The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-09-08

gain the commence OF the DeOplc 81 tuds slim
lar work could be done here. Our DOCKS are
open to the commission and the company VIII
always be GLAD to explain what may not Do
clear.
There is no power that can compel any one to
do business at a loss. To reduce rates below
an income that will pay expenses is TO aespo1i
the rallrosd. 1t might be unpopular nor 70 re.
duce rates, but you, Mr.. Chairman, are not
afraid of that. Hew to the line and let the
chips fall where they will. There have been no
dividends, and this commission cannon regu-
late rates. Its power ceases when the rates 90
not produce revenue that pays expenses ana
something, however little. over.
The grain rates are less than the average OF
the rates.
La Rue-In comparison with other commod-
ltles they may not be higher, but the quantity
OF wheat entities it to low rate
Martln-People have wrong impression
about the railroad. They call 1t the octopus
and everything that is bad. 1t is hard TO get
the facts before the people. They think the
railroad is making lots OF money. Iney De-
Heve 1t has an enormous bonded Indebtedness,
and that the people are ground down. Inc
TACT is that the California roads have less BOND,
ed Indebtedness per mile than any otner road
in the United States. According to figures pre-
sented here our bonded Indebtedness is about
500 900 per mile. West of the Mississippi 1T is
about $31 900 and east of the Mississippi 1T is
much higher.
Your power is at end so far as the southern
Pacific is concerned.
La Rue-There is evidence of the prosperity
OF the railroad people on every SIDE, whlie the
the railroad has made money. This Is also
shown by the many Improvements and better
ments it has made
Martin-From 1894 to the present time the
condition of the road has been such that it has
not paid expenses. 1.-THE railroad people are
rlch" Is the only answer that we get 10 TINS
showing. That cry should not be used.
La Rue-That is a fact. They made their
money out of the railroad.
Mr.. Martin then reviewed the early his
tory OF railroad operations in this State to
show the railroad projectors were deserv-
ing of their wealth. His concluding words
were:
ask you this: If anything has been said by
me worthy of attention give it that consIdera-
ton which it deserves Decide this matter
upon the testimony-the sworn testimony be-
fore you. / believe this commission will de-
eide this case as the law directs and according
TO the testimony given.
A recess was then taken till 2 o'clock.
There had been considerable guessing as
to what DR.. Stanton's view would be on
the La Rue resolution in the light of the
volume of testimony adduced from the
railroad company and the various petitions
from farmers and from worklngmen. de
had announced at the last sitting of the
board that his mind was in that frame that
would require no more discussion or argu-
ment, and at the beginning of the after
noon session yesterday he was ready with
ised and also with substitute resolu-
ton which he had not promised. The
opinion, as read by Secretary Newman,
was an exhaustive document of some 1000
words, which in substance was as follows:
The question tor decision to which shall
direct my attention is: Are the rates charged
by the Southern Pacific Company and the
leased lines for the transportation OF freight
within the State of California such as are just
and fair between the carrier and the people OF
the State?
On the part of the company the claim is
made that the present rates are as low as can
be charged in order to enable the company to
pay its operating expenses taxes and interest.
AS a member of this commission, since my
induction into office, have endeayored to OBJ
tain from all sources all information which
would enable me to act intelligently and con-
scientiously upon the questions arising before
this body.
The claim was then made that the hear
ing given the Southern Pacific Company
was not granted as right and judicial
decisions were cited to sustain this asser-
ton. Continuing, this opinion stated:
The affairs of the Southern Pacific Company
are of a most complicated and anomalous
character. A foreign corporation, for Interior
purposes unknown to this commission, organ
lied and existing under the laws OF the State OF
Kentucky, entirely without the ownership of a
mile OF road, is engaged in both local and
transcontinental traffic.
operating QDQer It's management q large
number of leased lines, in many of which the
principal stockholders of the Southern Pacific
Company own the controlling interest, 1T is
enabled by its system of keeping accounts to so
complicate matters as to render it most diff
cult to arrive at q correct conclusion as to Its
exact condition with regard to its local traffic.
This company has expended large amounts
of money in the acquisition and maintenance
OF miles of railroad in and through mountain
Gus country, having but little connection
with and being OF slight practical benefit to the
local traffic of California.
The pretended original cost of this road, the
cost of maintenance and the interest upon the
said original cost they seek to charge against
the local traffic Of California. To my mind
am satisfied that the value OF the property
operated by this company as represented in
connection with their bonded indebtedness is
excessive and out of all proportions TO their
real or market value, and that the bonded in
debtedness represents fraudulent issue. and
the fixed charges and operating expenses have
been greatly inflated. While honest debts of
the companies must be paid, the laws OF the
country will not permit or tolerate frauds and
will not compel shippers to bear the burden OF
fictitious debts represented by bonds wrong
fully and fraudulently issued oy these compa-
MES. Nor will they tax the shipper unneces-
sarily to pay exorbitant salaries to officers.
This corporation is engaged in the business
of contracting, and does great percentage OF
the work OF the Southern Pacific Company,
and receives in payment therefor the bonds of
the company benefited. How are these bonds
value. The testimony of Mr.. Lansing shows
that they are given in payment at lar less than
par, the amount not appearing before the
commission. The result is that these bonds
have been increased many millions of dollars.
1t is claimed that we must establish rates as to
enable the interest on this debt to be paid from
the company's earnings. For US to adopt
any such standard would be robbery and
theft OF the money of the people of California.
lam of the opinion that the company's rates
are unjust, and should be subject to an aver
age reduction on al commodities.
The merchants of San Francisco and of the
interior OF the State in their present depressed
financial condition require all the help that
can be extended 10 them, and no reason can
exist why they in common with the farmer
should not be given their proportionate bene
fit of any reduction which can be reasonably
made in freight rates. Again, the farmers of
the State are not all grain-growers; the prod
ucts of agriculture are diversified and are all
subject to freight charges; but no relief is af
forded them by the resolution before the
board.
i have determined at this time to waive my
objections to a horizontal cut in the amended
grain tariff rates prior to the adjustment of
determinations therein; and am now willing
to give to that tariff such reduction as be-
lieve taken in connection with the reductions
already made in December last, to which 1T is
entitled upon the basis of 25 per cent average
reduction of all freight rates in favor OF which
/ have declared myself. After careful con-
sideration OF all matters in connection with
the subject have concluded that a reduction
of 8 per cent on all grain rates OF said tariff