The San Francisco call., 1895-10-15
The Railroad Company Alleges
COnfiscation of It's Prop
erty.
/ ATTACK STANTON AND La RUE.
Weighty Questions OF Constltu-
tional Law and Equity for the
Circuit Court.


battle with the Railroad Commits
sioners bv filing in the United States
Circuit Court formidable complaint
asking that the Commissioners be en-
Joined from putting into effect its per
cent reduction in grain rates, from adopt
inc the proposed p per cent reduction in
commodity rates, and from proceeding to
make any reduction in passenger rates.
Judge Mckenna granted a temporary
restraining order, to be considered ON the
DIST inst, and fixed the hearing of the
complaint for November 4. The complaint
was backed up with strong affidavits by
J. c. Stubs, c. f. Smurr and other rail
road people.
The railroad company attacks the State
constitution and the Legislative acts from
which the authority of the Commissioners
proceed as being in conflict with the con-
stitution of the United States, alleges that
the reduced rates are unreasonable and
unjust, that its property is being taken
without due process law and confscated,
and that Railroad Commissioners Stanton
and La Rue are disqualified from fixing
the rates of the complainant because the
action was taken in accordance with an
election pledge and not in accordance with
any evidence.
Railroad Commissioner La Rue came to
the City yesterday, and to-day he and DR..
Stanton will determine on date for an
early meeting of the board Attorney
General Fitzgerald will have at least NOM
inaI charge of the case, but special counsel
Will be employed by the Commissioners.
The suit brought involves the full merits
OF the controversy, including the Justice of
lOrNnNSnH red 10 ~
the commissions S acts, and the constitu-
tlonahty OF the laws giving it power.
Pending the big legal battle, the commits
sion will be estopped from further pro-
ceedings In the line of rate reductions.
1t is recited in the course of many pages
OF the complaint among other things that
the complainant IS a corporation existing
under the laws of Kentucky and q citizen
OF that State; that the defendants derive
all their authority and power from section
%, article XII of the constitution, and
from an act of the Legislature approved
April 10, 1880; that the complainant
operates several lines of railroad, together
with their rolling stock and equipments,
which lines are operated as one railroad
system. called its Pacific system, and that
the Southern Pacific Company has paid
up capital stock OF $120, ,934, ,170, distributed
among $50 shareholders.
The various lines of railroad and the
corporations owning them between Port
land, Ogden and Ell Paso, comprising the
Pacific system of the Southern Pacific
Company are enumerated. The indebt-
edness and interest charges OF the COM
panies owning the lines so operated are
given. Their Indebtedness aggregates
S95, ,337, 400 and the annual interest charge
is $S,417 234. These lines the complainant
must maintain, pay the taxes OF and pro-
vide for and pay the interest on the
bonded indebtedness mentioned. The
complainant must pay into the treas
.ury OF the United States 25 per cent
OF the net earnings of the Central
Pacific road, and must pay $235, 900
annually into a sinking fund.- and
must pay the Central Pacific Company
one-haH OF any net earnings above per
cent of the par value OF Its stock, $67,-
275,5OO. The complainant must annually
pay $500 600 as rent for the roads operated,
and other required payments to the lessons
are specified. The companies owning the
lines are the Oregon and California, the
Central Pacific, the California Pacific, the
Northern, Northern California, South Pa
cihc Coast and the Southern Pacific Rail
road companies of California. Arizona and
New Mexico.
None OF these companies, except the Cal
ifornia Pacific and the Northern Railway
Company, it Is asserted, have fOr more than
q. year received any profit or net income
from funds payable to them from the COM
pIainant or paid any dividends. The sur
plus received by the two companies men,
toned is less than "a per cent OF its paid
up capital stock. The complainant has in
vested $4,832, ,491 IS in the purchase Of
property necessary for the operation Of the
said roads, and of this 81, 900, 000is invested
in California.
ain order to enable your orator to oper-
ate said railroads and to secure TO it the
possession and use thereof, it is necessary
that its income therefrom should be sufi-
cient to pay the cost and expense of the
maintenance thereof, of the service thereon,
of the interest on said bonded indebted
ness and of the other fixed charges herein
before set forth, and your orator is law
fully entitled to some compensation fol
the use of the said several railroad proper
ties engaged, used and employed in Its
business as aforesaid.
1t is also decided that the interstate
traffic of the company is conducted at rates
fixed under an act of Congress: that the
traffic exclusively within the States OF
California, Oregon and Nevada is con.
Quoted at rates fixed by the Railroad Com
missioners Of thoge States, and that the
California rates are now lower, both
actually and relatively, than the rates sc
fixed in either OF the other States. Said
ficient to operate the roads, and in 1894
when the business depression set in, the
complainant at these rates was unable tc
pay the operating expenses and charges
described.
"Your orator further shows that from
time to time reductions have been made in
its rates of freights on various commodi
ties transported by it over the said rail
roads operated by it wherever the same
has been possible, fair or reasonable, sc
that there has been gradual and constant
reduction in It's said rates of freight fol
more than six years last past, and that the
revenue per ton per mile derived by your
orator from the freight transported by i
for the period commencing January l, 1889
down to and including the 30th day o.
June, 1895, was as follows, to-wit:
Revenue per ton per mile for 1889, 81 30
1890, 81 IS; 1891, 81 81; 1892, 81 81 1893
81 81; 1894, 81 80; 1895 Ito June 3o), 81 "a
The receipts of the company for 1894 are
given as $31, ,458, ,522 "a and the .expendi-
lures as S31, ,734, ,785 "a, leaving deficiency
for that year OF S276, ,262 70 For the frs
six months of 1895 the receipts are given
as Sl4836,l ,l25 n and the expenditures SO,
3l2,302 16, leaving a deficiency for that
period Of 81, ,476, l76 80. These expendi'
lures include operating expenses, taxes
rents lDfprasf Sip f1lnd f1aUmPnfs and