The San Francisco call., 1913-08-02
NEW RATE BASIS
IS EsTAbLI LIsHED
as sY COMMISSION
Far Reaching Decision After
Long Wells Fargo In
quiry Brings Principle
Into Practice
STATE is DIVIDED
INTO TRAFFIC ZONES
Countervaihng Tariffs Pre-
scribed-Fixed Charges
Within Each Area

that the proper governmental author
fty investigate these intercorporate re-
lationships
The decision points out that with lit
tie extra cost the railroads could take
over and handle the express business.
IT states further that this is true par
tcularly as to the Southern Pacific,
which could thereby stop the leak to
the express company which new exists
NO SANTA FE HOLDINGS
II is set forth that evidence shows
that the Santa Fe railway receives 55
per cent of the gross earnings of Wells
Fargo & Co. upon its lines. and that the
Southern Pacific company receives
only 4o.S per cent of the express earn
ings upon its lines. In view of this
fact, however. the Santa Fe intervened
in the case and fled protest. claim
ing that it did not receive fair com
pensation for the service performed
for the express company, while the
Southern Pacific did not make an ap-
pearance in the~case.
The commission finds this significant
and explainable on the ground that
neither the Santa Fe nor its principal
stock holders are heavily, if at all in
terested I'm Wells Fargo g. Co, and
that the Southern Pacific officials and
Its principal stock holders are.
1t is declared that the value of the
company's property devoted TO Cali
fornia business is ssfs.2ss.e5. The
company has been earning annually
as high as ss42,0s754 or 1S6 per cent
on this investment.
HUGE PROPERTY AMASsED
Commenting upon the company's $
operations throughout the United
States, the commission finds that 1t has
accumulated property of the approxi-
mate value OF s27,00o.00o through ex-
cessive and burdensome rates upon the
patrons.
The investigation began when the
present railroad commission assumed
ONCE in January. 1911. and all rail-
roads and express corporations within
the state filed their rates
During its Investigations. the COM
missions express experts, accountants
and general stan have examined 2 800.
600 actual package shipments and way
bills. 1t has worked out in detail In
excess of $1,000 900 rates. The en-
BlnSeFtHS department. HAS worked OUT
a checkerboard map of the state of
California creating the 10 mile zones
In reaching It's conclusions the conn
mission took the months of June and
July, 1911, as typical months of the
express company's business. These
months were suggested by the express
company.
SUBJECT TO REVISION
The commission directs that the new
rates shall be put into effect by Octo-
Der I. The decision calls upon Wells
Fargo & Co. to make a compilation
during the next six months of the gen.
eral effect of the new rates and pro-
vides that a statement thereof shall
be submitted for the purpose of ap-
prising the commission of the exact
effect of this decision upon the COM
pany's revenue.
The express company is to be al
lowed 10 per cent upon It's investment
devoted to California business. This
percentage was requested by the COM
pany.
IF it appears" says the decision.
that by reason of causes not now
known or facts not in evidence in this
case, or any other reason, that the
changes In rates herein ordered have
resulted in injustice either to this car
rier or its patrons, the commission will
make such further order as the evil
dence so submitted shall justify
Changes in the regulations include
the provision that the use OF rubber
stamps for receipts shall be prohib-
tied and that valuations must appear
on receipts. or, in lieu thereof. state
ment that no valuation was given.
OTHER RULES ALTERED
The rule allowing a corporation to
charge q higher rate when charges are
DC fc
quired that charge for valua ton shall
not exceed the charge for transferring
g like amount of currency.
Segregating the business wholly
within the state of California from the
interstate business, the railroad COM
mission reaches the following cenelu-
sion as to the annuel earnings of Wells
Fargo & Co. in this state;
Gross earnings per year. 81 sos 4sa IS
Paid 10 railroads Observation-Disclosures. i 997oi9 IA
Balance .a.........-.....l..-... sam, At 45
Operating expenses. !. .729, ,5IS 81
Profit for the year. ss42 oe7. "a
Value OF company's property used
in California business. ..-........ Sele 22S e3
Rate return per sHnuu. lea per cent
Net earnings at 10 per cent, s61,3zs.
Reduction in net earnings, 80 per
cent
absurd" Ripley Says
CHICAGO, Aug. 1.-"As for the ex-
press company's being parasite on
the railroads. that's absurd" said E. p.
Ripley, president of the Atchison, To-
peka and Santa Fe railroad, tonight.
L think the proportion which the ex-
press company now pays for service
rendered is about equable, except that
If we were going to make new con-
tract, as we shall in four or five years.
we would ask for little more"
BOY, e, SHOOTS HIS FOE, S
Chicago Lad Says He Fired to Avenge
Week Old Blow on Head
CHICAGO, Aug. 1.-Genaro Raffaele.
s years old. was held by the police
today and confessed that he shot and