The San Francisco call., 1896-03-13
Mr. HERR|N TALKSALL DAY.
The Lawyer Battles Calamity
in the Southern Pacifc's
Cause.
MIsTRUsTs ASSESSED VALUES.
He Considers Mr.. Larue's Affidavit
Inadmissible and Incompetent
Evidence.

Attorney Herrin continued his argument
for the Southern Pacific Company during
yesterdays sitting of the United States
Circuit Court.
Mr.. Herrin commenced by paying his
respects to the affidavit of Railway Com
missioner Larue relating to the assessed
valuation of the property in California
owned by the Southern Pacific Company.
He contended at considerable length that
the court could not take cognizance of Mr..
Larue's figures and strongly maintained
that assessment lists were incompetent
and unreliable as evidence of the actual
value OF property assessed. Assessments
were made, he said, for the special purpose
of taxation, and in determining the ques-
tion at issue he thought no court could
properly take them under consideration.
Having been prepared for one special pur-
pose and with view to one special end,
he did not see how any court could have
the right to make any use of them for any
purpose whatever other than that for
which they had been prepared.
No attack, he explained, was intended
to be directed against the official honesty
of Tax Assessors. The statement was fire.
quently made that property. both real and
personal, was seldom or never assessed for
anything near its market value. This,
Mr.. Herrin said, might be true, but 1t
made no difference so long as the basis OF
assessment was uniform and no unfair dis
tinctions were made between taxpayers.
He maintained that such distinctions were
seldom or never made, and denied that
corporations were the recipients OF favors
greater than those shown to individuals.
The Assessor could not be attainted as
guilty of criminal negligence or bad faith
in office merely because he usually assessed
taxable property at a figure below its mar
ket value. Still, this fact should render
all tax assessment-lists inadmissible for
the purpose of proving the real value OF
property assessed, and hence he objected
to Mr.. Larue's facts and figures as evidence
of the value of the Southern Pacific Com
pany's property.
the Central Pacific Railway Company and
the Contract and Finance Company Mr..
Herrin maintained that while the road was
in process of construction the railroad
made no money. Every dollar received by
the latter-named organization from the
sale of bonds and other securities went
forthwith into the construction fund, ieav-
ing Mr.. Crocker and the other members of
the concern without a cent of profit as in
dividuals.
At the opening of the afternoon session
Mr. Herrin commenced by reading an affi-
davit made by w. E. Curtis during the
Central Pacific investigation before the
Railway Commission. Mr.. Curtis state
ment dealt with the cost of laying and
maintaining the railway between Sacra-
mento and Ogden. He named $30,000,00O
as a conservative figure and gave an esti-
mate of the running expenses and extra
ordinary disbursements, from which Mr..
Herrin deduced the conclusion that the
company owning and operating the road
should be free to charge such transporta-
tion rates as would yield reasonable rate
of interest on the funds invested. Esti-
mates of the cost of other Pacific Coast
railway lines were also cited to the same
effect.
1.-The result of the testimony cited" con-
tinued Mr.. Herrin, lis to show that in the
case of the Southern Pacific lines the cost
of laying and maintaining them far ex-
ceeds the amount of their bonded indebt-
edness. The California lines earned a sur
plus during 1894 of over 100000, but in
the first half of 1895 there was deficit of
over $500, 600. This shows how the reve-
nues of railway may fuctuate. An ar
bitrary reduction of the company's trans
portation rates might iniure the company
to great extent.
Now the Railway Commission has not
segregated the various Pacific lines, but
has treated them all as branches of the
Southern Pacific Company, regarding them
practically as unit. However. some of
these lines are merely leased while others
are the property of other companies
He contended that care should be used
in referring to the different lines, SO as to
avoid danger of confusion and possible i'll
justice.
The case of ex-Parte Kohler, receiver of
the Oregon Pacific Railway, was cited as
showing that owing to the expense of
travel on certain portions OF the road
rate which might be considered high it the
travel were uniformly even and easy on
all sections of the line was sustained as
reasonable. Mr. Herrin reiterated his ref
erences to the dictum OF Judge Brewer in
the Day case as being in harmony with the
spirit of the Oregon Pacific case. Other
citations to the same effect were COM
mented upon at length.
Mr.. Herrin was spirited and vigorous in
his contention that if complaint is
made that rates on certain lines are exces-
sively high, the offending lines alone are
to be held subject to investigation, and in
case of an Injunction issuing to reduce the
rates complained of this reduction ought
to effect the line or lines concerned, and
not all lines of railway owned leased or
operated by the company owning the road
or roads whose rates are called in question.
AT uDe SdIIle tlLlt, ile sdlel, luc GA pCllScS VI
running other lines owned by the same
company would have to be taken into con-
sideration in arranging the schedule of
transportation charges.
"This circumstance" continued Mr.. Her
rim, lis peculiarly deserving Of consider
alton in this case. The Southern Pacific
Company's lines are the links which join
California to the Eastern States. Now, the
transcontinental line is not gold mine for
the company. The cost of laying it was
enormous, while the expenses attendant
upon its maintenance are enough to render
its gains exceedingly small. For profit the
company depends mainly upon the reyen-
ues derived from its branch roads and
leased lines. Hence, in fixing the rates to
be charged on any one or more of these lines
regard must be had to the general expenses
OF the entire system of which the roads in
question form part.
1.-THE power OF fixing transportation
rates is not an arbitrary, tyrannical one,
irresponsible in its nature. with no other
object than the oppression OF property
owners. 1t is a benignant power, whose
only end is the prevention of fraud and
extortion.
THE Railway Commission can have no
greater authority than the Federal Con-
prass vet that BODY cannot cOnfiscate pri.