The San Francisco call., 1896-04-02
The Attorney.General Says That
It Exceeds the Value of
the Property.
CAUSING EXoRBITANT RATES
Remarkable Showing Made in the
United States Circuit Court in
the Railroad Case.

Attorney-General Fitzgerald spoke all
day yesterday in Judge McKenna's court
and handled mass of figures ana statis-
tics that would have distracted an ordi-
nary layman. The figures were those of
the railroad company, and were quoted to
show that the business was yielding large
profits and that the bonded indebtedness
of the roads was greater than their value
In The morning he resumed his showing
against the railroad company on its report
for 1894. He argued that the report had
been doctored TO show deficiency when
in fact the net profits of the entire Pacific
system amounted to 1884. 600 in 1894, and
on the California system to 1885,, 600, max
ing total net profit from all sources of
more than one million dollars
He argued also from the company's own
report that the railroad company had used
the cost of the betterments for the pur-
pose OF showing a deficit, ana also for
showing an added cost of construction
over an@ above the actual cost. The at
torneys for the company had filed the re-
port as part of the evidence, only for which
fact he would not have been allowed to
use 1t in his argument.
The Attornev-Genera spent considerable
that the cost of the roads exceeded their
bonded Indebtedness. Mr.. Herrin, he
said, had stated that there were additions
and betterments not being in the nature of
repairs or mere operating expenses from
1870 to 1874 amounting to S., ,9O3, SIS Is.
Included in the bill of the complainant as
operating expenses are these items, based
upon the estimates of Engineer Stevens:
Southern Pacific of Arizona-Cost of
construction, S7,OO5, $50 09; additions, bet
terments and improvements, 5000, 900;
total cost, S1O,O23, $50; bonded indebted
ness, 10000 900.
Southern Pacific of New Mexico-Cost of
construction, S3,649,572 20; betterments,
etc, $3.50, 37S %; total of 81, ,213950 46.
Northern Railway-Cost, 50, ,419 903 OF;
betterments, ETC., 81 ,003 900 10; total, $10-
s454, ,903 IL.
The Attorney General asked the court to
carefully consider this question of better
ments and additions. He contended that
the plaintiff operated the Northern Cali
.fernia Railway Company as though il
were its own property for the term of forty
years at nominal rental of 81 per year;
therefore, the imp lovements and better
ments must be treated as an addition to
the-value OF its own property.
= The plaintiff has availed itself OF these
expenditures for additions, improvements
and betterments for the purpose OF show
ing an apparent increase in the cost of
construction, and it could not again avail
itself of them for the purpose of increasing
the operating expenses so as to create an
alleged deficit.
The speaker next proceeded to show the
values OF the roads, as sworn TO by the
proper railway officials under oath in max
ing their returns to the Assessors, and the
value of the steam boats, ETC., as made by
the Assessors.
Central Pacific Railroad - Franchise.
roadbed, ETC., So, 702, ,671; Assessors valua-
ton on steamboats,, etc., $5,516, ,S96; total
$14, 219, $50.
Southern Pacific Railroad Company OF
California = Franchise, etc., $11, 106, 369;
Assessors valuation, So, ,012,973; total, S16,-
119 80.
California Pacific Railroad Company
Franchise, etc., SI,350000 Assessor S
valuation, $54 ,935; total, 81, ,404, ,935.
Northern Railway Company-$3, AS, 542;
Assessors valuation, $l75,110; total
S3, ,620, ,652.
The total valuation of all the roads was
given by the speaker at S47, 7,695, 728 and the
bonded Indebtedness at $l02, 1856, 800, so
that the value OF the property, according
TO Mr. Towne's sworn statement to the
Assessor, was less than one-half of the
bonded Indebtedness. Then the following
9 statements were read:
StilIdl faClHC TN OdllIOr0la l-BOnQed
Indebtedness. $35, APO 900; excess of bonded
Indebtedness over value, $15, ,691. .533; actual
value, $4,000, 900, the bonded indebtedness
being more than two-thirds greater than
the value.
Southern Pacific Railroad Company
Bonded Indebtedness, $43, $50, 400; actual
value, $2l, 1872, 205; excess 500, $50 1876. Here
the indebtedness is more than twice the
value of the road.
California Pacific Railroad Company
Indebtedness more than four and half
times the value of the road
Theexcess of the bonded indebtedness
over the actual value OF the Northern Rail
way Company was SSSS. $50.
Those are the valuations of the Asses
sor," suggested Judge CARRIER.
"They are the valuations as furnished
bv you to the Assessor; as furnished by
Mr.. Towne under oath, replied the Attor-
ney- General.
The excess of the bonded Indebtedness
of the Southern Pacific Railroad Company
over the value was 81, 127 ,04S, continued
the speaker. The aggregate bonded in
debtedness OF the roads in California was
$l02, 1886, 800 and their actual value only
$47,695, 798. The bonded Indebtedness of
the roads to the Government was not in
cluded in the foregoing, and the annual
interest of $5,505,753 is nearly II per cent
OF the actual value or the roads.
1.-The complainant asks" continued the
speaker, that the shippers of California
Q should be burdened with exorbitant rates
in order that they:may make profit upon
this enormously isproporiionate bonded
Indebtedness. They say to the Assessor
under oath that this property is worth
SAT 100000 and TO the court in this case
they say it is worth more than $102, 900, 600.
They are acting in bad faith In this case.
and they are not entitled TO anything in
equity.
'"W hile the valuation, as shown by the
Assessor, is not evidence of its value in
other cases, in this case the COMP iainant
has furnished the court with q definite
standard by which the real value of the.
property may be arrived at 1t has shown
that II is the custom of Assessors to assess
property at &c per cent of It's commercial
value. Therefore the valuation doubled
may be taken as the actual commercial
value of the property assessed"
Tie. Attorney Genera! argued that Mr.,
Herrin had omitted from his statement
S27, 600, 900 of bonded Indebtedness of the
Central Pacific Railroad Company to the
Government and SIS. 100000 of interest,
which made the total bonded indebted
ness $l02, ,024,0Oo. or $4,000 600 more than