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between the long and short hauls, is unjust. It, therefore, only remains for your honorable body to determine what the maximum rates on hay and grain shall be for the first hundred miles or over. The rate now asked for is 2 cents per ton per mile. The claim is certainly reasonable, when you consider that it is four times the cost, and four times as much as is charged in the East for a like service.
Relying upon the justice of my cause, and the well known intelligence and integrity of your honorable body, I submit the same for your most serious consideration.
R. G. SNEATH,
Plaintiff. SAN FRANCISCO, CALIFORNIA, November 25, 1889.
ARGUMENT OF DEFENDANT.
Before the Board of Railroad Commissioners of the State of California.
(Orally delivered by H. V. Morehouse.) May it please your Honors: In reply to Mr. Sneath's written argument, and also to the testimony of the witnesses presented by him this morning, permit me to say, that I am glad that this is the final chapter in this hearing:
We were summoned to appear, under a complaint of Mr. Sneath. To that complaint we filed a verified answer, and the cause was set for trial. At the time appointed we appeared and testimony was taken, and the cause was submitted, but behold Mr. Sneath amends his complaint with new charges, which we again answered. He then came again into Court, and subpoenaed some twelve witnesses to prove, as he says, that the giant monopoly, the defendant, is trespassing upon the farmers, and that the farmers are complaining. How has he shown this? By presenting twelve commission merchants and not one farmer, because, as he says, the farmers don't know enough, and can't explain their grievances. I submit that he has not proven his charge. No farmer complains. The proof is clear that the hay and barley crop for the last two years has been poor, and the prevailing market price below the maximum cost of production, and that if the defendant had carried the products of the farm for nothing, the farmers would not have shipped either hay or barley, the two articles of shipment complained of by Mr. Sneath. Then this testimony of witnesses needs no further answer from us, as it proves nothing, and shows that Mr. Sneath is entirely mistaken and is actuated by some other motive than the wants of the farmers.
The next point urged by Mr. Sneath has no merit, because Section 489 of the Civil Code of this State has long since been repealed, not by implication, but directly by the adoption of the new Constitution of this State. That Section 489 is inconsistent with the new Constitution seems to me puerile to deny, for the Constitution has organized your honorable body for the very purpose of fixing rates and charges, both of fares and freights. This question is now taken from the Legislature and from the railroad company and given to you, so that neither the Legislature nor the defendant has any power to fix rates of charges. For instance, Section 489 says: "All railroad corporations must fix and publish their rates of charges," etc. Now then, under the new Constitution, the railroad can not fix rates of charges at all. Is not this an inconsistency? The statute gives the railroad the right to fix charges, but the Constitution gives you the right. Thus the statute conflicts with the Constitution and must fall. Besides, there is not now a single schedule of rates of charges since the adoption of the new Constitution, in use by the defendant, but that you have made and compelled the defendant to put in use. Can Mr. Sneath deny that? Can you deny it? No. Then why does any sane man, actuated by honorable motives, claim that the defendant must disobey the imperative orders and decrees of your honorable body and subject itself to the action of damages provided for in the new Constitution? I need not review the authorities cited by Mr. Sneath, because I do not deny that the Courts do not favor repeals by implication. But here is no implication, no doubt, but an express repeal, by actually prohibiting the railroad company, defendant, from making, adopting, or putting in use any schedule of rates other than such schedule as you shall command; and this defendant is obeying and using your schedule. Does Mr. Sneath deny that? No. Does not Mr. Sneath know that your rates when fixed are conclusively just and reasonable? Does he not know that he comes in this form, that is, before your honorable body, and enters his complaint? Why don't he go to the Legislature? Why does he not enter the Courts for the relief he claims? Because he knows that under the Constitution this whole question of rates has been taken from the Courts and from the Legislature and given to your honorable body. Then, sirs, by his very acts he admits that Section 489 has ceased to be the law of the land. This shows not only the inconsistency of the statute with the Constitution, but also shows the inconsistency of Mr. Sneath.
I need not argue this proposition further, for the whole law of the case, as to the repeal of Section 489, is fully set forth in my brief on file herein, and I need not worry your patience with further review of the authorities.
In returning to the charge that this company's rate of $1 per ton for carload freights from San Francisco to San Bruno is an excessive one, Mr. Sneath gives you elaborate figures drawn from Poor's Manual, and other sources, as to the average charge for moving freight upon all the roads in the United States." Is there anything in this beyond an attempt on his part to impose upon the credulity of the public and to mislead your honorable body? He seeks to prove that there is a reasonable margin of profit in moving freight at the rate of 18 of 1 cent per mile per ton. This would give us from San Francisco to San Bruno, a distance of fourteen miles, a rate of not quite $1 27 per carload of ten tons. We certainly are unwilling to tax the patience of your honorable body by further illustrations of the absurdity of such arguments. Mr. Sneath also draws upon statistics furnished by the Interstate Commerce Commission, to show that the average cost of running a freight train in California is $1 17 per mile. If the Interstate Commerce Commission has succeeded in ascertaining the cost of moving freight trains upon a single track road, it has accomplished something which has heretofore been regarded as impossible by practical railroad men, and which has baffled the efforts of the most expert railway accountants in this country. But, as a matter of fact, these gentlemen in their last report (Rep. 1888, p. 67) admit that the apportionment of expenses between the passenger and freight service must, to a large extent, be " upon some arbitrary rule.” So arbitrary is the rule adopted, that no railroad man would feel safe in using the figures deduced from its application.
As to Mr. Sneath's specific allegation, that squash could not be shipped from Santa Clara County on account of the high rate of charges charged by this company: At the time referred to (in 1885) we gave shippers of this article at San José and Santa Clara reduced rates to San Francisco, San Bruno, and other dairy points, and under these rates several thousand tons were marketed at a reasonable profit to producers, and the surplus pretty effectually disposed of. The principal shippers were consulted, and practically fixed the rates themselves.
Plaintiff's rambling statement as to rates, earnings, etc., has been answered by us in the earlier stages of the case, and we do not think it necessary to submit any further figures in support of the fact that this company's charges are just and reasonable, and compare very favorably with rates charged by other California and many eastern roads for equal distances.
Plaintiff's allegation that the "excessively high rate of charges on this road are impoverishing the farming class, and greatly retarding the general prosperity of the State,” is the product of his own fertile imagination, and we believe your honorable body will agree with us that he has signally failed to establish this fact by his own witnesses, summoned for that purpose, and who testified at the last hearing of the case. It is a fact beyond dispute that the farmers owning land along the line of the Coast Division are generally in a very prosperous condition. The substantial farm houses and barns, the well fenced fields, the fine county and private roads, the numerous school houses and churches to be seen on every hand, are all evidences of prosperity, which cannot fail to impress the most casual observer, and which convict Mr. Sneath with coloring his statement to suit the exigencies of his case.
We cannot frame a serious reply to Mr. Sneath's eloquent harangue as to the fearful results to flow from the continued operation of this road, unless rates are made in accordance with his ideas. The part which this road has played in the development of the country through which it runs, and the great material wealth which it has added to the resources of the State, are too well known to the members of your honorable body. But the honorable gentleman makes us smile when he talks of "grim, hollow-eyed poverty, and wild, unclad children, which shall be seen among the wrecks of uncared-for tenements along the line of defendant's road."
Indeed, who has made prosperity possible from San Francisco to San Marguerita? It was not Mr. Sneath, but it was the defendant company. This great enterprise opened up the valleys of the coast and planted the wealth of San Mateo and Santa Clara Counties along its road. What would San José be to-day but a little country village had it not been for the defendant company? What has changed the great plains of Santa Clara, Gilroy, San Benito, Pajaro, and Salinas, from lands over which roamed great herds of Spanish cattle, and planted them with beautiful towns, filled them with thousands of people, and increased the wealth from nothing to colossal fortunes and opened up a market for the labor of hundreds and hundreds of people? This defendant. Who came into Monterey and opened up a pleasure resort which added millions to the wealth of the county and advertised California to the civilized world? This defendant. Who has enriched Mr. Sneath and made it possible for him to sell the milk of a dairy of one thousand four hundred cows, by bringing into San Francisco thousands and thousands of people to buy the products of his dairy? This defendant. Why, sirs, Mr. Sneath has grown rich through the agency of this road, and his florid talk of hollow-eyed poverty, rotting products of the soil
, weeping children, crying babies, should in fact be applied only to the weeping children and crying babies who are yelling with all their might for the good, sweet milk of Mr. Sneath's dairy. He has mistaken his theme. But I need not talk longer. I have no fear of the terrible results seen by Mr. Sneath through his diseased imagination. Neither has Mr. Sneath nor you. I, therefore, submit this cause in the full belief that you will give judgment dismissing the case.
COMPARATIVE STATEMENTS OF DEFENDANTS. SOUTHERN PACIFIC COMPANY (NORTHERN Division)--COMPARATIVE STATEMENT OF RATES ON
HAY IN CARLOADS.
Rate tance. per Ton.
36 35 39 36) 361 35%
Southern Pacific Co. (Coast Division) San José
San Bruno Southern Pacific Co. (Coast Division) San Francisco. - Mayfield Southern Pacific Co. (Coast Division) San Francisco. Mt. View.. San Francisco and North Pacific Railway. San Francisco... Petaluma North Pacific Coast Railroad..
San Francisco... North Bend. Southern Pacific Co. (Pacific System) San Francisco... Martinez Southern Pacific Co. (Pacific System) Oakland.. Milpitas... Southern Pacific Co. (Pacific System) Oakland.
Oakland Pacific Coast Railway
San Luis Obispo. Lake View Atchison, Topeka, and Santa Fe Railroad Kansas City. Endora Chicago, Milwaukee, and St. Paul
Elgin Chicago and Alton...
Joliet Chicago and Alton..
East St. Louis Miles Missouri and Pacific Railway
Little Rock... Traskwood.
$1 50 1 40 1 50 1 60 2 133 *1 733 *1 80 *2 133 2 133
* Rates in box cars averaging six tons capacity.
Case of Sneath vs. Southern Pacific Company (Coast Division) now awaits decision of the Board. The same will be filed in January, 1890.