The San Francisco call., 1895-12-02
Rights of the Federal Govern
ment in the Railway Rate
Matter.
POWER OF THE STATE BOARD.
DR.. Stanton and Barclay Henley Ex.
press Their Views of the Situa.
tion Freely.


Commissioners in the regulation of rates
on lines operated within this State by the
Southern Pacific Company?
This is question that has confronted
the people of San Francisco within the
past three days.
1t is q question that is considered by at
torneys and shippers to be of very great
moment, and has been looked at from all
apparent points of view.
If there be IN the presentation of the
bill in intervention, copy of which was
printed exclusively in The CALL of yester-
day, single feature to commend or sup
port the action of the Department of JUS
tce at Washington, by its representative,
H. S. Foote, those who entered into the
discussion of the case yesterday failed to
discover it.
In the text of the bill the intervenors
claim that the Congress of the United
States has the exclusive jurisdiction to
regulate rates for freight and passengers
over the lines of the Central Pacific. But
the Southern Pacific Company did volun-
tarily on December %, 1894, reduce the
rates on these same leased lines, and that
apparently without fear OF intervention by
the United States Government. Again in
May of the present year the Southern Pa
citic Company did, of its own volition, in
crease a portion of those rates, again with
out there being any Intervention suggested.
The act of Congress does provide for
reduction by Congress in the Central Pa
cifc rates whenever certain profits
shall have been accumulated, if un-
reasonable in amount, and may fix and
establish the same by law. This precau-
tionary measure refers to interstate COM
merce, but it does not give to Congress the
exclusive right according to the construc-
tions placed upon the act by the attorneys
who have studied the question.
at strikes me as rather queer" said
Commissioner Stanton yesterday, that
the Government did not intervene when
the Southern Pacific Company made its
voluntary reduction last December. If the
Government has the exclusive right TO
regulate the rates over these lines upon
which it holds a mortgage, do not see
why it should have neglected to interfere
with the Southern Pacific Company's ac-
tions in reducing rates in December, 1894,
and increasing them in May, 1895. [ do
not see that the Southern Pacific has more
rights or greater power than the Board Of
Railroad Commissioners.
Il have not been served with copy OF
the bill in Intervention, and get my
knowledge OF it from the copy printed in
THE CALL, which | read carefully. 1t COLI
tains practically the same subject matter
ing for a restraining order, filed In Judge
McKenna's court last October, the hearing
of which will come up on the 9th inst.
Here is another peculiar fact in connec-
ton with this matter. Some OF the reduc-
tions OH these leased lines OF the Central
Pacific made by my resolution adopted by
the board last September are not as great
as the reductions made by the Southern
Pacific Company itself.
This applies, ofcourse, to items that had |
been increased III May, following the De- |
cember reduction. The board acted on
the basis of fairness to the railroad COM
pany, taking into consideration it's rela-
tions with the Government in the matter
OF the Central Pacific leased lines. The
board realized that the act OF Congress
provided that the operating company
should make margin Of 10 per cent on its
cost, and took this into consideration.
Il think the schedule will bear me out
in the statement that the average reduc-
ton of rates on these leased lines, from
San Jose. via Lathrop, Niles, Goshen,
San Francisco, Sacramento, to the eastern
State line were not SO great as the average
reduction made by the Southern Pacific
in December last. But it is fair to state
that, considering the volume of business,
com pairing one part of the lines with an
other, the earnings were reduced. But
that they were reduced enough to effect
the interests of the Government l do not
believe.
"If the Government have rights as an
intervenUr in the premises why did it not
assert its rights at the time the action was
being taken? If we had no right as a
Board of Railroad Commissioners to regu-
late the rates on the Central Pacific lines
we might have been estopped then. We
based our schedule upon that of the South
ern Pacific in effect at the time the resolu-
ton was adopted. There was nothing else
to do. But we did not go beyond the State
line, and thus did not interfere with the
rights OF the Government"
DR.. Stanton, when asked if he could con-
ceive of any reason for the action of the
Governments representative in bringing
this bill in intervention, replied:
mo, | cannot comprehend the reason
but / can see the effect that will result
from the delay that must naturally follow
the consideration of the matter in the
courts. The benefit which the shippers
hoped to derive from the reduction in
grain rates will be withheld from next
years crops as well as from this years."
Barclay Henley turned from the reading
of the text of the bill last night and ex-
claimed:
"That is most preposterous idea. The
Government of the United States has no
more right to interfere in this matter than
would have an individual holder of
mortgage. If the Southern Pacific Com
pany had the right to lease the lines of the
Central Pacific it had the right to regulate |
the traffic under the guiding hand of the
State Board of Railroad Commissioner
that is to say, it would have the right to |
reduce rates, and if not sufficiently re-
duced, then the board has the power to !
regulate the Southern Pacific.
''The Governments rights in the matter |
refer to interstate commerce, not to COM |
merce within the State. If the Board of |
Railroad Commissioners had no power |
over the Central Pacific's lines it would |
have none over any of the lines (for they |
are all leased) if the owners should see fit |
to interfere by act of Intervention. No, |
sir; the Government in this case has no |
more rights than an individual or a corpo- |
ration. l never heard of such PROPOSE |
ton as is presented here. 1t is simply as
tonishing."
w. w. Foote, Assistant Attorney-Gen-
eral, declared: THE Government has no |
more right to cinch the people than has |
anybody else. But l have not read the |
bill. was merely served with notice and |
do not care to discuss it,