Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1883-02-07
The First Letter.


the public good must be determined by careful
inquiry into all the conditions influencing the es-
tablishment Of just and reasonable rate upon the
lines to which it is intended to apply
The companies named own lines of road present
ing greatly varying conditions The establishment Of
this maximum upon all the lines equally is to ignore
these controlling differences, and will proceed upon
the false assumption that all the lines OF road oper-
ated by the companies named exist under precisely
the same conditions, and that the rates obtaining
upon them are produced by exactly equivalent
factors.
UNJUST DISCRIMINATION.
The adoption of this regulation will exclude from
its operation the lines of road operated by other
under precisely the same conditions attend
ing the lines Of the Central Pacific and Southern
Pacific Railroad Companies. You are therefore,
proposing to regulate rates Of transportation by
just standard, which should determine the proper
adjustment Of rates to the conditions facts and cir
cumstances which produce them aud you are pre-
posing to be governed by the arbitrary and irree-
want standard of individual ownership OF lines to be
subjected to such regulation.
The glaring Inconsistency Of this arbitrary meas.
ure is fully exposed by the obvious consideration
that should one Of the roads operated BY the COM
panies named pass into other hands, such portion Of
the lines would at once be relieved from the opera
to the ground, because its basis would have been
taken away, and yet all the factors which should
have controlled the establishment OF rate Of trans.
portation upon these lines would remain.
A COMPLEX QUESTION.
Founded upon the observation and experience of
the best trained minds, who have made this COM
pleX question life study, the immediate predeces-
sors Of this Board, by unanimous vote (which Of
course includes the affirmative vote of the present
Governor Of our State) resolved that in determin.
ing the rates OF charges for transportation of freghts
and fares on the various lines, portions Of lines
Of transportation within this State, the Board will
have regard to the equities between shippers aud
carriers, and the protection of private property in
vested in transportation enterprises, and determn-
ing what is just and reasonable rate will consider
the value Of the services performed distance OF
riage, volume and direction OF traffic. the general
character thereof to be fixed by classification to
volume, weight, value, the liability to accident,
climatic Influences competition grades, eurvatures
and cost OF maintenance"
This was adopted a rule OF action governing
this Board, and its justice will commend itself to the
Judgment OF men. The equities between shipper
and carrier are the paramount consideration under
lying all exercise of power vested in this Board nor
is the protection Of the private property invested
the lines Of transportation secondary consdera-
ton, for aside from the duty incumbent upon all
branches Of Government TO protect the rights
equally OF all citizens, the public has special and
peculiar interest in treating the private property in
vested in the great enterprise of transportation with
justness and fairness.
THE EQUITIEs BETWEEN SHIPPER AND CARRIER.
In the pursuance of these objects the rule de-
cared the several standards by which they could be
and consumer must ba determined by irGrirln1.
into the conditions governing the relations between
specific classes of shippers and specific carrying
agencies. Remedies need not be broader than the
evils they established to cure and the equities
between shipper and carrier cannot be properly ad-
jus.ed and maintained by proceeding upon the
false assumption that precisely analogous relations
exist between these interests in all por ons of the
broad commonwealth.
Recognizing the self-evident proposition that
these equities constantly change with the VARYING
circumstances and conditions which control them,
the Board declared the standard of determination
pies controlling them. These were:
First-The value Of the service performed, which
is the cost of reproduction.
Second-Distances of carriage.
Third-Volume and direction Of traffic.
Fourth-General character OF traffic to be de-
termiued by classification, as volume grades,
curyatures, cost of maintenance, etc.
IGNORING ELEMENTARY PRINCIPLES.
Ignoring these elementary principles and the in.
fluence they exert upon the proper adjustment of
the relations between the shipper and the carrier
the resolution before you establishes new standard.
1t, in effect declares that these equities are depend
e1t upon the personnel of the ne,ship Of the
transportation agency; that the rights and equities
of both the carrier aod shipper vary with the change
of ownership of the line of roads.
In the contemplation Of this resolution the ship.
pers rights have substantial basis than the
ephemeral ownership of the capital stock OF the
road, which IN the mutations OF finance change
hands daily The same absurd standard offers no
greater security protection TO the private capital
invested in this important interest Of transporta.
tion than this fancu and caprcious private owner
ship.
a PUBLIC WRONG.
That the adoption of this erroneous standard
would be grievous public wrong win not be de.
MED by any just tribunal and that the private prep
erty invested in the railroads OF this State cannot
receive at your hands that protection which all vi
lized Governments are bound by an enlightened
of justice to accord, Is self evident IN con-
sidering the relation Of public control to the private
right of capital invested in railroads. Commissioners
Stoneman, Doyle and Smith declared in their able
and exhaustive report that the stockholders Of a
road could not be Invested by public regulation of
their stock or the value of such stock without Just
compensation.
They further declared that while the State "has
indeed the power indirectly to render the roads val
ueless to their owners by hostile legislation the ex-
erc:se Of such power would be atrocous tyranny
This must be accepted as Just Characterization of
all regulative measures conceived from the stand.
point of hostility to any single corporation of stock
holders.
DIsREGRApING JUST PRINCIPLES.
Its sweeping stricturts are equally applicable to
any proposition Of regulation which, ignoring the
inherent principles upon which Just rate of trans.
portation is dependent, substitutes the invidious
oppressive and irrelevant standard of the private
ownership OF the lines subjected to the regulation,
thus conierring upon other lines exemptions
special privileges and inmunities inconsistent with
the Constitution OF the State, and subversye of
the principles of free government
II is next in order to inquire whether the reru
lation proposed Is in any respect in aceord with
correct elementary principles Of transportation
The measure proposed begins by declaring that
no exi5fing rate OF any part OF the raj road sys-
tens owned by the Central Pacific and Southern
Pacific Companies shall be increased. Following
the inherent controlling factors the schedule Of
rates on these systems are established with due
reference TO the value OF the service performed,
the distance of carriage. the volume Of business
cost OF maintenance, and other standards which
have been developed by experience and declared T.,
be just by the Board Of Railroad Commissioners Of
this State.
ILLUSTRATIONS.
These rates vary from one-half cent per mile to
the maximum allowed by law. They are inter-
dependent; they were produced by the relation CT
one part OF the system with another they are
founded primarily upon the attendant conditions
OF each peculiar division of the sys em. The two
leading considerations producing them were toe
volume OF traffic and cost OF maintenance: but
these rates were modified by their relations with
each other. In other words the minimum rates
existed because the niaxinums were possible
and the maximuns were not higher because of the
volume OF traffic and cheaper cost Of maintenance
on those divisions OF the systems where minimum
rates obtained.
THE INJUSTICE OF THE RESOLUTION.
The resolution before You ignores these import
ant and qualIylng faotS. 1t Sohdifies the minimum
rates and reduces the maximums 1t is put forth as
readjustment OF fares, but it makes the adjust
ment Of the various parts of the system to each
other impossible. 1t assumes that a MAXIMUM Of
three cents per mile upon the mountain division
of the Central Pacific Railroad Is adequate where
the cost Of carriage and maintenance is large and
the volume Of traffic is small, and yet it allows
Of three cents per mile upon finss in
the level valleys Of the Sacramento and San Joa-
quin, where the cost Of maintenance is compare
lively small and the volume Of pa ronaee compare
mating the equities between the shipper and
carrier on the mountain division, the same rate
allowed on the valley lines is too great, and by
reversal Of the comparison, If the rate is adequate
on the valley lines it il grossly INADEQUATE Whsn