Correspondence (incoming) - B

Robert Bonner

N.Y. - Nov. 29, 1890

Leaving Sunol at P.A. Farm for winter.

Palace Hotel San Francisco, Cal. April 1892

Hon. Leland Stanford. Prest. Central Pacific R.R.

Dear Sir:

At the next meeting of the board I propose to move the following resolutions and as I understand you will not be present, I think it courteous to submit to you the text of the resolutions, and briefly, the reasons why I put them forward:

1. As to the sinking funds. "That Messrs Hubbard & Huntington be appointed a committee to take charge of the investment of the companys sinking funds, with instructions to call in as soon as conveniently can be done the loan to the Pacific Improvement Company, and to

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confine the future investments to just mortgage bonds of railways in the United States, or to bonds issued by this company. Reasons. I consider the loan to the Pacific Improvement Co. illegal: all the sinking fund clauses in the various mortgages refer to investments, not loans: moreover a loan to the P.I.Co. is virtually a loan by the majority of the directors to themselves, and on that account alone both illegal and imprudent. The P.I.Co. is not in any sense a required public company but merely a private partnership under corporate form: the money might just as well be lent to Crocker & Co. or Huntington, Hopkins & Co.

I brought this matter forward a year ago and the greater part of the loan is still outstanding: I therefore bring it forward again so that the responsibility may be on those directors who vote for the continuance of the loan.

Moreover the security given by the [P.T.Co.?] is insufficient: the bonds secured on [inconsistent?] [?] or on a railway in a revolutionary Spanish-American state are not such as any [binders?] in a [fiduciary?] especially are justified in accepting.

2. As to [scribing?] funds. "That the sinking fund committee so appointed keep the separate funds distinct in conformity with the mortgages, and [appropriate?] the existing securities to each as they may [think best and support?] their action to the board." Reason. Each mortgage has its own distinct sinking funds which cannot legally be mixed up with any other. The directors responsibility is to each set of bond holders separately.

L.S.[4?]

3. The Government [debt?] "That Messrs Huntington, Hubbard and Bretherton be appointed a committee to watch the proceedings in Congress relating to the extension and adjustment of the government [debt?], and to prepare such measures as they may think fit in relation to such matters, with power to employ counsel, and make each further expenditures as may be necessary and proper."

Reason. The substance of Senators [Fryes'?] bill on which all proposed legislature is based is to seize the rent now paid by the [Southern?] to the Central in whole or in part and apply it to the Government [debt?]. My own opinion is that we should do better by cancelling the lease, stopping the dividends, and letting the Government do what they please than by allowing the [Southern?] to become the intermediary of the settlement: but on a matter of such importance [?] not