(» also the special objec- 
tion that the rights of I). 0. Colton and of these 
defendants are defined and established bv 
written agreement of O(*tobor otli, 1874; that 
that is set forth in the amended complaint and 
marked *' E.\hibit A,'' and that the rights of the 
l)arties under that agreement could not be 
vari(»d in the first ])lace l)y Huntington alone. 
Huntington (tould not by written agreement 
have varied those rights. He had no power, 
and he and ( 'olton together had no power t > 
vary that contract; it recjuired the assent of all 



.972 

tlio p«artios. Tliis letter, your Honor under- 
stands, is written by Mr. Huntington in New 
York. Tlu»se defendants reside in San Fran- 
eisco. 

Mr. Hayks. I>o I understand, Mr. McAllister, 
that you are going to redargue this (juestion, or" 
nien^lv to state your ohieetions? 

Mr. M( Allistkr. I am going to state ray 
objections. I say that Mr. Huntington had no 
power, and Mr. Oolton and hi» together had i o 
power, to change or affect the written agreenient 
of October oth, 1874: that the introduction Of 
this letter is for the purpcvse of varying and con- 
tradicting and impairing the rights of the parties 
inidcM' that WTitten agreement of October 5tlu 
1874, and that it is incompetent for that pur- 
pose: that th(» great mass of this letter has no 
rehition to anything in this case, and that thtMH- 
is no part of it whatc^'er tliat is con^pet<Mit. 
That is mv first objection, vour Honor. 

TiiK ('(vruT. Vou might as wc^U statc^ th(»m 
all. 

Mi?. Mc Allistkr. Wi^ll, 1 want to get the 
nbjiM'tion first ovcrruliMl or sustaincnl — perhaps 
I would pivtcr it in the latte-r form — ^to this 
letter as a whol(\ 

Thk Corirr. Ves. sir. Very W(^1L I will give- 
you yom* excc[>tion. 

Mil AFcAllistkil \V(M'.vcept on l)ehalf of the 
defendants. Xow th(HL with n^feiTMice t<^ 



973 

tho balance of this letter: I will now specially 
object to certain portions, of this letter. 
Now we want to specially object to this por- 
tion c)f the l-ettiT: '* I want von to bo sure to 
jj;et some one to see L.ittrell and Haj?\^r and jjjet 
them to work to change the line of the S. 
P. to the Salinas Valley and give the com- 
pany more time to build that road than they 
now have. We want the land grant(»rl to remain 
a^ it is; that is, it was withdrawn (m a certain 
line. Jsow, what we want, as I understand, is 
to remove the line on which the road is to be 
buih." 

Mr.Havks, I shall not consent to the propo- 
sition of striking out that certain ])arties are to 
be seen. 

Mr. M(\VLLrsTKR. W(» object to that portion 
of the letter in the first place, jn^ur Honor, such 
as I have* rea I; w.» would Hk ^ to hive a ruling 
on that j)ortion. 

Mr. Havks. S.) far a^^ the nam »s of th:* g.Mi- 
tlemen mentione I there are concerned, Wv^ d ) 
not obj(»ct to the names being omitted or not 
read at all, (MtluT now or in the firesentation of 
other letters in which nani'^s mav ocunir. Wv» 
do, howev(»r, deem it important that there shall 
be evidence go bc^fore the (>ourt, which this is, 
sh:>wing tlrit the j)rojec*ts of these parties as to 
1 ^jjislatiou which aT.»:'t;* I th:»ir ac^tuil interests 
WvM*c» co'.nminic ite 1 bv o:i » to the other. Thev 



974 

jiiv fss'^ittiallv confidential communic.itioiis and 
bring them within the section of the Code on 
which Wv> Fi^v to constitute these parties, irre- 
s[):*;*tive of tli(» copartnership rehition, TrusU^es. 

The CorRT. Can you not, on showinjj; them 
to counsel, omit those portions by merely 
stating that it does refer to thai subject? 

y\H. H.vvKs. We can do son^ething of that 
kind, ves. 

Mr. Waulack. If your Honor please, wt* 
l\:ive proposed for ourselves — I think it has \}oo\\ 
stat(»d to the Court — that we would read no por- 
tio 1 of til ^se letters which reflected to the injur\- 
of third persons. That is proper, I supposes 
and we will all agree upon that. But if third 
p.M'sons ha|)[>en t(>l>e nam^d in tlu* course of the- 
\i»tters no' reflecting on them, would it be neces- 
s.irv, und(M' t\w view of vour Honor, not to r(*ad 
thos(» names? Now, in ths case, for instance — 

TiiK Coi'KT. If it is material and has a bear- 
ing on the case, 1 suppose you hav(^ a right to 
Vv'ad the lifter, nanu^s and all. 

Mi^ Wai-lack. Y(»s, sir: but in this case, as 
I und(M*stand it, for instance, these gentl(Mnen 
who we sav art^ interested t()i*:(4h(*r. Thev oro- 
pose to remove the line* of th(»ir road, and leave 
the land grant when* it is. It is suggested, and 
[) »rfeetly [)i'oper, 1 suppos(\ that as two giMitle- 
m '11 are in Congre^ss that arc^ Democrats, that it" 
o:ie of these' l>usiness [)artuers — 



975 

Thk CorRT. I (loirt uiidorstaudthtU this to- 
fleets upon cither of these gentlemen. 

Mr. Wallack. No, sir; hut it might l)e said, 
** What has that got to do witli thehusiness?" hut 
it shows the confidential relation and husiness 
dealing ahout th(»ir common interests, where it 
is suggested properly (»nough that if you can get 
somehody of tlu* same political affiliations, proh- 
ably they would have a better chance to per- 
suade those gentlemen to go that way: and 
fairly enough; I see nothing wrong in mention- 
ing that in this connection, and yet it might Ik* 
sai<l that, isolated hv itself, it speaks of third 
persons. I only submit those views. 

Thk ('orRT. Of course, as 1 said before, I do 
not know what other people may say about it. 
I know a great deal of capital is made out of a 
little stock sometimes. I do not think it at all 
improi)er myself for a person to apply to a 
memb(»r of the L(»gislature or (^)ngress to in- 
<luce him to get such legislation as he thinks 
proper and right. 

Mr. Wallack. Surelv not. 

TiiK CorRT. I don't know that W(» have a 
right to inf(»r that anything was ask(Ml him that 
was im|)n)j)er. 

Mr. Wali.ack. It is suggested now that if 
we couK* to something of that kind, we say A and 
1). Verv well. 

Thk CorRT. That might disclose* just as 



976 

much, th()ii<!:li- My suggestion \vas a litth^ <Iif- 
f<Tf»nt; simply to say it ha^ n^ferom-o to {)ro- 
I)oso(l l(*gislation. 

Mr. IIavks. I think in n^anv instances >\v 

a. 

could scarcely gf) to that extent, the extent of 
your Honor's suggestion, l>ecause I do not think 
the other side and ourselves wimld agree as to 
what th(» effect of the passage was. 

TuKCorRT. Well, if vou can't do it, sonu^ 
oth(»r c<mrs(» will he taken. 

Mk. Hayks. We think we have the right to 
hav(» the passage that was ohjecte<l to in. 

Tmk ('oi'RT. Sinc(^ it has hcnm read it niav 
h(» consi<ler(Hl in. 

Mr. McAijjstkr. V^mr Honor understan(l^i 
we ohjectinl to that passage^ sjxMMally? 

TuK CoiKT. Y(»s, sir. 

Mr. McAlijstkr. That is vom* Honor's rul- 
ing? 

TiiK CoiRT. I will giv(^ you the IxMH'Ht of an 
♦*xc(»ption MOW. 

Mr. McAijjstkr. W(» will (^\cej>t to that Ix^injc 
ruled in. Now, wc ohjcH't to this portion of the 
letter. This I ohject to is " A menilx^r of the 
I)eni()ci*atic |)arty." 

.Mi{. Havks. I ()l>j(H't to that ohj(K*tion heini;* 
heard. The Democratic party is not a i)arty to 
this action. 

Mr. .Mc.Vijjstkr. | R(^ading from letter.] *' I 
would suggest that you get some DtMUocrat that 



977 

lias int<»rests on the line of our roads that can 
convince Luttrell that it is for his interests to 
work for the C. P. and S. P. interests for that 
woidd he in tlie interest of the whole people. 
You attend to this and lot me know what has 
heen done/' That part we ohject to. Perhaps 
if. we could suhstitute the word Repuhlican for 
Democrat, we would have no ohjection. . Well, 
we object to that portion. 

Thk CorRT. Out of a patriotic motive. 

Mr. Haves. The objection is made that, not 
being a party to the suit, that ohjection be not 
entertained. 

The Coi-RT. I think we will get along. 

Mr. McAllister. We except to the ruling 
to the second portion of the letter. 

The ( 'orRT. I suppose it may be understood 
that all are excepted to when they come up, in 
the same way, or do you wish to except spe- 
ciallv? 

Mr. McAllister. 1 think there are a great 
many things in these letters that ought to be ex- 
cepted to specially, your Honor. ( )f course, the 
whole of it will be published, I suppose. 

The ( 'OCRt. That is the trouble, the misfor- 
tune of it. 

Mr. Haves. That is not our fault. 1 do not 
know whether it will or not. 

Mr. McAllister. Of course, we cannot pre- 
scribe the course of the other side. 



97.5 

yUi. Dklmas. It seems to me that there is 
rcMy {^rave apprehenision that there will I>e ter- 
rihle disclosures in this corrospoixlenee, for 
wliich \yv eaunot find anv warrant as vet for 
anythinfj; said or offered. 

Mk. McAllistkr. Well, we will simply take 
our legal ohjcx^tions, and havetlveni ptu^se<l uix)n 
as thev arise. If the other side want to l>rin*r 
in these thinl parties, they can do it. 

Mr. Hayks. We will next offer in evidenet* a 
Iett(»rfrom Mr. Huntinj!:to'i to Mr. Oolton.datiMl 
New York, (K^toher 21st, 1874. 

Mr. McAlustkr. We make the sam(» k^mi- 
rral ohjc^ctions to this letter of Oetoher 21st, 
1874, that wv made to the letter of Oetoher Stlu 
1874. 1 su|>pose the sam(» rulin<r and the same 
I'xeeption on Ix^lialf of d(^f(»ndants. 

Mr. Havk-. [ K'v»adinj^.| ** X(*\v York, <);*t.)- 
luM* 21st, 1874. Friend (\)lton — Yours of th(* 
K^ih in-^t;i:it is r.v'iw I, an I I am* hapj)y t) 
l(»nrn that a c^ontraet has Ihm^u concluded, and 
that from this time on you art* to work with us. 
and 1 sinccrc-lv hoiK^ that we shall havc^ manv 
l)lcasant and profitahle years tojr^et her. You will 
find that it is no siiietnm^ to hK>k after the vast 
interests vou have hou<ijht into, l)ut thiTi* is 
in ich to h(» <lonc\ so mu(*h that it will no douht 
t;ik(' lu^arlv all vour tinu* to do it. That is to 
do it as yini will want to do it. well. I was j^hul 
to learn tiiat v<^u were jroinjr over the line «v ^ 



i79 

the S. P., as that for soiiie tiiuo will he th(» ini- 
))ortant work and will need to ho looked after 
verv carefully hv some one outside of the en- 
pneering clepartnient. 1 would suggjL'st that 
you do not spend mueh money on the Coos 
Hay eoal proi>ertv until you are well assured 
that there is not sufficient coal alonji: the lines 
of our rails to answer our purposes, hut I am 
j^lad you houjijht the Coos Bay property, so that 
we can have somc^thing to fall hack onto, if we 
fail elsewhere, (lould and Dillon were hack 
here. Was all our junction matter fixed up with 
them? They are slashing around here as usual, 
talking ahout Pacific Steamshii) Company, liy 
the way, I wish you would talk over this sti^am- 
ship matter there, and let me know what vour 
views an*. 1 don*t think there is anvthintr 
more worth writing ahout. Yours trulv, C. P. 
Huntington.'' Wo will next offer in evidence a 
l(»tter, numh(»r .S(V2, dated N(»w York, Xovemher 
()th, 1874. 

Mr. McAlustkr. Now, Mr. Reporter, we 
make the same general ohjection to this hotter 
of Xovemher 0th, 1874, that we made to the let- 
ter of Ov'toher 8th, 1874. r suppose the sam • 
ruling and the same exception, your Honor. 
Then the other side an* willing to leave out of 
this letter what is surrounded with rvd pencil, 
hut defcMidant moves to strike out what is in 
greiMi pencil in addition. Your Honor will just 



...9S0 

Kw w'lirtt that is. We reallv think that fs cii- 
tirely irrelevant to the ease; it has no bearing; 
the greiMi [H»ncil'is what the defendants objeet 
to: the re<l |K*neil is what the plaintiff is willinjj: 
to omit. 

Thk Court. T think vou had l^^tter omit 
that, Mr. Haves. 

Mr. Hayrs. Omit all that is in green? 

Thk Court. Yes, sir. 

>[r. Havks. We will rest*r\''e an exception, if 
your Honor please, to the ruling out of that 
portion of it. 

(Mr. Haves reads the letter last offered as 
follows:] '* New York, November (Jth, 1874. 
Friend Colton. — As you now seem to l^e one of 
us, I shall number vour letter, or rather vour 
hitters, or rather mine to vou in with those 
s(Mit to u\y oth(U' asscK'iates in (^ilifornia. 
Yours of Oc-tober 2oth is rcH'eived. I an> gla<l 
that you hav(^ tlu^ fuel (juestion bc^bre^you, and 
Iio|)(» you will kiH'\> it thei^e until you know 
that its cost to us has reache<l its n^inimuuK 
;is 'tis 1k»;*u like a cancc^r eating into our very 
vitals from almost our very beginning." 

Mk. Havks. Mr. McAllistc^r, I don't think 
vou read the whole* of this letter. 

Mu. McArj.rsTKR. [After examining the hot- 
ter. | \V(» hav(^ struck a second oasis which we 
wish to have struck out, marki^l in green. 

^Ik. Havrs. Run y<vur pencil around it. We 



981 • 

« 

will oonscMit that that passage be ruled out; it 
goes to the end of the' letter. 

Mr. McAlmstku. Number two green. 

Mr. Stanlky. Just read the signature. 

Mr. Hayks. Mr. (\ P. Huntington: they are 
all signed by C. P. Huntington. 

]\[r. MrALLFSTKR. What is th(» date of the 
next one ? 

Mr. Hayks. It is dat^d NovenilxM' Oth, 
1874. 

Mr. M(^M(^Vllistkr. We make the sami^ ob- 
jection to this letter as we did to that of October 
8th, 1874, and the same ruling and the sam.> ex- 
ception. Read it, then, Mr. Hayes. 

Mr. Hayks. [Ri^ading.] 

** Xew York, November i)th, 1874. 

'Friend ('olton: 

'Yours of October 'ilst is received. I am sur- 
prised to learn that any one should think it was 
for our interest to put on the (/hina line seven 
steamers to start with. I think three is plenty, 
and wv shall, no doubt, have such an opposition 
on the start that we shall have to run them at 
a loss, but with those* three we can make the 
pricc-i for th? old line, and I think there is 
enough to break them with, unless the 
managers of that company are changed, 
and then we m;)St likely can get their stt»am- 
(M-s. lint what we want U) avoid is a surplus. 



982 

c-cs f(»\v kinds of property arc* as [wrishablo a.< 
s^Unimships. I do not think the roads this side^ 
of Chicago would go in with us, as neither 
would the 1-tKid between Chicago and ( >maha at 
t'lis time. Traev is the only man on their 
roads that had sufficient nerve to reach out for 
tliis business, but he is not able to do any Inisi- 
ness at this time, and it is important that this 
line should be controlled by the Central, and I 
think it is more important that the roads thi > 
si le of Omaha should l)e in it, and if they wen* 

r 

in, yery likely we could not control it. The Pa- 

• t. 

citic St(»amship Company is very weak, in 
my opinion', but if we knew they 
would break uj) in three months, I 
am disp(>se<l to think our ix)licy would be to 
put on tbis line . of st(*amers. Then* is tiyc- 
lines of roa<l that we can conne(*t with at and 
near ( >maha, and I have littb* doubt but that wt^ 
can jjcet out on tiMMus that an^ satisfactory on 
some of tluMu, Do not understand me that 1 
would not like to have thesi* roads in, but I am 
. sjtisHiMl w(» cannot get them in — ^that is, the 
Pennsylvania or New York C(Mitral; and would 
W(: want to le-avi^ them out? I think not. I 
think vci'v lik(»lv w could make out a through 
line. \'(M*v likely tlu^ lialtimore and Ohio would 
ronie in, and make up a line that would 
run to ( )maba or Fort Kearney, pass- 
ing through St. Louis and Chicago. Hut 



i)83 

if this was dono, \'orv likely it would 
1).» difficult for us to control the steam- 
ship Company, and if we made up this line, 
leaving out the roads above nientioned, of course 
tlu»v would not expect any of the China busi- 
ness coming over our roads, and then would 
they not be likely to work against us by allow- 
ing the Pacific Mail Steamship (-ompany ami 
any other companies to give bills of lading from 
China and Japan to Chicago, St. Louis, etc., 
over their roads, and to bring freight from thos * 
points to th(» sea coast here, to go by sti^amer 
and sail to ('alifornia. Think of this, and ifvou 
all think it best to 'mak<» up a line all the way 
through, taking only one of the trunk lines, I 

will s<^e what can be done and then let vou 

• 

know: and if you wish it done, telegraph 
me on riV:M|)t of this. We cannot bc» 
too can»ful in starting this steamship 
liniS f<>^' it is one of the things that if we go 
into, 1 have little drmbt we shall hold ft for 

V(*ars, and tlK^efon^ the more reason whv w » 

• • • 

should hold a majority of the stock of the com- 
p.inv, as aim )st(»Vv»rv road h »re is controlled bv 
thos(» that are always short or long of stock and 
end(»avor to render ev'ervthing IkmicI to their 
particular wants. If short, they want to put 
the stock down, and if long they work for the 
r(»verse, and Wt** cannot afford to be in tbcnr 
j)ower. Yours truly, C. P. HrxTixcjTo.x." 



98 i- 

^Fit. Hayks. W(; will next oflfor in ovuleuoe 
letter N<K 880. November 13th, 1874. 

Mr. MoAllistkr. Have you road it over? 

Mr. Hayf:s. I have sir, but I don't recollect 
just now. I will tell vou in a moment whether 
there is anything — ;ves, I f»:iiess you want to read 
this. 

yiu. ^rcAhUSTKR. That surrounded with 
green Hik^s is U>ft out l>y ci>nsent, Init we make*- 
the same objection. 

Mr. Havks. It will not be read. 

Mr. M( Alijstkr. I merely state here, if 
vour Honor will allow me, that we make the 
same gen(M'al objtH'^tioii without repeating it each 
X\u\i\ that wv have n^ade to the letter of ( >ctober 
7th, 1(S74; the sinn(>' ruling and excej)tion with- 
i)ut rc^pcatiug it every tjni<*. Will your Honor 
;Ulow us to do tliat ? 

TuK CorRT. (\M-taiuIv. 

• 

Mr. McAm.istkr. Th(* siune objte ions 
^il^ Hayks. Tlie sanuM)bj(^ction, ruh'ng and 
•'xc('|)tion. 

Mr. Havks. | IviMiding-. | Xo. :i(S(). '* New 

York, Novcmlx^r b'itlk. 1H74. FricMid (V)hon: 
Y )urs of til'.' oth inst. rc^tviviMl. I n(>tic(» what 
vou sav of our tVicnd. and am V(*rv ulad that 
vou have s(»(Mi him and that vou think well of' 
him. Hut, in my opinion, that if he is our 
friiMul ancl will do for us what we want, that 



- 985 

those are the fellows that have interests on the 
line of the 8. P., and also those that have prop- 
ertv on the Truckee, will suffer if thev do not 
see him and convince him that they are right. 
( )f course railroad men are right with him and 
must do nothing." Then comes the expurgated 
])assage, which I will not read. ;^ You have a 
large field to he worked over in California to 
hring ahout good feeling hetween ourselves and 
our enemies, and, as you are a new man in the 
firm, I think you are the party to do this.'' 
The halance of the letter is about 
some immaterial matter. I do not 

propose to read it. You do not want it, 
do vou? 

•M U. Mc A LLTSTKR. No. 

Mr. Hayes. Well, I will omit the next. It 
is immaterial. 

** Yours truly, C. P. Huntington.'' 

The next letter we will offer in evidence will 
beNo. :i8r). Nov. 17th, 1874. That vou will 
want to read, Mr. McAllister. 

[Mr. McAllistiT examines letter.] 

Mk. Hayes. [Referring to a part of the let- 
ter.] Well, we will consent to the expurgation 
of this one. [Reading letter.] 



'' No. 385. 
"New York, Nov. 17, 1874. 

'*Fri(Mi(l Colton: 

'* Yours of the 7th and 9th inst. are 
received.*' Then eomes the passage whicli is 
omitted bv consent. *' I noticed what Von say 
about getting control of the A. and P. franchises 
by getting a majority of the stock.'' 

Mr. McAllister. That is the Atlantic and 
Pacific, I suppose? 

Mr. Haves. Yes, sir. I will read it that 
way if you will allow me to. 

Mr. McAlllster. Yes, sir. 

Mr. Havp:s. [Continuing.] ** I noticed what 
you say about getting control of the Atlantic 
and Pacific franchises by getting a majority of 
the stock. My opinion is, that a majority of 
that stock is in the hands of those that contnd 
the Atlantic and Pacific, and Texas Pacific. 
You no (loul)t ar(» aware that they went in with 
the T(^\'as Pacific some two years ago, and the 
two companies agret^ to run the Atlantic and 
Pacific down to meet the Texas Pacific some- 
wlu^'c in Tc^xas, and then run one line through 
to tlu^ Pacific, but I will find out all I can and 
let vou know. 

'* Yours truly. 

*' C P. HrxTiXfjTox/' 

The next hotter we will offer in evidence, you 

ft 

will probably obj(K*t to. 



987 

^Ir. McAllistkr. What istbo (lal(»? 

Mr. Hayes. The date* is Novemhor 20th, 
1874. Xo 'V,)2. It is getting so hite, if your 
Honor please, and the reading of these letters is 
so diffieult, and, in addition, we on our side 
would like to have a little conversation concern- 
ing some of the letters which will shortly he 
read, and it is approaching the hour of adjourn- 
ment, and in this light it is almost impossible 
to read the letters,, and I would like to have an 
adjournment. 



■o- 



An adjournment was here taken until to-mor- 
row morning at 10 o'clock.