New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-08-30
THE PACIFIC NAILS FUTURE
WILL IT HAVE TO ADOPT THE CAPE HORN
ROUTEr
A RUPTURE PROBABLE BETWEEN THE STEAM.

A RUPTURE PROBABLE BETWEEN THE STEAM.
SHIP COMPANY AND THE PANAMA RAILROAD.
1t learned Yesterday that the friendly relations
existing between the Pacific Mail steamship Com
pany and the Panama Railroad Company moro
than likely to be broken off, For fifteen years the two
companies have been working in harmony under Q
contract which will expire on February 1, 1909.
When this contract made in 1875 the companies
practically on" interest and the formal agreement
entered into was drawn up without the same regard
for possible changes in tho situation that would have
characterized il had the two properties been separate
and distinct. Tie relations between the companies
and the conditions and character Of the business have
changed sncs then, that now the contract Is con-
sidered unjust and unreasonable by both. Negoth-
tons entered into sometime for the formula
lion OF a new contract. but no agreement has been
reached. and the Panama Company has now served
notice upon the officers Of the Pacific Mail that unless
the terms Of the former company arr accepted By
Thursday all negotiations will be declared on
The situation is complicated by the attitude Of the
Transcontinental RAILWAY Association. This body has
several years guaranteed TO the Pacific Mail that
rs receipts for transconnenta business shall not fall
below 100000 year. The average annual cost b
the association OF this guarantee has been about
100000 The guarantee has for long time been .
bone OF contention among the members Of the asso
cistion and recently 1t has been voted only for the
three months intervals between meetings At the
meeting In this city last week the guarantee con-
tinued until December I. and II is likely that the
ISOLATION would take similar action il from time tn
time indefinitely were II not for the fact that rate
war; precpitated by the Canadian Pacific threatens to
disrupt the organization. which would. Of shut
of the subsidy. The Pacific Mall Is therefore, between
fires. on the ore hand. II is danger of losing It's
subsidy from the TInnScontinenta Association and
The other, II object, TO demands made by the Panama
road.
A. Drake. a director OF the Panama Railroad.
said Yesterday: The hiteen-year contract between
our company and the Pacific Mail will expire next
February There Is hitch I'm the negotiations for
It's renewal. The Pacific Mail has paid us $4,000
monthly from It's subsidy from the Transcontinental
Association and now wishes to reduce share II
the Pacific Mall does not accede To terms II will
bc without route TO take freight the cont.
nent. We will then go ahead independently to tho
point OF establishing own line OF steamers to
Ncw-York and san Francisco We are issuing some
bonds with the view OF probably extending our Line
In Panama Bay and securing other advantages. The
company X In strong position for an Independent
service There IS 81 5O0.OO0 In the sinking fund.
II the Pacific Mail contract should not be renewed
II would have TO pay local freight rates build
line OF It's own, which Is not likely.
our disagreement with the Pacific Mail people Is
no. so much Of money Of the distribution Of
business. When the contract was made the business
OF the Pacific Mail In Central America and Mexico
WAS practically nothing and was not considered.
Now II makes up large part Of their tonnage. In
1891 carried for them 81 600 TONS Of which 81 900
tons was for the Central American and Mexican trade
Under the contract have no Interest In all this
business and that Is Of the points Of difference be-
tween Us. The old contract onerous and unjust
to both companies and neither can AFFORD to renew
1t. but ] cannot tell you yet whether We can get
together under q new agreement or not
Vice President Houston, OF the Pac6c Mail Steam
slip Company, said that the negotiations with the
Panama road had not been broken of, but he could
not sny that they would not be- lie thought that the
extraordinary demands OF the railroad Ind been
ins;igated BY the Panama Canal Company through 10
receiver, VI. Monchlc0ur.
II the Pacifc Mil is prevented rom uSng the
Panama Railroad for its trsnscontinenta business Il
will be forced TO send Its freight around Caps Horn.
rs there is at presen; other available route. The
news OF the probable rupture between the two CON-
pcnles and the consequent erbaITass Ient TO the
tsslnc Mail sent the stock Of the latter down with .
jump yesterday. Closing quotations on Saturday
SO. Tie opening yesterday was 32 4. the high
est point for the day The stock went as low 40
90 81, closing at 30 80.