The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1915-12-24
THEY Still TALK
OF PACIFIC MAIL
Californian Says Railroads Sub
sidized COMPANY TO Keep
II Out of Trade

mat Jne WltnuTaWal OF the Ioclnc
Mail Steamship Company from the
Oriental service in no way was influ.
enced by the enforcement Of the Sea
mems act and that such action had
been contemplated for several years,
or at least since the passage of the
Panama. Canal act, which prohibited
railroad owned steamships from using
the canal, and that the company saw
an opportune. time to retire at a.profit,
were the charges made by Isadpr
Jacobs, president of the California
Canner.es Company, at a luncheon Of
the Homet Industry League, according
to San Francisco mail dispatches. q
Largely Inflated Value =
There is so niue. being said on
both sides regarding the operation of
the Scamon s bill and the effect OF
the same that, i propose to go into it,
from q new phase OF the subject. 20 The
most important controversy in regard
to this centers around the withdrawal
| Of the steamers. of the Pacific Mail
Steamship Company from the Oriental
trade. XXX
mr.. Jacobs said .v,.i
when the Pacific Mail Steamship
Company was organized many years
ago the capital stock was put on the
! market, and as usual represented, n
largely inflated value. The control of
the stock was In the hands of che
Southern Pacific Company, who there.
by were enabled to influence the pol
icy of the company. A contract was
made by the Pacific Mail Steamship
Company with the railroad across the
sthmus Of I'anhna, then controlled
by French interests, but as the years
passed il developed that the Pacife
hail did not become even q small
factor in the transportation of goods
between California and the Atlantic
sea0Oard cities, OF, vice vera.
Pooled Their interests
IAN investigation disclosed that the
transcOntinental railroads had pooled
their interests and were cont, ibutins
the sum of 100000 per year to the
Pacific Mail Steamship Company in
order to sneutralize their competition
between the Atlantic and the Pacific
| All the transe ontinental railroads Join
ed in this subsidy or subvention t.
the Pacific Mail, each road contributing
an agreed pro rata.
| This was an extremely proftab bic
contract for the Pacific Mail. 1t en-
/ abled the Pacific Mail to earn good
dividends on its inflated capital. AS a
'esult of the agitation begun in Cali.
fornia the contract was abrogated and
yet the Pacific Mail, controlled as il
was, made little effort to get into the
trade between California and the At
lantic seaboard centers.
"Of course, with this income cut of
the Pacific Mail profits were to a
i great extent curtailed. The United
States government having taken over
the French interests on the Isthmus
/ of Panama, complaint was filed in
Washington by Pacific coast cities that
4 the Pacific Mail was not legit;mately
4 eatering to business, that was com
petition with the railroads, and >Presi
i dent Roosevelt, at the recommendation
of then Secretary of War Taft, ap
pointed Bristow of Kansas as special
Panama commissioner to investigate am
report on the complaints from the Pa,
cifc coast cities. This report was sub.
mitted to congress and the facts
brought out. This led to the formation
of the American Hawaiian STEAMSHIP
COMPANY by contract with the Mexican
government across the Tehauntepec
\ Isthmus.
Inc ease Is Enormous
| Immediately Pacific coast trade on
the isthmus became an important factor
the value of mere ha ndise moving via
Tehauntcpec alone increasing between
1905 and 1910 from under eight mill
ions of dollars to over twenty-five mill
ions. Since then the Increase has been
enormous. although for many years the
Pacific Mail still continued on their
policy of not catering to this bust
| ness.
"Then came the passage of the Canal
act, which especially prohibited
controlled in whole or in part from
using the Panama Canal Immediately
u Mr.. Sehwerin announced that if Prssi
dent Taft signed the bill the Pacific
Mail Steamship Company would retire
from business, including its Oriental
trade