Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1883-03-17
TIE RAILROAD COMMISSION.
ryrERHs FING TESTIMONY BEFORE TIE
BOARD YESTERDAY.
How an Interview Was Heported-Mr
Harrison cornered and Confronted
With His Own Admissions.


The hearing Of the Richards & Harrison
complaint case Was resumed before the
Beard OF Railroad Commissioners at IL
o'clock yesterday at San Francisco.
J. C. Stubs, General Freight Traffic
Manager of the Central Pacific Railroad,
was called for the defense. He stated that
he had held his present position for about
a year. Prior TO that since 1871 ne was
General Freight Agent of the company
The witness was asked by General Barnes
to explain the special contract system OF
freight traffic with which he tthe witness)
was presumed to be thoroughly familiar
He stated that the system referred to was
begun about 1878 or 1879 at the suggestion
of the General Freight Agent of the Union
Pacific Railroad, and afterwards agreed
upon by all the roads directly interested.
The object of the system was to secure for
the roads concerned majority of the
patronage of the overland trade. The
strongest competitors Of the roads at this
time, as all know, were the clipper ships
sailing around Cape Horn. Merchants
were not generally disposed to patronize
the railroads to ship all their goods.
ORIGIN OF THE SPECIAL CONTRACT SYSTEM
A dry goods merchant would purchase a
consignment of goods in The East and have
the bulk of the coarser goods sent around
by ship and small lot sent by rail- The
railroads of course wanted to secure this
trade, and after conference the system
known as the special contract was decided
upon. The rate of freight was reduced,
but in order to secure the patronage of
merchants for these certain roads an agree.
ment was necessary. Mr. Vining, of the
Union Pacific, together with the witness,
went to many merchants in this city and
talked the matter over before the system
was introduced. At first some were not
disposed to favor the idea. They did not
want to be bound down to any particular
patronage, but after discussion and the
assurance of reduced rate for all goods,
of safer transit, and a consequent reduc.
ton in the insurance rate by the under
writers, the large majority of the mer-
chants agreed 10 the system proposed.
This, then, was the origin of this system.
1t was mutual agreement.
THE FIRST CONTRACT.
The first contract was drawn by Mr..
Vining of the Union Pacific, and sent here
afterward for approval. Tbs first part OF
this year other roads were admitted, and
only recently the Atchison, Topeka, and
Santa Fe and the Galveston, Harrisburg
and San Antonio came into the system.
General Barnes = What, then, Mr..
Stubbs, is your opinion of the effect of this
system upon the general business of the
city?
Mr. Stubbs-It has been only the most
favorable. Roads not IN the union in the
East were made to reduce rates. Mer-
chants secured goods of all kinds at much
less rates, in quicker time, with less dan.
ger, at a rate really only slightly in ad-
vance of the clipper ships. The carriers
by water by this competition of the roads
were made to reduce their rates to a still
lower figure and the commerce of the port
thus proportionately increased.
At the request of General Barnes Mr..
Stubs indorsed the statements of Mr..
Gray made and published yesterday con-
corning the arrangements made between
the Central Pacific and the other roads for
the division of freight profit. At first the
trunk lines east of Chicago received 20 per
cent. of the whole rate.
Mr.. Stubs stated that he believed mer-
chants of good standing had never been re-
fused special contract. There might
have been cases, but he had no recollection
of any.
THE QUESTION OF THREATS.
General Barnes-Did your road ever
make any threats against Richards & Har-
rison that if they did not enter into spe-
cial contract you would shut them out of
the Montana and Idaho business by raising
rates
Witness-None whatever. The witness
further explained that his road had never
had any control of the business referred to.
The fact of the matter was that his road
had been in direct competition for the
trade with the Northern Pacific Railroad,
but that road had entirely shut the Central
Pacific Railroad out. Mr.. Stubs then re.
lated the particulars of his fight with the
Union Pacific in regard to freight rates.
In order to get even, the Central Pacific
Railroad shut its rival ont of the Utah
trade. Finally, last August, s. II. FL.
Clark, Of the Union Pacific Railroad, came
to this city, and, after consultation with
cided to form truce on both sides. 1t
was arranged that though goods could be
shipped from this city to points in Mon
tana, about 800 miles, at the same rate to
shippers that goods were shipped from
Omaha to those points, only about 400
miles, the other road was TO receive about 70
per cent. of the profit and our road about
% per cent.
THE OFFICIAL CORRESPONDENCE.
The witness presented and Mr.. Barnes
submitted in evidence the correspondence
that occurred last August between Mr.,
Vining and Mr.. Stubbs, relative to an in
terview which occurred between Mr..
Vining and representative of the firm Of
Voechting, Shape & Co., of Milwaukee,
the principals of Richards & Harrison.
False particulars of this interview were
published in San Francisco morning pa
per. This publication caused Mr.. Stubbs
to write to Mr.. Viring, and ask him if the
report was true that be had endeavored to
coerce the Milwaukee firm into sending its
beer overland instead of TO New York and
around by sea, or their Montana and Idaho
trade would be shut out. In reply came
an emphatic denial from Mr.. Vining, aud
copies of this denial were sent also by him
to the firm in Milwaukee, and to the daily
paper of this city which had first pub
lished the first report, denounced as false.
PARTICULARS OF THE FIRST ACQUAINTANCE.
In response to questions put by General
Barnes, Mr.. Stubbs related the particulars
of mis- first acquaintane with MIR. Harri-
son. He saw him first about last August.
He came in response to a letter sent by
witness. An interview then occurred con.
corning rates that could be made to Mr..
Harrison over the line of the road repre-
sented by Mr.. Stubs. At this interview
a stenographer was present behind screen,
aud the conversation was taken down.
The witness stated that Mr.. Harrison was
aware of the presence of their Secretary.
TIE screen was not placed there purposely.
It was put there originally TO accommodate
a lady stenographer.
CROSS EXAMINATION.
The witness was then turned over to Mr..
Harrison for cross examination. He ques.
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