Year: 1878

tSac. Record U Union.1


The amendment proposed by Mr..
Ayers to the eighteenth section of
the report of the Committee on
Corporations other than Municipal
has given rise to prolonged discuss
zion, and no wonder: for it is among
the most extraordinary PROPOSE.
tIons that have been introduced
in the Convention. The interest
sought to be protected is that OF Los
Angeles, and 1t Is demanded that
this interest shall be put before
those Of all the rest Of the Southern
portion OF the State. 1t is the
ambition of Los Angeles to be the
distributing and supply point for
the Southern territory, and hith-
erto this ambition has not been sat-
isfied, for the reason that the rail-
road cannot make special terms for
that city without discriminating
In the most unfair manner against
other places. Los Angeles virtual
" requires that all other neighbor-
ing places shall be put at q disad-
vantage In regard to transporta-
tion, In order that her trade may be
built up. AT present the people
who live In the surrounding coun-
try can procure their supplies direct
from San Francisco as favorably as
they can get them from Los Ange-
les. 1t is sought to compel them to
trade with the latter city, and this
Is the real meaning of the PROPOSE
tlon advanced by Mr.. Ayers. There
is nothing to prevent the people OF
Los Angeles from chartering steam
ers to run between their city and
San Francisco at the present time,
but 1t seems that they do not want
to do this.


II the amendment proposed was
inserted in the Constitution, how
ever, possibly they think 1t would
be easy to put on q steamer for one
or two trips, force freights down be-
low living rates, then withdraw the
steamers, and thus secure starva-
tion rates In perpetuity. 1t is nec-
essary to bear in mind, however,
that this Is 8 sort of game that two
could play at. Under such state
Of the law 1t would be quite prac-
ticahle for the railroad company TO
blockade the Sacramento river, and
prevent the establishment of any
opposition by water. 1t would
also be possible for any one to close
up any railroad, by forcing compe-
tition and then Withdrawing from
the contest. Of course it would
depend greatly upon the relative
strength of the mbatants, and
the promptness with which the
Initiative was taken, how the
struggle would terminate; but it is
perfectly apparent that since
neither railroads nor steamers can
continue to carry goods and passen.
gers below the cost of Transports
ton, the ultimate tendency of the
law wonld be to destroy, not COM
petition alone, but transportation.
Wherever competition was possi-
Bile, in fact, this law would put it
In the power of any one possessing
little capital to break down
the business of q railroad.
A corporation might have
spent millions in building q
road, and somebody could then
come in, start an opposition at q
cost of q few thousand dollars,
compel the company to lower their
rates, and thus destroy their means
OF earning interest on their invest.
ment. The proposition is thor.
oughly inequitable, and it Is i'm
possible that it could operate tc
The advantage of the public, un-
less it il to he assumed that the
closing Of railroads and the sus
pension of steamer lines would be
= public benefit. 1t frequently
happens that companies are
forced by competition to lower
their rates TO point below
what will return profit OF
transportation. Insuch case this
law would compel them to go on
carrying for nothing indefinitely
The result would be that no bona
.fde competition would be attempt
ed, for 1t is evident that new line
would have no more chance of sue
ceeding under such provision
than an old one. When an opposi


tion line of any kind is started, the
rates are at first put very low il
order to attract business, but ii /,
was known that the company
could never expect any bet.
ter returns than could be OBJ
tained from the very lowest rates q
sharp competition might produce
no man in his senses would evel
again invest dollar ia such an un
dertaking. The only persons whe
would be tempted to do anything
would be sharpers and blackmail.
ers, and Mr.. Ayers's amend.
ment certainly opens an invit.
ing field to that class of op'
orators. For they could, un-
der his provision, go to any
navigation or railroad company and
extor. money from them by threat
ening O ruinous competition. II
would certainly not be worth while
to establish q Railroad Commission
il this amendment were adopted,
tor rates Of fare and freight would
then be regulated upon an entirely
new principle. A more certain
method of shutting up railroads it
would be difficult to devise; but
where the public advantage comes
In we do not perceive.