The San Francisco call., 1896-03-19
A Legislative Enactment Under
a Title That Is Mis-
leading.
FIGHT OF THE COMMISSION.
Another Day Occupied by the States
representative in the Fed
eral Court.

Attorney General Fitzgerald continued
his argument yesterday in the Southern
Pacific injunction suit against the Railway
Commissioners. He addressed the court
mainly on the right of outside corpora
tions to come into the State and assume
privileges not previously possessed by
them.
His contention was that the Southern
Pacific Company could not come into Cali
fornia and acquire leases not directly per-
mitted under its original franchise, and he
held to be illegal the act of 1880, which he
declared was not intended for the purpose
of fraud, under which the railroad COM
pany asserted its rights. The act is as fol-
lows:
An act permitting and authorizing railway
and other corporations organized under the
laws OF this State, or OF any State or Territory
OF the United States OF America, or any act of
Congress of the United States to do business
in this State on equal terms.
(Approved April 81, 18sO,)
Section 1. That every railway corporation
and every corporation organized for the pur-
pose OF carrying freights or passengers which
has or may be created or organized under or
by virtue OF any of the laws of any State or
Territory of the United States of America,
or any act of Congress OF the United States of
America, may hereafter build railways, exer-
else the right of eminent domain and do or
transact any other business which such cor
poration might if the same had been created
or organized under or by virtue OF the laws of
this State, having the same rights, privileges
and immunities and subject to the same laws,
penalties obligations and burdens as though
said corporations had been created by or Or
11udar the laws of the State of CalifOr-
MIA.
Sec. 2. Railroad corporations doing business
in this State and organized under any law of
this State or the United States, or any State or
Territory thereof, have power to enter into
contracts with one another whereby the one
may lease, of the other, the whole or any part
of its railroad, or may acquire OF the other the
right TO use in common with 1t the whole or
any part of its railroad.
Following out this line of argument At
torney-General Fitzgerald said that the act
authorizing foreign corporations to do
business in this State on equai terms with
the California corporations could not give
the outside corporations any new power to
lease. They could only use such power as
possessed by them before.
Quoting from the constitution that no
corporation organized outside OF the State
shall be allowed to transact business in
this State under more favorable terms than
given to the corporations organized in this
State, Mr.. Fitzgerald argued that the lease
of railroad property under consideration
was impossible. The outside corporations
could only be permitted to come here and
do business on equal terms with the Cali
fornia corporations.
I Sla4 III
ever the Legislature enlarges in any way
or seeks to enlarge the powers generally
granted to corporations it should be ex-
pected to give the utmost publicity to the
act. In enlarging the powers to the ex-
tent OF permitting the lease of the fran
chises the Legislature would not be ex-
pected to cover up the act as in this case.
To grant such power in an act thus dis
guised is misleading, deceptive, dishonest
"a fraud on the people.
The putting of the foreign corporations
on an equal footing with those of Califor-
MIA is intended. 1t cannot be contended,
and will not be contended, that the act is
to be understood as increasing the powers
of California corporations. Nobody read
ing the title would say that the act relates
to increasing the powers of California cor
porationg. The sole object and intention
outside corporations-to place hem on a
standing of business equality.
If the assumed powers to lease could be
obtained in that way, any corporation that
could attach itself to another corporation
would be able to increase its poTsr in the
same way.
The Acknowledgement declared that an
act with-a title like that under discussion
is obnoxious to the constitution.
Jrdge McKenna asked for informal
regarding certain authorities quoted in
sunport OF this latter declaration, stating
that as he had understood the reading it
was necessary 70 show Incongruity as well
as differences in the subjects of an act.
The title in the act under discussion, he
remarked, was rather general one.
Attorney General Fitzgerald went over
a portion of his argument bearing on that
point.
Then The representative of the people
took up the subject of the leases of the
California Pacific and South Pacific Coast
roads. arguing that franchises obtaine d
from the Government could not be leased
without Government permission.
Another proposition presented is that
the leases are void because they are -epug-
nant to section 20, article XII, of the consti-
tuition. which prohibits combinations be-
tween common carriers not directly shar-
ing in the profits.
Under this subject Mr.. Fitzgerald dis
cussed the combination of the Central Pa
cific and Southern Pacific roads. going
over different routes but having the same
terminals. BY that combination, ne de-
clared. the people were deprived OF the
benefits of competition, and the combina-
ton is contrary to the constitution.
In the argument the strike OF 1894 was
referred to in connection with an official
report that no injury to the business had
resulted. In that year less grain was
shipped over the roads than in any other
wear since 1877. 1t was shown that the
Southern Pacific Company's portion of
the profits under the omnibus lease in 1894
was $546,051 80. The Southern Pacific
Company of Arizona and the Southern
Pacific Company of New Mexico operated
at loss that year, but their share OF the
a.