The San Francisco call., 1896-04-08
SPEAKING FOR
THE RAILROAD,
Mr.. Pillsbury's Argument
Occupied the Whole
Of a Day.
THE RIGHT TO LEASE.
1t Was Conferred Upon the Com
pany by the Terms of
the Charter.
FULLY VESTED WITH POWER.
Authorities Cited in Cases of Corpor.
ations Operating Exclusively in
Foreign Places.

The whole OF Yesterday was taken up by
E. S. Pillsbury of counsel for the railroad
company in arguing on the matter of the
25 per cent reduction in freights made by
the Railroad Commissioners.
The gist of his argument during the
morning session was that the Southern
Pacific Company had the same rights in
this State as though it had been created
here.
He argued that foreign corporations and
State corporations were permitted to trans
act business on an equal basis, so far as
legal rights and privileges are concerned
Mr.. Pillsbury, in the afternoon, con-
tinued his argument with the statement
that the Legislature of Kentucky expressly
conferred upon the Southern Pacific Com
pany the power to lease railroads outside
OF the State of Kentucky. A corporation
created in any State may exercise in any
other State the general powers as con-
ferred IN its charter.
THAT means valid powers" interru pied
Mr.. Hayne.
What do you mean by that?' asked
Mr.. Pillsbury.
II mean powers which the Legislature
is authorized to confer upon the corpora
tion," was Mr.. Haynes reply.
Mr.. Pllsbury cited case wherein cor
poration was created in England to do
the business of mining in Missouri. This
was parallel to that of the Southern Pa
clhc OF Kentucky, created in Kentucky for
the purpose of doing business in States
otker than Kentucky. Other cases were
cited in support OF the same proposition.
Mr.. Hayne interrupted the counsel With
the question: Was there positive pro-
hlbltlon against carrying on business in
its home placer" Mr.. Hayne asked this
question because the charter granted TO
the Southern Pacific by the Legislature of
Kentucky prohibited that corporation
from doing business in the State of Ken
tuckv.
Mr.. Pillsbury's reply was that in the
case OF the mining company incorporated
in Great Britain the prohibition to do
business in that country was not expressed
in the charter, but was found in the gen
eral laws of the country. The Southern
Pacific, he argued, is controlled by the
laws of the several States in which il does
business and not by its charter in that
respect.
Opinions of the Supreme Court were
read to the effect that company could be
legally incorporated in Massachusetts, 10
go into the business of raising cotton in
South America or cocoanuts and bananas
in the South Sea islands.
Mr., Hayne was obdurate. 1t was evi-
not psychological him, and he broke in
again with, Suppose the charter pro-
vided that the corporation could do no
business in its own State?"
That is entirely irrelevant to this case"
responded Mr.. Pillsbury. with smile.
II have, been for some years educating
you in the law, and don't care to resume
the task just now"
VERY well,' retorted the imperturbabIe
Hayne, eff you don't want to commit
yourself on that point / won't press YOU"
Mr.. Plllsbury went on with his argu-
ment TO the effect that the Southern
Pacific Company had a right to lease
railroad in California or any other State
than Kentucky, provided that the laws of
the State of California and of other States
would permit it to do SO. If the charter
authorizes railroad corporation to build
railroads in another State it could do that
if not prohibited by the laws of that State.
Here Mr.. Hayne got in another inter-
ruption. He asked:
Would that imply the power to lease?"
The power to do banking business"
replied Mr.. Pillsbury, Implies the power
to lease place in which to do the busi-
ness of banking"
You don't answer my question: re-
marked Mr.. Hayne, frigidlv.
AT this point Judge McKenna inter-
posed with the remark that he thought
thSiC nciC too uidilN M T.
Hayne would have an opportunity of re-
plying i'll due time to the counsers argu-
ment, added the court. He might ask
questions, but not carry on cross fire of
argument with the opposing counsel.
Mr.. Pillsbury called attention to the
fact that the lease does not cover a con-
tinuous system from San Francisco to
New Orleans or New York, because there
was break in Texas. He denied that the
Sunset route and the Central Pacific were
not competing roads, because the latter
did not extend beyond Ogden and had no
control of the rates of freights and passage
beyond tnat point.
Then, In order to be a competing road,
it must go clear across the CONTINENT"
suggested District Attorney Fitzgerald.
"a competing road is one which starts
from the same terminal and ends at the
same terminal as another road" was Mr..
Pillsbury's definition.
In response to a question by the court
Mr.. Pillsbury SAID that the Southern Pa
cific OF Kentucky receives from the Cen
tral Pacific all over per cent on its capi-
tai stock.
does the lessee do the carrying" in
quired Mr.. Haype.
"Of course it does" said Mr.. Pillsbury.
''Then, why asked Mr.. Hayne, should
the lessee get share from the other?"
"If the Southern Pacific of Kentucky
sees fit to lease this read and operate it, it
has right to take a certain percentage OF
its earnings for that purpose" was Mr.
Plllsbury's explanation.
In illustrating point in his argument
the speaker said Suppose, for illustra-
ton, that the San Joaquin Valley road
that is being built was completed from
Stockton to Visalia it would be inhibited.
ii combination or an agreement should
be made between those roads by which
there should be an artificial division of
the business.
"They could not make an arrangement
that at the end of the month it should be
considered that one had carried so much
and the other SO much. and that on the
basis of tariff for that business one
should receive propor:ionate amount of
the money earned. Suppose that for the
purpose of convenience the Southern Pa
cific of California desired to operate that
road az part of through line and should
send its freight business over that road.
and that it would be allowed to get Ger,
tain percentage of all the freight collected
in California. they would have right to
do that in law if it was done for lawful
purpose"
The speaker then went on to discuss the