Direct State Aid
In addition to the acts permitting county subscriptions, mention should be made of two important acts by which the state granted direct assistance. The first of these laws was dated April 25, 1863. It authorized the comptroller of the state to draw warrants in favor of the Central Pacific to the extent of $10,000 per mile, the warrants to be issued when the first 20 miles, the second 20 miles, and the last 10 out of 50 miles were finished. These warrants were to bear 7 per cent interest if not cashed, because of lack of money in the treasury to pay them.[50]
The second act, dated April 4, 1864, repealed the act just quoted, and proposed that the state government, instead of drawing warrants, should assume interest on 1,500 of the company bonds, bearing 7 per cent, and running for twenty years. This grant, like the earlier one, was made on certain conditions, such as that the company should transport free of charge public convicts going to the state prison, material for the construction of the state capitol, troops, munitions of war, and the like, that it should construct at least 20 miles of line annually, and in the case of the Act of 1864, that it should deed over certain granite quarries in Placer County.[51]
On the face of it this grant was illegal, because of clauses in the state constitution which forbade the legislature to create liabilities in excess of $300,000 without submitting the proposal to popular vote, or to loan or give the credit of the state in any manner, in aid of any individual, association, or corporation.[52] But it was sustained on the theory that the act amounted to an appropriation in anticipation of revenue, and so did not create a debt at all. Thus the company was able to draw its first interest money in January, 1865.[53]
Opposition to Aid in San Francisco
The various acts just referred to were of course permissive, yet in general the counties seemed very willing to give up to the limit of their legal power. The two exceptions were the county of Placer and the city and county of San Francisco. In Placer County there was a very active campaign against the bonds, supported by newspapers such as the Placer Herald and the Advocate. The proposal for a bond issue was carried, but only by a majority of 409 in a total vote of 3,810.[54]
In the case of San Francisco, the city delegation in the legislature divided five to five on the proposal to authorize the city to subscribe. When the law was finally passed, a long and interesting struggle ensued. The first step after the passage of the act was to hold an election in San Francisco in order to ascertain whether the people would approve of a subscription to railroad bonds. This election took place in May, 1863, and the necessary popular consent was secured. There is reason to believe, however, that illegitimate means were employed to carry the election. We have affidavits that Philip Stanford went to the polls at San Francisco in a buggy, carrying a bag of money; that the said Stanford put his hand frequently in the bag of money and took money, some $20 pieces and some $5 pieces, to a considerable amount therefrom, and scattered the said money among the voters at the said polls, at the same time calling on them to vote in favor of the said subscription. Another eyewitness confirmed this account, adding that while the sum of money spent by the said Stanford was considerable, he could not tell how much as the crowd around the buggy of the said Stanford was so great. Still another testified to having received a written order on Stanford and others for $20, in return for which he and a man named Ross were to endeavor to influence voters at the polls to vote for the subscription.[55]
These affidavits were later supported by the assertion of Hon. William A. Piper, on the floor of the House of Representatives at Washington, to the effect that he, Piper, was an eyewitness at the election, and saw the brother of Leland Stanford openly going about the polling places, scattering gold and silver to influence and buy votes for the municipal subsidy. Statements of this sort are too detailed and circumstantial to be brushed lightly aside.
