The record-union., 1896-07-02
THE SOUTHERN PACIFIC CON-
PANY INDICATED.

The San Joaquin Valley Railroad has
reached a state of completion in which
it is enabled to offer to carry the
products of the country through which
it passes In order to get business at
all, it must necessarily make a reduc-
tion of rates. This 1t has done The
chief article of traffic in the San Joa-
quin Valley being wheat, it has re-
duced the rate on wheat from San Joa-
quin Valley points to Stockton. This
being accomplished. the anti-railroad
press heralds 1t as a triumph Of COM
petition.
Our anti-railroad friends had better
proceed very cautiously in these mat
ters. In the first place. it has not been
determined that the San Joaquin Val
ley Railroad can earn money at the
rate 1t proposes. In the second place,
that road is built through a country
crossed any mountain ranges or encoun-
tered any costly construction. The
road so far as built has been con-
structed at the very minimum Of the
low the average cost of constructing
lines in California. 1t has encountered
no costly bridges and very few culverts,
even.
That 1t has concluded to carry
grain at a lower rate Is not determinate
of any question that has agitated the
public mind, nor any problem relat-
ing to inland transportation In this
State. In brief, what 1t has accom-
plished Is to build road at the min
tmum cost of construction through a
rich district, and, in order to get busi-
ness, 1t has offered to carry the prod
ucts Of the country at g. low rate To
meet the competition offered by the San
Joaquin Valley road in the regions
served by It, the Southern Pacific Com
pany has necessarily reduced its rates.
This it must do or go out Of the carry
ing business. But it does not follow that
the rate 1t has offered is profitable, nor
is it determined that the two roads can
long maintain rates as low as are now
proposed.
Until these questions are determined,
the opening of the San Joaquin Valley
road to business, and its offer to carry
grain at reduced rates, are conclusive
OF nothing more than that 1t desires to
do some business. The fact that 1t
CliOhf radnafioy1
structed at the minimum cost is in it.
self vindication of the rates charged
by the Southern Pacific Company If
the San Joaquin Valley Railroad had
covered the State with a network OF
railroads, encountering mountainous
construction, contending against snow
and storm to keep communication open,
1t would afford analogies furnishing
standards of comparison But 1t has
done nothing of the kind. The San
Joaquin Valley road was built without
bonds. 1t remains to be seen whether
rates of transportation established by
1t will enable 1t to pay operating ex-
penSes and declare dividends to the
SdRAldi OiiGSS IL uO%S LllS, IL is q
failure. Nothing is ever established
until It is on a safe financial basis.
Neither the San Joaquin Valley road
nor any other road can afford to serve the
public at a loss, and 1t will do this un-
less the capital invested in it will earn
q fair rate of interest.
When therefore anyone arises to say
that the reduction OF rates by the San
Joaquin Valley Railroad is an evidence
that the rates heretofore obtaining
have been too high, they are indulging
in meaningless nonsense. No data is
afforded by what has been done by
which the great problem of maintain
ing a system Of transportation can be
solved.