The San Francisco call., 1895-10-16
THE CONSTITUTION ATTACKED
1t Is Shown That the Southern
Pacific Recognized the
Commission.

!urlous to the company" Commissioner
La Rue explained. "And as for the acts
OF TINS commission being unconstitutional
ana therefore illegal, as claimed by the
693utheTn Pacific Company, we shall see
Inc Fallroad has already accepted resolu-
luis sIous adopted by this body, and that is
N01 TS1aIuly not IN line with its latest action"
Inc president of the commission was in
disposed and reclined at length on q
ITGunge IN the boards office all day long
ne remarked that he should be at home,
out IeIt ms duty held him in town for the
purpose or conferring with Attorney Gen
erai Fitzgerald and DR.. Stanton. In the
SarIy afternoon the doctor arrived at the
1aAToau commissioners Office, and began
at once with Mr.. La Rue to review the
many phases OF the situation as presented
oy the legal contest. Thev went through
reports OF proceedings, constitutional pro
TsionS regarding the commission, and
plcked to pieces statements made by
southern Pacific officials at the recent in
Eestgaton, which statements will be used
III comparison with claims set forth bV the
railroad in its bold fight. Finally, the two
commissioners concluded to call special
meeting for Thursday afternoon to take
othclaI RECOGNITION of the suit and to for
maIIy determine upon line of action to
be pursued in connection Herewith
After carefully considering the case Mr.
La Rue spoke freely upon the subject. He
sald that the suit attacked the very life of
the. Railroad Commission, for, as he ex-
planned, II rates could not be made bv il
IDe poaru would OF necessity become a
mere bureau OF railway statistics. Said he:
This Texas case, which is taken by tie
rallroad as precedent, I'm told bv good
authorlty, has no bearing upon this board
-. The Texas commission was created by the
Legislature, while the California body was
created by the constitution. 1t is quite a
different thing. Then, I've no doubt there
was coluSlon in the Texas case
1t is not true that the railroad never
recognized rates made by this commits
slon' nor our power to fix rates. The pres
ent board adjusted rates between Wood
bridge and Valley Springs, where they
had been complained of as excessive. On
the complaint | made to Mr. Smurr of the
Southern Pacific the rate was reduced ex-
actly one hall
The railroad abided by rates made by
the commission when the Western CLASH
hcatlon was applied to California, and in
tthat cannot see how the railroad could
have more fully recognized this board.
On October 25, 1898, the commission
applied general reduction of 10 per cent
TO the railways in California, and the rail-
road accepted II. This is the resolution
}, on the matter and it was carried unani-
mously:
WHEREAS, 1t has been the intention of this
commission 10 bring about the adoption of the
Western classification for freight on the rail
ROADS OF the State of California, said classifca-
cation being almost universally adopted for
local business by the great railroad systems
west Of the Nfssissippi River; and. whereas
pursuant TO instructions Iof the commission !
the southern Pacific Railroad Company has
prepared and submitted to the commission a
proposed new local tariff of freight rates Tor
The transportation OF general merchandise, TO !
De governed by the Western classification, with !
an average reduction OF 10 per cent in its gen
eral results 10 the shippers of merchandise in
This state; and whereas, this commission has
examined said proposed new tariff and has de-
fRrElueQ Tlatlt SubStaQTIa lV niles with the
- instructions OF this commission; therefore,
De It
ResoIred, That the publication OF said tariff
by said Southern Pacific Company be and is
hereby authorized, and the rates embraced in
said tariff be and are hereby adopted by this
commission and ordered to become efectlye
on and after the first (1sD day OF January, A D.
1884. J. NJ. LITCHFIELD,
Commissioner Second District.
JAS. w. REA,
Commissioner Third District.
WM. BECKMAN,
Commissioner First District.
Il don't believe that the courts will hold
S per cent reduction to be reasonable. The
company made an average reduction OF 10
per cent last December of its own volition.
Regarding wheat, which in quantity
amounts to more than One-fourth OF the
whole freight carried in California, and is
OF such importance to the State, 1t can
stand q reduction of per cent. Then we
claim that the rates have been too high,
and the welfare OF the State calls for more
equitable and reasonable figures.
The railroad people take the first cost
of the road and then add on every addi-
tional outlay for Improvements, and all
together are taken as the cost of the road.
They put up million-dollar bridge and it
IS burned down. a new bridge is built
and then the road is estimated worth the
added expense Bonds are issued, and so
on, and, as Mr. Lansing stated before the
board, The road increases in value as it
grows in age But that is where the in.
come goes, and the income is taken mainly
from freight"
Commissioner Stanton said: "I've been
thinking whether this restraining order
will affect wheat shipped after the 18th,
when the reduced tariff was to have taken
effect. Suppose the shipper pay the old
rate under protest. | think that under
such conditions and if decision were
granted in favor of the commission the
shipper should be paid the difference.
That is, the excess of s per cent would have
10 be refunded"
Il am of the same opinion" added Mr..
La Rue. 81 think the railroad will be
held responsible for the per cent wher-
ever the old rate is paid on grain shipped
during the existence of the restraining
order. | know if | shipped grain under
these circumstances I should certainly pay
the rate under protest"
DIR. Stanton continued:
The railroad company claims that we
haven't power to make any reduction. |
Now, there are places where rates are man
ifestly unjust, but we are absolutely pro-
hibited from making any reduction. We
cannot do anything official since our hands |
are tied; we cannot promulgate anything
in the nature of reduction, for then we |
would be in contempt of court. Still be- |
lleve we are right, OF course. The rate is |
reasonable and after the per cent reduc-
ton the railroad would get reasonable re-
muneration for its services. 1t is a matter
before the courts
The doctor was asked if the restraining
order was so sweeping as to take away |
from the Railroad Commission the power |
OF reducing rates why should it not equally |
render the board helpless if the Southern |
Pacific Company undertook to raise rates |
Rates reduced in competition cannot |
be raised without consent of the commits
sion, " he replied. "But, of course, if the |
railroad should continue to ignore us, as it |
has been doing, how are we to know? [ |
don't know what it might do in that direc |
uon-another matter of law. The railroad |