The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1896-12-01


The lease of the Northern California Rail-
road provides that the Southern Pacific Com
pany shall ''add to and better the same during
the term" This expenditure, therefore, is
proper charge of the Southern Pacific Com
pany.
Tneiease of the South Pacific Coast Rail-
road Company is 100 long to quote.
1t is said by counsel for the respond
ents that it as q virtual convey
ance OF the property for the term (hfty-fye
years. without any recompense to the lessor
other than the payment of its annual liabi.i-
ties and guaranty of It's bonded indebted
ness" Granting this is SO, it yet devolves upon
the Southern Pacific Company TO maintain the
road and the making of such improvements as
have already been described was proper
expenditure by 1t. hence a proper item OF
charge to be made by it.
In the omnibus lease, so called, in which the
Southern Pacific Company tof California, Ari-
IONA and New Mexico, respectively lease to
complainant there is this provision:
.'Third-The betterments and additions to
said leased properties shall be made by the
said Southern Pacific Company, and settlement
therefor made annually at the same time that
payment is made for the net profits as herein
provided, and each of said railroad companies
shall be charged respectively with the amount
of payments made for betterments and addi-
lions to the property owned by it."
This makes the betterment and improve
ments expenditure of the several compa-
MES, not of the Southern Pacific Company,
and therefore not to be allowed TO it.
The remaining objection is that made to the
rental of $500, 900 to be paid to the California
Pacific road. l see no objection to this $780,
600 rental 1t is an annual expenditure OF the
Southern Pacific Company, to be annually re-
i'm bursed TO it from the income OF the road
with other expenditures. The deficit on that
road, therefore, can be regarded, if the other
charges are correct. to be $54 ,905 60.
After review and consideration of elab-
crate tables of figures submitted by both
sides. the court states it as his conclusion
that there was ''deficit for 1896 Sirom the
operation of the road entirely in California
of $552, 1856 81"
The decision concludes as follows:
In this computation is not included land de-
partment expenses, taxes on land, back taxes
or taxes on franchises held legal by the Su-
preme Court.
From this showing it is perfectly evident
that there should be no reduction of rates of
the Southern Pacific Company, either regard
ing the Pacific system or the California roads,
unless its business increases. Us there pros
pect OF that so near that the court will be justi-
against the new rates?
1t is alleged in the bill that when the rates
in California were esta blished by complainant
they "were no more than sufficient to enable
your orator to operate said railroads as afore-
said and so remained down 10 the commence
ment of the year 1894. That in said year an
unusual depression in business occurred, and
the freight and passengers offered to your
orator for transportation over said railroads
your orator was unable from the income de-
rived therefrom, at the rates aforesaid TO pay
the charges, costs and expenses necessary for
the conduct of its business and the security of
its property, as hereinbefore set FORTH
THAT said business depression has continued
to the present time, and there is no indication
that it will be relieved or the volume of freight
and passenger traffic be increased during the
present or next ensuing year; and your orator
is informed and believes and therefore AYERS
that said business depression will not be re-
lieved or SUCH freight and passenger traffic be
increased during the present or the next en-
suing year."
These allegations of the depression of bust
ness and the possibilities of its continuance
were attempted to be supported or denied by
the respective parties by affidavits necess arily
more or less speculative and coniectural and
the power of the court to take judicial notice
OF 1t and make special applications of it was
asserted or denied. Bnt there need be no con-
lecture, nor need the court resort to any but
the ordinary methods of proof. The business
of the complainant has certainly decreased, as
is apparent from the evidence. How 1894
compared with 1893 do no. know How
1894 compared with 1895 has been shown
and the difference is easily understood and ac-
counted for. 1t could have no other cause but
depression in business affecting the market
and transportation OF all articles.
The depression existed when the bin in this
case was filed, to-wit, October Id, 1895. and
there has been nothing offered to show a
change. may not assume one, even from the
sources of judicial notice, so definite as to time
or amount as TO determine judicial view or
action. But this is not seriously important.
The regulation of the rates on classes of freight
other than grain does not now embarrass our
consideration. Before final action shall be de-
termined or taken on them by the Board of
Commissioners and before they shall be ex-
pressed in a schedule this case can be tried
Before any considerable movement in grain it
can be tried, and the conclusions from this
preliminary showing be confirmed or refuted
and final injunction be granted or denied 1
cannot refrain from saving TO that oppor-
tunity and time the parties to this suit
should eagerly LOOK and eagerly prepare
Great problems are awaiting solution
which will receive their solution, or COM
mence TO receive their solution, then and bv
it. Then and by it will be shown whether
that allegation of the complaint be true. s.that
the rates now in force upon the several rail-
roads operated by it as aforesaid have been
fixed according to conditions and circum-
stances surrounding the traffic, and with a.
careful regard for the commercial and com.
petitive conditions which enter into, affect or
control the making and relative adjust ment
of rates and classiications and commodities in
the territory traversed by said railroads, and
in many cases are now fixed at the actual cost
OF transportation, by reason of competition
with other carriers by railroad and water.n
Or that other averment of respondents be
true, that ''affant is informed and believes
and the history of the complainant corpora
ton in this State, with which he is familiar.
confirms him in such belief, and he there
fore AYERS that in many cases the rate
OF transportation is fixed at about the
actual cost of such transportation at points
where IL is the interest and object of the COM
plainant to crush out opposition and destroy
the property of competing common carriers;
and that large expenditures of money have
been made which were unwarrsnted and I'M
called for by the commercial conditions exist
ing at the present time, or in the near future.
but that such expenditures were made and
large properties created for the purpose of