The morning call., 1893-03-01

1reSiuenL houston ana
the other Pacific Mall employees. took seat,
and was present for short tine while the
committee remained in session, an inter-
ested listener of the proceedings. A smile
went around when Mr.. Huntington entered,
for Representative Geary had only mo-
ment before been saying some facetious
things about some Of the railway magnate's
characteristics.
There was little or nothing new elected at
to-day's committee session. Vice President
Houston admitted that pooling arrange
ment had existed between the Transconti-
mental Association and the Pacific Mail on
the one side, and between the Pacific Mail
and the Panama Railroad on the other, and
that the transeontinental roads had paid
monthly subsidy Of $4,000 to the Pacific
Mail Mr.. Houston was not ready to call
this subsidy" but termed it pay for
space reserved to the Railroad Association
by the steamship company.
Mr.. Houston greatly surprised the men,
bers Of the committee and others by giving
positive opinion that such a pooling ar
rangement as that was calculated to benefit
California shippers, but they were more
than surprised when he declared that if all
the railroads In the United States would
pool together a great advantage would re-
States. because stable rates of traEsporta-
tion were always more conducive to mer-
camille prosperity than when rates Wsre
constantly being cut and nothing could be
depended upon by merchants and shippers.
Not the least surprising thing about TO-
days investigation was the fact that Chair
man Fellows was inclined to fndorse
Houston's peculiar views. Indeed, it was
through suggestion of Fellows that
Houston enunciated his surprising piece of
philosophy.
Now is it not true" asked Chairman
Fellows, "that railroad pooling arrange
ments have the effect Of lowering rates aud
otherwise benefting the people?"
If there ever was any doubt entertained
that Fellows was a corporation man that
doubt was dispelled today. He objected to
the shape the investigation was taking
when Geary submitted questions concerning
he workings Of the Pacific Mail in relation
to California shippers, but did not lose an
opportunity to score point for the Pacific
Mail. Geary continually asked Houston
why the Transcontinental Railroad Associ-
alton paid $4,000 monthly subsidy to the
Pacific Mail, and Houston would answer
every time that it WAS not a subsidy at all,
but merely the payment for 1900 tons of
freight carried monthly by the Pacific Mail
for the transcontinental railroads. He was
finally forced to admit that the payment
amounted 10 twice as much as was received
for the same amount of freight carried,
and when pinned down Houston practically
admitted that tho balance was paid to
maintain rates.
Lauterbacb. the attorney for the Pacific
Mail. in his evidence admitted that the
severing of the relation between the Pacific
Mail and the Panama road was great blow
to the former and that the steamship COM
pany plight not be able to survive unless
some arrangement could again be entered
into between them. He also admitted that
the Pacific Mail Company was anxious and
had tried to secure stock enough to control
the Panama Railroad. Lauterbach said
that the isthmus Of Panama was one of the
most valuable strategic military points on
the continent of America, and asked the
committee if Congress should not graveiy
consider whether something should not be
done to prevent foreigners from dominating
the isthmus, in contrayention of the Mon
roe doctrine.
At times when the proceedings were be-
coming duh some member of the committee
would enlven matters with some sally of
wit or numor. Thus Mr.. Patterson of Ten
nessee raised laugh at Mr. Lauterbach's
expense by asking quite gravely:
What plan shall this committee Of Con-
gress recommend to renew the relations
between the Pacific Mail and especially the
Panama Ralroad?"
The laugh was participated in by those
who understood the animus of the Pacific
Mail people in setting this investigation on
foot.
]. z. Houston, vice. e-president of the Pa
cifc Mail Steamship Company, was the next
witness called. He said that before Febru-
airy l. 1893, when the contract between the
Pacific Mail and the Panama Railroad ex-
pired, the officers of the Pacific Mail went
10 the Panama cOmpany's directors to make
new contract This purpose, witness in
dicated, 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 $4,000 monthly to the Panama Rail-
road, which declined to negotiate further,
and stopped through bills of lading of 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 Rail-
way Company for this action was that the
steamship company would not guarantee Ii
the old amount Of money per month. The
Panama company wanted guarantee of
$4,000 per month and a restriction as to
the amount Of freight to be carried, W hicb
would prevent competition with the trans
continental railroads. At another time the
railroad company insisted on the right to
make rates. The Pacific Mail offered TO
go on and take all the freight it could carry
at minimum rate to be established be-
tween the two companies
Mr.. Geary asked the witness how he re-
conciled the agreement by which the rail-
roads were allowed 10 fix rates over the
steamship route with the Governments
policy Of aiding the company in order to
develop commerce.
To this Houston replied, by the con-
tInuanee of stable rates." The contract
resulted In cheap rates. The witness did
not believe that the steamship company
could compete with the railroads on any
class of freight business between New
York and San Francisco if IT were not for
the local Central and South American busi-
ness.
Geary inquired why the Transcontinental
Association had paid the Pacific Mail Com
pany $4,000 month for the right to fix its
rates If it could lot compete
Witness replied that the discontinuanee
of the agreement would not have occurred
IL 1t had been profitable to the railroads
Il don't think we can transport goods from
New York to San Francisco cheaper than
the railroads." he said.
"Then the building Of the canals will not
give better rates." remarked Mr.. Geary.
"Ah. that will be good thing for both