Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1884-04-22
Railroad Legislation.

Railroad Legislation.
As illustration of the variety of views en-
tertained concerning the wisdom of rail
road legislation, the following is repro
duced from the Stockton Maa of the 18th
instant That journal has been recognized
as one of the most radical anti-monopoly
papers in the State. 1t says under the
heading of The Common Sense of IT,
1t is impossible 10 regulate by legislation the
manner i'll which great corporation like the
Central Pacific Railroad Company shall conduct
its business. No Legislature has ever assembled
that was capable of doing this Railroading is
a science, and there is not Il member ofeitherth
Senate or Assembly at Sacramento to-day who
is scientific railroad man. There is no mem
Der who Is competent TO classify freights, or TO
fix the relative charges for long and short haus.
or to- establish Just basis of discrimination on
sound business principles, between competitive
and non-cOmpetitiYe points. This is why there
is such confusion of ideas and such a diyerg-
ence of opinion on the Barry bill. 1t is doubtful
If the Legislature can pass any law regulating
the manner in which the railroad company
shall do Its business without making a bad mat
ter worse, ana lnf1lctlng greater injury upon the
people than that from which they now suffer
This is because, as we have said that railroad
ing is a science and the Legislators are not
scientific railroad men.
How then, it will be asked is the railroad
question to be Settled-how is the State to eNer-
else its acknowledged right TO control the cor
poratlons which It has permitted to come into
existence and which continue only by its suffer
ance? This can be done easily enough if only
those who undertake the task go about il in the
right way. Let II committee or commission
come into this Office and endeavor to ascertain
what it costs to publish half-column advertise
ment in the Mail for week, a month or six
months-that Is, what the cost of the service is
and there Is no one here who can tell. Let
the committee or the commission call in experts
and nS n :
they choose and they will be no wiser when
they finished than when they commenced. We
regulate the cost OF advertising according to
circumstances, charging less, relatively, for
long period than for Il short period and giving
better terms to those who take Il large space and
are steady customers than to those who take IL
small space and are transient customers. The
gross income from the advertising patronage
and the circulation is, of course considerably
more than the gross outlay for conducting the
! business but the precise relation that any par
tcular item on one side or the other bears to the
general result no one can tell or is foolish
enough to bother himself about finding out
The relation that SubSiStS among the various
items is something that has been developed by
the growth of the newspaper business not in
this Office or in this town, but elsewhere and
everywhere.
Now, suppose we had monopoly of the bust
ness in stockton, and that the Council had the
power to regulate our charges. 1t is obvious
that in such a case they would make things
worse by undertaking 10 fix the amount that we
should receive lOf uOuDle-COluIln. Slngle-cOl-
umn, monthly or yearly advertisements, for the
COuncilmen have 10 special knowledge of this
kind of business, and furthermore the methods
of conducting it are the result of gradual devel
opment. everywhere the same. and which it
would be folly To undertake to ignore. The
Council could, of course, prevent discrimiua-
tons against persons, except when the same
were based upon proper business considerations
If they wished TO regulate our charges lin other
words, to prevent OVerchargeSl they would be
obliged first to ascertain whether we were max
| ing more than we should make out of the bust
ness, and II we were, the reductions could be
made nationally only by percentages. But be
fore any step in this direction could be taken it
would be necessary 10 ascertain the capital in
vested the gross income as compared with the
gross outgo, and the percentage of net profit on
the investment.
Now this is precisely what should be done in
the case of the railroads. 1t should be ascer-
tanned first whether they are making more on
the legitimate capital invested than they should
make, and then, if necessary, the charges should
be cut down all round. To 90 into an inquiry
such as that which has been in prOgreSS at Sac
ramento without first being provided with these
requisite preliminary factors is absurd \ thou
sand witnesses might be called on such points
as the value OF the service in carrying trunk
from Gait to Iulare, or Il horse from LODI TO Mo
deStO, or a carload of wool from Fresno to San
Francisco, without accomplishing anythingmore
than TO make confusion worse cOnfOunded.
/ If the State of California owned the Central
Pacific Railroad and operated ii for the benefit
of the whole people, would ii be considered
right 10 charge less, relatively for long than for
short hauls? Would it be considered right to
discriminate in favor of points which are natu-
rally competitive? Would il be considered right
to 50 classify freight that the kind best able to
stand high tariff should be made to yield more,
in order that the other kind might Weld less 3?
Would it be considered right to haul Il ton of
castor beans from Hanford as cheap as a ton of
wheat? II is clear that if the beans paid less
the wheat or something else would have to pay
more, in order to make the business as q whole
sclfsustaiuing. These are Queries which those
who wish to consider the railroad question
calmly a scientific problem should turn over
occasionally in their minds.
Stockton is Il competitive point. 1t is 50 natur-
ally. SO are Los Angeles and Sacramento. Sup
pose, now, that there was direct water route to
san Francisco which was but One-quarter the
distance of any posi- bic rail route owing to Ger
tain insuperable obstacles in topography. Is it
not apparent that in such case the railroad to
compete with the steamers for the traffic hence
to the metropolis would be obliged to put charges
down to the very lowest notch lower than the
standard ut which il could afford to conduct its
entire business? Livermore on the other hand
is not a competitive point. Stockton enjoyed
superior facilities before the railroad was built
or thought of. If all the points from which the
railroad derives its business were naturally com
petitiNc, or were provided by nature with the
facilities of commerce. the road would probably
never have been built. Would il be wrong then
ifthe State owned and operated the road to charc
the people of LivermOrea little more than the peO-
pie of Stockton for similar services? We must
remember that If the rates everywhere were put
up to the nOn-competitiye standard little or no
business would be derived from the competitive
points, whereas if the competitive standard
were made uniform, the business would be con
Quoted at loss. This is supposing the traffic to
be carried on for the benefit of the entire peo-
pie, or for the benefit of the majority, it is
clear that the benefits cannot be equally dis
tributed among localities so uncqually favored
by nature.
1t must be apparent to the cOmmOnest under
standing, from what we have occupied so much
space to point out, that the only way to regulate
railroad charges is by percentages of reduction
based upon the showing of net profit positively
prohibiting. at all times, such determinations
between persons or places as are not based upon
obvious natural laws Of competition. Until this
idea Of the regulation of railroads becomes
more general there can be no satisfactory or
int .Lff lDrn of The n ilrnad rnrlllnrn