Los Angeles herald., 1906-02-16
ORANGE RATE
AND SHIPPERS
AN OPEN LETTER TO TRAFFIC
MANAGER FEE
An Orange Growers Vigorous Protest
Against the Rates Maintained by
Southern Pacific and Other
Transeontinental Roads

lar letter in re railroad rates and the
threatened danger to California inter-
ests by the Interstate commerce COM
| mission, together with certain other
printed matter, have been received and
| carefully read.
AS this is public communication
and probably addressed to the voters
of the state to mould public opinion,
l take the liberty of answering 1T
publicly, as a citizen of California and
producer of oranges in Southern Cal
ifornia and as one having the prosper
ity of this state and nation at heart.
From my knowledge of things gem
orally / have learned that the average
railroad rate in the United States for
carrying freight is mills or 7-10 of
one cent, per ton per mile. Also that
the average distance for freight car
riage haul is 240 miles. (See statis
ties of railways, L. =. c. reports 1902,
p. 64) l have also learned that the
cost of carrying freight per ton per
mile decreases as the haul increases.
In other words, that it does not cost
as much to carry a train load of
freight the second five hundred miles
as it does to carry it the first five hum
dred miles. The reasons are obvious. /
have also learned that the average haul
for California oranges from Southern
California is 2500 miles to points of dis
tribution.
A Case in Point
The rate charged for hauling my
orange crop from my station, ontario,
by your road is $125 per hundred
pounds, or $25 ton; whereas, If the
orange growers We're only required to
pay the average rate of mills per
t,,,, 10 e., ~.
short haul of 24O miles, it would only
cost me $3.50 per ton, instead of $25
per ton. In other words, we are COM
PEELED to pay your road $25 for every
ton of oranges shipped, when we only
ought to pay $3.50, even at the local,
or average rate, for only 240 miles;
whereas, you carried my oranges $500
miles, which rate should have been at
least one half as mucn per ton as the
average rate of Z mills for 24O miles,
or l am compelled to pay your road
$25 for what L ought to have had done
for $S.75.
l also know that last year the net
earnings of the railroads and car lines
of this country were, in round numbers,
$500, 900, 900, earned on the average rate
of mills per ton per mile for freight
carriage. This $500, 900, 900 is 6 per cent
interest on $4,000, 100000. / turn to the
statistical reports and find that the
nine groups, or pools, consisting of the
Vanderbilt group. Pennsylvania, Harri-
man yours) Hill, Morgan, Could
Moores, Rockefeller and Santa Fe sys-
tenn, comprise three-fourths of the
railroads in the United States and are
groups and pools, and they operate
under Joint tariff" and have stocks
issued amounting to $3,S27 100000 and
hnt dc 1OI.f Il
ing total of 81, 452, 600 900.
Now, if this represents three-fourths
of the value of all the railroads, four
fourths or the full value of all the
railroads, would be $9936, 100000, a sum
considerably less than $15,000,0 100000 on
which was earned per cent. But the
fact is that the railroads of this coun-
try are not worth any such sum as
So, 800 OO00 000
Hon. Joseph H. Call of this city,
special counsel for the government,
showed before the senate committee of
interstate commerce that the value of
your railroad, according to Interstate
commerce commissiOn's report of Feb
ruary II, 1905, at page 606, was con-
siderably less than 100000 per mile. If
we take this valuation as basis for
all railroads the true value of the
total mileage in the United States of
211,90O miles was only $6,330, 100000, in
stead of SO, 1856, ,000, 900, for which they
are stocked and bonded. And $4,000, =
100000 is what the interstate commerce
commission finds is the true valuation
Of all the railroads. The difference be-
tween $4,000, 900, 900 and the 50, 936, 900, 900,
for which they are stocked and bonded,
being 1886, 100000, must represent
watered stock, upon which and every
nt bat. ono n,
pay interest, at combination rates, ar
bitrarily fixed by all the roads in a
particular territory, joining in a pool,
or Joint tariff. "
Again, the report of your company
to the Interstate commerce commission
for 1902 shows that your. system OF
SAB miles was valued at $153, 1903, S67 and
had net earnings that year of $42S1
per mile. Or your systems net earn
ings in 1902. after paying all operating
expenses, was $23,301 ,4S3, which is fif-
teen and one-fifth per cent net on the
total valuation of $153, 303, ,S67, and is
six per cent on total valuation of
$3SS, 1858, ,050 And L further find from
the state board of equalization that
your road pays taxes on only $4,000 a
mile, that earns you net from your own
statement, $42S1 per mile, or rs 1-2 per
cent ON the taxable valuation, while
my ranch is assessed for nearly it's
full cash value and my orange crop
does not pay per cent net on that
amount. At this rate of taxable value
of $4,000 a mile, your whole system in
this and other states of 5443 miles
would be worth $S1, ,645, ,OOO But we
orange growers are charged rate that
pays per cent on $3SS, ,35S,O5O, or nearly
five times its taxable valuation.
In the face of these facts and fig
ures, your road, with pool, or Joint
tariff, rate with the Santa Fe system,
that has the producers and consumers
Of California at your mercy, charged
me and all the other orange growers
of California rate on 32, 900 carloads
Of fruit, that you hauled by trainloads
250O miles, nearly double the average
rate of mills per ton per mile for the
local short haul of 240 miles, that paid
this enormous. rate of interest. And
now you hope to induce me TO use my
influence to help you perpetuate that
inquity against this commonwealth.
If your road was compelled to carry
the oranges and other products TO
market at the average rate of even Z
mills per ton per mile the orange grow
ers alone would have $3,12O.O0O in their
pockets that are now wrOngfully IN
your treasury. And il you were made
to carry that freight at the reduced
rate for the long haul of 2500 miles
that you should carry 1t for, to-wit, at
x,f ba y a.