referred to it on the second of December, 1884. By reason of the absence of Mr. Gray on the fourth, and of the official stenographer on the fifth, the next meeting was held on the sixth of August, when the newspaper schedule was taken up. It consists of three trial sheets representing the plan of examination before stated. So much of it as relates to grain rates, is a faithful copy, at second hand, of that prepared under the direction of Commissioner Carpenter, with some additional comparisons on the same plan of rates on wool and live stock. Of every four columns of figures which it contains, only two could have any place in a schedule, of which it never had the semblance, and into which it could not be converted by copying. As one of many methods for studying and comparing rates, it is precisely the same as the one from which it was copied, and without the slightest credit to any one, is relatively good or bad for that purpose. But as a pretended schedule it was never more nor less than a transparent sham. In response to the notice given, Richard Gray, General Freight Agent of the Southern Pacific Company, submitted a number of tabular statements (vide Exhibit F) of which the following is a brief synopsis: A comparison of the cattle rates showed the following result: Central Pacific Railroad, .02069 cents per ton per mile; proposed rate, .02121; Kansas Commission rate, .01908; Union Pacific rate, .02749. In his oral examination he said that the grain rates of California were lower than those of Kansas, Iowa, and Nebraska. The rates on the Southern Pacific system were in many instances lower than the tariff adopted by the Kansas Commission, and thereafter rescinded by reason of its injustice to the railroads of that State. To controvert the previous statement of Commissioner Foote that Kansas and Nebraska were not leading grain-producing States, he referred to statistics from which it appeared that Kansas produced more corn, and with one exception, more grain, than any State in the Union; and that for grain Nebraska ranked third, and for corn was second only to Kansas. . In answer to questions he explained why his company for the last three months had been charging grain shippers to Port Costa and other terminal points for unloading. . Until within the last three months, shippers at Port Costa had been allowed the cost of unloading on their bills. Now, as with all other classes of freight, at all other terminal points, the burden was on the shipper. One of the reasons for the regulation was to prevent the detention of cars by the shipper, who was charged eight cents per ton for unloading. As that was the actual cost of the service it could have no effect on the price of grain. He said that the earnings of his company, in 1884, were $2,500,000 less than in the previous year, and that by reason of the partial failure of the grain crop the prospect for the present season was not good. Hence it had supposed that a common carrier can afford to carry at much the same rate of hire as that which is exacted universally by carriers similarly situated, and which, if it has been found to remunerate them, may, upon the best grounds, be called reasonable. The word reasonable, therefore, is to be the criterion of the price which a common carrier has a right to demand." All the books, and Browne on the Law of Carriers, p. 82. "Like circumstances" construed to mean and include cases where the labor, liability, and expense of the carriage are the same. (Great Western Railway Company vs. Sutton, H. of Lords, 38; J. L. Exch. 184; Browne on the Law of Carriers, p. 258; Walf. Sum. Law of Rys., p. 317; Ransome vs. Eastern Co.'s Ry., 4 C. B. [N. S.] 63.) Briefly generalized, this is a condensed presentation of dry but instructive facts and figures contained in the annual returns to this office of twenty-five roads. It has been carefully prepared and compared with the original returns by Commissioner Humphreys, and is more convenient for reference than the full returns in their undigested form. It will be seen by reference to this exhibit, that the roads reporting to this office are generally in sound financial and physical condition, and during the year covered by the returns were participating to some extent in the peace, plenty, and prosperity of the State. They have, of course, shared in the depression caused by the short crop of 1885. Exhibit H. Showing incidental expenses of the Commission for the year ending December 31, 1885. A SHAM SCHEDULE. The Commission, in its report of last year, page 25, pricked the bubble as follows: EXAMINATION OF COMMODITY RATES ON DISTANCE PLAN. In May of this year, upon his own motion, without complaint or petition, Commissioner Carpenter, with the clerical assistance of Secretary Andrus, renewed investigations of grain and other commodity rates from interior points to tide-water. The method adopted was to compare tariffs on the Central Pacific system with those of other roads for the same classes of freight, and for like distances. It was done by preparing a trial sheet with distances and key, compared and scaled rates in parallel columns, and was intelligible enough for its purpose. Only the column of distances and of the rates finally established could have any place in a schedule. Some time after the preparation of this trial sheet, as one of the various methods of systematizing the study of comparative charges on different roads, and determining what they should be on those of California, it was copied for Commissioner Humphreys, and thereafter, with slight changes, for Commissioner Foote, as whose schedule it is now known. It was presented by him at a meeting of the Commission held on the twenty-ninth day of November, 1884, and together with lengthy comparative and statistical statements (vide Exhibit C, p. 39) submitted by the Central Pacific Railroad Company, was passed for consideration on the second ultimo. On the day appointed it was taken up, and General Freight Agent, Richard Gray, being present, explained the statements prepared in his office, and at the instance of Commissioner Foote, had leave to make some additions thereto. Whereupon the Commission adjourned to meet at the call of the Chairman. At the subsequent and last meeting in 1884, it was passed without further action. And in the absence of Commissioner Foote during the first six months of 1885, further proceedings upon it were deferred. On the thirtieth day of July, 1885, all the Commissioners being present, on motion of Commissioner Carpenter, the Central Pacific Railroad Company was notified that the Commission was ready to receive its report, touching the matters referred to it on the second of December, 1884. By reason of the absence of Mr. Gray on the fourth, and of the official stenographer on the fifth, the next meeting was held on the sixth of August, when the newspaper schedule was taken up. It consists of three trial sheets representing the plan of examination before stated. So much of it as relates to grain rates, is a faithful copy, at second hand, of that prepared under the direction of Commissioner Carpenter, with some additional comparisons on the same plan of rates on wool and live stock. Of every four columns of figures which it contains, only two could have any place in a schedule, of which it never had the semblance, and into which it could not be converted by copying. As one of many methods for studying and comparing rates, it is precisely the same as the one from which it was copied, and without the slightest credit to any one, is relatively good or bad for that purpose. But as a pretended schedule it was never more nor less than a transparent sham. In response to the notice given, Richard Gray, General Freight Agent of the Southern Pacific Company, submitted a number of tabular statements (vide Exhibit F) of which the following is a brief synopsis: A comparison of the cattle rates showed the following result: Central Pacific Railroad, .02069 cents per ton per mile; proposed rate, .02121; Kansas Commission rate, .01908; Union Pacific rate, .02749. In his oral examination he said that the grain rates of California were lower than those of Kansas, Iowa, and Nebraska. The rates on the Southern Pacific system were in many instances lower than the tariff adopted by the Kansas Commission, and thereafter rescinded by reason of its injustice to the railroads of that State. To controvert the previous statement of Commissioner Foote that Kansas and Nebraska were not leading grain-producing States, he referred to statistics from which it appeared that Kansas produced more corn, and with one exception, more grain, than any State in the Union; and that for grain Nebraska ranked third, and for corn was second only to Kansas. . In answer to questions he explained why his company for the last three months had been charging grain shippers to Port Costa and other terminal points for unloading. . Until within the last three months, shippers at Port Costa had been allowed the cost of unloading on their bills. Now, as with all other classes of freight, at all other terminal points, the burden was on the shipper. One of the reasons for the regulation was to prevent the detention of cars by the shipper, who was charged eight cents per ton for unloading. As that was the actual cost of the service it could have no effect on the price of grain. He said that the earnings of his company, in 1884, were $2,500,000 less than in the previous year, and that by reason of the partial failure of the grain crop the prospect for the present season was not good. Hence it had ceased extending its lines, had discharged large numbers of men, and had sought to reduce expenses and economize in all departments of its business. During the past year it had discharged 2,000 workmen and employés, but continued to pay better wages and salaries than any company in the United States. Referring to the abandonment of special contracts as the result of competition by overland roads, Mr. Gray said that the tariff of rates was about the same as before. Through the transcontinental pool the Southern Pacific Company received 18 per cent of the traffic over the Atchison, Topeka, and Santa Fe, and the Atlantic and Pacific roads. Of the freight and passenger traffic over the Omaha route the Union Pacific received 54 per cent, and the Central Pacific Company 46 per cent. As nearly all the wool of California was shipped directly east, and did not come to San Francisco at all, it was subject to overland rates not within the jurisdiction of the Commission. In his statements, therefore, he had regarded wool rates as of comparatively little importance. He further stated that less than one half the wheat of California was handled by his company. Of 1,200,000 tons in 1883 it carried to shipping points 500,000 tons, and of 1,609,000 tons in 1884 it carried 643,000. North of Marysville there might be about an average crop, but about Fresno and Merced there would not be more than one third of the usual product. The overland fruit business had improved. Of fresh fruit transported on passenger trains the quantity had doubled, and the cost of carriage per carload to Chicago, had been reduced from $800 to $600. Cherries which could not be sold here for 2 cents per pound were shipped to Chicago and netted 8 cents. Oranges go by freight train at 1 cent per pound or $200 per carload. During the past six months 2,000,000 pounds of oranges had gone east. Of all the fruit handled by the railroads fully 95 per cent goes east. Most of that brought to the San Francisco market is transported in boats. In all his experience in the freight department of his company he had never known an increase of rates once established, and unless shown to be unreasonable the Commission should not again reduce them. At the conclusion of Mr. Gray's statements, Commissioner Foote desired time to examine them, but introduced the resolutions following: OFFICE OF THE BOARD OF RAILROAD COMMISSIONERS OF THE STATE OF CALIFORNIA, WHEREAS, An examination and comparison of the freight schedule of the Central Pacific system of railroads demonstrates the fact that unjust discriminations have been and are now being made, in certain sections of this State upon certain classes of freight; therefore, be it Resolved, That the Secretary of this Board be and he is hereby instructed to immediately prepare and serve upon the proper officer of said companies a schedule of freight rates in accordance with the schedule here following; provided, that where the rates now charged are less than those provided by said schedule, they shall remain as they now are; in all other cases they shall be fixed as provided in said schedules. We commend this resolution, as the last and best of its class, to the considerate judgment of all concerned. It brings bald assertions by resolution up to date. It matches and mates a schedule of freight rates in accordance with the schedule here following." It will be observed that the conventional whereas "demonstrates" "discriminations" as usual, not specified, and the only certainty of which is, that they are "in certain sections of this State, upon certain classes of freight." As a substitute for these hypothetical "schedules," "sections," and "classes," Commissioner Carpenter introduced the order following: BOARD OF RAILROAD COMMISSIONERS OF THE STATE OF CALIFORNIA. It is hereby ordered that the tabulated trial sheets, heretofore prepared by the Commission for purposes of comparison, and now under consideration as the proposed basis of freight schedules, be placed on file for reference. And pending further proceedings and the hearing of shippers in the premises, it is held and decided: First-That the cost to the carrier, or the value to the shipper, of any railroad service, involves the consideration of other factors beside that of distance. Second-That the direction of carriage is also to be considered, and that the constitutional prohibition of a greater charge for a short than a longer haul, of the same class of freight in the same direction, means aggregate charge for such distance, and not rate per mile. Third-That other conditions being substantially the same, the rate per mile for the longer haul should be less than for the shorter included therein. Fourth--That subject to the foregoing provision of the Constitution, to which the railroad tariffs of this State now conform, the rate of charge on each and all roads should be governed by the class and volume of freight, by the distance and direction of carriage, and by the general nature and vicissitudes of the service rendered. Fifth-That by express provisions of the Constitution and law creating and governing this Commission, it is distinctly and fully authorized, in the exercise of its own unbiased judgment, to "change," "establish," or "adopt" existing rates of charge upon any or all of the railroads of this State, but is nowhere required to raise or reduce existing rates. Sixth-That every proposition to put them up or down has two sides to be considered, and that the real parties in interest entitled to be heard by themselves or their authorized attorneys, are shippers and carriers. Seventh-That by reason of the law and the evidence, the finding and decision of this Commission are against uniform rates, based upon any single factor of transportation, and in favor of such differential tariffs of rates as shall conform to the essential and diversified conditions of railroad construction, operation, and extension in this State. Eighth-Holding, therefore, as the Commission does, that producers who have ample railroad facilities are not to be further favored to the lasting detriment of those who have none, and that the interests of all are to be considered, it finds from the record of this office that no shipper of grain, wool, live stock, fruit, or other staple of domestic production, or commerce, has appeared by himself or his authorized agent, to controvert or question any of the numerous statements, returns, or exhibits presented and filed by railroad companies. That the real parties in interest upon the other side may be heard, pending the further proceedings of this Commission, shippers and producers may supply such oral or written statements and recommendations in the premises as they have hitherto failed to make. Commissioners Humphreys and Carpenter voting for, and Commissioner Foote against, this order was adopted. STALE ASSERTIONS OF RAILROAD ABUSES WITHOUT LEGAL MEANING OR PROOF. This order embodies very conclusive reasons for its adoption. It distinctly discards and denies the drivel and pretense of resolutions, by which vague charges of extortions and discriminations are resolved into something like Carlyle's "solution of universal slush." It takes decided issue with the stale assertions of railroad abuses, not specified, and which shippers have failed to discover or expose. It recognizes the rights of the "real parties in interest," so often falsely personated by partisan road agents, who have been totally ruined by having nothing on earth to ship, and so are good enough to demand relief for others. Upon every principle of justice and decency, it assumes that in default of evidence upon which a Justice of the Peace would render judgment for one dollar, the alleged abuses are not proven, much less "demonstrated." It repudiates unsupported suppositions and assertions of discriminations which, in the mouths of brawling agitators, have lost their legal meaning, and requires some evidence of their actual existence, whereof the records of this office are as barren as those of the Extra Session, and as those of the Courts which always had, and now have, exclusive jurisdiction of actions sounding in damages for the alleged abuses. Thus it is grounded, not only in the clearest presumptions of law and fact, but also in the uncontroverted proof, that the freight rates in question are among the lowest in the schedules of this State, and that, |