Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1880-01-10

Government aid to the Pacific railroads mas
been the means of overcoming distance, Vi
cheapening transportation, and OF ptlngiiie
us into speedy intercourse with the Atiahtic
States 1t is enc of those departures lroin
the anti-snbsidy principle that California can
afford and if other States do not complain we
should not"
AROMATIC CONDITIONS.
some of the implied conditions precedent
To having railroads and other transportation
facilities is that the public who use them
I ,xiomatic. seems to have been overlooked.
Notwithstanding this, it is the great unwrlt-
ten law which no penal enactments or organic
law can set aside. The railroad system OF
California is grand in its conception, and has
anticipated by many years our industrial de-
yelopment. Hence, for a long time, higher
rates must necessarily prevail for local
freight and passenger service than are charged
in more densely populated communities"
CONCERNING GOVERNMENT ROADS.
Referring to proposed Government roads
to compete for the transportation business OF
the center of the continent, the Com
missioner points out that neither govern
ments nor individuals can construct railways
without the investment of money, the prin-
cipal and interest of which must be repaid.
The principal and interest must be realized,
either by charge on the traffic available to
the roads or by tax upon the whole people.
The same may also be said of the cost OF
operation and maintenance. In fact the same
conditions surround the Government roads
as those owned by private parties. And the
conditions involved in competition are the
same, and the Government would have to
make the same determinations in its rates
that private roads do. or make up, by direct
taxation of the people, what might be lost in
operating its roads, It would be compelled
to meet rates where rail and water trans
portation meet, as well as at COM
peting points of other lines of railroads.
All transportation charges must of neces-
sity be paid out of the rewards of productive
industry, whether owned by Government or
individuals The same rules also will gov
ern in establishing rates for traffic along the
line of Government railroad az apply to pri-
vate railroads If the expense of construc-
ton, operation and maintenance Is not i'm
posed upon the traffic. then it must be met
| by taxation, and in either case it will come
out of productive industry. 1t would be of
doubtful expediency for Government to enter
upon line of policy which would eventuate
in largely increasing transportation facilities,
and thus dividing with the existing railroads
traffic the receipts from which, when all OF
them are pooled, are found barely adequate
to meet the annual liabilities of the com
panies, because of the competition afforded
| by the system of inland navigation alluded to.
RAILROAD MONOPOLY.
Concerning railroad monopoly the report
points out that but for the water ways the
railroads would have a monopoly of the car
rying trade but that if these are preserved
there is not much to fear from railroad
monopoly.
THROUGH AND LOCAL RATES.
Through rates largely influence local rates
| if the former are remunerative the latter
are reasonable, and vice versa, because then
the deficit is taxed upon the local business.
| Uncontrolled competition is the immediate
cause of fuctuating rates and Determinations.
In California fluctuations in railroad rates are
few because most of the roads are under one
management For the local traffic of rail-
roads there cannot be any competition, and
the rates must be regulated wholly with ref
erence to the value of service Railroads are
as permanent as canals and natural water
ways, and conditions similar to those con-
trolling the fixing of rates in one case must
prevail in the other.
DISCRIMINATION
| Is the charging more to one for like service
under like circumstances than TO another.
| Unjust discrimination implies a wrong de-
manding remedy. But simple discrimina-
ton is but another term for competition, or
differences founded upon natural distinctions
which are the only obstacle to a uniform tariff
of rates proportionate to distance carried
The power of the Government to regulate is
indisputable; and, if disputed, is, under the
decision of the Supreme Court, set at rest.
Shall the railway companies carry passen-
gers and freight between points where water
competition exists at such rates as the water
craft may establish, CT shall they abandon
business with such points? There are certain
! fixed expenses connected with conducting
railroads that must be met by the earnings
operation and maintenance, cost of equipment,
interest on capital employed in construction.
The cost of operation and maintenance OBJ
tanned, fair remuneration on permanent in
vestment in construction andequipment fixed,
the rates on the traffic should be gradually
reduced as the volume of business is in
creased. If the railway companies aban-
don business between localities having
water communication, because Of low rates,
the water craft advance their rates, and
the railroad advances its rates between
non competitive points. Assuming that
| the service to non competitive points is
| performed at just and reasonable rates, it
! follows that the freight and passengers, to
/ anu IIOul COLI ptblilNe lbilllS, uusL NC
at rates fixed by the competition,
! If railroad companies were compelled by
law to do business at competitive rates, which
natural conditions have made necessary,
bankruptcy must follow. To avoid that the
roads would abandon competitive business
and make local traffic meet their necessities.
Hence any profit derived from competitive
business is a benefit to the local shipper, as
it tends to lessen local charges.
THE COMPLAINT
Is not of too high rates between non-com-
! petitive points, but by comparison they are
in excess of those for like service between
competitive points. Hence the unpopularity
of discrimination. To carry between COM
petitive points at less mileage rates than be-
tween intermediate points where no compe-
tition exists, is not an act of injustice.
Example of Effect.-San Francisco and
Sacramento are connected by navigable
waters and by rail. On the latter lire is
San Francisco. Before the building of
the railroad freight from San Francisco
came to SacTa nento by water, thence by
wagon to Gait. Now it may come by
rail direct or by water to Sacramento, and
thence by rail. To find the rate to Calf by
water add the rail-rate from Sacramento.
The latter is below the old wagon rate, and
to the extent of the difference the
shipper at Gait is benefited by the
building of the road, to say nothing
of time saved and convenience accruing.
If the road terminated at Gait there would
be no complaint, but the new route of 124
miles to San Francisco gives rise to trouble.
The railroad company must carry from San
Francisco to Sacramento at the low water
rate, which is below average cost of railroad
transportation but if it derives a small
profit from this source, it is enabled to make
a reduction in rates between San Francisco
and Gait dilect, and between Sacramento
and Gait. 1t is obliged to charge the ship
pers at Calf more per ton per mile for the
124 miles to San Francisco than per ton per
mile to Sacramento /; but the total can in no
case exceed the sum of the water and rail
rate from San Francisco to Gait via Sacra-
mento else the latter would be the preferred
route. There is no injustice in this to the
shipper at Gait. Common carriers should
not be compelled to expend money to over
come natural obstacles and place the benefits
arising therefrom at the disposal of places less
favorably situated.
DETERMINATIONS MUST EXIST
In transportation. The carrier does not
create them of his own will. Necessity COM
pels carriage to some points at lower rates
than the others less favorably located. Dis
ordinations arise also from classification of
merchandise, and from competition between
dealers in certain merchandise. Instance:
Lumber goes from Truckee to Salt Lake as
cheap as to points 100 miles nearer Truckee.
IL l. Ca IL