The record-union., 1895-09-09
THE RAILROAD COMMISSION.
Proceedings in Regard to Freight
Rate Reduction.
Resolutions Presented by Mr.. Stanton
and Statement From Mr..
Clark.


mission in San Francisco on Saturday
the time was largely taken up by argu.
ment on the LaRue resolutions, which
have been published in the RECORD
UNION. The main points of interest in
the meeting were a set Of resolutions pre-
sented by Commissioner Stanton and q
communication from Commissioned
Clark. Mr.. Stanton's resolutions were
as follows:
| ResolUed. That the present rates OF
| charges for the transportation of treights
in California by the Southern Pacific
Company and its leased lines are unjust
to the shippers of the State; therefore be
! it
Resolued. That the present rate of
| charges for the transportation of freights
in California by the Southern Pacific
| Company and its leased lines be SUBJ
jected TO such an average reduction as in
Guiding all reductions made therein since
December l, 1894. shall equal an average
reduction of 25 per cent. upon said rates
as i'll existence on said December l. 1894;
that the manner of apportiOnment and
affecting said reduction shall be- as fol-
! lows:
| tlrst-All Determinations in freight
charges shall be so adjusted as to make
rates uniform between different points OF
shipment similarly situated in SO far as
circumstances will permit. Any reduc-
| ton in rate made for this purpose shall
| be charged against the class to which the
mmodity or article belongs.
Seeend-Each class of freight specified
| by the Western classification, or for
which commodity tariff exists, shall be
entitled to and receive its pro rata of said
% per cent. reduction. determined on the
basis of the amount OF revenue paid by 1t
| to the total amountof said reduction;
provided that the rate of freight i'll each
class shall be regulated so as TO prevent
Determinations in rates on classes or
comm odities; said pro rata shall be fixed
| by the board.
ResOlUed, That the grain tariff having
| been since the lst day of Decem Der, 1894,
subjected to q reduction which, inclusive
| OF the amount to be charged against it for
discrimination, and the percentage here
| matter allowed will nearly or fully equal
the proportion Of such average reduction,
therefore, be il
| ReSOtUed, That the rates at present eX-
! listing for the transportation of grain in
| California by the Southern Pacific Com
pany and its leased lines, as established
| by Grain Tariff No. 2 and all subsequent
amendments thereto. be and the same are
! hereby reduced s per cent, and The Sec
retary of this board is hereby directed
forthwith to prepare for publication by
| this board q schedule of rates in accord
ance herewith, and whom SO prepared the
| same shall be pu blished at once and take
| effect as soon thereafter as allowed by
law, and that on the adoption OF the re-
vised general freight tariff of said COM
pany herein provided for. any further per
| cent. reduction due said grain tariff as
| provided herein snail be given.
| ResOLUed, That this board proceed at
once to adopt revised schedule of rates
in accordance herewith, in order that the
same may be in force on or before Janu-
ary /, 1896; and be it further
! ReSOLUed, That If the necessities of the
case so require this board will at once
proceed to the ascertainment OF the pro-
portion of reduction due any commodity
which, ,by reason of its nature, requires
to be moved between now and the time
herein fixed OF the taking effect of said
| general reduction.
| Commissioner Clark submitted the fol-
| lowing communications:
The resolution before the board pro-
| poses a reduction in the grain rate of the
| Southern Pacific Company, railroad
corporation doing business in this State,
| from 10 per cent. upon portion of their
| road, designated IN said resolution, and a
| further reduction OF % per cent. upon
other portions OF their system in Calfor-
MIA, which is also specifically set forth in
said resolution, and urges as a reason
| that the rates now charged are excessive
| and greater than the producer can afford
to pay, and that the cost OF transportation
| is greater than the traffic will bear.
! 1t will be seen that an order so general
aud at the same time SO radical in the
proposed reduction requires careful con-
sideration of the evidence in order to ar
rive at an honest and equitable adjust
ment of the differences that may exist
- l,a o,.,ia Il D. ochi
In arriving at that conclusion all party
platforms and pledges made by any
member OF this commission should be
cast aside and whatever feeling there
may be in this State against the Southern
Pacific Company, justly or otherwise,
cannot now be considered.
The Constitution has conferred upon
this commission the power to fix the
! freight and passenger rates, and that
| when the rates arc adjusted they shall be
deemed to be conclusively just and rea-
sonable.
1t follows that in the making of a rate
| great care should be exercised in arriving
at conclusion that would be deemed by
the courts TO be just and reasonable
The next question that presents itself
| is, What is a reasonable rate?
Without attempting to lay down a rule
for general guidance, | would say that it
should be equitable, and the carrier al
lowed fair remuneration for the serv-
ices performed, aud reasonable margin
for interest upon the principal, judi
ciousiy invested, and a reasonable sink
ing fund for emergencies that may arise
in the economical operation of the road.
To arrive, therefore, at just conclusion
as to what would be a just and equitable
rate. 1t Is necessary to examine into the
actual condition of the cOmpany's affairs,
as it now exists. L lind from the testi-
inony that the average bonded indebted
ness of the lines operated by the South
ern Pacific Company in California is
about S29, 900 per mile OF road. 1t would
seem, when compared with other roads
similarly situated throughout the United
States, that the bonded Indebtedness of
the Southern Pacific Company compares
iavorably with those lines, and that The
company is therefore warranted in tax
ing into consideration the liked charges
upon the bonded Indebtedness, such as
interest, taxes ana providing TOR a sink
ing fund, as provided by law, for the pur-
pose of adjusting q fair rate for services
rendered.
Ii is also shown from the uncontra-
dicted testimony of Mr.. Lansing, the Sec
retary and Controller of said company,
and also Mr.. Curtis. the assistant 10 the
general manager. that for period of six
months, ending June So 1895, there was
deficit OF over Sl.250.0O0 in the opera
ton OF the road. taking into consideration
liked charges, and when compared with
the sworn statements OF The earnings for
the first six months of 1894, there is "A
marked falling Oft in the earnings of the
road.
This has been attributed to the de-
pressed condition OF the country, and in
all probability is likely to continue for
some time to come. The passenger traffic
has suffered also, and / tind that for the
first six months OF this year the passenger
revenue amounted to 81, l5l 900. and for a
like period last year 81. i7S, 200, showing