The San Francisco call., 1896-04-09
His Prediction That Clouds
of Depression Would
Roll Away.
TWO WEEKS MORE OF TALKING
Mr.. Pil Sbury Contends That the Rail.
road Company Loves
Deficiency.


the United States Circuit Court.
Mr.. Pillsbury's very able and very dry
argument in the Railroad Commissioner
case was oasised with something like hu-
NOR yesterday when the name of Chaun-
cey Depew was mentioned incidentally by
Mr. Pillsbury. 1t might not have been wit
and numor after all, but in contrast with
an argument abounding in figures and
most didactically phrased, it was as re-
freshing by contrast as cold water shower
bath in the Plutonian regions.
Mr.. Pillsbury did not finish his argu-
ment yesterday, but promised that he
would do so by noon to-day. This after
noon Mr.. Hayne will reply on behalf of
the people and will consume two or three
days. Then Mr.. CARRIER will follow for two
or three days more and District Attorney
Foote will close in two or three days after
that.
The case has been of more than ordinary
importance, because of its subject-matter
and because of the searching nature of the
argument on both sides. All the author
ities eXtanG have been raked over by the
bright legal minds engaged in the discus
sion, and when the case shall have been
finally submitted it will form an inval-
liable textbook on the powers of CORPORA
tions and of commissions, no matter what
the decision OF the court may be.
In the afternoon Mr.. Pillsbury turned
his attention to the improvements and
betterments OF the road. Attorney General
Fitzgerald, he said, had argued that the
S6O9,0O0 expended for Improvements and
betterments should be added to the net
earnings of the road instead of being
charged to expenses.
The speaker argued that the items for
ha Of
full in the report. They were fencing,
bridges, railroad-shops, depots, ETC., items
which, he asserted, came properly under
the head OF annual expenditures.
Judge Hayne interrupted the speaker
several times on this subject, and Mr..
Pillsbury with a trace OF irrita biIitv re-
marked that he was surprised that Mr..
Hayne should ask such foolish questions.
"0h, If that be your idea" retorted Mr.
II eyne very coolly, Il shall not ask any
more questions
I'm sure replied Mr.. Pillsbury, bow
ing to the court, "that I shall not shed
any tears over the matter
Here Judge Mckenna took hand and
suggested that Mr.. Pillsbury should with
Draw the epithet foolish" aid that Mr..
Hayne should reconsider his resolution
not to ask any more questions, because
the court would have asked the very same
questions put by Mr.. Hayne. He desired
10 nave tue Items lOeDI1n6Q.
Mr. Pillsbury expressed his willingness
TO accept the suggestions of the court and
TO begin de novo. He then proceeded TO
discuss the question as to which items OF
expenditure were properly chargeable
against the gross earnings in order to ar
rive at the net earnings. Some roads
charge to the expenditures whatever was
taken from the earnings and not raised by
issues OF stock. Some take annually from
the gross earnings that which goes to
make the roads better than they were be-
fore.
He would not argue, he said, that a
bridge across the straits of Carquinez cost
ing 100000 should be charged to the
annual expenditure, because that was an
extraordinary outlay for an extraordinary
purpose and could not be made without
an issue of bonds or the raising of money.
The case of the United States against
the Kansas Railroad was cited to show
that new depot and site and the replac-
ing OF rails, roadbed and rolling stock, if
paid for oui of the earnings, should be de-
Quoted from the gross earnings, in order to
ascertain the net earnings. Many other
cases were quoted to the same effect. 1t
had been decided also that it were better
that the surplus should be expended in
necessary Improvements. etc., and that
the expenditures should be deducted from
the gross earnings.
Mr.. Pillsbury alleged that these decis-
ions overthrew completely the arguments
OF the Attorney-General. The case of a
truckman was cited who found that he
had made so much net surplus at the end
OF the year who had to buy a horse to re-
place one tnat died and who, refusing TO
touch his gross earnings, had borrowed the
money on chattel mortgage instead of
deducting the amount from his gross earn
lngs. 1t would not be long, he said, be-
fOr hot frf1.aL b IA -
bankruptcy.
The speaker showed the increased weight
OF cars, the use of ice and other dead
weight in the eQuipm ent of the railroad
company during the last few years, and ex-
planned that with the increase of the
weight It had become necessary to improve
the roadbed
The speaker went on TO show that there
was net deficit of $l46 529 % in 1894 on
the Pacific system exclusive of several
hundred thousand dollars expended in the
payment OF back taxes, Il suppose, she
ADDED, that the Attorney-General will not
question the propriety OF paying those
back taxes"
No, sir" replied the Attorney. Gene raj,
~ thlhK they ought to have been paid
many years before"
Inc smile which followed this retort was
hot l?lned in by Messrs. Pllsbury, Herrin,
MaTtln and CARRIER. They evidently failed
10 dlscover any wit in the remark.
= MI. fIllsbury waded through a mass of
HguIes ana aided and subtracted until he
goL the result desired by himself and his
coileagues, TO the effect that the railroad
was losing money, was growing fat in
ruptcy and was rather happy over it.
ne Attorney-General's contention that
1874 was an average business year in the
railroad business was then taken up. This
was denied by the railroads ATTORNEYS.
"a a md
far far basis for estimating the business of
ios2. In 1874 an unusual depression in
business occurred, and the depression con-
tinued until the present time.
Attorney General Fitzgerald intsrruntad
by saying that Mr.. Huntington's affidayit
admitted az that the business in January.
was in the corresponding months Of 1909
Mr.. Plllsbury argued that period of
general depression set in in 1893, CON
tinued through 1894 and still continued
with no immediate prospect of any i'm
prOYement, notwithstanding that somai