Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1883-03-16
RAILROAD COMMISSIONERS.
Inquiry Relative to the System of Special
Contracts.

Inquiry Relative to the System of specla
Contracts.
Especial to the RECORD -UNIoN.l
SAN Francisco, March 18th. = at tn
meeting of the Board of Rsilroad Commif
present. The formal hearing of the trial @
the case of Richards & Harrison w. the Ger
tral Pacific Railroad Company was held, ant
which is the first regular investigation of
complaint in the form of trial that wss eve
held before the Board. The complaint flet
was billed by Secretary Andrus as Complain
No. 1. w. II. L. Barnes appeared for th,
defendants and r. J. Harrison for the firm
the plaintiffs.
Richard Gray was called by Mr.. Harrison
aud testified as follows: am the Genera
Freight Agent Of the Central Pacific Rail
road; an not aware Of any spscisl contracts
made in this State except those in writing
These contracts contain the rates for which
goods may be shipped from sll points in the
United States. TIE party of the frat part
agrees that be will ship his goods overland
only by the roads of the party of the second
part. -Four roads are mentioned in the con-
tract, namely, the Union Pacific, the Atchi.
son. Topeka and Santa Fe, the Missouri.
Pacific, and Galveston, Harrisburg and San
Antonio. OF course, the shippers agree not
1 " SuObS bEOulu lE0 IOLQs 1n5Ee Is 2
special tariff for the shippers.
| A blank form of contract of special rates
| to New York was identified by Mr.. Gray as
the blank now used by the Central Pacific.
He denied that the special contract system
ever existed in this State, although the con.
tracts were signed by parties in this city with
parties in the East.
Mr.. HarrisoH-By what authority do you,
or does your read, act as agent for these
| roads?
Mr.. Gray-We have no general authority
as agent. We do not receive pay for freight.
| We have an understanding with them that
we shall fulfill our part of the contract. We
settle our accounts with the Union Pacific
every day. This is TIE custom Of all roads.
| The G., IL. and S. A. r. r. was admitted to
this special contract in the year 1882. In
1880 the Union Pacific was the only other
marty In the contract. The Central Pacific
| Railroad has never appeared as a party to
any west-bound contract. We have nothing
to do with making the rates of the contract
| the rates are already established. We are
interested in the rates to the amount of our
| earnings. We get certain proportion Of the
| freight receipts. All the west.bound rates are
| left In the hands Of the Eastern roads. On
freight from this side of the Missouri river
| we get 46 per cent; the Union Pacific the
balance. The Central Pacific has had voice
in the formation of these rates. We had to
submit TO the majority. The Union Pacific
has the greater interest. The divisions be-
tween Us are entirely by mileage. These con.
| tracts will Ee given to any shipper applying
| for them. The contract must first be sub
mitted 20 the Union Pacific before is becomes
an agreement.
Mr. Harrison-Have you ever refused "a
Issue contrec's without applying to the
| Union Pacific?
MIR. Gray-Weu, l am not prepared to saw.
| Sometimes there might have been cases where
| the clerk, for some reason known to himself,
refused the applicant the contract desired,
but don't remember any. Don't think there
have been any CASES of the sort.
Mr.. Harrison-Have you ever asked or ever
heard OF applicants agreeing to do business
with any particular firm.
Mr.. Gray-I never have.
MIR. Barnes called the attention of tie
Bosrd TO the fact that Mr.. Harrison was
wandering from the subject Of the complaint.
He asked that he be confined to the special
matter alleged IN the paper fled, and upon
which only testimony should be heard.
Mr.. Foote thought that this complaint
| might be made the occasion of the inyestiga.
tion Of the entire contract system. The de-
cision in this case could then be made the pre-
cedent In all future cases that might come
before the Board.
To this Mr.. Barnes disagreed. He thought
! the special contract system, in general. neej
not now BE- investigated, and asked that the
witness be confined to giving strictly evil
deuce, and evidence only. IF the Board. ia
making decision IL the case, wished to give
general order, that would be proper. but
| this special case ought not to be made gen
| ersl one. Ho disputed the legal right of the
Board in this manner of procedure.
A long discussion on this subjsct followed.
| Chairman Carpenter thought that it was the
| duty of the Board TO make record for refer
| ence, which might apply not TO this case only
! but TO this class Of csses. The case ought to
be conducted and decided in such o manner
that il might be carried into the courts of
justice. Therefore the testimony and the en-
tire case ought to be confined to the special
| subject OF complaint. He disputed with Mr..
Foote in his opinion in this regard, and some
wsrm words ensued. 1t was finally decided
| that the witness answer the question which
| occssioned the discussion. The question
asked was, " Have you ever referred appli-
csnts for contracts to other contract custom
ers TO import goods on their contracts ~ The
reply was, "No."
Mr.. Harrison-In case of protest by over.
charges, do you exact prepayment?
Mr.. Gray-We do.
| Mr. Harrison asked whether the company
had ever discovered the parties to a contract
violating the terms by importing goods
around the Horn, and called Mr.. Grsy's at
tention to bill of lsding with the Chicago,
| Milwaukee and st. Paul, 60 Richards & Har.
rison.
Mr.. Gray, in reply, said it was no contract
with the Central Pacific Railroad; it was
merely between the other railroad mentioned
and Mr.. Hariison's firm. He then gave d.
rect answer to the question, that such viola.
ton had occurred.
| Mr.. Harrison-What precautions are used
TO prevent such breach Of contract?
Mr.. Barnes objected 10 this question as
irrelevant. The objsction was rot sustained.
! Ths witness said in answer that the pre-
cautions are used by the merchants them.
selves.
| down IN one corner, reading contract en-
beer" meant: He replied that it meant
nothing to his road.
A number Of other papers were submitted,
most OF them pertaining to the grievances of
Richards & Harrison.
| General Barnes then cross-examinei the
witness regarding the special contracs bus;
ness. The witness testified that the contracts
had been mads with the trunk lines and the
overland roads across the continent. The
trunk lines referred 70 are the New York
! Oeubtsi, tAo L ShHoyiFania EOaO, the Erie,
and tle Baltimore and Ohio. These coz
meet at Chicago with the Chicago and North
weste n, the Rock Island, the Chicago, Bur.
lington and Quincy, the Milwaukee, st.
Louis and Pacific, Chicago, Milwaukee and
ST. Paul, and the Missouri Pacific. These
are known ss the Iowa lines. Other roads
connect at ST. Louis. OF all receipts for
freight west of Chicago the Iowa lines get l5
per cent, not including five cents arbitrary
| that is taken cut by the bridge across the
Missouri river. The Union Pacific and Cen.
trsl Pacific thus get the remainder on the
basis of 81 per cent. and 46 per cent. re-
| spectively.
Witness stated, in reply TO questions by
Chairman Carpenter, that the charges on
| freight were based On mileage, and that the
| offices of the Central and Union Pacific at
| Ogden were separate and distinct.
After further examination, the Board ad-
iourned until tomorrow morning.