The herald., 1898-10-24
TO CANCEL AGREEMENT
SANTA FE TO CUT LOOSE FROM
THE SOUTHERN PACIFIC
PROMISE TO THE VALLEY ROAD
Banker Hellman Declares That the
Deal Ensures Legitimate Railway
Competition

First Vice President Robert Watt of the
Valley railroad, according to the San Fran
cisco Examiner, states that the deal by
which the Santa Fe is to obtain control OF
the Valley road includes promise on the
part of the Santa Fe that it will cut loose
from its existing traffic agreements with the
Southern Pacific company.
l. w. Hellman, president of the Nevada
bank, who is floating the $6,OOO,O 900 bonds OF
the Valley line, said as to that matter:
Il have nothing to say about the details
OF the deal between the Santa Fe and the
firmly believe, that the deal with the Santa
Fc means legitimate competition with the
Southern Pacific on both local and overland
business
According to certain friends Of the Valley
road, the Santa Fe has promised to cancel its
California overland freight arrangements
with the Southern Pacific as soon as its deal
with the Valley line can be perfected. When
Vice President Watb was asked specifically
as to this matter it is reported that he said
with much candor:
| Once in control of through line in and
out of San Francisco, the Santa Fe will
maintain an independent and competing
route. 1t will cancel IT. - arrange
ments with the Southern Pacific"
Others are quoted as taking a much less
hopeful view of the situation, recalling the
fact that not long ago the Southern Pacific
had contract with the Santa Fe, binding
that company not to build line between
San Francisco and Mojave without one or
| two years notice. coysldcrabie cash 1or-
feiture being provided for the violation of
the agreement. 1t may be pointed out,
however, that the requirement of road al
ready built could hardly be construed as a
| violation of that clause in the contract Fur
| themore, the competition of the Valley
road, already very keen in the central part
OF the state, may have left the Southern
Pacific in mood to raise no special objection
to the transfer, if by means of such transfer
further construction southwark could be
stopped and the Santa Fe bound up by a
new contract, providing for the use of the
Southern Pacific track between the Valley
terminus and Mojave. This trackage agree
ment is, however, believed to be uncertain
OF consummation, and if it should be neces-
sary for the Santa Fe to construct the con-
Meeting link, the gauntlet would be fairly
thrown down, and the Southern Pacific
could then test its security under the con.
tract.
In the face of Mr.. Hellman's positive as.
sertion that legitimate competition is bound
to ensue from the Santa Fe's deal with the
Valley road, there appears to be no basis for
man of the Democratic state central COM
mittee, and others, that the Santa Fe is
acting in collusion with the Southern Pacific,
with view Of ending the competition Of the
Valley read. The desirability of a San
Francisco terminal is too great for the Santa
Fe to tie itself up with non-competitive
agreement when it is in position to rear
large profits from course of strict independ
ence The Southern Pacific contract is prob
ably no longer feared by the Santa Fe.