The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1892-06-08
sHIRKING THE ISSUE.

Mr. Leeds reply to Mr.. Huntington's let
ter must make the President of the South
ern Pacific wish he had not been so v0iuble.
He has drawn fire which Is destructive.
He does not deny that his rates are excess
i've. but be says that they cannot be reduced
until traffic increases. To this Mr.. Leeds
replies that the Southern Pacific is earning
$4,000 a mile net, which is more than double
The net earnings Of other roads in States
similar TO California, and he asks why,
under the circumstances, a portion OF this
tax should not be lifted from the shoulders
of the people Of this State. We all know
why this is, Everybody is aware that the
roads which constitute the Southern Pacific
system are capitalized at sum so far in
excess Of their real cost that fair rates which
would yield income on the actual outlay
would not enable the company to pay inter
est on the water with which thar outlay has
been diluted.
Mr.. Huntington invites the public 10 in
spect his books in order TO convince them
selves that his company is not making
money. But be only proposes to show a
balance-sheet of his own cOntTiying-the
business and net receipts on one side and
the nominal cost of the road on the other
i ID
cost Of the road and then compare the net
earnings, with an annual interest charge at
a fair rate on that sum, the complaints
which ara made against the company would
subside If Mr. Huntington directed his
auditor to compile from the records of the
finance and construction company a simple
statement showing how much it cost in real
money 10 build and equip the road the pub
..,fa lr1or hos, +i,o
pauy ought to earn net TO pay interest on
bonds and dividends on stock. This he
will not do, and the public naturally con-
clude that the sum actually collected from
them is far in excess of what they would
have TO pay if they only had to provide inter
est on The real outlay. In these pronuncia-
mentos, which arc issued periodically, Mr..
Huntington seems TO take the public for
fools. He says that he cannot reduce rates
because if he did he could not earn interest
on the bonds which have been issued and
divided with his partners. And lie actually
supposes that it viii never occur to the
people to compare this volume of bonds
with the actual cost of the road or the sum
for which it could now be replaced.
1t is proved that the wheat rates outside
Of the influence Of the Bay Of San Francisco
are p per cent more than the prevailing
wheat rates in Kansas; that the meTchan-
disc rates on the coast division from points
south Of San Jose TO San Francisco are
IS per cent higher than they are in
Nebraska; that the rates from Fresno to
San Francisco are 90 per cent higher than
rates for similar distances in Kansas; that
rates from Sacramento to Valley points are
ITO per cent higher than rates on the North
ern Pacific west from St. Paul; and Mr.
Huntington iustiies the discrepancy by in.
Sistins that he has the right to tax the peC-
pie Of this State in order 10 pay interest not
only on the cost OF the road, but on a lot OF
bonds which represent nothing and which
cost nothing but the paper on which they
are printed and the printing and engraving
Of the cost Of the bonds. Is not this pre-
sUming little too far on the good nature
and the simplicity Of the California people?
Everybody is willing that the railroads
should reap the reward Of the enterprise.
But people want square deal all round and
honest treatment. When the president Of
the railroad company says that his concern
is earning no money, and that rates are fair
and reasonable, and when his railroad CON-
mission meets applications for redress
with abuse Of MT. Leeds, people con-
clude that lie is not honest. that he
does not believe what he says. and
that he does not propose to give them
fair deal They are driven to the convic-
ton that lie not only intends to take their
money, but that be thinks they are such
tools that they don't know when they are
robbed That treatment they do not relish,
and it can hardly be expected that they will
endure. They may have 10 submit for a
while, but this kind of wrong always cures
itself in the end, and when the remedy
comes It is apt to be as radical as the disease
was acnta