The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1893-03-01
PANAMA PACIFIC MAIL.
Affairs of the Steamship Com
pany Thoroughly Aired.
THE STORY OF THE COMBINE.
e-President Houston Before the In
vestigating Committee.
The Pacific Mail Took Everything in Sight,
Including the Subsidy Paid to De-
velop Commerce-Interesting
Evidence Adduced.

ID
vice president of the Pacific Mail Steam
ship company testified before the Pan
ama-Pacific Mail investigating committee
today with reference to the affairs of the
Pacific Mail. He said before Feb. 1, 1893,
when the contract between the Pacific
Mail and the Panama railroad expired,
officers of the Pacific Mail went to the
Panama company's officers to make a new
contract. This purpose, the witness in
Dictated, was frustrated by threat OF the
transcontinental association to cut off the
amount monthly paid the Pacific Mail.
The steamship company could not guar
antee $40, 600 monthly to the Panama rail
road which declined to negotiate further,
and stopped through bills of lading to the
Pacific Mail. Witness had discovered
that the Panama railroad was advertising
in English papers for English freight and
English ships to run between New York
and Aspinwall.
The reason assigned by the Panama
company for this action was that the
steamship company would not guarantee
it the old amount of money per month.
The Panama company wanted a guarantee
of $40, 600 per month and restriction as to
the amount to be carried, which would
prevent competition with the transcon-
tinental roads. Another time they in
sisted on the right to make rates. The
Pacific Mail had offered to go in and
take all the freight it could carry at the
minimum rate to be established between
the two companies.
Mr.. Geary asked witness how he recon-
ciled the agreement by which the rail-
roads allowed fixed rates over the steam
skip route with the governments policy
of aiding it in order to develop commerce.
Mr.. Houston replied "By continu-
ance of stable rates. The contract re-
suited in cheap rates. Witness did not
believe the steamship company could COM
pete with the railroads on any class of
freight business between New York and
San Francisco, if it were not for local,
Central and South American business.
Mr.. Geary inquired why then had the
transcontinental association paid the
Pacific Mail company $40, 900 a.month for
the right to fix its rates if it could not
compete?
Witness replied that the discontinuance
of the agreement would not have occurred
if it had been profitable to the railroads.
81 don't think we can transport goods
from New York 10 San Francisco cheaper
than the railroads. ="
Mr.. Geary-Then the building of canals
will not give better rates?
Witness-Ahl that will be good thing
for both coasts and especially for the
steamship companies. Now the Panama
railroad must be paid a large rate. The
Pacific Mail company received a subsidy
of 81, 600 per trip from New York to
Aspinwall and 81, 800 per trip for the west
coast trip.
Mr.. Geary-Do you think yourselves
justified in accepting the money which
was paid for the development of commerce
when you were IN the transcontinental
combination?
Mr.. Houston-I don't think it has any
thing to do with it. The increased SER
vice entailed on us has been so onerous
that would be perfectly willing il the
postmaster general would cancel our bond
and give up the contract. Yes, 1 do think
the act tended to increase trade, but it has
been at our expense. There was a very
decided increase in trade between San
Francisco and Central and South Ameri-
can coasts as result of the contract. For
instance, the German line formerly car
ried IS. coo bags of coffee a year. Last
year 1t carried only 33, 600 bags and the in
crease came to the Pacific Mail, which
secured the business. In answer to fur
ther questions Mr.. Houston said the
association had probably
made arrangements with the Pacific Mail
company partly for the purpose to pre-
vent competition.
Edward Lauterback, director and at
torney of the Pacific Mail company, told
of efforts made since the break between
the Panama railroad company and the
Pacific Mail company to have friendly
relations continued. 81 invoked the aid
OF Mr.. Grace" he said, 'Eand there is
where put my foot in it, he added,
narrating the fact that Mr.. Grace was in
terested in what is commonly known as the
CHILEAN Steamship company, and the COM
pany sought to secure trade from Panama
north to Acapulco which the Pacific Mail
company had paid for, had built up and
was just bringing into promising activity
under reciprocity treaties.
That attempt was checked by the New
York courts granting an injunction. The
Panama railroad passed under French
control, and it is question for considera-
ton whether such railroad at important
stragetIc points should be allowed TO con-
tinue under foreign control. The ar
between the Panama railway
and Transcontinental association and Pa
cific mail he thought beneficial to the
people of California.
There had formerly been war between
the steamship company and the railroads,
in which the merchants of California
agreed to stand by the water carriers.
The roads gave rebates to merchants and
all but two firms deserted the steamship
The Pacific mail did not get
much business, the railroads lost money
and the merchants did not fare well, for
the rates were unstable and uncertain.
Mr.. Drake, member OF the executive
board of the Panama Railroad company,
said shippers had been led to believe that
services by the Isthmus required forty
days services, whereas it should be
twenty-five to thirty days service, against
fifteen to eighteen days by railroads.
The object Of the subsidy to the Pacific
Mail by the Transcontinental association
was to eliminate the Pacific mail as q factor
in the transportation business. Having
this the subsidy was now
This closed the hearing.
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