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above quoted unless it is entirely of one kind of goods, which can rarely occur; and that hence the rates paid are almost invariably those charged on lesser quantities, averaging fifty per cent more than the aforesaid carload rates, namely: $2 354, $i 50, and $1 20 per 100 pounds, respectively.
It is very difficult to get at what this party means by the language of the complaint. But I notice that the rates first above quoted under this head are stated as “carload rates;” that is, it is alleged that the rates of $1 20, $1 09, and $1 01 per 100 pounds, respectively, apply only when straight carloads of goods are shipped. This is a mistake, so far as first class rate of $1 20 per 100 pounds is concerned. That is the rate per 100 pounds on all ordinary merchandise, regardless of the quantity shipped, whether great or small. It is, therefore, not true that the charges are invariably 50 per cent more than $1 20 per 100 pounds.
The rate of $2 351 is the maximum rate charged upon anything. It is applied only upon such articles as band boxes, baskets, batting, bird cages, boats, empty churns, empty barrels and casks, fruit boxes and trays, feathers, fireworks, etc.-articles that are extremely bulky, displacing from four to ten times the space occupied by the same weight of ordinary merchandise; or articles which are extremely hazardous, such as coal oil or gunpowder, in small quantities, liable to injure the train, damage the cars, or damage other freight when loaded in the same car, or which require special cars or special attention in order to handle, etc. These articles number, as you well know, scarcely one hundred out of the multitudes of articles of human production and consumption which makes the sum of traffic of a railroad company. Their amount is infinitessimal in proportion to the tonnage of the road, not equaling, I venture to assert, one hundredth of one per cent of the whole. If they were all taken at first class rates, the reduced rates could have no appreciable influence upon the prosperity of any community or individual. The same is true of the articles which are taken at the lower rate of $1 80 per 100 pounds, being such as are rated in the railroad parlance at one and one half times first class. They are so rated for reasons similar to those given in the explanation of the maximum rates. The list contains such articles as thrashers, steam boilers, brooms, children's cabs and wagons knocked down, china baskets, copper vessels, unless they are nested and packed, drygoods, when packed in bales, which, by being so packed, are extremely susceptible of damage by chafing or leaking of liquids in the same car, some kinds of empty packages, hats and caps, shrubbery in bundles, and drain tiling in less than carloads. I think that one twentieth of one per cent would be a very liberal estimate of the relation they would bear to the whole tonnage. Respecting these rates, if there is taken into consideration the displacement of space, the liability of damage to the article itself or its liability to damage other articles loaded near it, its value, and the risk in handling it, and all the other elements proper to be considered in rating freight, they will be found to be the lowest charged by this or any other railroad company.
The legal restriction of 15 cents per ton per mile makes it impossible for the railroad company to fix a fair charge for the transportation of some of the articles included in the class above referred to.
This complaint also states that the charges between San Francisco and Los Angeles are but 10 cents, 6 cents, and 7 cents per 100 pounds on first, second, and third classes, respectively, greater than the charges from San Francisco to Sumner. The statement is partially incorrect, as the real difference is 10 cents, 8 cents, and 7 cents, respectively. The smallness of the difference is adduced as evidence of unjust discrimination in favor of Los Angeles and against the citizens of Kern County. I am unable to view the matter in the same light, and I think it will be difficult to justify the views of the gentleman making the charge before any thoughtful or unprejudiced Judge or jury.
Before the Southern Pacific Railroad was built, Kern County was dependent upon wagons and stages for its means of transportation, at a cost of which the tariffs of the railroad company are but a fraction. Its lands were chiefly devoted to grazing. At the same time Los Angeles County was served by sailing craft and regular lines of steamships, at rates which, it is reported, were seldom greater than the same class of carriers now charge. The interests of the county were diverse—fruits, cereals, cattle, and sheep were abundantly produced, and the chief city of the county was the center of trade for the southern portion of the State. That which this complaint terms discrimination, i. e., the difference in the cost of transportation to and from Kern and Los Angeles Counties, respectively, certainly subsisted at that time. Did the railroad company create it? Did it increase it? How is it with Kern County now? The railroad has been built, cost of transportation of supplies has been largely reduced, land has not only trebled and quadrupled in value, but values have been created where none before existed. Agriculture has not only become possible, but profitable, for the people have secured the “open sesame" to all the world's markets, and this, too, without a dollar's expense to a citizen of the county. How is it with Los Angeles County? It has received the same railroad facilities, in addition to its other natural advantages, but has been deprived of the same relative benefits (the cheapening of the cost of marketing its produce and receiving its supplies) by law. Here is a discrimination, indeed. The railroad company is allowed to decrease the cost of freight for the Kern County citizens, but restrained, by law, from doing the same thing for the citizens of Los Angeles County. The hardship is twofold, but does not affect, except indirectly or remotely, a single citizen of or interest in Kern County; but it does affect the railroad company by compelling it to forego a large portion of the traffic interchanged by Los Angeles County and the City of San Francisco, which it might engage in at a very little additional expense. And it affects the citizen of Los Angeles County by depriving him
of the benefits of competition which the natural advantages of location, near the sea, would promote, were its transportation interests left to the control of commerce and trade.
The railroad company maintains that its rates between San Francisco and Sumner are reasonable, and I think you will agree with me, that neither this complaint nor any of its fellows advocates anything worthy of evidence or argument to the contrary. There is not only utter barrenness of faets or logic in the complaint, illustrations of the alleged unfairness and injustice of carrying freight between San Francisco and Los Angeles for the slight advance over the rates between San Francisco and Sumner, but I dare assert that the knowledge and experience of the author of each and every complaint before me, is equally barren of an example wherein his or his neighbor's interest has been injured or retarded by the practice. Again, according to this complaint, the rate of $5 50 per ton charged from Sumner to San Francisco for wheat, "leaves the producer no adequate margin of profit to encourage its production."
The Kern County farmer can deliver his wheat at ship's side for $5 per ton. For years wheat has been and is now being produced in this state and
marketed in Europe which has cost the producer $6 per ton to deliver at ship's tackle in San Francisco harbor, and the wheat production has and is steadily increasing. I have known it to be produced even in Arizona and Utah and marketed in San Francisco at rates considerably above those complained of. The very fact that California produces, and markets in Europe, against the local producer, from 600,000 to 1,000,000 tons of wheat annually, is sufficient answer to this specification.
Complaint No. 4, Is that the freight on potatoes from Tulare to Sumner is so high that the shipper cannot make a living profit on his goods. Potatoes are rated by this company with wheat, for which a very low rate is provided when going to the general market, but when moved short distances, or in the other direction, i. e., away from the general markets, it is rated second class. Now, while I don't attach much importance to the statement in estimating the relative fairness or reasonableness of the rates, yet just to show how the arguments of these complaining gentlemen may be turned against themselves, I beg to state that the tariffs of the Illinois railroads, governed by the laws of that State, provide a higher rate for second class freight moved like distances. For example: for sixty miles the second class rate of the Chicago and Burlington and Quincy Railroad is 34 cents per 100 pounds; that of the Chicago and Alton Railroad is 374 cents per 100 pounds; while this company's second class rate, Tulare to Sumner, 63 miles, is but 3i4 cents per 100 pounds. I am unable to discover any evidence of extortion upon the part of this compady by that comparison, which is certainly the very method chosen by the complaining parties whereby to test the traffic of the Central Pacific Railroad Company. But this complainant says that, on account of the charges of this company, he cannot make a living profit on his goods, and the same assertion runs monotonously through all the complaints. Respecting it, I beg to submit that, to entitle such a complainant to the patient hearing of the honorable Board of Railroad Commissioners, it ought to be accompanied by evidence of what is or may be considered a "living profit," and proof that such a profit was not secured from the transactions or transaction referred to, and that the failure to gain it was or is wholly chargeable to the fact that transportation charges were more than a certain sum conceded by all to be reasonable. As the general complaint under notice consists of mere unsupported assertions, I venture to meet it with an assertion which I think you will indorse, and that will commend itself to any reflecting man who will consider it for a moment, namely: that if a just estimate be taken of the expenditure of brain power, physical labor, skill, capital, experience, and the risk involved in the transaction, in fact everything which contributes to the value of a service, it will be conceded that the service of the carrier in hauling the car of potatoes--Tulare to Sumner-is by far the cheapest rendered by any body, from the producer to the merchant who distributes to the consumer. And the percentage of profit upon the investment of capital, skill, and labor, made in 'the transaction referred to by the merchant who makes this complaint, was very many times that realized by the carrier, and this is equally true of every case in the complaints before me.
I venture to say further, that proper inquiry will reveal the fact that the merchants and dealers of the town of Bakersfield, as a rule, make a larger percentage of profit than those of the same class doing business in less remote districts, or at points served by competing carriers, which enjoy lower rates of freight. It is idle to say that the merchant's profits depend in any degree upon the freight rates. If dependent at all, it is upon this rule only: that the higher the freight rates, the greater the profit of the merchant.
COMPLAINT No. 6, Alleges, as a special cause for complaint, that the rate on wool from Poso is or was one hundred and fifty-five ($155) dollars per carload; that this rate is exorbitant and unfair; because the rate is no greater from Los Angeles to San Francisco, although Los Angeles is one hundred and eighty-eight (188) miles further off. The fact is, the rate on wool from Poso to San Francisco is but sixty (60) cents per 100 pounds, no matter what quantity is shipped. The rate per ton would, therefore, depend altogether upon the quantity loaded to the car. If that should be 20,000 pounds, which is considered the minimum capacity of the car, the carload rate would be but one hundred and twenty ($120) dollars. The ground of the complaint in this case is evidently the view of its author, that the relative rates from Poso and Los Angeles should be in proportion to the length of each haul, and because it is not so terms " it an unjust discrimination in favor of Los Angeles and against the inhabitants of Poso and Kern County." In noticing Complaint No. 2, I have covered this point of unjust discrimination, but wish here to ask, in what
way is any wool grower of Kern County injured, or how are his material interests affected in the least by the fact that the citizen of Los Angeles County can forward his wool to the general market at no greater cost? There is no competition between the counties in this product. Neither one produces more than the other, or a better quality than the other, and does not affect the price secured. The wool is all marketed in the Atlantic States. The demand is more than all California can supply, and the price is governed, not by the size of the clip in this State, but by prices in London, and the relation of the supply to the demand from all sources. What the author of this complaint desires is, that rates from Poso and Kern County shall be the same per mile as from Los Angeles.
Another of the complainants goes further-urges that the rates to Sumner should be the same proportionately—that is, in proportion to distance as to Arizona--and the same principle, that rates should be uniform for all distances, would require
rates to and from Sumner or Poso to be the same per mile as to and from New York and San Francisco. These gentlemen seem to be utterly oblivious to the common principle of trade, that a large business can be handled at a lower rate per mile of service than a small one. As a man can and will work for less per day under contract guaranteeing him constant employment for a long term than he can or will if employed by the day, or as a farmer can cultivate a section of land at a less cost per acre than he can twenty acres, or as a merchant can afford to sell a million dollars worth of goods per annum at a lower percentage of profit than he can if he but handled fifty thousand dollars worth of goods; so a railroad company, having miles of transportation service to sell, can sell a thousand miles at a lower rate per mile than three hundred. Again, competition of markets and of other carriers as factors in transportation seem to have been entirely ignored. This company and its eastern connections are now, and have been for more than a year, carrying barley to Chicago for twenty dollars ($20) per ton, which is less than one cent per ton per mile. To charge a higher rate would absolutely exclude the California barley from competition with that grown in the Eastern States and Canadas. By taking it, the railroads increase their expense but a trifle over and above the cost of operating them without this tonnage, and they open a market for a California product which could not be placed at any other point.
Now, are not both the public of California directly, and this company indirectly--by the promotion of home industries, if not directly--benefited by this extremely low rate? What would be the result if any competent power required rates to intermediate points to be the same per mile? Nothing less than the abandonment of the Chicago business, i. t., the rates, too, would have to be advanced, so as to exclude California grain from that market, and the producer of California would be the sufferer. The effect would be the same in a case of competition between carriers. Take, for example, the business between Los Angeles and San Francisco. The desire of the complainants can be accomplished in two ways only, namely: by advancing rates to and from Los Angeles to the same rate per mile as the rates between San Francisco and Sumner or Poso, or by reducing the latter to the scale of the former. If the first plan were adopted, Los Angeles would ship her wool by sea, which, while damaging the railroad and making it much more difficult for its managers to reduce rates to intermediate points, would not benefit Kern County. In fact it would injure it, by postponing the day when the tariff upon its products could fairly be modified, or even, perhaps, necessitate an advance in its freights, in order to continue profitable operation of the road.
The effect of the railroad regulation in the new Constitution has been precisely as described above. The railroad company was compelled to advance the Los Angeles rates on all general merchandise, and has consequently lost the traffic. The suggestions of these complaints would force to the sea all the trade of that section that is left to the railroad. Were the second plan adopted, it would have to be by some such regulation as this:
First-The railroad company must make rates to competing points as low as other carriers.
Second-The rates to points intermediate must not be greater per mile than to the competing point.
This I am sure you will excuse me from commenting upon, especially as the State, or its officers the honorable Commissioners, has and can exercise no authority over all the competitors of this company. The railroad company simply could not and would not be operated.
COMPLAINT No. 7, Alleges, for special cause of complaint, that upon offering four mules for shipment, Sumner to Modesto, the complainant was told that the rate would be $20 each, or $80 for the four. Upon further inquiry he learned he could ship one mule for $20, two for $30, three for $36, four for $48, and a carload for $44. Complainant avers that this method of rating discriminates against the poor, in favor of the rich man. The rates from Sumner to Modesto on horses, mules, and cattle, are for one head $19 80, two $33 65, three $44, and a carload $44. In no case is there a greater charge made for a lesser than for a greater quantity in the same car. The rates for carloads are fixed with reference to cattle and sheep, though they are applied on horses and mules as well. The carload rates might fairly be greater, but cannot be made so without driving business from the road. The rate for a single head is the same as that for a ton of freight, for two head the same as for a ton and three quarters of ordinary freight, for three head the same as for two and one half tons of ordinary freight, and for every additional head the same as for one half a ton of freight, except it is stipulated that in no case shall the charge for less than a carload be greater than for a full carload. You are well aware that while the charge for a single head may seen out of proportion to the charge for a carload, yet the disproportion disappears with acquaintance for the reasons for the difference. A horse, mule, or cow will certainly
occupy a great deal more space in a car than a ton of freight, and if from four to five are placed in one car they practically occupy the whole car—that is to say, the car is not available for any other freight.
The shipment was made June eighth, and the mules occupied the entire car, so that while the shippers had the privilege of shipping sixteen, at the same cost, and only shipped four, the railroad company performed the same service that they would have performed had the car contained sixteen mules. The complainant suggests that the railroad company be compelled to carry mules, whenever there are four or more in the same train, no matter if consigned to four different persons, and charge no more for each mule than in proportion to the carload rate—that is to say, one sixteenth (1) of the carload rate for each mule. "If such a method of rating mules was reasonable and just, to apply it to the rating of all other animals and freight as well-that is to say, the rate of charge for one sheep should be one ninetieth (6) of carload rates, for a hog one seventieth () of a carload rate, and for each lot of 100 pounds of freight one twentieth (b) of the rate per ton. The suggestion is so absurd and impracticable that further comments are unnecessary.
COMPLAINT No. 9, Complains first, because the railroad company will not furnish cars containing two decks for the transportation of sheep; and second, that the charge for a carload of sheep-that is a single deck car--is as much as it should be for a double deck car. Double decked cars are not furnished, for the following reasons: they would be wholly useless for all kinds of freight, excepting sheep and hogs; and as the business of the company in the transportation of this kind of freight is limited not only in quantity, but to certain seasons of the year, the cars would be idle at least half of the time. If this were not the case, the shipment of live stock is as a rule altogether in one direction—that is towards San Francisco-and as the cars would not be available for any other class of freight, they would have to be sent to a shipping point empty, hence requiring the car to double the road in order to transport one carload of stock to this
market. It is, therefore, evident that whatever might be considered a reasonable rate for a carload of sheep in a car, but with one deck, that double that rate would not compensate the railroad company were it required to furnish double deck cars and haul double the number of sheep per car. The rate of single deck cars being from Sumner to San Francisco fifty-three dollars and sixty cents ($53 60), or 20 per cent lower than the same cars would earn if cattle were loaded in it. I think there can be no doubt that it is reasonable.
COMPLAINT No. 10, Alleges that the present rate of $1 20 on comb honey and 55 cents on extracted honey—the rates named being for 100 pounds---reduce the profits of complainant to an extent that will not admit of its further production.
Regarding this, permit me to state that honey is produced in California, shipped over the railroad of this company, thence shipped by rail across the continent, and marketed in the Eastern States against the honey produced there, and is even exported to and sold in Europe with honey produced in European countries. No other comment seems to be necessary.
COMPLAINT No. 11, Is specific, and alleges that the rates on wines and liquors from San Francisco to Sumner are exorbitant, because the rates on whisky from Illinois and Kentucky to Sacramento and Stockton are lower per mile than the rates from San Francisco to Sumner. The particular grievance of the complainant is, that those rates deprive him of a large portion of the earnings and profits which he should rightfully derive from his business. The rates on whiskies from the East are very low, and are made so simply because low rates are necessary to compete with vessels following the Cape Horn route, which brings to this port by far the larger proportion of the whisky imported. It is not reasonable to suppose that the entire traffic of this railroad company, or any railroad company, can be done upon the basis of low rates, made necessary for the through business, taken in competition with other carriers, nor that the railroad companies should undertake to place interior towns upon a footing with respect to transportation charges with San Francisco and other places located at competitive points. The ground of this complaint has been covered in previous remarks.
COMPLAINT No. 12, Is, for the most part, same as No. 9; that is, that double deck cars are not furnished for sheep at Fresno at same rates charged for single decks. It is not necessary to notice this, except that complainant avers that it is practicable to provide a movable upper deck, which would remove the difficulties in the way of providing cars with two fixed decks.
The answer to this is, that the experiment of movable decks has been tried by railroad companies and rejected as a failure, so that railroad companies who have a large stock business Bo distributed over their line that double decked cars can be furnished with economy, prefer and use fixed decks. Another specification of this complaint is, that the rate for wool from Fresno to San Francisco is $100 per car, while wheat is taken for $48 50, and complainant can see no reason or justice in such wide discrimination.
With respect to this, it is submitted that the rate on wool is not unreasonable, and that the rate for wheat is very low, and, while the latter is very much lower than the former, that the relation which the two articles bear to the whole tonnage of the State, their relative value and industries upon which the prosperity of the State depends—the cost of production--and the price obtained for them at the general market, are sufficient to justify the difference. Classification of freight is necessary. If it were possible to make an average rate per ton to be charged for all classes of freight, regardless of their value, or weight and measurement, their liability to damage, or to damage other freight, etc., the question of freight tariff would be a very simple one. Carriers would be very eager, for the purpose of economy and profit, to adopt it.
The wisdom, and it may be said the necessity, of making differential rates, is apparent. To charge the same rate per ton on all classes of freight as is charged upon wheat, would require the rates on grain to be advanced, so as to absolutely prohibit production, except in localities adjacent to the general markets, or the freight on all other articles to be reduced to the level of wheat, which would plainly make profitable pursuit of the transportation business impossible. No further argument upon this point seems to be necessary, although it will be noted that the complainant does not aver that the wool rate is too high, by itself considered, but that it is relatively high when compared with the rate on wheat. Complainant feels that he has another grievance, by reason of having been charged $7 06 more for hauling a car of goats from Fresno to Fowler, which the company hauled under contract with him from Niles to Fresno for $38 40, and avers that the goats were not taken from the car at Fresno, nor the car taken from the train, but they were simply forwarded nine and a half miles further. Had he directed the goats to be shipped from Niles to Fowler, the service would have been performed for him for $40. Instead, however, he contracted they should be shipped to Fresno, and, after arriving there, he desired them to be forwarded to Fowler. This required a new contract for the extra service, and a new way-bill to be made out. The agent of the company could not do otherwise than to bill them at his rates from Fresno to Fowler, as the company does not, and cannot, make tariffs and rules which will provide for peculiar and exceptional cases, as the one which gives rise to this complaint. Had the shipper given notice to the general office, even after the goats had been shipped from Niles, and desired to have the destination changed to Fowler, the change could have been made, and he received the benefits of the rate of $40 from Niles to Fowler. But this would have required some telegraphing, the actual cost of which would perhaps have equaled, if not exceeded, the difference in the rate to be paid. This complaint appears to be very trivial. Complainant also thinks that the rate of $10 per carload on wool, from Fowler to Fresno, is too high. It is my opinion that a car cannot be moved any distance, with profit, for less than $10, although the legal maximum rate of 15 cents per ton per mile, established by the law incorporating the company, imposes upon it the necessity of removing cars short distances for a lower rate.
COMPLAINT No. 13, Alleges that the rate on alfalfa seed from Sumner to San Francisco is $180 per car; that it discourages production, as it will subject the producer to a loss of about $246 per carload. Accordingly, if the car were consigned to San Francisco, free of charge, the producer would still be loser in the sum of $66 50. But permit me to go further into the complaint, in which the following is given as the approximate cost of producing and marketing alfalfa seed : Cost of mowing, per acre.-
$1 00 Hauling, stacking, etc., per acre.
3 00 Thrashing and reclaiming, $78 per day, 3,000 pounds per day on the yield of 30 acres, per acre.
2 60 Sacking and hauling to cars, one half cent per pound
50 Freight (?)
$8 00 The yield per acre is given as one hundred (100) pounds, hence the cost of 100 pounds would be $8. The freight, however, is but 55 cents per 100 pounds, instead of 90 cents, as charged in the complaint, which would reduce the cost laid down in San Francisco, to $7 65 per 100 pounds.
The Alta, of December 2d, quotes the price of alfalfa seed at from 12 cents to 13 cents per pound, or from $12 to $13 per 100 pounds, and I know of a carload from Utah, paying a much higher freight, having been placed in the market for 11: cents per pound.
The fact is, then, that instead of being marketed at a loss of $246 per carload, alfalfa seed can be produced in Kern County, and marketed in San Francisco, at a profit of from $4 35 to $5 35 per 100 pounds, or $870 to $1,070 per carload. The complaint under notice also alleges the rate for wheat to be $60. per carload—it is but $55 per carload of ten tons-and reasons that that is sufficient to prove the unfairness of the rate on alfalfa seed. Permit me to test the logic, and at the same time to illustrate the wisdom of differential rates, or of classifying freights. In 1878 a committee of prominent farmers, residing in Fresno and Tulare Counties, submitted to me an estimate of the cost of producing and delivering wheat to the cars. I have that estimate, and can give the names of the farmers, and produce their certificate to verify the figures. You will doubtless agree with me, that they may be fairly applied to Kern as well as Tulare and Fresno Counties. The estimate places the average yield at 20 bushels, or 1,200 pounds per acre, and