Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1881-01-22

railroad corporation to pay to the individual whose
property has been taken its full value. And here
let that the legitimacy OF the investment OF
the means Of the individual ncorporators, and its
character, are stamped by the State when it de
clares that that investment is of SO great public
benefit that it is justified IN exercising the right OF
eminent domain to enable the investors to carry out
the objects specified in the articles OF incorporation
Ii, then, this is the economic character stamped
upon the investment by the State, why in the next
breath discourage that investment by limiting the
possible profits and hampering the investors in the
control OF the property that they and they alone,
placed in the corporation? Why discourage them
from putting in their individual property to aid an
enterprise of such great public advantage? When
the State exercises the right OF eminent domain in
taking the property OF the individual and allowing
the railroad company to use 1t upon full payment of
its value, it is upon the theory, and only upon the
theory, that the of that property would inure so
largely to the benefit Of the public. Now, what por-
ton OF the people is benefited? Why, that portion,
and that portion only, whom you by an arbitrary
reduction of rates would further benefit. Now, why
exercise the right of eminent domain and require
the railroad company pay the individual for the
when you take the property of incorporators, and
the of this identical property taken by the right
of eminent domain, and give it to the same public
And here might say, in passing, that when the life
of the corporation the right of way expires
with it, and the uncontrolled use of the property
reverts to the owner in fee.
Your second question is ''Railroad managers
justify the practice of giving low rates to some ship
pers and refusing them to others on the ground of
development of business in certain localities
Is it consistent With the public
welfare and the rights of citizens to allow railroad
managers to decide what persons and places shall be
thus developed 2? shall not say anything to justify
discrimination against individuals and communities
but content myself on this head by simply stating
that such has been practieed by the railroad
companies with which am connected. So far as they
are concerned they practice the same general bus:-
ness principles that govern and regulate individuals
in the management Of their affairs.
The Primary Consideration with Railroad
Managers.
The primary consideration with railroad man.
ayers, under the observance of the golden rule is
their treasury With this idea in view, and to meet
competition they often carry freight at less rates
for longer than for shorter distance, and they
accept the less rate because they cannot do better
and because small profit is better than none. This
is only in accordance with the principles of industry
of thrift and of economy, which should ever be en-
couraged. To deny the companies the privilege of
working for small profit, would be on par with
saying to an individual, Better be idle than take
small earnings when larger cannot be had"
You have been pleased TO forward to me an ex.
tract from ' Gaths letters referring to this ques
ton, and relating directly to the Central Pacific
Railroad Company. The principle there stated l
propose to justify although the facts he states
them, are largely magnied 1t is he policy of the
Central Pacific and, l believe, of the rail-
road c.mpanies of the United States gen
orally, to accept small profit where
larger cannot be obtained, as it is also its
policy encourage the development of the resources
of the country. In doing SO it practices no unjust
discrimination. 1t charges nobody else more be-
cause of the low rate it is compelled to accept from
others, but it puts into practice aud econ
omic principle which | think will be recognized as
just by simple illustration. Four individuals
have different articles which they desire to transport
in bulk market, the general conditions of trans
porting being about equal, but the goods varying
in value as one, two, three and four. II is ques
tion of constructing road-we will call it a raroai
to move the four different commodities of these
four different persons to the same market We will
further suppose that without the construction of the
road II would be impossible for either Of these par
ties to move their property and that the property
once moved to market the road would be of no fur.
ther Is it not clear that the proportion of the
the expense be buted by each should be de.
termined by the value OF the different commodities
to be moved? Articles | and would not Justify
the average expense consequent upon the building
OF the road; hence, if articles and did not pay
larger share, l and . could not be moved, and per
haps without the aid OF l and 3 3 and could not
alone afford the construction of the road Hence all
four commodities might remain in the hands of the
owners, unable TO reach market
The Question of " Determination"
Another illustration in point Is found in the case
of the warehouseman who has his building two
thirds full at regular rates To fill the other third
he often will accept less rate for cheaper COM
modities that cannot afford to pay the higher rate
because it is better for him to take this small sdd
tion to the aggregate receipts than have any por
ton of his building idle. If he had nothing offered
however, but the cheaper class he could not affo-d
to continue business The same principle is recog-
nzed by the owner Of the quartz MILL say OF fifteen
stamps Ii of high grade rock he can obtain sufi.
cient to keep ten stamps employed, he can run the
other five on the poorer article because, while the
mill must be to work the good ore the low
grade be crushed and the metals saved at little
cost beyond the wear and tear of the battery Any
thing, however small, earned over fixed expenses is
better than nothing and the warehouseman, the
millman and the railroad company gladly accept q
low rate (Which helps pay expenses that must be in
cu:red), when the articles offered cannot afford to
pay higher. IT. however, they had nothi G which
paid the higher rates. all would fail Every ship ply
ing the ocean practices this principle of business
1t is on this principle that justify the carrying
of low-grade ores at rate that possibly barely
covers the expense consequent upon its movement
while we charge for those of higher grade rate
that will enable us to operate the road and pay a
fair rate for the services rendered This principle
of charging according ovalues entirely in harmony
with the rule of taxation levied for the support of
the Gov yernnent
In fixing the charge for service by RAILROAD com.
panies there are various things that may enter into
the determination of the rates. prominently among
quantity, the distance moved the climatic and other
difficulties to oe in the transportation the
volume of business whether the movement in either
direction is about equal and the question of COM
petition 1t is to meet competition that freight is
carried from New York to San Francisco for a less
rate than from New York to Salt Lake City. The
rate to Salt Lake is the sum of the regular rates
charged by the various railroad companies between
as freight on his goods from New York to Chicago
the rate, and only the same as the Chicago
merchant pays, and from Chicago to Council Bluffs
the same, and only the same, as the shipper at
Council Bluffs pays. But when freight moves from
New York to San Francisco the railroad companies
meet competition by water, and they are compelled
to work for very low rate, else accept compare
tive idleness. The only rates that are absolutely
fixed by the railroad companies are those on that
small portion OF the business paying the maximum
All others are fixed and Influenced by the various
circumstances before mentioned and beyond the
control of the companies.
The Influences that Determine Rates.
Your committee is undoubtedly aware that a very
large portion of the coarse, manufactured pro-
ducts Of the country is moved below the average
rate Of the cost of transportation, yet in doing So
nobody is harmed. The railroad companies find the
smallest profit better than none, and rate barely
sufficient to pay the expense of movement is better