The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-12-11

act of 1873, giving the Government a prop
erty interest in the revenue of the Central
Pacific, an interest which it had right to
protect; and further that the Government
has rights as q mortgage.
There was quite large number of promi-
nent attorneys present TO hear the deci-
sion OF the court, though it was generally
believed among the lawyers that it would
be favorable to the petitioners. The
quartet for the Railroad Commissioner
Attorney General Fitzgerald, ex- Judge
Hayne. W. W. Foote and Attorney Daily
was early on hand. The Attorney-General
did not remove his overcoat. He evil
IDENTIFY anticipated the action of the United
States District Attorney IN asking for
postponement OF the case. The cold face
of W. f. Herrin, chief of the law depart
ment of the Southern Pacific, peered from
behind wall of affidavits, which he had
already prepared to fire at the defense.
]. c. Martin was associated with Mr..
Herrin.
Judge McKenna's opinion is as follows:
The court (orally)-In passing upon this mo-
ton OF the Government 10 intervene l can
only indicate my views, and not elaborate
them.
The original bill is by the Southern Pacific
Company TO restrain the execution of an order
and resolution OF the Board OF Railroad Com
missioners of the State of California fixing
certain rates on grain. The bill is voluminous
and need not be quoted.
The United States has made q motion to in
tervene, and presents q bill of intervention to
support the motion. 1t alleges that it is
creditor, having lien under the act of July
i, 1862, entitled "An act to aid in the con-
struction OF railroad and telegraph line from
the Missouri River TO the Pacific Ocean, and to
secure to the Government the use OF the same
for postal, military and other purposes" and
under the several acts amendatory thereof and
supplemental thereto, upon the Central Pacific
Railroad, for $27 900 900 and interest thereon
amounting TO about $45 ,000, 900.
That by section Is OF said act it is claimed
that the United States has the sole right to
regulate fTeights and fares.
That under the act of May z, 1873, called the
Thurman act, the acts of 1862 and 1864 were
amended to require the company on or before
the first day OF February of each year to pay
into the treasury of the United States an
amount aggregating % per cent of the net
earnings Of said road, defined in said act
1t further alleges that the company has out
standing first mortgage bonds amounting to
S27 ,000,O 900 which were given priority over
those OF the United States.
That complainant is corporation under the
laws OF Kentucky and lessee of the Central Pa
cific Railroad, and bound to pay out of the
earnings of said railroad the sum required 10
be paid under the Thurman act.
That the lease was made without the cons ent
OF the United States.
Then follow the allegations of fixing the
rates, etc., and the unreasonableness of them,
and shows that the Central Pacific Railroad
Company owns about TWO hundred and forty
odd miles in California which has received aid
from the Government, and that "said proposed
reduced rates cannot be adopted to quote the
BILL "or put or continued in effect upon said
Central Pacific Railroad without serious or IT.
reparable injury 10 and destruction of the
property and property rights of said Central
Pacific Railroad Company and of the United
States as its creditor, and as lienholder upon
the property thereof"
The bill further alleges that the property has
no value except as railroad property, and in
the revenue from passenger and freight rates.
The other allegations ii is not necessary to
quote. On these allegations the United States
contends:
l. That it has the exclusive right to regulate
rates, and hence the Railroad Commission of
California is without jurisdiction or power.
2. That as second mortgage it has an inter-
est which entities it TO intervene.
3. That the payment OF % per cent of net
earnings, under the Thurman act, gives il such
interest as entities 1t to intervene and as part
OF this contention it is further urged that the
act commands action on the part of the Atior-
ney.General TO secure the purposes of the act.
All these contentious are opposed by the re-
spondent Railroad Commissioners.
To support the first contention the District
Attorney relies on section IS of the act OF 1862,
which 1t is not necessary 10 read as counsel
are familiar with il. This however, reserves
the right TO regulate only in the event that
the earnings OF the railroad exceed 10 per cent
whether Congress has the right under this
section, or without ii under the general power.
TO alter and amend the act OF 1862 and that of
1864, but whether the power is exclusive.
There is no direct adjudication upon this
point. In the Ames case, "a Federal Reporter,
10, the point was considered by Justice
Brewer, but not explicitly decided, yet he
entertained jurisdiction and rendered judg-
ment.
The Ames case is familiar. 1t was an action