With this much of preliminary, we return to Stanford, to see just what this super-plutocratic board of trustees has done. To begin with, let me explain that the holding concern devised by the “Big Four” plunderers of the Central-Southern Pacific, for the purpose of skimming off the cream of the profits, was known as the Pacific Improvement Company. The affairs of this concern have been kept a dark secret; the holdings of Stanford in Pacific Improvement stock were not made over to the Stanford trust by Mrs. Stanford, but were placed in the hands of Judge Crothers, a trustee, and by him turned over to the Stanford trust after Mrs. Stanford died. In the last annual report of the treasurer of the university, I find the value of this holding listed at one hundred dollars for twenty-five hundred shares, with “dividends from earnings” for the year of $2,482.44, and “liquidation dividends” of two hundred and seventy-five thousand dollars. That is a pretty good earning capacity for a hundred dollars’ worth of stock, you must admit! You see how the big insiders operate—no one knows what this stock is really worth. In his letter to me Trustee Crothers admits that “there were a number of reasons why Mrs. Stanford did not wish the whole world, nor even all of the trustees of the university to know the terms ... of the Pacific Improvement trust.” No probate courts, or inheritance tax appraisers, or other unfriendly investigators were ever to have a chance to stick their noses into Pacific Improvement!
Next, these super-plutocratic trustees turned over to Stanford University the sum of eight hundred thousand dollars a year, without explanation, and this sum of money was deposited in the Union Trust Company of San Francisco without interest. Let Professor Brander Matthews inquire around among his banker friends in New York, and find out how much they would be willing to pay him in the way of interest on a deposit account, amounting at its maximum to eight hundred thousand dollars a year! I am informed that when Mr. Anderson came into the board, representing the Morgan interests in the Standard Oil Bank of California, he pointed out that that arrangement was not a profitable one for the university. Also, I am told by a Stanford professor, in whose rigid integrity I have many reasons for trusting, that he once heard one of these trustees state angrily that the board had that afternoon made a loan of five hundred thousand dollars to one of their own members, at a ridiculously low rate of interest on the real estate security offered. Afterwards the trustee who had borrowed this money got into trouble, and no one knows how much money the university lost. In the last president’s report I find a “capital decrease” recorded of $17,320 on Sacramento Northern Railway bonds. I also find an item, “Stock not recorded on books, when acquired in 1919 at Northern Electric Company reorganization.” This is only one sample—nobody knows how many other items are “not recorded on books!”