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United States Pacific Railway Commission,
1887 Report, Volume V, CPRR.
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APPOINTED UNDER THE ACT OF CONGRESS APPROVED MARCH 3, 1887, ENTITLED "AN ACT AUTHORIZING AN INVESTIGATION OF THE BOOKS, ACCOUNTS, AND METHODS OF RAILROADS WHICH HAVE RECEIVED AID FROM THE UNITED STATES, AND FOR OTHER PURPOSES,"
EGBERT E. PATTISON, OF PENNSYLVANIA, Chairman, E. ELLERY ANDERSON, OF NEW
YORK, DAVID T. LITTLER, OF ILLINOIS,
Commissioners.
VOLUME V.
REPORTED BY
CHARLES P. YOUNG, of New York, I SECRETARY AND STENOGRAPHER TO THE COMMISSION.
WASHIKGTOK:
GOVERNMENT PRINTING OFFICE.
1887. P R VOL V 1 2331
pt
TESTIMONY
TAKEN BY
THE UNITED STATES PACIFIC RAILWAY COMMISSION,
AS TO
THE WORKING AND FINANCIAL MANAGEMENT OF THE RAILROAD* THAT HAVE RECEIVED AID
FROM THE GOVERNMENT IN BONDS.
OFFICES OF THE CENTRAL PACIFIC RAILROAD COMPANY,
San Francisco, CaL, Monday, July 25, 1887.
The Commission reconvened upon the call of the chair, all the Commissioners
being present.
EDWARD H. MILLER, JR., being duly sworn and examined, testified as follows
:
By Commissioner ANDERSON :
Question. Where do you reside? Answer. In Alameda, Alaineda County.
Q. Do you do business in San Francisco ! A. Yes, sir. Q. How long have you
been in business in San Francisco? A. Since 1873.
THE CENTRAL PACIFIC OF CALIFORNIA.
Q. What has been your connection, if any, with the Central Pacific Railway?
A. I have been secretary and am a director of the company.
Q. When was your first connection with the company? A. In 1863.
Q. When was your original connection? A. My original connection was as book-keeper,
for about one year.
Q. And that was for the Central Pacific of California, as it was then known
? A. Yes, sir.
Q. Where were their headquarters? A. At Sacramento.
Q. Had they any office in San Francisco at that time? A. No regular office.
But President Stanford was in San Francisco a great deal of the time. He had
an office here.
Q. But the headquarters of the company were at Sacramento? A. At Sacramento.
Q. Please state what your connection has been with the company since 1803 to
date *? A. For one year, about, I was book-keeper for the company. Since then
I have been secretary continuously.
Q. How many years have you been a director? A. I think the whole time that
I was secretary. I think I was elected director at the same time I was elected
secretary.
3333
2334 U. S. PACIFIC RAILWAY COMMISSION.
Q. Please state for what companies you have been secretary, indicating at the
same time the changes in the corporate title of the railway? A. It has been
the Central Pacific Eailroad Company of California, and then a change of
title occurred.
Q. That was from 1863 until 1870, was it not ! A. Yes, sir.
THE CONSOLIDATION.
Q. What happened in 1870? A. In 1870 a consolidation with two or three other
companies took place.
Q. Will you name them, please 1 A. There were several consolidations, and I
cannot name them without reference to books.
Q. Will you name what you can? A. There was the Western Pacific Eailroad Company.
Q. Kunning between what points? A. Between San Jose" and Sacramento.
The San Francisco, Oakland and Alameda Kailroad Company, from Alameda, or including
the line between San Francisco and Niles. No, I am mistaken ; it was between
San Francisco and Oakland and Alameda. It was a branch. It had two lines, one
to Alameda and one to Oakland. I will explain them. There was a ferry from
San Francisco, both to the Alameda wharf and to the Oakland wharf, and then
local trains ran out from Oakland and also from Alameda, which were two different
points on the opposite side of the bay.
By the CHAIRMAN :
Q. Have you a map on which you can point those roads out? A. Yes, sir ; I
can furnish you one.
THE CENTRAL PACIFIC INCLUDED.
By Commissioner ANDERSON :
Q. What other company was included in this consolidation in 1870? A. I do
not remember.
Q. Was the Central Pacific itself included? A. The Central Pacific itself.
I am not sure whether the California and Oregon was consolidated at that time
or at a previous consolidation. There were three different times when the consolidations
were made, and we are getting it in consecutive form.
Q. I understand you remained secretary to the new company, as you had been
to the old? A. Yes, sir.
PREVIOUS CONSOLIDATIONS.
Q. How many consolidations were there? A. The consolidations as they appear
were several before these roads were consolidated with the Central Pacific
of California, Several of them had had previous consolidations with other roads.
I cannot give it to you in consecutive form without getting a statement I need
for that purpose.
Commissioner ANDERSON. As I understand the method pursued, the several roads,
consisting themselves of minor parts, had a species of integration among themselves,
and then the whole was integrated into the Central Pacific Railway, about 1870.
The WITNESS. Yes, sir.
Q. And you do not remember how many of these consolidations took place? A.
Yes, sir; I can remember how many, but I cannot give you the dates, I can name
all the companies that were cousolidateci.
EDWARD H. MILLER, JR. 2335
ARTICLES OF CONSOLIDATION.
Q. Was the process of consolidation always by entering into articles of consolidation?
A. I think so ; but as to some of the roads that had been consolidated previous
to their coming into the consolidation with the Central Pacific, I do not know
how they were consolidated with one another.
Q. Of the records of these consolidations, what have you on hand? A. I have
the minutes of the Central Pacific Railroad Company (and possibly of some of
the other companies that were consolidated), which show the dates and facts
of the consolidation.
Q. Have you the articles of consolidation? A. Yes, sir.
Q. Of the Central Pacific alone, or of some of these others also? A. I think
I have of some of the others, but I certainly have those of the consolidation
of the Central Pacific.
Q. Will you please produce for our information all the articles of consolidation
i A. Yes, sir.
OFFICERS OF THE CENTRAL PACIFIC.
Q. As to the present organization of the Central Pacific, who is the president
? A. Leland Stanford.
Q. He resides here in San Francisco? A. San Francisco.
Q. Please state the other officers by name, or at least the principal officers
? A. Leland Stanford is the president, and C. P. Huntington is first vice-president.
Q. Mr. Huntington residing in New York? A. Residing in New York. Charles Crocker
is second vice-president.
Q. Mr. Crocker also residing in New York? A. Residing in New York.
Q. And he is now in Europe? A. Yes, sir.
Q. Do you know when he will return? A. I do not.
Q. Can you ascertain for us? A. I do not know how I can.
Q. Can you tell us where we can have his deposition taken abroad, if desired?
A. I do not know where he is in Europe. I can ascertain, probably.
Q. Mr. Charles F. Crocker is his son, is he not? A. Yes, sir. I can ascertain
from him, probably.
Q. What other officers are there? A. Charles F. Crocker, third vicepresident.
Q. Is that Colonel Crocker? A. Yes, sir.
Q. Is he residing here? A. Residing in San Francisco.
Q. Who else? A. E. H. Miller, jr., is secretary. Timothy Hopkins is treasurer.
By the CHAIRMAN : Q. Where does he reside? A. In San Francisco.
By Commissioner ANDERSON : Q. Who is your land agent? A. William H. Mills.
Q. He is also residing here? A. Yes, sir ; also residing in San Francisco.
RAILROAD COUNSEL.
Q. Who are your present counsel? A. Col. Creed Haymond and Judge Harvey S.
Brown.
Q. Does Mr. Haymond reside here in San Francisco? A. Yes; in San Francisco.
2336 U. S. PACIFIC RAILWAY COMMISSION.
Q. Where does Judge Brown reside? A. He resides in Oakland. Judge L. D. McKisick
is another.
Q. Residing where?- A. In San Francisco. John Foulds, residing in tSan Francisco.
Q. What counsel have you in New York? A. Charles H. Tweed.
Q. Have you any other counsel elsewhere? A. No other counsel regularly employed.
ITS WASHINGTON COUNSEL.
Q. Have you permanent counsel in Washington now? A. I do not think there is
any one in Washington exclusively employed by the company. When I say permanently
employed I mean employed exclusively in the business of the company, to give
their exclusive attention to the business of the company.
Commissioner ANDERSON. You may give us the name of your Washington occasional
counsel, if there be one.
The WITNESS. Henry Beard, I think it is.
Q. Has he succeeded Mr. Sherrill and Judge Franchot? A. No, sir.
Q. In what respect does his employment differ from that of others? A. His
employment has been to look after the accounts of the company a great deal
and to attend to general business.
Q. That is, the adjustments between this company and the Commissioner of Railroads
? A. The Government ; yes, sir.
THE BOARD OF DIRECTORS.
Q. Of how many members does your board consist? A. Seven.
Q. Will you please give us their names as the board is constituted to-day?
A. Leland Stanford, C. P. Huntington, Chas. Crocker, Chas. F. Crocker, W. Y.
Huntington, Timothy JHopkins, and E. H. Miller, jr.
Q. W. V. Huutington is what relation to C. P. Huntington? A. Nephew.
Q. Where does he reside? A. San Francisco.
Q. Has your board always consisted of seven? A. I am not sure. I have an impression
that at one time it was five, but it was a long time ago. I do not recollect.
The report of 1872, I think, will show that it consisted of seven.
Q It has ever since 1872 consisted of seven? Do you remember whether there
was any change prior to that? A. I do not remember distinctly, but I am now
inclined to think that there was never any change ; that it was always seven.
COURSE OF CONSTRUCTION.
Q. Will you please state the course of construction of this road in point of
time?
The WITNESS. From the aided line?
Commissioner ANDERSON. In point of time ; yes, sir. A. I cannot do that without
referring to some papers documents.
Q. Will you state which portion was first constructed? A. The line from Sacramento
to Ogden was completed May 9, 1869.
Q. But was that from Sacramento to San Jose constructed before the railroad
east of Sacramento? A. No, sir.
Q. How far had the railroad east of Sacramento progressed when the line between
Sacramento and San Jose was completed? A. To Ogden* The line from Sacramento
to Ogden was completed first.
EDWARD H. MILLER, JR. 2337
Q. Before the road from Sacramento to San Jos6? A. Yes, sir.
Q. Was any part of that road which lies southwest of Sacramento completed before
the railroad east of Sacramento was completed? A. Yes, sir.
Q. Between what points! A. Between San Jos< and Mies.
Q. Was it after the act of 1862 had been passed I A. Yes, sir.
Q. How many miles is it from Sacramento to Mies?
The WITNESS. Allow me to refer to papers.
The CHAIRMAN. Certainly. Eefer to anything that will give you the information.
Commissioner ANDERSON. You will find it on page 5 of the report of 1872.
The WITNESS. This gives only the total from San Francisco.
By Commissioner ANDERSON :
Q. I will put this map in evidence. Please examine the map nowshown you, and
state whether the names of the roads and their lengths are correctly given
?
The CHAIRMAN. You will find here, on this map, the consolidations, with the
distances of the different roads given.
The WITNESS. Yes, sir ; it is correct at the time of its date, May, 1878, but
there may have been some little changes in the lengths of the lines since,
although I do not see how there could be. The Southern Pacific Bail way Company
has extended its line since the date of this map.
Q. Your answer merely shows that it is correct at the time? A. Yes, sir.
THE WESTERN PACIFIC.
Q. What is the corporate name of this railway constructed from Sacramento to
Mies?
The WITNESS. What is it now?
Commissioner ANDERSON. What was it at the time?
The WITNESS. The Western Pacific Eailroad Company.
Q. Which was built first that portion of the Western Eailroad Company from
Mies to San Jos6 or the portion from Niles to San Francisco? A. The portion
from Mies to San Jose, is my recollection. It was built before the portion
between Mies and Oakland.
Q. Was the portion between Mies and Oakland constructed before the consolidation
of 1870? A. Yes, sir.
Q. So that when the consolidation of 1870 took place the Western Pacific Eailway
Company was substantially completed from Sacramento to San Jos6 and to Oakland,
was it not? A. Yes, sir.
THE SAN FRANCISCO BAY RAILROAD.
Q. What was the name of the company from Oakland to Mies 1 A. The San Francisco
Bay Eailroad Company.
Q. That was consolidated into the Western Pacific then, was it not? A. No,
sir ; that was consolidated into the Central Pacific.
Q. Was that in 1870 u? Was there more than one consolidation to which the
Central Pacific was a party? A. Yes, sir.
COMMENCEMENT OF CONSTRUCTION OF CENTRAL PACIFIC FROM SACRAMENTO.
Q. When was the construction of the Central Pacific from Sacramento commenced!
I do not refer to the day of the month, but with reference to the acts of Congress.
2338 U. S. PACIFIC RAILWAY COMMISSION.
The WITNESS. Do you mean what year!
Commissioner ANDERSON. The first act of Congress was passed in 1862. How soon
after that was it that construction was commenced on the Central Pacific east
of Sacramento?
The WITNESS. The first actual work done on the construction was January 1,
1863, 1 think.
Q. That was east of Sacramento? A. At Sacramento.
Q. And going east? A. Starting east ; yes, sir.
METHOD OF CONSTRUCTION.
Q. Under whose direction were the first contracts? A. The board of directors.
Q. How was it done, I mean. Was it a large contract for the whole railroad,
or was it let out in small sections under specific contractors at first? A.
The first contracts I think were in small sections, considering 18 miles to
be a small section, and then in subsections or other sections of from 2 to
4 or 5 miles.
CONTRACT OF CHARLES CROCKER & COMPANY.
Q. Who took the first large contract for any portion of the work? A. Charles
Crocker & Co.
Q. Is that the same Charles Crocker who is now second vice-presideut? A. Yes,
sir.
Q. Was he at the time a director in the company? A. Not at the time he took
the contract.
Q. Who were the directors at the time he took the contract? A. I will have
to look.
Q. Will your book of minutes show? A. Yes, sir.
Q. Does your company keep a book of contracts? A. No, sir.
Q. What disposition do you make of contracts? A. We file them in the office.
Q. Between what parties was this contract, the Central Pacific and Charles
Crocker & Co? A. Yes, sir.
Q. Who were the members of the compauy besides Mr. Crocker? A. I do not know.
ITS TERMS.
Q. Do you remember for how many miles this contract extended? A. I think it
covered the first 18 miles from Sacramento.
Q. Do you remember the rate per mile? A. I do not.
Q. Do you remember how frequently that contract was modified? A. I do not remember
that it was ever modified ; it possibly was, but I do not remember it.
Q. You remember nothing about the terms of that co n tract, or what do you
remember about the terms? A. 1 do not think the contract was specific per
mile ; my recollection is that the contract was not specific, so much per mile,
but that it was so much in the aggregate for the 18 miles, or else there were
specifications which had prices fixed for grading and other work, masonry,
bridges, &c. I cannot remember distinctly which it was.
CUSTODY OF THE CONTRACT.
Q. In whose custody was that contract? A. In mine. Q. Has it always remained
in your custody? A. No, sir. Q. In whose custody did it pass? A. I do not
know.
EDWARD H. MILLER, JR. 2339
Commissioner ANDERSON. If it were in your custody you must have delivered it
to some one.
The WITNESS. I did not.
Q. Where did you keep it? A. In a vault, or in the safe, at Sacramento.
Q. When did you last see it? A. That I cannot tell you ; a great many years
ago.
Q. More than ten years ago? ^A. I cannot specifically say whether it was more
than that, but it was more than seven.
Q. How many copies were there? A. But one that I remember.
Q. Did not the contractors have one? A. Yes, sir ; doubtless they did, but
I do not remember.
Q. Were there two copies? A. I do not remember.
Q. Do you remember in whose handwriting it was? A. No, sir.
Q. Do you remember how many pages it covered? A. No, sir.
Q. You do not remember how many pages it covered? A. No, sir.
NOT ENTERED IN FULL ON MINUTES.
By Commissioner LITTLER :
Q. Was the contract entered on the minutes of the company? A. Not in full,
I think.
By Commissioner ANDERSON :
Q. Can you give us no further information as to its terms than you have heretofore
given? A. Not until I make an examination of the minutes ; there may be something
in the minutes.
Commissioner ANDERSON. We will ask you to do so.
CONTRACT MISSING.
By the CHAIRMAN :
Q. Where is the contract now? A. I do not know.
Q. You do not know because you have not examined the safe for a number of years
? A. No ; I do not know because I have examined the safe and I cannot find
it.
Q. When did you make the last examination? A. Within a few days.
Q. When did you make an examination prior to that time? A. I had made no special
examination for the contract prior to that time.
Q. Within a few days did you make a thorough examination? A. Yes, sir 5 it
was called for by the general accountant of the Commission.
NO MEANS OF ASCERTAINING ITS WHEREABOUTS.
By Commissioner ANDERSON :
Q. Has not this contract been called for in four or five litigations within
the last four or five years? A. I do not remember that it has, but I have
no doubt that it has.
Q. Was it not called for in the Colton suit? A. I do not remember that it
was.
Q. Was it called for in the Stewart suit? A. I do not remember.
Q. Was it not called for in the Hopkins's accounting? A. I do not remember.
Q. Do you not remember, as a matter of fact, making several searches for it
? A. I do not remember, as a matter of fact, although I doubtless did.
2340 U. S. PACIFIC EAILWAY COMMISSION.
Q Do you not remember talking with different persons as to this contract and
its whereabouts? A. No, sir.
Q. Have you not talked with Governor Stanford as to its whereabouts? A. No,
sir.
Q. Have you not talked with Mr. Huntington as to its whereabouts'? A. No, sir.
Q. Have you not talked with Mr. Charles Crocker as to its whereabouts'? A.
No, sir.
Q. Had you not, before Mr. Hopkins's death, talked to him as to its whereabouts'?
A. No, sir.
Q. And you declare positively and in good faith that you have no means of ascertaining
anything as to the disposition made of this paper? A. I do.
Q. Have you any suspicion as to what has been done with it? A. No, sir.
Q. Have you any idea as to what has been done with it I A. I have not.
By Commissioner LITTLER :
Q. Was anybody interested in its destruction? A. I do not know that there was.
PAPERS MISSING OWING TO FREQUENT USE IN SUITS.
By the CHAIRMAN :
Q. Were you in the habit of missing papers from your vault? A. Yes, sir.
Q. Did you miss other papers? A. Yes, sir.
Q. How many other papers? A. A great many.
Q. What kind of papers? A. Papers that were taken in any lawsuit and given
to the lawyers given to our lawyers or to the other lawyers. It became of very
frequent occurrence that they never caine back.
By Commissioner ANDERSON :
Q. Did you give up such papers as these without taking a receipt for them?
A. Yes, sir, I did ; but we do not do it any more.
Q. Who gave up the papers without taking a receipt for them? A. I do not say
anybody gave any specific papers up, but I mean those papers that went to court
in lawsuits. We became very much annoyed in one case, the Winchester case.
The same question was asked me if papers had been missing frequently, and I
said "yes." The result of the examination brought out just what I
am now saying, that probably they were in court or h,ad been taken to court.
A gentleman who was present went to court, and among its files found the very
document they were asking for.
Commissioner ANDERSON. Somebody, on behalf of your company, must be in the
habit of parting with these papers.
The WITNESS. I myself do that.
Q. You do not mean to say anybody could go in and get them, do you? A. I was
myself in the habit of giving them to our lawyers without taking receipts.
Q. Who was the lawyer you gave such papers to? A. Any one of our lawyers.
PERSONS HAVING ACCESS TO VAULTS CONTAINING PAPERS.
Q. Who had access to your vault and safe? A. No one but clerks in our office
and myself.
EDWARD H. MILLER, JR. 2341
Q. Had the clerks unlimited access, except under your supervision?
A. They had unlimited access, to go in and out when they chose.
Q. Had they any interest in taking these papers and losing them, or delivering
them to any one without your knowledge or without conferring with you?
The WITNESS. Do you mean these contracts?
Commissioner ANDERSON. Yes.
The WITNESS. No, sir ; not that I know of.
Q. Had Governor Stanford access to your vaults? A. I do not think he was ever
in them.
Q. Could he go there if he wanted to? A. Certainly ; if he undertook to go
there I should never attempt to prevent him.
Q. And the safe was open all day long? A. Yes, sir.
Q. Who were these attorneys to whom you parted with these papers? A. They
were the various attorneys of the company for all the time.
COUNSEL EMPLOYED AT TIMES PAPERS WERE MISSED.
Q. Give the names of those who were attorneys at the time you missed the papers
? A. Robert Kobinson. I cannot specify any particular time.
Q. Give the names of all the attorneys, and their residence? A. E.
B. Crocker.
Q. He is dead, is he not? A. Yes, sir. Kobert Eobinson, S. W. Sanderson.
Q. Is he dead? A. Yes, sir. Judge Eamage. His first name I do not remember.
By the CHAIRMAN :
Q. State if he is living, and where? A. I do not know. He was a resident of
Sacramento. I think he is dead, but I do not know. I cannot think of all of
them.
Commissioner ANDERSON. To limit this set of names, I think you stated you had
seen this contract within seven years?
The WITNESS. No, sir.
WHEN CONTRACT WAS LAST SEEN.
Q. When did you last see it? A. I do not remember.
Commissioner ANDERSON. You know you saw it twenty-five years ago?
The WITNESS. Yes, sir.
Q. Can you come down from that date and say when you last saw it? A. It is
very difficult to do that. I do not know that I have seen it within fifteen
years.
Q. Do you know that you did see it as far back as 1879, before the consolidation
? A. I saw it when it was made.
Q. That was in what year? A. That was in 1863 or 18G4.
Q. Did you not see it frequently after it was made? A. I probably did, during
the time of the construction of the 18 miles.
Q. How long did that last? A. A little over a year, I think.
Q. After it was completed do you not know that you frequently saw that contract,
with other contracts, in your safe? A. I cannot remember that I did. I will
say, doubtless I did but I do not remember having seen it.
2342 U. S. PACIFIC RAILWAY COMMISSION.
Q. Do you remember the fact that the first time you \vere asked to look for
it you found it had disappeared? A. I do not remember that fact.
Q. Do you not remember looking for that contract in the Colton case? A. No,
sir.
Q. Do you not remember being examined as to this contract and other papers
in the Colton case? A. I do not remember that I was examined as to this contract.
I was examined, of course, as to papers.
Q. Do you not remember the fact that you were examined at great length in the
Colton case? A. Yes, sir.
Q. Who else was examined on behalf of your company in regard to the custody
of these papers? A. I do not know that anybody was.
OTHER CONTRACTS.
Q. What was the next contract made after the 18 miles that you have referred
to? A. There were contracts made with Cyrus Collins & Bros. ; C. D. Bates & Co.,
I think ; S. T. Smith ; and, I think, there was another, but I do not remember
the name.
Q. These were all small contracts, were they not? A. All small contracts ;
yes, sir.
Q. Were these contracts in your custody? A. They were ; yes, sir.
Q. What has become of them $ A. There is one of them I found the other day.
[Producing it,]
Q. Where did you find it"? A. I found it in the vault.
Q. Just alone by itself, without companions? A. Without any companions of
that nature.
CONTENTS OF THE BOX OF CONTRACTS.
Q. Was it by itself or was it mingled with other papers that it did not pertain
to? A. No; it was in the box of contracts, or that which I call a box.
Q. In a box of contracts? A. In a file of contracts.
Q. What other contracts did you find with the Cyrus Collins I A. I do not remember
which one I found.
Q. What other contracts did you find with the contract you did find? A. I
cannot specify, because I was not looking for any but the contracts for building,
but there was quite a package.
Q. Were they construction contracts? A. No, sir.
Q. Were they contracts that belonged to the Central Pacific Company? A. Yes,
sir.
Q. Were they of the same date as the one you have found, or were they more
recent contracts? A. No ; they were of all dates.
Q. Were some of them as old as the one you discovered? A. I think not. Yes
; about the same date. Contracts for iron, &c.
Q. When did you make this discovery? A. Within the last week, or within the
last two weeks.
Q. Did you go over any of those papers yourself personally? A. Yes, sir.
Q. All the papers in that box? A. Yes, sir ; all the papers in that box.
Q. Did you find any other contracts relating to the construction of this road
? A. I did not.
Q. You say you do not remember the name of the contractor as to the contract
you found? A. No, sir ; I do not remember which one it was.
EDWARD H. MILLER, JR. 2343
Q. It was one of these small contracts? A. Yes, sir. Q. As to all the others
you have no information to give us I A. 1 have not.
TIME NEEDED TO THOROUGHLY EXAMINE THE VAULT.
By the CHAIRMAN :
Q. Have you made such examination of the vault as to swear now that the missing
contracts are not in the vault? A. I could not positively swear that, because
the vault contains so many papers; but I can swear to the best of my knowledge
and belief it is not there.
Q. Will you make such an examination as to be able to swear positively to this
Commission that the missing contracts are not in the vault? A. I will if you
will give me a year. It will take at least a year to do that.
By Commissioner ANDERSON :
Q. Why "? A. The vault contains an immense number of papers, and we would
have to go through every box and every paper to be able to swear it was not
there.
The CHAIRMAN. We will give you all the assistance needed by detailing men to
aid in going over the contracts, if you will give us access to the vault and
to the old contracts.
The WITNESS. I have no objections to that.
Commissioner ANDERSON. I suppose you refer us to the president in answer to
that ; but we want to be perfectly satisfied that those papers are thoroughly
examined.
The WITNESS. You ask me to swear to something that I cannot swear to. If you
ask me to swear that it was not in this room, I could not swear to it.
POSITIVE CROCKER CONTRACT IS NOT IN THE VAULT.
The CHAIRMAN. We want to know that when you swear that the missing contracts
are not in the vault you swear with positive information to that effect, having
made such an examination as to enable you to do so.
The WITNESS. I have made such an examination that I am willing to state positively
that it is not in that vault.
Commissioner ANDERSON. That conclusion may be reached in two ways: one, by
having searched the vault, and the other by having information as to where
the contracts may be.
The WITNESS. I tell you I have no information.
By Commissioner ANDERSON :
Q. Have you no direct or indirect information I A. No direct or indirect information.
THE NEXT LARGE CONTRACT WITH CROCKER.
Q. What was the next large contract made after these small contracts you have
referred to? A. The next contract, I think, was made with Charles Crocker & Co.
(calling the sections about a mile each, although they were not exactly a mile),
for sections from section 31 east. I do not remember how many miles.
Q. Was it to Camp 24 that it went? A. I am not sure of that. Camp 24 was named,
I think? but it is indistinct in my mind,
2344 U. S. PACIFIC RAILWAY COMMISSION.
Q. How many miles was it? A. I cannot remember specifically how many miles,
but my impression is to about section 58. That would be about 25 miles. I
am not positive about that, however.
Q. When was that contract made? A. I do not remember.
Q, Was the second Crocker contract made after the completion of these small
pieces 9 A. I think the second contract was made before they were entirely
completed. They went on with the work beyond section 31.
Q. Was this firm of Charles Crocker & Co. the same firm that had taken
the prior contract? A. So far as Charles Crocker was concerned it was. As
to the company, I do not know.
Q. You do not know anything about that? A. No, sir.
Q. Was there any company? A. Not that I know of. I do not know.
Q. Charles Crocker was the only person you dealt with? A. The only person
I know.
WHO COMPOSED THE BOARD OF DIRECTORS.
Q. Who negotiated that contract? A. The board of directors made it. Whether
the negotiation was referred previously to any committee or not I do not remember.
In some cases it was.
Q. Who composed the board of directors at the time the Crocker contract No.
2 was made? A. I will have to look to ascertain that.
Q. Perhaps you had better look. You can ascertain that in a moment, can you
not I A. I can, by going into the office. I can bring the list of directors
from the commencement.
Commissioner ANDERSON. We would like to have that. Also bring the contract
you found in the vault The Last Rose of Summer.
The WITNESS (after returning). I can state now that the directors were nine
instead of five for a certain time, if you care for that.
Q. Will you give their names in 1864, 1865, and 1866? A. In 1864, Leland Stanford,
C. P. Huntington, Mark Hopkins, A. P. Stanford, E. H. Miller, jr., Chas. Marsh,
arid E. B. Crocker. Those were elected October 8, 1864. If you want those in
office during 1864 I will have to go back.
Commissioner ANDERSON. Give us those in office during 1864.
The WITNESS. Elected July 14, 1863: Leland Stanford, C. P. Huntington, Mark
Hopkins, A. P. Stanford, James Bailey, T. D. Judah, Chas. Marsh, D. W. Strong,
L. A. Booth, and John F. Morse.
E. B. CROCKER.
Q. What relation is E. B. Crocker, who appears in the year 1864, to Chas. Crocker
1 A. Brother.
Q. What were their business relations? A. They had no business relations together.
One was a lawyer and one had been a merchant.
Q. Was E. B. Crocker the lawyer 9 A. Yes, sir.
Q. Did not Mr. Chas. Crocker become his assignee subsequently ! A. Yes, sir
; some time subsequently, though.
Q. Did you not know enough of their relations to say whether they had business
relations together or not? A I never knew that they had.
Q. You say this second contract was made before the completion of the first
con tract? A. I did not say that positively, but I think so.
SECOND CROCKER CONTRACT ALSO MISSING.
Q. Have you looked for that contract No. 2? A. Yes, sir. Q. When did you look
for that contract 1 A. The same time I looked for the other one, two weeks
ago.
EDWARD H. MILLER, JR. 2345
Q. Have you not also looked for that contract on other occasions? A I presume
I have ; I do not remember.
Q. When I asked you a few moments ago whether you had any suspicions as to
who had removed these contracts you hesitated. Please tell me, did the name
of any person occur to your mind at that time I A. No, sir ; I hesitated simply
Q. (Interposing.) Wait a moment. Did anybody's name present itself to you at
that time? A. No, sir.
Q. You thought of no one? A. I did not. I will explain that now.
Commissioner ANDERSON. You may do so now.
The WITNESS. I hesitated for the reason that I thought it was a proper question
for me to decline to answer. That was the only cause for hesitation.
By the "CHAIRMAN:
Q. Did you ever talk to anybody about the missing contract? A. A. No, sir
; except to Mr. Richard F. Stevens, your general accountant.
Q. Prior to that time did it occur to you that it was an unbusiness like method
to have contracts on so important a matter as the construction of the road
missing ! A. No, sir ; I do not think it was.
Q. Did it make any impression on you at all? A. You are getting by inference
a statement that I have not made.
STATEMENT AS TO MISSING CONTRACTS.
Q. What is the statement that you have made"? A. The statement I have
made is that I found the contracts missing within the last two weeks, and that
I do not remember ever having searched for them before.
Q. When you discovered within the last two weeks that the contracts were missing
did you discuss the question with anybody then? A. No, sir.
Q. Did you not think it important to report it to your superior officers at
that time? A. I did not.
Q. Do I understand you to swear that that was the first indication, two weeks
ago, that you had that those contracts were missing? A. I do not swear to
anything of the sort. I do swear that I do not remember ever having looked
for them before, or ever having known that they were missing.
Q. Why do you hesitate to swear that you had not information prior to two weeks
ago that the contracts were missing? A. Because I do not remembeir that I
had.
Q. Do you swear that the contracts were not called for in the Colton case?
A. I do not. I swear that I do not remember that they were.
DOES NOT BELIEVE THE PAPERS ARE IN THE VAULT.
Q. Then I understand, as you stated before, that you are not prepared to swear
now that the contracts are missing? A. I am prepared to swear that I have
made an examination and a search for these contracts in the place where they
ought to be, or the place where I supposed where they formerly had been, and
that I do not find them, and I do not believe that they are in the vault ;
that is, the vault in my office.
Q. Are you prepared to swear that the contracts are not in your vault $ A.
I believe I have answered that before.
Q. I do not think you have, yes or no. I would ask you to answer that question
yes or no. A. You know very well, Mr. Chairman, that
2346 U. S. PACIFIC RAILWAY COMMISSION.
I cannot possibly answer that question yes or no, after the explanation I have
previously made to the same question.
The CHAIRMAN. I will repeat my question, and call for an answer. Mr. Stenographer,
you will read it to Mr. Miller.
The STENOGRAPHER (reading) : " Then I understand, as you stated before,
that you are not prepared to swear now that the contracts are missing? A.
I am prepared to swear that I have made an examination and a search for these
contracts in the place where they ought to be, or the place where I supposed
where they formerly had been, and that I did not find them, and I do not believe
they are in my vault; that is, the vault in my office."
The WITNESS. Will you repeat the question?
By Commissioner ANDERSON :
Q. Are you prepared to swear that the contracts are not in your vault? Answer
yes or no. A. If I understand that question there is nothing to it except whether
I am prepared to swear whether the contracts are in my vault or not. Is that
the way it reads?
Q. Are you prepared to swear that the contracts are not in your vault? Answer
yes or no? A. No. I suppose I have a right to explain?
The CHAIRMAN. Certainly.
The WITNESS. I am not prepared to swear, because there is such a large mass
of papers in my vault that I had not recently gone through all those papers.
It would take a long time to do so. But I am prepared to swear that to the
best of my knowledge and belief, after having examined thoroughly the place
where those contracts should be, if they were in the vault, that I think that
I said to the best of my knowledge and beliefthe contract is not in my vault
TERMS OF SECOND CONTRACT.
Q. What do you recollect as to the terms of that second contract? A. The best
of my recollection is that that contract was made under certain specifications
which required payment to the contractor at a specific price for grading per
cubic yard, of all natures, rock work, &c., and for masonry and for iron, &c.,
furnished, to complete the road. ' I dp not mean the rails, but iron work necessary
for bridges, &c., at specified prices.
Q. Not including the rails? A. Not including the rails, I think, but it may
have included the rails.
HOW PAYABLE.
Q. Do you remember whether the amounts payable under that contract were payable
in dollars or in bonds or in stocks? A. My recollection is that it was payable,
a portion in cash, a portion in bonds, and another portion in stock.
Q. Can you give the percentages? A. I think it was five-eighths cash and three-eighths
in bonds and stock. Of that, however, I am not positive. I do not recollect.
Q. Do you remember whether the percentages were altered from time to time?
A. My recollection is that the percentages were not altered.
Q. Will your minutes show? A. I do not know whether the minutes will show
or not, but the books of the company will show. The accounts will show.
EDWARD H. MILLER, JR. 2347
Q. That is to say, the entries in the books of account of the company will
show? A. The entries in the books of account of the company will show.
METHOD OF KEEPING THE BOOKS.
Q. What distinction did you make in the entry of an issue of bonds on these
contracts, or a payment of cash? A. I do not quite comprehend.
Q. Did you debit in one case "cash 77 and in the other case u bonds," or
what is the distinction made in your books I A. We opened an account with the
contractors, crediting them with the work done and charging them with the bonds
and cash and stock when paid.
Q. In what account will the counter-charges be made, showing from whence the
bonds came and from whence the cash came and from whence the stock came? A.
The contractor being charged with cash, the cash would take credit ; and if
with bonds, the bonds would be credited ; and if with stock the stock would
be credited.
CHANGES MADE IN CONTRACT.
Q. So that by following the contract down from the inception of that contract
to the end, if there were any changes in its terms they will appear in your
books? A. Yes, sir 5 but I think I can explain it.
Commissioner ANDERSON. We will take any explanation you can give.
The WITNESS. This is the contract as I remember it. The stock was to be issued
at 50 cents on the dollar, and there was a change made in the percentage to
30 cents.
Q. In the percentage of cash or the percentage of stock? A. No, sir ; the
percentage of cash remained the same. The percentage of bonds, as I recollect
it, remained the same. But as to the percentage of stock, the stock was not
paid at par. First it was paid at 50 cents on the dollar and afterwards at
30 cents on the dollar.
Q. Do you remember the aggregate amount of stock, bonds, and cash which this
contract called for? A. Eo, sir.
Q. Can that be ascertained from your books? A. Yes, sir.
THE CONTRACT AND FINANCE COMPANY.
Q. What was the next construction contract which this company entered into
? A. As I remember it, the next contract was with a corporation called the
Contract and Finance Company.
Q. When was that company organized? A. My recollection of dates, especially
of those so long ago, is so poor that I cannot give it. I will explain that
I do not remember my own age, without counting back to the year I was born.
Q. Was it organized shortly before taking this contract? A. Yes, sir.
SPECIAL OBJECT OF ITS ORGANIZATION.
Commissioner ANDERSON. It was organized especially for the taking of these
contracts. I am quoting from Mr. Huntington.
The WITNESS. That was its business. Undoubtedly it was.
Q. Who were its officers? A. That I cannot say. I knew at the time, but now
I do not recollect.
Q. Who were the principal stockholders? A. I do not know.
Q. Who kept the books of the Contract and Finance Company? A, William E. Brown.
P R YOL iv 2
2348 U. S. PACIFIC RAILWAY COMMISSION.
Q. Where is lie? A. He is here.
Q. Is he president of the Southern Pacific Company 1? A. No, sir.
Q. What is his office? A. He is one of the directors of the Southern Pacific
Company at present.
Q. Does he reside in San Francisco? A. His office is here in the building.
Q. Is he present now? A. I presume he is.
Q. Can you obtain from him a list of the officers and stockholders of this
company at the time it took the contract I refer to? A. I think I can.
Commissioner ANDERSON. We will excuse you for that. We would like to have that
list now.
The WITNESS (after returning). Mr. Brown does not recollect. He was secretary
himself. He recollects that, and can give the names of two other directors,
but whether there were mo re than three he cannot say. He will ascertain, however.
ITS MEMBERS.
Q. Who were the directors he named? A. Wm. E. Brown, T. J. Millikin, and B.
K. Crocker.
Q. As a matter of fact, were not Mark Hopkins, Leland Stanford, C. P. Huntington,
and Chas. Crocker the holders of substantially all the stock of this Contract
and Finance Company? A. Not to my knowledge.
Q. Have you not heard them say so in litigations? A. No; I do not think I have.
I presume that to be the fact. But that is my presumption.
Q. Have you not heard them say so 1 A. No, sir ; I never did.
Q. Have you not heard them say that Mr. Millikin, Mr. B. F. Crocker, and Mr.
William E. Brown were holders of small portions of the stock for the purpose
of qualifying them to act as directors? A. I never heard them say that.
Q. You never heard any one say that? A. I never heard any of them say that.
Q. Have you ever heard anybody say that? A. I could only say for myself. That
is my presumption. Nobody knew.
Q. I will read for you from Mr. Huntington's testimony, taken before us, referring
to this Finance Company: "The stock of that company was nearly all held
by Governor Stanford, Mr. Hopkins, Mr. Crocker, and myself; there were some
few stockholders, but I could not say who." Are you satisfied that that
statement is correct? A. Yes, sir.
BOOKS OF THE CONTRACT AND FINANCE COMPANY.
Q. Have you ever seen any of the books kept by the Contract and Finance Company
? A. Yes ; I saw them.
Q. What books did you ever see? A. I saw the day-book and ledger, or journal,
I suppose; cash-book, day-book, and ledger, probably.
Q. When did you see these books? A. They had an office in the same building
with me in Sacramento, and I saw them when I went into their office.
Q. At Sacramento? A. Yes, sir ; I saw them in use by their bookkeeper.
Q. That was while this contract was under way? A. Yes, sir.
Q. Have you never seen them since? A. No, sir.
EDWAKD H. MILLER, JR. 2349
THAT CONTRACT ALSO MISSING.
Q. Where is that contract between the Central Pacific Company and the Contract
and Finance Company? A. That is missing.
Q. How many miles did that embrace? A. It embraced a large portion of the
road east of the contracts that have been mentioned previously.
Q. When did you last see that contract? A. I do not recollect.
Commissioner ANDERSON. That contract embraces, as you say, a large portion
of the construction of the Central Pacific?
The WITNESS. Yes, sir.
Commissioner ANDERSON. It is a contract of great magnitude and importance.
The WITNESS. Yes, sir.
Q. You say you never observed that it was missing until within the last few
weeks? A. I do not remember that I ever did.
THE COLTON CASE.
Q. Do you not remember being examined particularly with reference to all the
papers of the Contract and Finance Company in the Colton case? A. 1 do not
remember.
Q. Do you not remember being asked if those books were in Loudon? A. I do not
remember that.
Q. Or if they had been purposely destroyed? A. I could not possibly know that.
Q. I asked you if you remembered being asked that question 1? A. No ; I do
not remember being asked that.
Q. By Mr. Hayes? A. No, sir.
Q. You know Mr. Hayes? A. Yes, sir.
Q. You know he asked you a great many questions in the Colton suit three or
four years ago? A. Yes, sir.
Q. Do you not know that it was a question of public talk as to the disappearance
of the books of this company, at that time? A. I say I do not remember. I
do not remember anything about it.
Q. You do not remember that the subject was discussed in San Francisco at all
at the time of the trial of the Colton case? A. No, sir.
Q. Will you swear that you and Governor Stanford did not talk this matter over,
of the disappearance of these books, during the trial of the Colton case?
A. I will swear that I do not remember ever having spoken to him about it,
or his having spoken to me about it.
GOVERNOR STANFORD'S DEPOSITION.
Q. Do you not remember Governor Stanford's deposition was taken at great length
I A. Yes, sir.
Q. Where was he when his deposition was taken? A. In New York, I think.
Q. When he came back here, did you have no conversation with reference to that
subject? A. Not that I remember. Not only that I do not remember, but I do
riot think I ever did. I do not believe I ever did.
Q. Was no surprise expressed by any of the officers of the company as to the
disappearance of such important papers as this contract? A. Not that I remember.
Q. Was the subject never brought up in the board of directors when you were
present? A. No, sir.
2350 U. S. PACIFIC RAILWAY COMMISSION.
Q. Has no fault ever been found with you for having permitted these papers
to disappear? A. No, sir.
TERMS OF CONTRACT AND FINANCE COMPANY CONTRACT.
Q. What do you remember about the terms of the contract made with tbe Contract
and Finance Company? A. I do not remember the details of it at all.
Commissioner ANDERSON. From Camp 24 to Ogden? That is, substantially, from
the boundary of the State to Ogden, through Nevada and Utah.
The WITNESS. Does that say " Camp 24, the boundary of the State"?
Commissioner ANDERSON. It was substantially.
The WITNESS. Then I misstated the miles.
Q. I read to you from Mr. Huntington's testimony. He was asked :
Q. What was the subject of their contract? I want to know between what points
? A. It was Camp 24, if I remember right. I am not certain that I ever saw
the contract.
Q. It was the road substantially after leaving the State of California? A.
Yes, sir. Camp 24 I think is on the State line. It was a contractor's camp,
you know, and it was from that point to the point of junction.
In other words, the whole of this road in the State of Nevada and Territory
of Utah. You can tell us nothing as to the terms of that contract? A. No,
sir ; only what appears upon the books of the company now.
Q. Do you know whether it was an agreement at so much per mile? A. I believe
it was.
Q. Do you know whether the rate per mile was the same throughout the entire
length of the road from Camp 24 to Ogdeu, or to Promontory Point? A. I do
not recollect that.
Q. Do you know whether the rate per mile was payable in money or in bonds,
or whether it was mixed? A. I think it was mixed.
Q. Do you know whether the payment included the Government bonds? A. It did
not.
Q. Do you know, as a matter of fact, that none of the Government bonds went
to the Contract and Finance Company? A. Yes, sir.
Q. They did not? A. They did not.
GOVERNMENT BONDS SOLD FOR ACCOUNT CENTRAL PACIFIC.
Q. How were the Government bonds disposed of? A. They were sold in New York
by Mr. Huntiugton, almost wholly ; possibly a portion may have been paid out
directly on contracts for locomotives, engines, iron, &c.
Q. Do you know whether they were sold for account of the Central Pacific Company
or on account of tbe Contract and Finance Company? A. They were sold for account
of Central Pacific Railroad Company.
Q. Do you remember that the price per mile was about $100,000 in the Contract
and Finance Company's contract, payable in stocks and bonds? A. 1 not remember
that. I believe that was about the cost, as entered up on the books under that
contract.
COST PER MILE, IN SECURITIES AT PAR, $100,000.
Q. Do you mean, when you say "cost," the amount of stocks and bonds
issued at par? A. The stocks and bonds paid to them.
Q. Taken at par it would amount to $100,000? A. Yes, sir. The stocks, bonds,
and cash, at par, amounted to about that amount.
EDWARD H. MILLER, JR. 235 1
Q. Do you remember that the amount of bonds issued per mile was $64,000?
The WITNESS. I do not think I understand your question. The amount of what
bonds?
Commissioner ANDERSON. The amount of bonds issued to the Contract and Finance
Company.
The WITNESS. I do not remember that.
CHARACTER OF SECURITIES ISSUED TO CONTRACT COMPANY.
Q. What bonds were issued to the Contract and Finance Company? What character
of bonds'? A. The company's first-mortgage bonds, if any.
Q. Are you positive that any bonds were given to them? A. No, I am not positive.
Q. Will your books show? A. Yes, sir.
Q. And you have never examined them for the purpose of ascertaining whether
they received any bonds or not? A. I know, but I do not remember. I know perfectly
weil if 1 can look at the books.
Q. Do you not know perfectly well that the Contract and Finance Company did
get bonds'? A. No, sir; I do not. You are asking positive questions.
Commissioner ANDERSON. No, I do not ask positive questions.
The WITNESS. Possibly I am technical in my answer, but I do not remember it.
The books would show very plainly what they did get.
Q. How much of this contract with the Contract and Finance Company is entered
in your books of minutes? A. I do not know that any of it is.
THE WESTERN DEVELOPMENT COMPANY.
Q. What other large construction contracts has the Central Pacific made? A.
They made a contract for constructing the
Q. (Interposing.) Well, I will follow my own order. Did it make a contract
with the Western Development Company? A. I do not think it did.
Q. Was the Western Development Company subsequent in time to the Contract and
Finance Company? A. Yes, sir.
WHAT BECAME OF CONTRACT AND FINANCE COMPANY.
Q. What became of the Contract and Finance Company? A. It was disincorporated,
I think.
Q. Was it wound up by judicial proceedings? A. Not that I know of*
Q. Where was it last located? A. At San Francisco, I think.
Q. In what building? A. This building.
Q. In what room? A. Room No. 1, on the first floor, at the side entrance.
Q. When did you last see that room occupied by the Contract and Finance Company
? A. By the book-keeper.
Q. When? A. I think in 1874.
JOHN F. MILLER.
Q. Whom did you see there then? A. John F. Miller. Q. Is he a relation of yours
? A. No, sir.
Q. Where does he live? A. He lives somewhere on the Sacramento River, in Sacramento
County, I think.
2352 U. S. PACIFIC RAILWAY COMMISSION.
Q. Can you identify it a little better than that? A. No, sir ; I really do
not know.
Q. Who knows him here in this office? A. Almost everybody connected with the
office.
Q. So that we can find him? Does Mr. Brown know where he can be found? A.
I presume he does.
Q. You refer us to him? A. Yes, sir.
By the CHAIRMAN : Q. What is his business now? A. Farmer.
BOOKS AND PAPERS OF THE CONTRACT AND FINANCE COMPANY.
By Commissioner ANDERSON :
Q. Were the books and papers of the Contract and Finance Company in that room
when you saw.it in 1874? A. I never saw the books there.
Q. You only saw Mr. Miller there? A. Yes, sir ; I saw him.
Q. He had some books, I presume? A. Well, he was connected with some other
company Western Development Company I think ; and whether he had any books
of the Contract and Finance Company there, I do not know. I never saw them.
THE WESTERN DEVELOPMENT COMPANY.
By the CHAIRMAN :
Q. Who composed the Western Development Company? A. I do not know.
By Commissioner ANDERSON :
Q. Who was its president I A. That I do not know.
Q. Do you know the names of any of its officers 1 A. F. S. Douty was one of
its officers. He was either president or secretary ; I do not know which.
Q. Where is Mr. Douty? A. His office is in this building.
Q. What position does he now hold? A. He is president, I think, of the Pacific
Improvement Company, or secretary of it.
CONTRACT FOR ROAD FROM SACRAMENTO TO NILES.
Q. What was the contract with the Western Development Company? A. I do not
remember whether the contract for building the Western Pacific Railroad from
Sacramento to Niles was with the Pacific Improvement Company or the Western
Development Company.
Q. It was with one or the other? A. I think so.
Q. When was that contract made? Was it before the Contract and Finance Company
or after? A. I think it was made very soon after the completion of the Central
Pacific road to Ogden.
Q. That is, soon after May, 1869? A. Yes, sir.
THAT CONTRACT ALSO MISSING.
Q. Where is that contract? A. It is missing.
Q. Have you looked for that recently? A. I have looked for all of them.
Q. What can you tell us in regard to the terms of that contract? A. My recollection
of the terms is very indefinite.
Q. Can you refer us to any entries in your books, or the minutes, that will
furnish us with the terms of that contract? A. The entries on the
I
EDWARD H. MILLER, JR. 2353
regular books of the company will show the terms of that contract, but not
in detail. I do not think there is anything in the minutes of the company in
detail.
Q. How long did the Western Development Company continue to work this contract
?
The WITNESS. In building that road "?
Commissioner ANDERSON. Yes ; from 1869 until when?
The WITNESS. They finished it in about a year.
Q. What became of the company? A. I do not know.
OFFICES OF WESTERN DEVELOPMENT COMPANY IN SACRAMENTO.
Q. Where was their office? A. At that time I do not remember the date of the
organization of the Western Development Company, but if I am right, their office
must have been in Sacramento.
Q. Why do you say " must have been 9 " Is it because they were all
kept together? A. Because there were no offices here.
Q. Is it not also because the whole business of the Central Pacific was at
Sacramento at that time? A. Because the Western Development Company, as I
understand it, was successor to the Contract and Finance Company, and they
held their offices in the same place until we moved from Sacramento to San
Francisco, which was in 1873.
Q. Do you know who the stockholders of the Western Development Company were
? A. No, sir.
Q. Do you not know that they were substantially the same persons who were the
stockholders of the Contract and Finance Company? A. I do not know ; but I
presume they were. That is all I can say.
Q. You presume they were? A. I think they were.
CONSTRUCTION OF CALIFORNIA AND OREGON BRANCH.
Q. What subsequent contract did the Central Pacific make with the Pacific Improvement
Company? A. They made a contract I will not say it was the Pacific Improvement
Company, because I am not sure ; but they made a contract with one of the three
companies for building the California and Oregon Branch road.
Q. It was the Pacific Improvement Company, was it not? A. Practically the
successor.
Q. That is, the north part of that road? A. Yes, sir.
Q. From what point; from Bedding to the State line? A. No; Eoseville was the
beginning. I think they had a contract for building some portion of the road
between Eoseville and Bedding.
Q. Did they not have the contract for building the northerly 200 miles of that
road? A. Yes, sir.
THE PACIFIC IMPROVEMENT COMPANY.
Q. Who was the president of the Pacific Improvement Company? A. F. S. Douty,
I think.
Q. When was this contract made?
The WITNESS. The contract for building the northerly 200 miles, you are speaking
of?
Commissioner ANDERSON. Yes.
The WITNESS. Last year.
Q. Was it not longer ago than that? When was that finished? A. It was just
finished.
Q. Last year? A. No, sir.
2354 U. S. PACIFIC RAILWAY COMMISSION.
Q. Finished this year? A. Just finished within a month.
Q. Y/ho are the directors of the Pacific Improvement Company? A. I do not
know.
Q. Can you ascertain? A. I presume that I can from Mr. Douty.
Q. Who are the stockholders? A. I do not know that.
Q. Are they not substantially the same persons who were stockholders in the
Contract and Finance and the Western Development Companies? A. I think so.
Q. Who keeps their books? A. F. S. Douty.
Commissioner ANDERSON. I think you said he was president.
The WITNESS. He keeps the books also. They are in his charge, in one office.
Q. Where is the office of that company I A. That is in room No. 3, on the first
floor of this building.
Q. What other persons are in that room besides Mr. Douty? A. There is Judge
Underbill.
Q. What position does he hold? A. He is a lawyer.
Q. Is he the lawyer of the Pacific Improvement Company? A. He does and has
done considerable business for the Central Pacific Railroad Company, and now
does for the Southern Pacific Company.
ITS CONTRACT PRODUCED.
Q. Where is this contract with the Pacific Improvement Company? A. I think
I have it. At any rate it is entered in full on the minutes. Recently I have
adopted the plan of entering everything in full on the minutes.
Commissioner ANDERSON. Please see if you can produce the contract.
(The witness produced the contract between the Central Pacific Railroad Company
and the Pacific Improvement Company, dated October 11, 1886. It is marked Exhibit
No. 2, July 25, 1887," and is as follows :)
CONTRACT BETWEEN THE CENTRAL PACIFIC RAILROAD COMPANY AND THE PACIFIC IMPROVEMENT
COMPANY.
This agreement, made and entered into on the eleventh day of October, 1886,
between the Central Pacific Railroad Company, party of the first part, the
Pacific Improvement Company, party of the second part, and the Southern Pacific
Company, party of the third part, witnesseth :
That whereas the Central Pacific Railroad Company is the successor in interest
of the California and Oregon Railroad Company, mentioned in the act of Congress
of July 25th, 1886, entitled "An act granting lands to aid in the construction
of a railroad and telegraph line from the Central Pacific Railroad, in California,
to Portland, in Oregon ;" and
Whereas the said Central Pacific Railroad Company has constructed a portion
of the line contemplated by said act of Congress, to wit, that portion between
Roseville Junction, on the Central Pacific Railroad, and the town of Delta
; and
Whereas about one hundred and four miles of the line between Roseville Junction
and the southern boundary line of Oregon, as contemplated in said act of Corigress,
has not been constructed ; and
Whereas the Oregon and. California Railroad Company, charged by said act of
Congress with the construction of that portion of the said lino of railroad
between Portland, in Oregon, and the northern boundary line of California,
has been in an embarrassed condition and has been unable to complete its road
to said boundary line; and
Whereas until the whole of said line is completed, making a through connection
between Portland, in Oregon, and the city of San Francisco, in California,
no part of said line can be advantageously or profitably operated, nor the
act of Congress in relation thereto be carried into effect according to the
spirit and intent thereof, to wit, the construction and maintenance of a continuous
railroad between the said cities, which the Government of the United States
may use for the transportation of its
EDWA&D H. MILLE&, JK. 2355
property, troops, and munitions of war when necessary, and to aid in the construction
of which it has granted quantities of the public lands ; and
Whereas the completion by the said Central Pacific Railroad Company of its
own road to the southern boundary line of Oregon without assurance of the completion
of that portion of the road from Portland to said boundary line would be a
waste of money, the road having to be constructed through a rugged and mountainous
country at great expense and without sustaining local traffic ; and
Whereas it is of the greatest importance to the Central Pacific Eailroad Company
that it should have an opening into Oregon, both for local traffic and the
through business of the two cities, and also to furnish business for its entire
line from Ogden:
Now, therefore, for tho purpose of completing its said road, and of securing
the completion of the road between the California State line and Portland,
Oreg., thus making a through line between said cities of Portland and San Francisco
and a connection with the Union Pacific Railroad at Ogden, and in order to
secure the business of the northern portion of the State of California and
as much as possible of the business of the State of Oregon, and to bring such
business to its line from Ogden, and for the purpose and with the intent of
carrying into effect the provisions of said act of Congress, the said Central
Pacific Railroad Company hereby convenants and agrees with the said Pacific
Improvement Company
First. That the said Pacific Improvement Company shall, in a good workmanlike
manner, construct, finish, furnish, and complete the railroad and telegraph
lino of the said Central Pacific Railroad Company, commencing at a point near
the said town of Delta and running thence in a general northerly direction
by the most practicable route to a point on the southern boundary line of Oregon,
there to connect with the road of the said Oregon and California Company, a
distance of 104 miles, as near as may be, together with the rolling-stock,
buildings, instruments, and fixtures thereof; that is to say, to construct,
finish, and complete all the clearing, grading, excavations, embankments, ditches,
drains, masonry, culverts, bridges, trestling, and necessary fencing, and furnish
all the ties, timber, rails, all the chairs, fish-plates, spikes, frogs, and
switches, lay and complete all the main line of track and all the side-tracks,
spur-tracks, and turnouts necessary, usual, and proper for a single-track railroad;
also all necessary and proper buildirgs and erections for stations, freight
and passenger depots, water-tanks, turn-tables, engine-houses, section-houses,
work and repair shops, with all the tools, furniture, and implements necessary
and proper therefor; also to furnish and place on said railroad all necessary
and proper rolling stock, instruments, and equipments, including locomotives,
passenger, box, freight, baggage, platform, dump, and hand cars for the proper
and successful working and repairing of said railroad and telegraph line, said
rolling-stock to be furnished and delivered as the same may be required by
the said Central Pacific Railroad Company, not to. exceed the following quantity
and proportion, namely: One locomotive for every eight miles of road constracted
under the contract ; one passenger car for every five miles of road ; three
box and flat cars for every mile of road, the proportion of each to be determined
by the said Central Pacific Railroad Company ; one hand car for every six miles
of road ; such number of dump cars as may be required for maintaining the line;
said railroad to be constructed and completed to a point at or near the Klamath
River within twelve months from the date hereof, and to the southern boundary
line of Oregon as soon as the said Oregon and California Railroad is completed
to said line.
Second. That the said Pacific Improvement Company shall furnish and pay for
all the engineer service necessary or requisite for the location and construction
of said railroad and its appurtenances, &uch location and construction
to be subject to the approval of the president or chief engineer of said Central
Pacific Railroad Company, who may direct such changes to be made as they may
deem proper, but the salary of the chief engineer shall be paid by said Central
Pacific Railroad Company.
Third. That the said Pacific Improvement Company will pay all the costs, damages,
and other expenses incurred in obtaining right of way for the construction
of said road, and to that end the Central Pacific Railroad Company agrees that
it may use the name of the said company in any legal steps found necessary
to be taken in securing such right of way.
Fourth. That the said Pacific Improvement Company will, within a reasonable
time and as soon as it can be done to the best advantage, purchase, obtain
possession and control of the said Oregon and California Railroad, or that
it will, within a reasonable time, purchase the whole of or a majority of the
shares of the capital stock of said Oregon and California Railroad Company,
and in either event will within a reasonable time complete or cause to be completed
the said Oregon and California Railroad to a connection with the Central Pacific
Railroad at a point on the boundary line between California and Oregon, and,
as the case may be, will enter into, or will cause the said Oregon and California
Railroad Company to enter into, a contract perpetual with the said Central
Pacific Railroad Company, its successors or assigns, that the said Oregon and
California Railroad shall be operated in harmony with the said
2356 U. S. PACIFIC RAILWAY COMMISSION.
Central Pacific Railroad, prorating for services and covenanting therein never
to give to any other railroad company any better terms for through traffic
and for the interchange of business than it gives to the Central Pacific
Railroad Company, its successors or assigns.
Fifth. That the said Pacific Improvement Company shall and will repay to the
said Central Pacific Railroad Company, within one hundred and twenty days from
the date hereof, all sums of money, with interest thereon at the rate of 6
per cent, per annum, heretofore by the said railroad company expended upon
that portion of its aforesaid line of railroad and telegraph line lying north
of Delta, and that if said railroad company has not fully paid all the costs
and expenses incurred as aforesaid, the said improvement company will assume
the whole thereof, and will, upon demand, pay oif and discharge the same ;
or that if the said railroad company is compelled to pay the same or any part
thereof, then the said improvement company will, within one hundred and twenty
days after notice thereof, pay to the said railroad company the full amount
of any such payments, with interest at the rate aforesaid.
And the said Southern Pacific Company, lessee of the said Central Pacific Railroad
Company, hereby covenants and agrees with the other parties to this contract
that, in consideration of the advantages to be derived by it from the bringing
of business to the main lines of the Central Pacific Railroad, it will, when
said through line is completed, finished, and ready for operation, enter into
an agreement in writing with the said Central Pacific Railroad Company whereby
it shall lease from said company that portion of said line between Roseville
Junction and the State line not now included within its lease, and will increase
the consideration of twelve hundred thousand dollars, guaranteed rental mentioned
in the existing lease, as much in proportion as 80,000 shares of the capital
stock of said Central Pacific road shall bear to the whole amount of capital
stock of said company now issued, and will also increase the limit of the maximum
rental of thirty-six hundred thousand dollars therein provided for in like-proportion
; and that it will transport and convey, free of charge, over the lines operated
by it in California, north of San Francisco, all agents, laborers, and employe's,
and all provisions, tools, iron, and other materials, and all other property
employed or used, or to be employed or used, in and about the construction
of said railroad and telegraph line and their appurtenances by or for said
Pacific Improvement Company.
And the said Central Pacific Railroad Company hereby covenants and agrees to
and with the said Pacific Improvement Company that, in consideration of the
premises and of the faithful performance of the covenants herein contained
to be kept, observed, and performed by said Pacific Improvement Company, it
will, upon the execution of this agreement, issue and deliver to said company
eighty thousand shares of its capital stock, and in addition thereto it will
pay to said Pacific Improvement Company four million five hundred thousand
dollars in mortgage bonds, as follows : When one-half of the work on said road
between Delta and the Oregon line is completed, it will pay and deliver to
said Pacific Improvement Company all of its first-mortgage bonds now unissued,
part of an issue by it heretofore provided for, to be used toward the construction
of its railroad between Roseville Junction and said Oregon line, and that it
will pay to said Pacific Improvement Company the balance of said four million
five hundred thousand dollars of bonds, in its mortgage bonds, part of an issue
by it provided for in an indenture of mortgage by it made to William E. Brown
and Frank S. Douty, bearing date October 1, 1886, and that it will make said
last-mentioned payment as the work on said road progresses, and as sections
of not less than ten miles between Delta and the Oregon State line are completed,
and in the proportion which the completed section shall bear to the whole length
of the road between the points last aforesaid :
In testimony whereof the parties hereunto have caused these presents to be
signed by their respective presidents and secretaries and their corporate seals
to be hereunto affixed. Done in triplicate the day and year first herein written.
LELAND STANFORD, President of the Central Pacific Railroad Company.
[SEAL.] E. H. MILLER, JR.,
Secretary of the Central Pacific Eailroad Company.
LELAND STANFORD, President of the Southern Pacific Company.
[SEAL.] E. H. MILLER, JR.,
Secretary of the Southern Pacific Company.
J. H. STROBRIDGE, President of the Pacific Improvement Company.
[SEAL.] F. S. DOUTY,
Secretary of the Pacific Improvement Company.
(Indorsed on back :) Executed copy agreement between Central Pacific, Pacific
Improvement Company, and Southern Pacific Company. Pacific Improvement Company
to finish construction of California and Oregon Extension. October 11, 1886.
"
Exhibit No. 2, July 25, 1887."
EDWARD H. MILLER, JR. 2357
The WITNESS. I can furnish you with the printed copy of that, certified, if
you wish it.
By Commissioner ANDERSON :
Q. We were so rejoiced to get hold of a copy of any paper that we thought we
would have it copied. Haveyou enumerated all the construction contracts that
you recall? A. Yes, sir.
Q. They, then, represent substantially all the contracts under which the aided
portion of the Central Pacific was constructed? A. Yes, sir ; more than that.
Commissioner ANDERSON. That is, the Crocker contract, the Contract and Finance
Company contract, the Western Development Company contract, and the Pacific
Improvement Company contract.
The WITNESS. Yes, sir.
Commissioner LITTLER. As I understand, the contract you found was a subcontract
between Crocker and somebody else, who built a few miles of the road.
The WITNESS. No, sir ; you are referring now to one of the original contracts'?
Commissioner LITTLER. Yes.
The WITNESS. I found one of the original contracts for 2 miles.
By Commissioner LITTLER : Q. Where is that? A. I think Mr. Stevens has it.
I will send forit.
REPORTS MADE BY STANFORD, HUNTINGTON, HOPKINS, AND CROCKER.
By Commissioner ANDERSON :
Q. Were Mr. Huntington, Governor Stanford, Mr. Crocker, and Mr. Hopkins in
the ha,bit of making reports to the company, from time to time, of the transactions
effected by them in their respective departments? A. I do not think Mr. Hopkins
ever made a report. Yes, sir; he did, too, as treasurer ; yes, sir ; they all
did.
Q. Where are those reports? A. I have them, I think.
Q. How frequently were they made? A. Mr. Huntington's were made in the form
of a statement of accounts practically monthly.
Q. Have you all of these in your possession? A. Yes, sir.
Q. Will you please produce them at the convenience of the Commission? A. Yes,
sir ; I will do so. I beg to say that Mr. Stevens is using them right along,
however.
Q. Mr. Stevens has access to them? A. He has as he calls for them.
Q. Do you mean to say^that Mr. Huntington has made monthly reports always?
A. Practically, monthly, yes, sir, except for the very first year or two.
Q. In the shape of statements of accounts? A. Since 1865, as statement of
accounts, monthly.
Q. What subject did Governor Stanford report on? A. Governor Stanford did
not make any report or statement of account. Governor Stanford's habit was,
when he was in San Francisco, to draw his checks for anything and everything
from his private account at the bank. When at Sacramento he handed me his check
book, and from that I made up a statement of account, which I call his report.
Q. Explaining the application of these moneys? A. Yes, sir.
Q. What was the subject of Mr. Crocker's reports? A. I do not remember that
Mr. Crocker ever made a report.
Q. What was the subject of Mr. Hopkins's reports? A. The business of the treasurer.
2358 U. S. PACIFIC RAILWAY COMMISSION
PUECHASE OF SAN FRANCISCO AND SACRAMENTO STEAMERS.
Q. Do you recollect the fact that the Central Pacific made a purchase of the
steamers plying between San Francisco and Sacramento, I think it was?- A.
Yes, sir.
Q. Was that purchase made by a contract? A. No, sir ; I do not think it was.
Q. How was it effected? A. I think the negotiation was carried on by Governor
Stanford.
Q. And Mr. Huntington? A. I do not think Mr. Huntington was here at the time,
but I presume he knew all about it, and was a part of it, probably, but I do
not think there was any written contract.
Q. Do you know how the price was negotiated? A. No, sir ; I do not.
Q. Do you know whether Mr. Stanford and Mr. Huntington were interested in those
steamers before the Central Pacific acquired them? A. I have never understood
that they were.
OWNED BY THE CALIFORNIA PACIFIC.
Q. Do you know whether they w^ere interested I mean Mr. Huntington and Governor
Stanford in the stock of the corporation which owned these steamers'? That
was the California Pacific Eailroad Company, I think. A. Yes, sir ; I believe
so.
Q. The California Pacific, it was called? A. Yes, sir.
Q. They were stockholders? A. m Yes, sir.
THE MINUTES WILL SHOW THE PRICE PAID.
Q. Do the minutes of this company show how the price to be paid for these steamers
was determined?
The WITNESS. The minutes of the Central Pacific?
Commissioner ANDERSON. Yes.
The WITNESS. Is that Mr. Huntington's testimony.
Commissioner ANDERSON. Yes $ Mr. Huntington's testimony.
The WITNESS. The minutes may show that. The minutes possibly show the price
that was to be paid ; bat how that price was determined is more than I think
is in the minutes.
Q. Could it be determined in any way except by a vote of the directors?
The WITNESS. I beg pardon ; I had an idea that you meant how the actual amount
to be paid was determined the negotiations.
Commissioner ANDERSON. That is tf hat I mean. Whether they were to pay $1,000,000
or $2,000,000 or $100,000? A. Yes, sir. I misapprehended the question.
Q. What is your answer? A. Yes, sir. The minutes of the books will show it.
The books of the company show the amount they paid.
Q. Do you know who was present and voted as to whether the price should be
approved or not? A. !Nb, sir; I do not remember that.
Q. Do you know whether Mr. Huntingtou voted in favor of paying the price?
A. I do not remember.
Q. Or whether Governor Stanford did? A. I do not remember. It is easily ascertained.
Q. The minutes will show? A. Yes, sir. That is, if it appears, the minutes
would show it.
Q. Do you know the price that was paid? A. No, sir ; I do not remember exactly.
EDWARD H. MILLER, JR. 2359
PURCHASES OF OFFICERS SUBSEQUENTLY RATIFIED BY BOARD.
Q. Do you know whether the officers of the Central Pacific were in the habit
of making such purchases without any vote of the board of directors, and of
their own motion? A. I think they frequently made purchases to that extent,
which were ratified by the board of directors afterward, or assumed to be ratified.
Q. Of properties where they were stockholders in the selling company? A. No.
Commissioner ANDERSON. That is this case.
The WITNESS. Yes, sir ; that is this case ; but I did not gather that from
the form of your question. For instance, Mr. Huntington purchases and has purchased
from time to time large amounts of iron without any action of the board of
directors.
Q. And procured its ratification subsequently? A. No, sir; nevei procured any
ratification.
Q. Simply did -the business of his own accord? A. Yes, sir.
Q. To very large amounts? A. Very large amounts.
HUNTINGDON HAD FULL POWERS OF ATTORNEY.
Q. Who would then fix the price at which the iron was to be sold or paid for?
A. Mr. Huntiugton, I will add to that, however, that Mr. Huntington had full
power of attorney.
Q. From whom? A. From the company.
Q. Approved by the board? A. Yes, sir ; adopted by the board.
By the CHAIRMAN :
Q. Did the company keep a copy of the power of attorney? A. Yes, 'r.
Q. Have you a copy of it? A. It is entered in the minutes. I presume I have
a copy. I have the original, I presume. I have no doubt I have. Q. Will you
produce the original? A. Yes, sir.
BOOKS KEPT BY THE CENTRAL PACIFIC.
Commissioner ANDERSON. Please describe in general the set of books which are
now kept by the Central Pacific Company.
The WITNESS. You only mean the general books, of course ; not the operative
detail books.
Commissioner ANDERSON. Yes.
The WITNESS. They are the cash book, in the treasurer's office ; a journal
and ledger, in the secretary's office; and the minute book of the company.
The stock journal, the transfer book and ledger.
Q. Are they all kept under your supervision? A. Yes, sir.
Q. How many clerks do you employ under you? A. in that immediate department
there are seven. They are not employed now by the Central Pacific. There is
only one in employ of the Central Pacific.
Q. You have not named all the books, have you? A. I have named
sir.
the general books.
GENERAL AUDITOR'S BOOKS .
Commissioner ANDERSON. I^ow, in regard to the books relating to the operation of the road, the receipts for freight and passengers? The WITNESS. They are kept in the general auditor's office. Q. What is the general auditor's name ? A. E. C. Wright.
2360 U. S. PACIFIC RAILWAY COMMISSION.
Q. Where are his books? A. They are now in room No. 1 of this building.
Q. What books does he keep, describing them generally? A. He keeps a day-book
and ledger and distribution book. That is about all the regular books that
are kept.
FREIGHT AUDITOR'S BOOKS.
Q. Does he keep all the operating accounts, both the receipts from freight
and passengers, and of operating expenses'? A. No, sir.
Q. Who keeps those? A. Those books are kept for the freight department by C.
J. Wilder, the freight auditor, and for the passenger department they are kept
by A. G. W. McOullough.
Q. Where are these gentlemen? A. They are here in this building.
Q. Take the freight department first. Is C. J. Wilder your freight auditor
? A. Freight auditor.
Q. Does he keep all the accounts of the Central Pacific receipts for freight?
A. Yes, sir.
Q. The form of the business, as I now understand it, is that the Central Pacific
is leased to the Southern Pacific for the rent of its road, for the actual
receipts 1 A. Yes, sir.
Q. That is the amount they pay? A. Well, a guaranty.
Q. Therefore the auditor keeps an account of the business done on the Central
Pacific, just as he did before the lease? A. Yes, sir ; they are kept in just
the same way.
Q. Does Mr. Wright receive reports from all your freight agents at different
stations along your road? A. No, sir.
Q. How does he get his receipts? A. Mr. Wilder receives reports from all the
freight agents on the road.
REBATE AND REFUND BOOKS.
Q. Do you know whether Mr. Wilder keeps rebate books or refund books? A. No,
sir ; they are not in his charge.
Q. In whose charge is that subject? A. That is kept by the general freight
agent.
Q. What is his name? A. His name is Richard Gray.
Q, Is he also in this building? A. Yes, sir.
Q. And has he a book of the description I have mentioned, of refunds or rebates?
A. I do not know whether he has such a book or not, because those rebates are
paid and go into the general auditor's office, Mr. Wright's office. Mr. Wright
mav have that book instead of Mr. Gray.
Q. They are paid on regular vouchers or receipts? A. Yes, sir.
Q. Who has the custody of those vouchers? A. Mr. Wright, the general auditor.
Q. Has Mr. Wright the general control of the whole subject as to whether rebates
shall be allowed, and how much? A. He has no control whatever.
Q. Who has control of that subject? A. Mr. Stubbs, the general traffic manager,
and Mr. Gray^ the freight agent.
THE DISTRIBUTION BOOK.
Q. Is Mr. Stubbs also in this building? A. Yes, sir. Q. Do you keep a register
called the expense-voucher register? A. No -, no register called expense-voucher
register, but there may be such
EDWARD H. MILLER, JR. 2361
a book kept in the general freight office. It will appear on the distribution
book in the general auditor's office, under the head of " expense account," which
I can explain.
Commissioner ANDERSON. Explain it.
The WITNESS. We have a very large book which we call the " distribution
book." Every item paid that goes into the account of the auditor is entered
under name, with the total amount. Then, if it is an expense, a portion of
it, it is entered in the column of expense. If the voucher contains two or
three items they are distributed along through the book under the various headings
to which they belong. Instead of keeping several books we keep one of that
kind.
By Commissioner LITTLER :
Q. Were all those books prescribed by you as secretarv of the company? A. Yes,
sir 5 practically.
Q. Are they all made up and approved by you, and under your direction? A.
The blank books are. The voucher comes to me as auditor of accounts and I allow
it ; then it goes to the general auditor to be entered on his books. When it
is so entered it comes to the paymaster to be paid, and the paymaster returns
it to the general auditor, so that he can get credit for that amount of money.
REBATES ON VOUCHERS SEPARATE AND DISTINCT.
i
By Commissioner ANDERSON :
Q. Is the refund or rebate made out on a voucher separately by itself and without
any necessity for following it in the distribution book? Can we recognize
rebates simply from the voucher, or is the account mixed up with other payments
? A. No, sir ; the rebates will appear on a voucher separate and distinct from
anything else.
Q. Is there a separate book also? A. No, sir ; I think not. There may be a
separate book kept in the general freight office.
Commissioner ANDERSON. We have the names and we will find them. What we desire
to see is a statement of the course pursued by this company in allowing rebates
or refunds to any of the persons with whom the company has dealt, and we will
ask you to produce the book which will most readily give us that information.
The WITNESS. The distribution book will ; you can have it.
RECEIPTS AND PAYMENTS OF POOL CONTRACTS.
Q. In what books do the receipts of the Central Pacific Kail way Company and
the payment by it on pool contracts appear? A. They all appear on the auditor's
books.
Q. How many pool contracts had this company prior to the act of last April,
or, rather, of how many pools was it a member 1
The WITNESS. Just at that time, or altogether? There were various pools from
time to time.
Commissioner ANDERSON. Tell us of the various pools.
The WITNESS. I cannot do that. I do not know. There were several, but I cannot
give them all.
Q. Have you the pool contracts $ A. No, sir ; I do not think I have all of
them. I think some of them are in the general freight office.
Commissioner ANDERSON. Tell me what pool contracts you remem ber.
2362 u. s; PACIFIC RAILWAY COMMISSION.
THE TRANSCONTINENTAL POOL.
The WITNESS. There is one that we call the Gould-Huutington contract.
Commissioner ANDERSON. The Gould-Huntington pool?
The WITNESS. Yes, sir. There was a contract with the Pacific I do not know
the name of it the Pacific Coast Steamship Company, I think.
Commissioner ANDERSON. The transcontinental pool?
The WITNESS. Yes, sir ; there is one called the transcontinental pool. But
I am not familiar with those pools.
Q. Who is familiar wit-h them? A. The general freight agent and the general
traffic manager.
Q. Mr. Wilder? A. No; Mr. Stubbs and Mr. Gray.
Q. Are those pool contracts in your possession? A. I think I have one, or
perhaps all. I do not think I have, though.
LAND-ACCOUNT BOOKS.
Q. We will ask you to look for them. Who keeps your land accounts? A. William
H. Mills is the land agent.
By Commissioner LITTLER : Q. Does he keep the books? A. They are kept under
his charge.
By Commissioner ANDERSON:
Q. Where is his office? A. I forget the number of the room. Q. It is in this
building? A. Yes, sir.
Q. Do you know anything of the number of books kept by him, and what books
they are? A. Yes, sir.
Q. What books does he keep? A. I cannot give you the details of just what
he does keep.
Q. You refer us to him for all the books relating to land? A. Yes, sir.
LAND-GRANT MORTGAGES.
Q. Who is the trustee of your land-grant mortgage?
The WITNESS. At present?
Commissioner ANDERSON. Yes.
A. William E. Brown and J. O? B. Gunu.
Q. Where is Mr. Gunn? A. He is in San Francisco.
Q. How many land-grant mortgages has your company made? A. Two.
Q. Have you copies of those mortgages? A. Yes, sir, We liave printed copies,
I think.
Q. Can you furnish us with a complete printed copy of ail the mortgages made
by this company? A. Yes, sir. I can have them printed by type- writer. Possibly
I may have them all.
Commissioner LITTLER. We supposed.you had them already.
The WITNESS. I think I have, but if I have not I can furnish them.
By the CHAIRMAN :
Q. Have you named all the books kept by the company in the accounting department
? A. No, sir.
AUDITOR OF MOTIVE POWER AND MACHINERY.
By Commissioner ANDERSON :
Q. Please tell what you have omitted? A, There is an auditor of motive power
and machinery.
EDWARD H. MILLER, JR. 2363
Q. What is his name? A. His name is C. fl. Foster. Q. He keeps the statistics
relating to motive power and machinery $ A. Yes, sir.
By Commissioner LITTLER : Q. Does that department include fuel? A. Yes, sir.
THE TREASURER'S BOOKS.
By Commissioner ANDERSON :
Q. What other books are there, if any? A. I mentioned the treasurer's office.
Those books are a part of the general books. They keep simply a cash-book.
Commissioner ANDERSON. You mentioned that at the beginning.
The WITNESS. I think I mentioned that. I do not think of any others; that is,
any other general books. Of course the agents at each shop have a set of books
kept. They all come here for final collation.
LEASED LINES.
Q. Now in regard to leases : What companies have the Central Pacific Eailroad
Company operated under lease 9 A. The Stockton and Copperopolis, the California
Pacific, the Northern Railway, the San Pablo and Tulare, the Southern Pacific
of California, Southern Pacific of Arizona, Southern Pacific of New Mexico,
the Los Angeles and Independence, the Los Angeles and San Diego, and the Amador
branch.
Q. Up to what period were those roads leased to the Central Pacific? A. The
leases of all except the Stockton and Copperopolis were transferred to the
Southern Pacific Company in October, 1886. I may be mistaken as to the month,
but it was about that no, they were not transferred, but those leases were
canceled.
Q. When? A. In October, 1886.
Q. Have you those leases? A. Yes,sir.
Q. Will you plesse hunt them up and produce them to the Commission? A. Yes,
sir ; that is, the leases of the roads that were leased to the Central Pacific.
LEASE OF CENTRAL BY SOUTHERN PACIFIC.
Q. Yes. When was the Central Pacific leased to the Southern Pacific? A. The
date of the lease was in February, 1885, to take effect April 1 9 1885.
Q. Will you furnish a copy of that lease 1 A. Yes, sir.
(The lease will be found in the testimony of E. H. Miller, jr., given on August
16, 1887.)
CIRCULAR LETTER OF COMMISSION.
Q. Have you a copy of the circular letter issued by this Commission to this
company? A. Yes, sir.
Q. Have you prepared answers to the questions contained in that letter? A.
Yes, sir ; I have prepared some. You mean the letter addressed to Governor
Stanford?
Commissioner ANDERSON. Yes.
The WITNESS. I have prepared answers to such as Governor Stanford referred
to me, but the answers are not complete. They are now in the hands of the type-
writers, to be printed.
Q. Have you received another circular letter calling for answers to various
other matters? A. I have not got it here, but what you call p R VOL in 3
2364 U. S. PACIFIC RAILWAY COMMISSION.
the circular was a letter addressed by the Commission to President Stanford.
Commissioner LITTLER. I call that a letter directed to the company, and not
a circular letter.
The WITNESS. Yes, sir ; that is so.
Q. Was that the one you refer to? A. Yes, sir.
Q. You received another letter? A. Yes. sir.
Q. Have you prepared answers to that? A. I have not, assuming that the letter
to Governor Stanford would take the place of the circular. They covered the
same ground, as far as I understand it. This is the one I referred to [producing
the printed circular letter of the Commission for public circulation]. This
is practially a copy of the letter sent to Governor Stanford. The previous
one, I think, covered only ten or eleven questions.
CONSTRUCTIVE MILEAGE ACCOUNT.
By the CHAIRMAN :
Q. Have you a constructive mileage account? A. Yes, sir ; your accountants
are making it out. We had a constructive mileage account only from 1880 to
one or two months in 1883.
MINUTE-BOOKS OF BOARD OF DIRECTORS.
By Commissioner ANDERSON :
Q. Where are your books of minutes of the board of directors? A. They are
in my office.
Q. How many books are there? A. I think there are four.
Q. Will you inquire of the president of the company whether there is any objection
to our having them moved to the hotel for convenient ex. amination there this
afternoon? A. I will.
NO MINUTES KEPT BY EXECUTIVE COMMITTEE.
Q. Are there minutes of the meetings of the executive committee !
By Commissioner LITTLER :
Q. Are they kept in a regular book of minutes? A. No, sir. Q. Have you a different
book of minutes of the executive committee?-^-A. No, sir ; the executive committee
never kept any minutes.
By the CHAIRMAN :
Q. How did they report to the general board? A. They did not report.
Q. How often did they meet? A. Occasionally.
Q. How occasionally ; once in three or six months? A. I do not know.
PERSONNEL OF EXECUTIVE COMMITTEE.
By Commissioner ANDERSON :
Q. Who composed the executive committee? A. Charles F. Crocker, Timothy Hopkins,
and S. T. Gage.
Commissioner ANDERSON. I do not remember Mr. Ga^e as being a director.
The WITNESS. Yes, sir.
EDWARD H. MILLER, JR. 2365
INFORMAL VERBAL REPORTS TO BOARD OF DIRECTORS.
By the CHAIRMAN :
Q. How do the board of directors get information as to the work of the executive
committee? A. I am sure 1 do not know that they got any information from the
executive committee, except as the individuals of the executive committee at
the meeting of the board stated.
Q. Who was chairman of the executive committee? A. I do not think they ever
organized.
Q. Were you present at the meeting of the board of directors when any individual
of the executive committee reported? A. Only as I state, when they reported
verbally.
Q. Did you take down the report as secretary? A. No, sir.
Q. Were you present when any action was ever taken on a report of the executive
committee? A. There never was a report made by the executive committee as
an executive committee.
METHOD OF ACTING ON SUCH REPORTS.
Q. Ware you present when any action was taken on a report of any individual
member of the executive committee? A. Yes, sir.
Q. How did the board act? A. Sometimes they adopted the action proposed by
the executive committee, or by the members of the executive committee, to be
adopted.
Q. How would the secretary of the board enter it upon the minutes? A. He would
enter it as the action of the board of directors.
Q. Would any intimation be given as to the report of an individual member of
the executive committee? A. No, sir.
Q. Then if they approved of the course of an individual member of the executive
committee, it would take the shape of a resolution of the board of directors,
would it? A. No, sir.
Q. How would it appear on the directors' minutes? A. The executive committee
would not appear at all. As a member of the board of directors one of them
would perhaps offer a resolution that certain things should be done in the
board, and it was either adopted or not.
Q. Then where the individual members of the executive committee appear in the
meetings of the board of directors as offering a resolution, and the board
approved of it, that is the result of the action of an individual member of
the executive committee approved by the board? A. No, sir ; I do not understand
that they appeared before the board as an executive committee at all, but they
appeared before the board as individual members of the board. If they, as members
of the board, offered a resolution, and if the board approved it, it is adopted.
But as an executive committee they never made any proposition to the board
of directors, or offered a resolution to be adopted.
Q. Did the board of directors ever act upon any action of the executive committee?
A. I think not; no, sir.
Q. Was there ever any action on the part of the executive committee? A. Not
to my knowledge.
OBJECT OF THE EXECUTIVE COMMITTEE.
Q. What was the use of the executive committee? A. I do not know, really.
Q. Had it any purpose? A. Yes, sir 5 I think it had this purpose, that those
three were to talk matters up and consult together, and then, if they agreed
upon a certain proposition, it would be presented to the
2366 U. S. PACIFIC EAILWAY COMMISSION.
board, not by the committee as an executive committee, but it would be presented*
to the board for its action.
Q. Would not that be the result of the executive committee, if they agreed
upon it? A. No, sir. They took no action. It was submitted entirely and always
to the board of directors for their action.
Q. Was it after consultation by the executive committee? A. I do not know
about that.
Q. I understood you to say that after consultation the executive committee,
reaching a point of agreement, then had one of the individual members report,
and then, if approved by the board of directors, it went upon the minutes.
Is that true? A. No, sir ; I did not intend to be understood in that way.
Q. Will you explain? A. You asked me what was the use of the executive committee,
and I explained it as well as I could, that they would perhaps get together
and consult among themselves on what action, if any, in certain matters ought
to be adopted by the company. When they came before the board of directors
they did not come at all as an executive committee. They came just as individual
members of the board of directors would come, and offered such a resolution.
It was done in open board. If it was adopted, all right. It was the action
of the board of directors, the executive committee having taken no action whatever
on it ; only, as I take it, every resolution offered before the board of directors
of any company is always considered by somebody before it is offered.
Q. What I want to know is, after having ascertained the views of a member of
the executive committee, and there having appeared on the minutes a resolution
with the approval of the board of directors, whether that was the course of
the executive committee as approved by the board of directors? A. No, sir
; it was not, in any case.
E. H. MILLEE, JR.
The Commission then adjourned to meet on Tuesday, July 26, 1887, at 10 a. m.
OFFICES OF THE CENTRAL PACIFIC EAILROAD COMPANY,
San Francisco, Cal, Tuesday, July 26, 1887.
The Commission met pursuant to adjournment, all the Commissioners being present.
EDWAKD H. MILLEE, JR., being further examined, testified as follows :
The W JTNESS - I did not give you yesterday, by oversight, the index to the
minute books.
The CHAIRMAN. We would like to have that.
The WITNESS. It is a separate book, and I ought to have handed it to you, but
I overlooked it.
FURNISHING INFORMATION PREVIOUSLY CALLED FOR.
By Commissioner ANDERSON :
Question. Will you inform us what you have that we called for yesterday? Answer.
Ail the articles of consolidation. I have not had time to arrange them, but
they are in this pile.
Charles Crocker's whereabouts I do not know anything about.
EDWARD H. MILLER, JR. 2367
I have the list of directors at the time of the Crocker contract. I now furnish
a complete list of the directors from the organization to the present time,
as you will see. As to the members of Crocker & Co., I answered that
yesterday.
Commissioner ANDERSON. You said you did not know.
The WITNESS. I did not know. As to Crocker's contracts, 1 and 2, 1 answered
yesterday that they were missing. As to the contract with Collins & Bro.,
I believe that is here, but I am not certain, I have been in such a hurry to
get them up.
As to the contracts with the Contract and Finance Company and the Western Development
Company, I answered yesterday that they were missing.
The copy of contract with the Pacific Improvement Company the Commission had
yesterday.
Eeports of Messrs. Stanford, Huntington, and Hopkins are not all here; but
the reports of Mr. Stanford, so far as I have found them, and of Mr. Huntington
up to 1878, are here. Your accountants are using the reports for 1879.
The reports of Mr. Hopkins, as treasurer, are all here, that I can find.
The powers of attorney to C. P. Huntington are here.
The refund book has not come in.
I have here the distribution book and books showing pool payments and receipts,
which will appear also upon the distribution book.
All pool agreements and leases are here that I have ever had in my charge.
I believe copies of all mortgages are here.
Q. Including the one of February, 1886 ! A. Including the mortgage of February,
1886.
Commissioner ANDERSON. The mortgage that was given to secure the last $10,000,000
issue. I think that is the date.
The WITNESS. That is the mortgage October, 1886, I think. That is $16,000,000.
They are all here, I think.
The minutes the Commission have.
PRODUCTION OF PAPERS.
The withess produced the following papers : Articles of association, of amalgamation,
and consolidation between the Western Pacific Railroad Company and the San
Francisco Bay Eailroad Company, dated October 28, 1869.
(It was marked Exhibit No. 1, July 26, 1887.")
The resolution agreeing to consolidate between the California and Oregon Eailroad
Company and the Yuba Railroad Company, dated December 15, 1869.
(It was marked "Exhibit No. 2, July 26, 1887")
Articles of consolidation between the Central Pacific Railroad Company and
the Western Pacific Railroad Company, dated June 22, 1870.
(It was marked "Exhibit No. 3, July 26, 1887.")
Articles of consolidation between the San Francisco and Oakland Railroad Company
and the San Francisco and Alaineda Railroad Company, dated June 28, 1870.
(It was marked " Exhibit No. 4, July 26, 1887.")
Articles of consolidation between the Central Pacific Railroad Company, the
California and Oregon Railroad Company, the San Francisco, Oakland and Alameda
Railroad Company, and the Joaquin Valley Railroad Company, dated August 20,
1870.
(It was marked "Exhibit No. 5, July 26, 1887.")
2368 U. S. PACIFIC RAILWAY COMMISSION.
ORGANIZATION OF CENTRAL PACIFIC.
Commissioner ANDERSON. It appears from the first article of Exhibit 5 of to-day
that the four companies mentioned in the last-named articles of consolidation
became known by the corporate title of the Central Pacific Railroad Company.
By Commissioner LITTLER :
Q. Was the first corporation, the Central Pacific Railroad Company, organized
under the statute of the State of California? A. Yes, sir.
Q. Under a special act? A. I think not.
Q. Was it under the general law? A. I think it was under the general law.
Q. Where is the certificate of incorporation of that company? A. I think I
have it.
By Commissioner ANDERSON:
Q. That is filed here in your county clerk's office, and you have a certified
eopy^ A. Yes, sir; filed in the office of the secretary of state, I think.
ARTICLES OF INCORPORATION RECORDED IN MINUTE-BOOK.
By Commissioner LITTLER :
Q. Have you not in your minutes the record of the proceedings by which you
became a corporation? A. I think the articles of incorporation are in there.
Q. In this first book of minutes? A. I think so. I think they are copied in
there, but I am not sure of that. But I have a copy of it if it is not here.
[After examination.] No, sir ; I am mistaken.
Commissioner LITTLER. I wish you would furnish the date of the certificate
of organization of the Central Pacific Company?
The WITNESS. I can get it now.
MORTGAGE OF JULY 5, 1865.
(The witness also produced a mortgage dated July 5, 1865, of the Central Pacific
Railroad Company, of California, to D. O. Mills and William E. Barron, trustees.
It was marked " Exhibit No. 6, Julv 26,
1887.")
By Commissioner ANDERSON :
Q. What was the amount of that mortgage of 1865? What was the authorized issue?
A. Series A, 3,000 bonds ; series B, 1,000 bonds.
By Commissioner LITTLER :
Q. What is the denomination? A. $1,000 each. Series C, 1,000 bonds. Series
D to be of bonds for? 1,000 each, and to include the remainder of said bonds
authorized to be issued on said portion of said railroad line.
Q. How long do these bonds run, respectively, and what are they payable in,
and how much interest do they pay per annum? A. They were 6 per cent, thirty-year
bonds.
Q. Each and all of them? A. Yes, sir.
Q. What are they payable in, principal as well as interest? A. In lawful money
of the United States.
EDWARD H. MILLER, JR. 2369
AMOUNT OF BONDS OUTSTANDING.
By Commissioner ANDERSON:
Q. What is the amount now outstanding? A. The report of 1885 will tell. The
amount of bonds to be issued was not definitely fixed by the mortgage.
Q. But it was to be equal to the amount of Government bonds? A. Yes, sir.
By Commissioner LITTLER :
Q. Were all the bonds issued that were authorized by that mortgage? A. Yes,
sir.
Q, Are they all outstanding? A. No, sir. The amount outstanding of Series A
is $2,995,000; of Series B, $1,000,000: of Series C, $1,000,000; of Series
D, $1,383,000.
By Commissioner ANDERSON :
Q. Making a total of how much? A. Six million three hundred and seventy-eight
thousand dollars.
ANTICIPATED TERMS OF RENEWAL AT MATURITY.
Q. Those mature in 1895? A. They mature at different dates ; they were issued
at different dates.
Q. Between what years do they mature? A. Series A matures July 1, 1895 ; Series
B, C, and D mature July 1, 1896.
Q. From your knowledge of the financial markets, at what rate of interest can
that mortgage be renewed when it matures? A. It depends entirely upon the
security.
Q. It is absolutely the first lien on your road, is it not? A. It is now.
Q. Assuming that it so remains, what is your answer? A. I think 3 J ; they
would sell at par ; possibly at 3 per cent.
HOW SECURED.
By Commissioner LITTLER:
Q. How many miles of road stand as security for that indebtedness? A. About
125, 1 think.
Commissioner LITTLER. I wish you would give the number of miles.
The WITNESS. It is estimated here at 125 miles ; I cannot give it to you exactly.
(The witness also produced a mortgage of the Central Pacific Bailroad Company
of California to D. O. Mills and William E. Barron, trustees, dated January
1, 1867. It was marked "