Leland Stanford Papers

7

the fashion of Owen or Fourier, to engage his people by the family, and return to the Feudal Castle and its retainers. He will carry with him all modern appliances. He will supply their food, good and plenty, and half what they could themselves. So with their clothing, shelter, all, scientifically. He will have workshops and factories [suit?] to his locality. Their wages will be a clear gain to them, over a good living.

All will be employed, men, women, and children, every day. There will be no unemploy, no idlers, beggars, or vagabonds. It will be the Commune, with the Proprietor, the only way in which it can be.

The proprietor and his family will be loved, obeyed and served as the old Baron was. He will have a moral control too. You cannot marry without his leave. Population cannot drive him to despair. He will check it, and improve the quality of his people. They will be better and happier. He will be

[nobler, better?][illegible][produce?][illegible] only fine goods exported.

This in the Republic! Yes, the laws of the Republic will just be pure air that will compel a nice adjustment of rights and duties, and a separation, when these are no longer possible. All these people will be devoted to the Capitalist who thus makes a superior home for them. The country, [then?] fortified, will command order in the [City?] and in the whole Republic.

He who will show the first working model of this new civilization will deserv and receive the eternal blessing of all mankind. And it will not cost him a dollar for it will pay. It will be science applied to human happiness, in which labor will find content and Capital peace, profit and security.

For education humanity and progres and yours truly

Henry Leland [King?]

[1?]06 Mason St.

MARCH 24, 1888. THE ARGONAUT. 3

[Rail]way, the possibilities of that were demonstrated. It opened up the development of a country greater in extent than that conquered by Cæsar in Europe, and all at a very small expense, so small that, from the time of the completion of the road in 1869 up to 1876, at which time the contract required that the road should be completed, the government saved during that time more money than it had loaned the company, the road being completed seven years ahead of the contract time.

I do not take into consideration, at all, what the government saved by the building of the road as regards the stopping of Indian wars. I do not say anything about that. I am speaking simply of the transportation of the government and the amount saved, according to the government's own reports.

All this is in the testimony, proven clearly and indisputably. The Pacific Railroad Commission has published all that testimony, and have submitted it to you; not only has the government made this important saving, but practically, the whole country was developed by the building of the road, and the advantages in that way to the government can not be fully estimated. The construction of this road also demonstrated the possibility of constructing other railroads across the continent. Before this road was built it was generally supposed there was no coal along its line. Geologists had stated that the country was one where coal could not be expected to be found, and that was supposed to be one of the difficulties in operating the road. I don't know that, today, except for the discovery of coal along the line, the road could be maintained for commercial purposes; but the discovery of these coal-beds helped the road at once. Large beds of coal were developed upon the line of the Union Pacific, which made the operation of the road practicable, and permitted great profits, and the road was a success. It was earning money largely, and could have paid off the government loan without difficulty had not its business been diverted; but, as soon as there was a competing line of railroad, it not only divided the business, but rates were reduced. The value of the road through this barren country, without competition, was such that the company could fix substantially its own rates, according to its own judgment of what it should charge to transact business.

Senator Davis - What competing line do you refer to?

Mr. Stanford - The first competing line was the Atchison, Topeka, and Santa Fé, which connected with the Southern Pacific Road at Deming. As soon as that was done, there was a competing line which divided the business and cut down the rates. Then the Northern Pacific Road was built, and the Short Line of the Union Pacific Company up into Idaho and Montana toward Oregon, that took from the Central Pacific Railway a very large portion of its business, because that road ran from the East. Most of the supplies of that country came from the East originally, but before that time they were bought at San Francisco, and then had to be carried back on our line into Idaho, Montana, Washington Territory, and Oregon. There are now, perhaps, seven hundred thousand people, all of whom, when we commenced building, we expected to supply, and did supply for a time, but the construction by the Union Pacific Railroad of that line, brought supplies for all that section of the country from the East, and the Central Pacific Road was cut off from that source of revenue. Our whole population in California west of the Rocky Mountains did not, at that time, exceed one million five hundred thousand people. That affected the Central Pacific Road seriously. Now, then, we say that, while we do not deny that the government had a right, in its discretion, to aid other lines of road, it was not expected at the time we entered into the contract with the government that other lines of road would be built, and they were built very slowly. A last, in 1864, the government provided for aid to the Northern Pacific lines. That was after we had entered into our contract with the government. However, the contract with the government was entered into under the Act of 1862, and we built the road under that act and the Amendatory Act of 1864; but we say this, that if the government has derived such great benefit from the construction of this road, which has developed its country and has given it facilities of transportation such as were hardly supposed possible - for it was not thought that this road could be operated as it has been operated - this constitutes an equitable proposition entitled to great consideration.

The first forty miles of the road were completed with our own means; we had iron enough to build fifty miles, entirely from our own means. We do not complain that the government has aided other railroads, but we do say that it is a circumstance to be considered by the government in settling with us that their aiding other roads diverted business from us to the extent, which is shown in the testimony, of many millions of dollars. The injuries we received through competition, which cut down our rates, can hardly be estimated. We were making money very rapidly, and were preparing a sinking fund by which to pay off this government loan before the competition commenced, and before the Thurman Act was passed.

We felt the Montana business going entirely from us, and even the Union Pacific Road, by constructing through its influence a line from Ogden, U. T., up toward Montana, stopped the business that usually came from the East, and it does not go over our road at all now. While we rendered a great deal better service, the government has never paid the rates for carrying the mails that it used to pay to the stage lines. It paid to Wells, Fargo & Co. one million seven hundred and fifty thousand dollars per annum for carrying the mails, with a maximum not to exceed one thousand pounds. As soon as our railroad was completed they required us to construct a special car, according to the directions of the government, to carry eighteen tons of mail-matter and two messengers. They had that car under their contract, whether they filled it or not with mail-matter. Oftentimes, when the Chinese, Japanese, and Australian mails are being sent across the road an extra car is required. I have known of two extra cars being used to carry the mails across the continent, and yet the government has never paid to this company quite a million dollars per annum for that service, although it was paying the large sum I mention to Wells, Fargo & Co.

The contract provided that the maximum amount should not exceed one thousand pounds. Now, the reports all show that the Central Pacific Road has lived up to its contracts in every respect. Neither the government nor the people of the country, in the construction of this road, have ever been disappointed in a single expectation. It was not supposed that the time allotted, which was until 1876, to build the road, was sufficient at the time of the passage of the bill, and it was so stated in Congress, but the reply was that if more was required it could be given. It has been said that the fact that we built the road so rapidly and at such extraordinary cost, is not to be considered by the government. I think that fact should be considered, as I have said that when we commenced to build this road we thought the local business and absence of competition, would unable us to charge substantially what we considered a fair price, and that the only competition would be that of ox and mule teams. At the time of the passage of the Act of 1864, the Union Pacific Road had made no progress whatever. The country from the summit of the Rocky Mountains through to Salt Lake was believed to be almost impassable, and it was thought it would take a long time to construct that part of the road. However, we proceeded with confidence, thinking that we should be able to reach Salt Lake before the UNion Pacific Road could possibly do so, but with the surveys which were made it was ascertained that the difficulties had been exaggerated; that, in fact, there were no great difficulties at all in constructing the road from Omaha to Salt Lake. The Union Pacific Road then sent over their engineers to see what kind of country we had to go through. When they got over the Sierra Nevada and saw what we were doing, saw the difficulties to be encountered there, they went home and reported that we could not possibly pass the Sierra Nevada as early as we did by at least two years. Then it was that they concluded to push on the building. By the construction of the Union Pacific Road we did actually lose the greater portion of that trade, except that immediately on our line of road. Now, consider that at the beginning we intended to build a road over the Sierra Nevada Mountains, because we could have no connection by water, and no competition of any kind, except that of mules and ox teams. But when the Union Pacific Road started and was liable to come in on us, we saw that it would be worse competition than to have had a vessel go round by Cape Horn, and it was a work of necessity, the act of Congress allowing two roads to build from opposite directions. It was not voluntary on our part, and we were compelled to make sacrifices in order to meet the Union Pacific Road in Utah. With the Union Pacific Road that was not the case. The extraordinary efforts they made were voluntary, and were made for the purpose of securing as much of the line as they could for themselves. There is a wide difference, therefore, between the two companies and the circumstances surrounding them in that respect.

Senator Hearst - You spoke a while ago of your end of the line, the Pacific end of the line, coming up to Utah and capturing the trade mostly of Washington Territory, Idaho, and Montana. How much of that trade was cut off by the Utah Northern and the Utah Southern Roads?

Mr. Stanford - Everything, so far as supplies were concerned, which naturally started from this side to go west. That was all lost to us. Aside from the competition caused by these competing lines of railroad, we should have had established our sinking fund; and except for the interference by the Thurman Bill it would have been ample to meet obligations, and up to the present time we have met every obligation. There has never been a claim against the Central Pacific which has not been promptly discharged. Every department of the government can certify that they have never had occasion to find fault with us in a single instance in that respect, and the government has received all the benefits it expected, and a great deal more. The agreement between the Central Pacific Railroad Company and the government constituted a contract. Each party to the contract covenanted to perform certain things. All those things which the government agreed to give the company, were to become the property of the company that built and maintained the road, held it subject to certain governmental uses, paid to the government five per cent. of the net proceeds, and allowed the government to retain one-half the value of the charges for government transportation. It fully performed its contract. If the company had given to charity all it received from the government, or had sunk it in the ocean, either would have been the right of the company as far as its relations with the government were concerned. All the government had the legal or moral right to claim was that the company should perform the obligations of the contract. That it has done. From the day of the organization of the Central Pacific Railroad Company down to this year, it has performed every obligation, public or private, which it ever undertook to perform. In regard to the savings of the government, it can easily be shown that the difference between what has actually been paid out for this much better service, and what they were paying out on an average from 1850 to the present time, is seven million dollars a year that they saved; and when you consider the benefit in the development of the country it has caused, it is impossible to overrate it. Besides this, we saved to the government in all other cases. It submitted to a discount in parting with its bonds, except to these railroads, and in their case the government has demanded the face of their paper, and are collecting six per cent. interest upon it, so that at the date of the maturity of the bonds, if we are called upon to pay, we shall pay twenty million dollars to the government for that which we never had one penny. That is the six per cent. interest on the seven million dollars, the difference between the value of the bonds the government loaned us and the amount we realized. At the end of thirty years, the date of the maturity of the bonds, this will amount to about twenty million dollars.

[end first column][second column]

The chairman - And you have realized as much from the bonds as the United States did from bonds it sold directly for its own benefit?

Mr. Stanford - We realized more, because we held on to them as long as we could. We had faith in the ultimate success of our government in the war, and we hypothecated those bonds, and in that way got a much better price than we otherwise should. We did not sell any bonds at forty cents on the dollar, but one time the currency was down so low that it took three dollars in currency to buy one dollar in gold, and you know all our business over there was done on a gold basis. Then the cost of our supplies was enormous. We had two engines on the road that cost us sixty-five thousand dollars, which could be placed there to-day for fourteen thousand dollars. It order to push this road forward rapidly, we had a great deal of the iron sent across the isthmus, and we had to pay sixty dollars a ton for that. The war risks were very great, insurance was very high, and we had to meet all of them. Thus, our road cost, no doubt, fully double what it would cost had it been built before or subsequent to the war, and built in the manner contractors would ordinarily build a road, but it was not optional with us. We had to build it in that way or lose what we had invested, and therefore we made the sacrifice.

Senator Butler - When do your bonds mature?

Mr. Stanford - In about ten years from the present time. Now we are here, not because we are derelict of our obligations to the government, but because, as the evidence shows, our business has fallen off very much, owing to reasons I have stated, and the probability is that we shall be unable to meet our obligations at maturity. It was anticipated that the government business would alone pay more than the interest. That would save the interest, and pay a large amount in addition. In all the debates in Congress you will observe that they discuss this question. They said: "We are paying out eight million dollars annually for transportation west of the Missouri river, and the laws of 1862 and 1864, required that one-half of the amount due us on account of transportation, should go to our credit with the government, and the other half we were to receive in cash." They said: "We have been paying out eight million dollars; one-half of that will be employed to protect the government, and the company will have the other four million, and can make that amount of money." As matters turned out, the government has paid out less than one million dollars, and that did not pay the interest on the bonds. The government in that respect was disappointed, but it was owing to the fact that the great benefit expected by the railroad company in doing the government business was not realized, although the government has had the service performed at a rate cheaper than ever before. The government has lost nothing by reason of that fact. On the contrary, it has been the gainer, because, had the business been paid for at that same rate, it would have put into our treasury four million dollars a year, and we should have had that amount to our credit to settle this indebtedness. But contemplate, for a moment, the condition of that country when we first went into it. In the eighteen hundred miles from the Missouri to the Sierra Nevada, there was not a navigable water-course. There was no settlement, except that of the Mormons in Utah. The government has had opened for settlement all that country, and if we pay these bonds at maturity, the government will enjoy these great benefits, without having expended a dollar in money. It is enjoying those benefits now, and will for all time to come. You are all more or less acquainted with the history of these times. It was considered a very doubtful enterprise when first initiated, so much so, that in California, until the end of 1864, no one would have anything to do with it. It was regarded as a hazardous enterprise, and to such an extent that, in San Francisco, all the stock for which we could get subscriptions amounted to ten shares, valued at one thousand dollars. At Sacramento some stock was subscribed for, caused by the local feeling and pride existing there, and they were willing to do something, but in San Francisco, but ten shares of stock were subscribed for, and that subscription was made by a foreigner, a Frenchman. Nobody had any confidence in it. It was a most reckless enterprise. I have been led to say much more than I had expected to when I began, but I wanted to show you the circumstances under which we commenced to build that road. It was with the idea that we were not to have competition; that we would command country which would probably develop, and if we could get over the mountains at all, that the enterprise would be a great success, and the subsequent history of that line shows that in this respect we should have made no mistake. And the reason the fortune of the road now is not ample security to the government arises entirely from the fact that by the government's own acts competing lines have been constructed, and the business injured to such an extent that it is doubtful if we have the ability to pay. Of course, it was never supposed that the railroad would pay off the bonds at maturity. I do not know of any railroad in the country which pays its bonded indebtedness, except by issuing new bonds, and that is the way we expected to do, because the government bonds and the first-mortgage bonds mature at the same time. As it is, we have our private sinking fund, and it is now between nine and ten million dollars. Gradually it will take care of these first-mortgage bonds, and every dollar that goes into that fund adds so much to the advantages the government has.

The chairman - That sinking fund you will take care of yourselves?

Mr. Stanford - Yes, sir; and I want to impress upon you the facts that before these roads came in competition with the business we were then doing, we were able to pay dividends, and we would have been able to pay off the government debts so far that we would have no difficulty in renewing a loan to meet it, and were ourselves providing a sinking fund for that purpose. When the government passed what is known as the Thurman Bill, and took the management of the sinking fund and the payment of the debt out of our hands, we could not make the provision required, and also have another fund, and it is not our fault that we do not make that sinking fund. As things have turned out, we could not have carried out the terms of that sinking fund, but according to the earning capacity of the road at that time it would not have been any trouble at all.

Senator Butler - What do you mean by your "private sinking fund?" The fund to take care of your bonds?

Mr. Stanford - I mean the fund the railroad company set apart to meet its obligations - obligations that are prior liens to that of the government. But the Thurman Bill provided a sinking fund, which I call the public fund.

The chairman - What was the effect of that Thurman Bill sinking fund?

Mr. Stanford - It disappointed its promoters. The mode of investing the fund was a failure, and even if the business had not fallen off by reason of competing lines, this defect in the bill rendered it worse than useless.

That fund was not accumulated. The Secretary of the Treasury has invested the money which the company has paid under the Thurman Act in government bonds, and paid an average premium therefor of thirty-four percent. There has been paid in by the Central Pacific Company, under the Thurman Act, three million one hundred and sixty-eight thousand six hundred dollars. The loss on which, in interest and premiums, up to August, 1887, was one million six hundred and twelve thousand nine hundred and sixty-six dollars. In fact, all the interest on the fund has been lost, and for all practical purposes, there is less money in that sinking fund than the amount paid in by the company by over five hundred thosand dollars.

The chairman - That is on account of the purchase of bonds at high prices?

Mr. Stanford - Yes; the government bought these bonds at a premium of one hundred and forty cents. They took the money that we paid in to buy these bonds at maturity; they will only pay off the debt at the rate of one hundred cents on the dollar, so that there is about six hundred thousand dollars of value to us less in that fund than we have put into it.

Senator Butler - By reason of these high premiums?

Senator Stanford - Exactly. For a long time during the construction of the road we borrowed all the money necessary on our own credit. We used the first-mortgage bonds and the government bonds as collateral, feeling confident at the time that they would not depreciate in value. We held them as long as possible, and when we could not help ourselves we sold them, and we sold our first-mortgage bonds. We realized seventy-two cents on the dollar for each class of bonds, but there was a time when we sold our bonds and realized only a little more than forty cents on the dollars.

Senator Hiscock - You mean in gold?

Mr. Stanford - Yes; that is the kind of money we used in constructing the road. As I have said, the government itself submitted to the sacrifice of its bonds in every case, except in dealing with these Pacific railroads. They alone had to take those bonds and suffered the loss, and they are now drawing six per cent. In all other cases, the government sold their bonds in the market for what they could get, and in every instance lost the discount themselves. Now, it seems to me that the magnificent results which have been attained by the government, should fairly be taken into consideration in dealing with these questions. That point I will not argue. The counsel will present all those things to you; but my object in addressing you now was to disabuse your minds of the popular notion that the Central Pacific Road had not lived up to its obligations, that it has made large amounts of money at the expense of the government; whereas, the fact is, it has never made a dollar at the expense of the government, and all the value that the company has had, and whatever of wealth it has gathered, has come from its own creation. Every dollar of the government bonds, and every dollar of the first-mortgage bonds, went into the construction of the road, and that has developed the country and created values, and for a time this road was very valuable. It was earning largely in excess of the requirements of a fund necessary to meet the government debt and its own first-mortgage bonds. The stock was selling at a high price, and nobody anticipated the disaster that afterward befell it in consequence of the construction of these competing lines of railroad. It is said that we issued a large amount of stock due. We did, but it affected nobody but the stockholders. If the stock of the Central Pacific Road were to-day gathered in, and all, excepting even shares, were destroyed, it would not make any difference to the government, or any one else in the world, except to the stockholders themselves. The value of the property does not depend on the number of shares that are outstanding. They are mere evidences of title, and nobody is, or can be, interested in them, except the stockholders and me. Stockholders are not complaining. The testimony will show that we built other railroads. We did; we built about six thousand miles of railroad to help level up the country, but we did not do it at the expense of the government. We did not do it at anybody's expense but our own, realized from our own resources. For instance, we planned a railroad, and we concluded to issue so much stock and so many bonds. we had a contract company to do the work. Now, who was wronged by that? Nobody. It was of no consequence to anybody in the world. The great public were interested in railroads, but if made no difference about the stock issues, or who issued it, provided the railroad was built, except to the stockholders. We built, as I say, about six thousand miles of railroad in that way, and transportation is, consequently, cheap all throgh the country.

Senator Hearst - Speaking of equities, the loan that the government granted to give you a foundation and a credit by which you were able to do this work at the start, you admit is an equity from the government, at least?

Mr. Stanford - Of course. As I have said, and as is well known, the government paid out nothing. their loan was the credit which they gave us. If they had paid out the money, the debt we owe would not be so much. In other words, if they would have parted with twenty-seven million dollars. it would

[end second column] [begin third column]

have been worth a great deal more than we received, and, up to this time, they have been having the benefits of the roads without paying anything but the payment of interest. The principal is in their own pockets. The interest they required us to pay back. If the government never gets another dollar back, it will have saved over two hundred million dollars, against what it is now paying for the service, prior to the construction of this road. How much value it has been to the government to have eighteen hundred miles of country developed, I shall not undertake to say, but the population has grown, other railroads have been built, and all this is a consequence of the construction of this road. I do not believe that one of the other lines of road would have been built through that country to-day, if this road had not been a pioneer and shown the possibility of its being done. With double the land grant, the Southern Pacific, the Atlantic and Pacific, and the Northern Pacific have been pushed forward, but the impulse came from the construction of our road. The Northern Pacific Road, running through a magnificent section of the country, with twice the land grant that the Central Pacific had, only completed its road in 1883, while we completed our road in 1869, during a part of which time the government bonds and the first-mortgage bonds, together, did not equal the face value of either one. All these results have followed from the construction of the road. The early construction of the Central Pacific Road was a matter compulsory on the part of the company, and the sacrifices it made, or was compelled to make, in order to perserve that which had already been expended upon the road. But I don't care to go into that matter further. I have stated substantially all that I desire, which is, that we have made no money at the expense of the government; that all we derived from the government went into the constructuion of the road, as can be easily ascertained; and these vague and uncertain stories - that the company has made money at the expense of the government - have no foundation, except in the wild rumors started some years ago. Instead of the projectors having made money at the expense of the government, it was made entirely out of values which were created by the company, and because we developed an empire.

Last winter Congress passed an act directing commissioners to inquire into certain equities between the company and the government. That act said they should examine and ascertain how much more it cost the company to give the use of this railroad to the government seven years earlier than the contract required. It said they should ascertain what sacrifices were made by the country on the bonds which were loaned and what discounts paid. It said they should ascertain the amount of business which was diverted from the road by reason of the construction of other roads. Congress demanded an enquiry into these equities. In reading the report of the commission one would suppose this question of equities originated entirely with the company, and that it had no foundation because the equities did not really exist. That is fairly to be implied from what they have said. The contrary is the case. Congress specified the equities, admitted their existence and directed the inquiry. Our Mr. Haymond will discuss all these things more carefully. There is a great deal to be said about them. It is the history of a great work from the conception, and can not be disposed of in a few minutes, and my object was simply to place the company in a fair attitude at this time so that you might consider the case without prejudice. If we to-day had the business that we fairly had a right to anticipate, and that we once enjoyed, there would have been no occasion for this investigation. We should have been able to pay the debt in full. But, as it is now, we think that we are fairly entitled to have the equities considered. Instead of a strong creditor, we will reap all the advantages which we supposed we would reap from this contract and more, now the government has a debtor to deal with. The question is, whether it will be as just as individuals dealing with one another would be under the same circumstances. The money to meet all these equities has been saved to the government already many times over. It has saved the difference between what it would pay out and what it has actually paid out, amounting to over two hundred million dollars, and it has obtained advantages in other ways which I am going to describe. Even the land grant it gave us has doubled the price of every alternate section, so that the government has actully given us nothing in that direction. The land was worth nothing before the railroad was built, and now it is worth a great deal.

The chairman - So that the government did not help you in the building of the road?

Mr. Stanford - They helped to give us credit.

The chairman - But they did not furnish you money?

Mr. Stanford - No, not during that time. we have sold some of these lands, but the government has not been very liberal with us even in that respect. There is a popular impression that we have neglected to take out land patents so as to avoid taxation. There has never been a time since our road was completed, that we had not money to pay for surveys, but we have not, as a rule, sold lands granted to the road between Ogden and Sacramento until we had them ourselves. The settlers go in and occupy them, and when the time comes that we obtain a patent from the government, we convey to those people at the credited prices, without reference to any improvements that have been made, so that we have saved nothing in the way of taxes on these lands, and besides we have suffered, no doubt, a very large amount - our land agent estimates it at five million dollars - by not having those patents issued to us by the land department at the time when we had money there to pay for the survey. I do not think we have had a single patent issue for three years. We have demanded patents from the beginning, and the government has refused to comply with its contract. The law provided that as soon as the line of road was definitely fixed, the government should cause all the granted lands to be surveyed. The surveys have not yet been made. The other roads across the continent, passing through a better country, have sold their lands in advance of the surveys, but in our case we have not been able to get the money for the lands, because the lands have not been patented to us. Now, if we are required to pay this debt by arbitrary requirements, the burden will fall chiefly upon the people of Utah and Nevada. They can not very well escape using the road. The other business upon which we anticipated making large profits to enable us to meet our obligations to the government, has been substantially destroyed by the acts of the government itself. The government has had all the advantages it anticipated and much more. Its lands along the line of the road have doubled in value, and if the bids are paid at maturity, it will not have cost the government one cent for the construction of this road. In closing, I desire to say to the committee, that every statement I have made to-day, or that is contained in my testimony, as given before the commission, is supported by other evidence, given before the committee; so that there has been, and can be, no contradiction. If Congress will allow the company the equities fairly due it, they may want to modify the terms of payment considerably. I was doubtful whether to ask, in this, if any arrangement had been made for the payment of balances that might be found due. the first thing is to ascertain what is due, and I want a court. I don't care whether you take the present existing court, or whether it is appointed; but I want a full, thorough, and impartial examination of all matters in controversy. There have been so many rumors in regard to this whole subject, and so many loose statements, that a court should investigate it, in order to satisfy everybody as to what is fair between the company and the government. That there are equities, Congress itself has recognized, by directing the commissioners to make inquiries into them.

COMMUNICATIONS.

Tariff Tinkers.

EDITORS ARGONAUT: You have a tariff tinker who signs "B;" who writes with an assurance of having probed this problem to the very bottom.

He says it will put wool on the free list, which will have the double effect of "giving wool-growers in this State a home-market for their product." I suppose they have no home-market for their product now, according to "B," but the manufacturers must buy cheap Australian wool. How amazingly that will help the wool-growers in this State. He - "B" - reminds me of the fellow who could sell his cake and eat it. Forty years ago, the tariff-tinkers, who were the ancestors of "B," tried the same thing. But the wool-growers amputated the heads of their sheep, took off the skins, sold them to the tanners, boiled down the meat, extracted the tallow, and fed the meat to the hogs. What an amazing effect it will have on the wool-growers to bring in Australian wool at one-half the price of California wool, and help the wool-growers of California!

And then he talks so wisely about iron, which we ought to make here, when we have only a little iron ore, and small quantities of dear coal.

Let me give one illustration of the wisdom of this Solomon:

"According to the New York [italics] Financier [/italics], the Belgian iron-masters, who are competing so successfully with England, even for England's home-trade, are preparing to strike for the American trade. The Belgian iron-master pays his rollers about fifty-four cents a day, his blast furnace-men about forty-three cents, while his puddlers get about five dollars a week. With these wages, he hopes to make inroads into American in spite of the duty."

It would be well for one-idea "B." to look at the several sides of this question.

In 1842, when the Whigs inaugurated the tariff, the country was wretchedly poor. No farmer could get anything but "trade" for his crops - oats fifteen cents a bushel, wheat fifty cents, corn thirty cents, butter eight cents, eggs six cents a dozen. In 1846, the tariff measures were repealed by the casting vote of George M. Dallas, who was elected with the Democratic slogan of "Polk, Dallas, and the tariff of '42." "B." seems to think that Polk, Dallas, and those chaps knew a heap more about the tariff than we who saw the terrible results of the tariff of 1846, in the last years of the administration of James Buchanan, when the government was obliged to borrow money to pay its current expenses. In 1857, the writer was interested in a little cutlery manufactory in New York. The tariff-tinkers, in 1857, shut us up. From 1842 to 1846, American industries were protected. When the war broke out, the tariff was again inaugurated. What bosh to say the stupendous and extraordinary ability of the country to pay war expenses and the debt since, was not due to the protecton of our industries.

God have mercy on the country when the tariff tinkers get control!

SAN FRANCISCO, March 12, 1888. ........................................... H.

[left margin] 4 [/leftmargin] THE ARGONAUT. [right margin] MARCH 24, 1888. [/right margin]

[column one] A MODERN PROTEUS.

Some Account of a Mysterious Gift of Personation.

BY ROBERT DUNCAN MILNE.

It is now little more than a week ago since a company of gentlemen were sitting and talking in a certain room in a certain club - I am not at liberty to say which - in this city. The company numbered some eight or ten persons, three of whom were strangers. I forget how the conversation turned upon the mysterious and occult - I think, however, now that I consider the whole matter calmly, that the subject was led up to, with a definite purpose, by one of the gentlemen present, who had, as it turned out, a vert definite object in doing so. At any rate, the topic is one possessing a certain charm for the average human mind, and each of the company was contributing his quotum of information, or idea, to the general fund.

"Now, take your theosophists," said Robson; "if one can only credit what they claim, they must be possessed of powers which ought to make them masters of any situation, either for good or evil. But what have they done, practically in either direction?"

"But then," objected Harding, "one of the conditions of acquirinh control over matter, it must be remembered, is a course of training which practically robs them of the desire to use that control."

"And," put in Thurman, "this course of training is said to so elevate the moral and intellectual nature, as to render an adept incapable of doing an evil action."

"Madam Blavatsky," remarked the cynical Cook, "is, I suppose, a case in point. I am of opinion, for one, that all of her miracles were well-arranged and preconcerted tricks."

"Whatever may be the case with Madam Blavatsky, gentlemen," put in one of the strangers who had been introduced as a Mr. Wharncliffe, "I do not think that anyone who has visited India, and seen the performances of the native jugglers, can apply the same strictures to them. I have myself been witness of some most strange and unaccountable feats in that mysterious country."

The speaker was a tall, dark, fine-looking, bearded man, of perhaps forty or thereabouts, on whose skin tropical suns had evidently done their work, of a rather grave and serious aspect, and distinguished air. Beyond these features, which are not so rare as to be extraordinary among polished and travelled gentlemen of any country in the world, there was another, which at once withdrew him from the conventional type I have depicted. That was the eye. It was an eye with a bright, black, dazzling pupil, which would have served to render its own singular in any company. It was an eye, too, that seemed to lack, when I first saw it, what I shall term soul, and depth, and calm. Not that it was forbidding, but, on the contrary, attractive, and the longer I looked at it, the more pleasant and attractive did it seem to become.

"My friend, Mt. Wharncliffe, here" explained Harding, who had introduced him, himself a member of a large mercantile house, "is recently from the East, and can give us, I doubt not, some interesting points on the occult from his own personal experience."

The stranger waved his hand deprecatingly, and assured us that his knowledge was confined merely to what he had seen. He was prepared, he said, to philosophize upon causes.

"You have, all of you," he went on, "doubtless read of - perhaps some of you have seen - those feats or tricks of legerdemain, performed commonly by Hindoo jugglers of the better sort; such as planting a seed in a flower-pot, wherefrom rises a plant before your eyes; producing bowls of water, when there was apparently no possible place of concealment for objects of such dimensions; and all this with no stage paraphernalia, such as our modern conjurors, who imitate these tricks, have ready to ther hand, but simply upon the open ground, the spectators standing round. But perhaps, the most marvelous of these tricks, or deceptions," he preceeded, "is that in which the juggler plants a wooden pole in the soil, up which he successively sends a cat, a monkey, and several other small animals, each of which disappears on reaching the top - vanishes, so to speak, into thin air. Not a vestige of them is afterward seen"

"May it not be, " suggested some one, "that this miraculous effect is produced by exerting some sort of influence, akin to mesmeric, upon the eyes of the spectators? That the juggler really sends no animals at all up his pole, but merely makes the spectators think he does."

"Just like that power," remarked some one else, "with which some mediæval necromancers were supposed to have been gifted. Scott uses it, if I remember right, in his 'Lay of the Last Minstrel' - the glamour, I think it was called. the Lady of Branksome sends some one she does not wish to be recognized from the castle - or was it the hobgoblin, Gilpin? - but anyhow, as he passes the warder at the gate, he casts the 'glamour' over him, and the warder avers that nothing passed the gate but 'a wisp of hay'."

"But admitting the possibility of the existence of such a power," said a materialistic doctor, who was present, "upon what form of matter would it be exerted? On the rays of light before they reached the retina, so as to cause them to project a false picture there? or on the substance of the retina itself? or on the optic nerve, so as to cause it to transmit a false message to the brain? or upon neither light rays, nor retina, nor optic nerve, but upon the brain itself, causing it thereby to substitute an image of its own creation, as in the case of a lunatic, or of some one else's creation, as in the case of a mesmerized subject, for the true image which it was physically incapable of perceiving?"

"The latter, I think, would be the most reasonable solution of the problem," observed Harding, "always admitting, as you say, that the power exists."

"If it does not exist," objected another, "what are we to think of the scores of independent witnesses - gentlemen of unimpeachable veracity - who testify to the vagaries of the [/column one]

[column two] Hindoo and his pole? We can not believe them all to have been duped by some cunning trick of legerdemain, for those who have given accounts of it were mostly men fully alive to the possibilities of the juggler's art. Equally difficult is it to comprehend by what power a simultaneous, and precisely similar, hallucination could be produced, upon say a score of spectators, by some extraordinary psychic influence. True, hallucinations of this very nature may be produced, or are said to be produced, upon a whole squad of mesmerized subjects at once. But the witnesses of the Hindoo's feats were not mesmerized. They were matter-of-fact every-day people, in full possession of their sober senses, at any rate upon every other point but this. Were they, then, put under the mesmeric influence of the Hindoo in this single and solitary particular? And, if such were the case, is it reasonable to suppose that any one possessed of such a mysterious and valuable power, would not turn it to better account than in picking up chance coins as a wandering juggler? I confess I do not see my way clear to accepting this view of the question yet."

"I think, gentlemen, I can give a little reminiscence which may, perhaps, serve to throw some light upon this matter," said a voice in somewhat diffident, hesitating tones, which were more noticeable as they broke the pause which had succeeded the argument of the last speaker.

I turned like the rest to see who had spoken, as the voice was unfamiliar. It was a middle-sized, gray-haired, and gray-whiskered old gentleman, with a benevolent aspect, who beamed modestly at us through his spectacles, and like Harding's friend, Wharncliffe, had been brought to the club that evening by one of the members, I forget which, and introduced to us as Mr. Johnson, a retired merchant, who had come to California with the object of securing a home for himself and family in his later days.

"I hardly know, gentlemen, whether I am justified," resumed Mr. Johnson, with an apologetic air, "in taking part in the discussion of a subject of which I know so little, and have myself no personal experience. What I purpose telling you, if you will allow me, are the experiences of another, and you must judge for yourselves as to what they are worth. I should not, in fact, have intruded them at all upon your notice, had they not seemed to me to be peculiarly apposite to the present discussion. If you care to hear them, I shall be proud to serve you, and I can confidently assure you that the recital will not take long."

We encouragingly gave assent to Mr. Johnson, who thereupon told the following story:

The scene of my part of the experience, gentlemen, if it can be called a part at al, was laid in the celebrated prison of Auburn, which is , as you are aware, one of the princial reformatories of New York State. I have for considerable time past held, and in fact still hold contacts, for supplying a certain line of commodities to the prison, and as my business naturally took me there upon occasion, I as naturally became acquainted with many of the officials connected with the institution.

About five or six months ago, while there to transact some business, which I found would entail my waiting for an hour or two, owing to the absence of the person it was necessary for me to see, and while sauntering around to kill time, I fell into conversation with Captain Coulter, the well-known detective officer, who propsed that we should make a tour of the prison, he volunteering to be guide. While I flatter myself that I have no taste for spectacles of misery, yet having nothing better to do, I gladly availed myself of the kind offer of my able mentor, and an able mentor he proved himself to be.

We passed through gallery after gallery, till we arrived at a portion where the securities seemed to be extra strong. The structure of the cells, fortified as they were by all the skill that can be brought to bear upon steel and iron, seemed to offer an impassable barrier to the criminals confined within, however daring and ingenious they might be. The cells situated in that part of the building, my guide explained, were reserved for the most dangerous and desperate class of criminals.

At length we paused before one of the most forbidding of the sepulchre-like tenements and the captain asked me to look through the little square orifice in the door, which seemed to serve at once for the passage of food, air, and light to the wretched prisoners inside. I did so, and crouching in a corner I beheld a grey and repulsive-looking man, his hair and beard long, unkempt, and straggling. He took not the least notice our presence, though he must have been, I think, aware of it. I was unprepared, however, for the - as I thought - heartless conduct of my guide, the more so, as he had spoken kindly and sympathetically to many of the prisoners we had passed, to some of whom, I am almost sure, I observed him passing money, though so quietly that it could scarcely be perceived. Unaccustomed as I am to the use of slang language, and averse as I am to the medium of its delivery, even in recounting it, truth compels me to say that upon the occasion Captain Coulter, after stepping up to the orifice before referred to, and actually making mouths at the poor, cowering wretch within, said:

"Come, brace up, old man. None of these fakes. You can't play it on me. Why can't you give us something better than that? Make yourself Jay Gould, or Russell Sage, for instance. Have some style about you."

I confess I was shocked at this heartless tirade against an old and defenseless prisoner, who, however, took not the least notice of us, and presently we passed on.

"That," said the detective, "is the most dangerous, the most elusive, and the most inexplicable criminal that it ever has been my good or bad luck to come across. I saw you were surprised by the way I treated him, but if you knew about him what I know, you wouldn't think so."

I became interested to know what could have given this apparently innocuous old man such distinction in the detective's eyes, and upon our return to the officers' quarters, as I had still some time to spare, I reverted to the subject, and questioned my friend regarding him, and what he had done to make him such an object of official aversion, and to necessitate his subjection to such rigorous treatment. [/column two]

[column three] "What has he done?" returned the captain, testily; "the question should rather be, what has he not done? The Lord only knows what unknonw villainies, with his peculiar powers, and his peculiar opportunities for mischief, that man, if he can be called a man, has perpetrated. His is the most extraordinary and incomprehensible case that has ever come under my notice," he continued, shaking his head. "Nobody can make head or tail of it. No one really believes me, when I tell them what has come under my notice. They imagine that I am laboring under a delusion, and had it not been for a piece of peculiar good fortune, and , I may add, some very hard and close work of my own -" ("You see, gentlemen," remarked Mr. Johnson, parenthetically, "the whole affair impressed me so much, that having naturally a good memory, and my friends being pleased to credit me with being something of a raconteur, I am enabled to give you the story pretty much as Captain Coulter gave it me") -"the fellow never would have been brought to justice at all. Even whenI had him 'dead to rights,' as we call it, he would have escaped, if I had not nailed him by a ruse. Would you believe it, if I told you," here, the captain sunk his voice almost to a whisper, and spoke slowly and impressively, at the same time looking me straight in the eyes, "would you believe that that old man you saw in the felon's cell is no more old than I am - at least, such is my firm conviction - and I am only forty-five? Would you believe that that man possesses the miraculous faculty of changing his appearance at will, not by clever manipulation of disguises, like your ordinary cracksman, or even like some members of my won profession, but by some mysterious power which seems to be innate in him? Would you believe that that gret and decrepit old man, if he were once outside his cell, could and would walk coolly and easily out of jail, under the noses of all the wardens and officers of the prison; yes, even under my own nose, did I not possess an infallible mode of detecting him and compelling him to resume his natural form. Yes, sir, he could walk out of that prison in the semblance of the warden himself if he so desired - at least, that is my firm conviction, though, unfortunately,it is nobody else's. Well, I hope they will not find out its truth some day to their cost."

I did not know, gentlemen, what to make of these words. Here was one of the most astute members of the metropolitan detective force, a man whose reputation and whose deeds put him at the head of his profession, giving expression to a theory so utterly at variance with common sense, that I did not know what to think.

"He would have to be a very skillful actor and possess something of a wardrobe to do such a thing," I at last ventured to say.

"That is what they all say," returned the captain, impatiently. "That is the way they all account for this man's powers - if, in fact, they give him credit for any; for there are many members of the police, and many reputable citizens outside, who still consider him a victim of mistaken identity; and, as I said before, had it not been for the direct testimony I was able to produce, together with my own unimpeachable reputation, this incomprehnsible villain would never have been convicted."

"But what did he do?" I asked; "what was the charge against him? and of what crime is he now convicted?"

"Grand larceny," returned my friend, "and, thanks to me, he has got the full extent of the law. His time will not be out for a good many years yet, and, by that time, I hope to be able to restrain him in confinement by some means or other, by convincing the public of his true nature. He will, at any rate, be kept under surveillance."

"But surely," I said, "what he is enduring now is very rigorous treatment for such a comparatively simple offense as grand larceny."

"My only object is to prevent his escape," explained the captain. "Apart from his being subjected to such confinement, his treatment in the matter of everything else is on a par with that of criminals of his own class. I have been the means of putting him where he is, and consider that I was perfectly justified in doing so."

I shuddered to think of the misery in store for any one who might be so unfortunate as to incur the displeasure of Captain Coulter, and wondered whether, after all, the prisoner I had seen might not owe his wretched condition to some delusion on the part of the great detective himself; the brightest minds, it is said, are sometimes subject to such.

"But the best thing I can do is to give you a brief history of the case," continued the captain, "and then you can judge for yourself. Something over a year ago, I received a letter from old Mr. Chisholm, senior partner of the well-known banking-house of Chisolm, Moffat & Co., requesting me to call upon him immediately, and, as it was after banking hours when I received the dispatch, I concluded to call at his house. I found the old gentleman in a very perturbed state of mind. he told me that his bank had been robbed that forenoon in a very mysterious manner. He had stepped out, as was his custom, about eleven o'clock, and while he was absent, a person, got up to resemble himself, had used this disguise to secure a considerable sum of money. It was Mr. Chisholm's custom to leave the bank at eleven o'clock, and to be gone for about half an hour. So methodical was he in this respect that the clerks were surprised when, scarcely two minutes after he had left, he returned, and walking to his private office, immediately summoned his confidential clerk by bell. He then told him to bring him five thousand dollars in gold, in two bags. The clerk returned with the money, which Mr. Chisholm then put in his coat-tail pockets, a bag in each pocket, and immediately left the bank. Though the proceeding was somewhat unusual, and though Mr. Chisholm had forgotten to leave a memorandum of the sum drawn, nothing more was thought of it. He again returned at his customary hour, and it was not until the day's balance was being made up that the teller reminded him of the morning's incident. To say that Mr. Chisholm and his clerks were surprised is to give no expression to the general state of feeling, Mr. Chisholm affirming that he had not returned to the bank, as was stated, and had drawn no money that day, while the clerks were as positive that he had; two of them averring they had seen him receive the money and put it in his pocket. It then dawned upon him that he had been so

The Bank of California San Francisco, [Jan?] [2nd?] 1869

Hon Leland Stanford [Sacramento?]

[Dr Sr?]

We have this day charged to your a/c 10 Notes Selby & others a/c [Mayfield?] [Palo Alto?] 3000 [ea?] $20.000 - left payments there on [10,352.50?] [Baldaco dao?] of principal $9647.50 Interest to date [3560.00?] Sent to your debit. $12,207.50 We hold the notes for your a/c

Yours Truly [?] Brown

The Barton Estate Company Limited Fresno, California

Strictly Personal

7th May 1889

Hon Leland Stanford My Dear Sir

When in the City recently. Saw Capt. [Youngberg?] - Chief Dep. Iech. Reo. Depart.?] S. Francisco. He stated he had a chat with you and had hopes that something could be arranged by which all growers of wine grapes could carry on their business the coming vintage, and not be at the mercy of any designing Reo. officer who might take it into his head to levy blood money. Hope this may be done - for should the plan of putting a special watch man at Each Distillery, be carried out, it would End in those who Could not See, the watch - not making any search [...] at all, and those who could, risking all there is [?].

at current prices, no one can afford to pay tax on fortified wines and live. Of course you know this. I think any Co. will send out a Receiver, and wind up business - unless we can soon show that we can earn a profit. This you must know would be a terrible blow to this country. But as a fact, they are already concluded that way. And if present high freights and low prices are to continue much longer nothing else can be expected.

Most Respectfully Robert [Barlow?]

U.S. Sanitary Commission, Jacob Stadtfelt New York, Jan. 19, 1865

My dear Governor

Can you aid my young friend, Mr. Johannes Schlarbaum, a practical engineer with your advice and countenance? He goes to your beautiful country to practice his profession in which he is said to be an adept. Please give him such furtherance as you can - without too much inconvenience to your

San Francisco May 13, 63

Governor Stanford:

Dear Sir;

If you will sign certificates of Stock for Mr. [Tolles?] I will endeavor to see they are not improperly opened.

Very respectfully Your obt servt [Newton Booth?]

this point with myself when your timely telegram was received. I saw [Lundt?] at [Terre?] Haute last June [not?] a quarter, [away?] within herself, on a heavy [hack?], in [31.25?]. I then said to [Ovien Hickok?], in presence of Mr.Allen of Pittsfield [and?] Mr. [Hamlin?] of Buffalo, "I want to make one of my peculiar bets with you." He wanted to know what that was. I said, "I will give you a hundred dollar suit of clothes if you can mark nearer the time than I can than [Lundt?] will make before the 1st of November." We both marked exactly the same figure, 2:09 - so that the "bet" was off; but I gained the point I had in view, namely, to ascertain what [Hickok?] thought of the mare's speed. I still think