The San Francisco call., 1913-08-02
Far Reaching Decision After
Long Wells Fargo In
quiry Brings Principle
Into Practice
STATE is DIVIDED
INTO TRAFFIC ZONES.
Countervailing Tariffs Pre-
scribed-Fixed Charges
Within Each Area

that the proper governmental author
lts investigate these intercorporate re-
lationships
The decisions points out that with lit
tie extra cost the railroads could take
over and handle the express business.
1t states further that this is true par
ticularly as TO the Southern Pacific.
which could thereby stop TIE leak to
the express company which now exists.
NO SANTA FE HOLDINGS
1t is set forth that evidence shows
that the Santa Fe railway receives SO
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 filed a protest. claim
ing that it did not receive fair COM
for the express company. while the
Southern Pacific did not make an ap-
pearance in the case.
The commission finds this significant
and e1plainable on the ground that
neither the Santa F'e nor its principal
stock holders are heavily if at all, in
terested in Wells Fargo g. Co, and
that the Southern Pacific officials and
its principal stock holders are.
IT is declared that the value OF the
company's property devoted to Cali
fornia business is s61323S65. The
company has been earning annually
as high as sS42. .09754. or 1876 per cent
on this investment,
HUGE PROPERTY AMASSED
Commenting upon the company's 5
operations throughout the United
States, the commission finds that it has
accumulated property of the approxi-
mate value of s27N00.o0o through ex-
cessive and burdensome rates upon the
patrons
The investigation began when the
present railroad commission assumed
office in January. 1911. and all rail-
roads and express corporations within
the state filed their rates.
During its. Investigations, the CONF
missions express, experts accountants
and general staff have examined 2,300,-
900 actual package shipments and way
bills. It has worked out ih detail in
excess of 5000. 000 rates The en-
gineering department has worked out
a checkerboard map of the state Of
California creating the 10 mile zones,
In reaching its conclusions the COM
mission took the moHths Of june and
July, 1911, as typical months of the
express companys business. These
months were suggested by the express
company.
SUBJECT 70 REVISION
The commissions directs that the new
rates shall be put into effect by Octo-
Der l. The decision calls upon Wells
Fargo g. 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 ia 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 ext
QEUCc SO SuDI1lllcu Snail JUSTLY
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 a higher rate when charges are
not prepaid Is rescinded. 1t is re-
quired that charge for valuation shall
not exceed the charge for transferring
a like amount of currency.
SegTesa ting the business wholly
within the state of California from the
Interstate business, the railroad com
mission reaches the following conclu-
sion as TO the annual earnings of Wells
Fargo. & Co in this state:
Gross earnings per year 81, 50s. 4se. Is
Paid TO railroads s-.,-.....-....-- 1887 ,O19. 7a
Balance $2.571. 4l6 Il
Operating expenses ....-.-........ L. 72s. .31S. 81
Profit for the year. $S42. oo7 a
Value OF companxs property used
in California business ........... S6l3 o33 G.
Rate on return per annum, 1876 per cent
Net earnings at 10 per cent. s61.32s.