The San Francisco call., 1896-03-20
THE REDUCTION
Of GRAIN RATES.
Attorney.General Fitzgerald
on the Commissions
Powers.
ESTIMATES NOT FAIR.
Accurate Information on Rail-
road Operating Expenses
Demanded.
THREE DAYS OF HIS ARGUMENT
Mr.. Fitzgerald Has Talked Since Mon
day, and Will Continue
To-Day.

Acknowledgement Fitzgerald has occu-
pied three days with his argument before
Judge McKenna in the injunction suit OF
the Southern Pacific Railroad Company
against the California Railway Commits
sion, and he will continue to-day.
Taking up the resolutions adopted by the
Railway Commission to reduce the grain
rates, the Attorney General said that the
railroad company treated them both In
the complaint as one and indivisible. They
are separate and distinct, however, and
were adopted on different days and by
different votes. The resolution of an
per cent reduction in grain rates was
adopted unanimously on September II,
and the proposed horizontal reduction OF
% per cent was adopted on September 13
by vote of to 1.
The railroad estimates of reduced rev.
enue are not fair, being based on the as
sumption that the resolutions stand to-
gether. If we can show that the grain
rates are reasonable that will end the
matter, provided that we can show the
resolution of the 25 per cent horizontal re-
duction to be the expression of purpose
when the Commissioners find on further
All the averments as 20 the effect that
the reduced rates have on the railroad
revenue are made on the personal knowl-
edge of Mr.. Huntington and not informa-
tion and belief.
In relation to the allegations of expendi-
lures Mr.. Fitzgerald held that the State
was entitled TO a detailed statement. with
out which it is impossible to determine
whether the rates are reasonable or unrea-
sonable. Improvements should not be
charged on the account of operating ex.
penses, as was done in the testimony be-
fore the Pacific Roads Commission. The
record does not show what the operating
expenses were.
The Acknowledgement returned to the
question of the validity of the leases, re-
plying to Mr.. Herrin's argument that the
roads must be treated as system.
The Southern Pacific Company comes
into court as the agent of six leased roads.
1t does not own these roads. The position
of the company is that if it has the right
to sue ut all it has merely the right of each
of the leased roads-it has nothing more
than the right to act as agent of each.
If the leases had not been made each of
these companies would have been COM
PEELED to resist the rates for itself. The
fact of road being leased to the Southern
Pacific Company does not give it any new
rights.
There is no showing in the complaint
that any injustice is done to any one of
these roads individually, nor otherwise
than as part of the Southern Pacific sys-
tenn.
My contention is that the Southern Pa
ciic Company represents these corpora
tions Individually and not collectively any
more than if the corporations were leased
to several different parties.
Judge McKenna asked whether the
lessees must not be regarded as conveying
present title to the Southern Pacific Com
pany, and Mr.. Fitzgerald again contended
that the lessees could not legally operate
the roads except as individual roads.
Combination of a direct nature would
have been unlawful, and by any system of
leases the combin alton cannot be legally
affected, though the means be indirect.
In answer to the question how the rates
are to be established under the laws of this
State, Mr.. Fitzgerald said that it is by the
preparation of schedule of rates and the
service of the schedule upon the railroad
companies. The rates go into effect
twenty days after the service of the sched-
ule. The establishment of the rates is
legislative act, not of a judicial nature.
The means are prescribed by the constitu-
ton and by legislative act, and nowhere
in the constitution or the legislative act
can be found authority for the adoption
of such resolution as this which we are
considering. The resolution is not worth
the paper upon which it is written.
The standing of the Railway Commits
sion as legislative body was discussed at
length, and that subject was under con-
sideration at the hour of adjournment,
Mr.. Fitzgerald contending that the Rail-
way Commissioners, as legislative body,
cannot be enjoined.