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The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, February 20, 1913, Image 11

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Central Pacific Barrier Discriminatory, Commission Is Told
_____________ j
Rail Chief Holds Line Should Reap
Gain of Years , Work
Combating the theory that several railroad companies can not use a eriven
fine of communication by mere act of courtesy, or business, to the exclusion
of a competitive factor, the Western Pacific Railroad company yesterday pre-
Eented, through its attorneys, a protest to the California railroad commis
sioners against the approval of a!
trackage agreement entered into after J
the unmerging plans of the Union,
Central and Southern Pacific systems
vere drawn.
From 10 o'clock in the morning,
fcarring noon recess, till 4:30 o'clock in
the afternoon Judge Robert S. Lovett,
t halrman of the board of directors of
the Union Pacific Railroad company,
insperturbably occupied the witness
*;and and cleverly maintained that the
lines that he directly and indirectly
represents were entitled to reap the
lenefit of their years of effort to oper-
Pt*» railoads with a view to making an
exclusive and "profitable Investment for
Charlea & Wheeler and E. J. Mc-
Cutcheon represented the Western Pa-
cifle railroad. William F. Herrin ap
i for the Southern Pacific, as
sisted by Guy V. Shoup. TV. W. Cotton
appeared for the Union Pacific. The
'itire board of railroad commissioners
.-esent with President John Eshle-
ntaq In the chair.
M-uiy railroad men, including nearly
all of the "higher ups" in both the
HarrUnaa and Western Pacific systems,
• recent. There was scarcely a bit
of room left for a layman's audience.
erflow <-rowd had to make Itself
<>>mfortable. in the hallway.
Judge Lovett wert on the stand and
said that he was there to answer any
question put to him. He mainly gave
such information as bore upon the ex
planation of the agreement approved
by I nited .States Attorney General
Wickersham after the supreme court
had severed the ties that bound the
kindred corporations into one great
fyetem created by the genius of Ed
ward H. Harriman.
The hearing dealt in millions—yes. in
hundreds of them. It -was a glib state
ment of the v&et resources of the
Southern and Union Pacific railroads,
and the ease in which the common and
preferred stock and bonds of the com
panies were floated in Europe and
Judge Lovett showed that the stock
of the corporations was held in almost
every conceivable part of the world,
end that for good, healthy corporate
power affecting financially thousands
of Individuals the corporations seemed
to have been wisely operated and with
an apparent effort to give public serv
ice for an equivalent in dollars.
The Western Pacific on the other
r-e.nd made a strong point in that it
showed that if more than one railroad
is to enjoy a given terminal facility.
or is permitted to make a short cut for
terminals over this or that line, then
All railroads should he accorded the
fame privilege. The base of the West
ern Pacific argument was placed In this
assertion, and its attorneys ably sus
tained their contentions. Judge Lovett
parried many direct questions and fre
quently discharged a shaft of -wit that
always hit the target.
Mr. T/heeler and Mr. McCutchen
l<ept steadily at thoir tasks of proving
that the Joint use of terminals would
be discrimination. Mr. Herrin spoke
for the Southern Pacific company and
drew from Mr. Eshleman the inquiry
as to whether he was not acting in a
dual capacity of counsel and vice presi
dent of the line he represented. Mr.
Herrin smiled and adhered to his right
to be the official Pooh Bah.
Judge Lovett, questioned by Mr. Mc-
Cutchen. told that his understanding
was that the inquiry was on the appli
cation of the Union Pacific to make
certain leases of connecting lines here
tofore jointly operated by the Union.
central and Southern Pacific railroads.
This developed the fact that the West
ern Pacific is most vitally interested in
?the connecting link between San Fran
. isco and Sacramento by the way of
3>nieia and Port Costa.
WAjrra right to bkxicia i_ine
It is over this particular stretch of
road that the Western Pacific feels
that it should have the same privileges
as would the Southern Pacific or any
other lines, now that the merger ha-«
been dissolved and the several routes
arc presumed to be competitive.
•ludge Lovett said that he had no
objection to the Western Pacific using
the tracks provided it paid the price.
'The Union Pacific was not willing
to buy the Central Pacific without a
trackage agreement,"' said the judge.
"The agreement was made between tho
two companies after the flupreme court
■ liiiK and it was submitted to the
IHitcd States attorney general and met
T\ith his approval. Part of the condi
tions-, as 1 understand them, was that
we would conduct a direct transconti
nental line, and all this was taken into
account when arriving at a price The
attorney general seemed to be anxious
to establish a central route between
the Atlantic and Pacific coasts."
••The commissioners have no reason
to look into other than the excesses
over the agreement that we understand
has been approved by the attorney
general," explained Mr. Eshleman.
"It was not the desire of the South
ern Pacific to dispose of the Central
Pacific interests, and the Union Pa
cific would not have cared to enter into
negotiations had not the Tracy route
and other lines been included in the
compact," continued Judge Lovett. "It
seems that under the agreement that
we will have two lines out of Ogden in
stead of one. and I suspect that is the
for the presence of the Western
Pacific here today."
At this Juncture Judge Lovetl. in
ibwer to a query said: "Wen, if we
really wanted a line into Han Fran
olseo maybe we might get the Western
"But you couldn't set the terminals,"
interposed Mr. Eshleman. "You might \
get a single track road for $100,000,000, !
but you -would not have the Oakland j
end of It."
"I don't want to convey the impres- i
slon that we want the Western Pacific," I
said Judge Lovett with a smile. "In j
making the Joint terminal arrange- j
mentg we thought It best to adopt the
joint idea as a means of creating less
disturbance for patrons of the serv
"For extra terminals we would not
expect to have to purchase properties
In San Francisco and I would like to
say that in reference to rates I liave
not given the matter any consideration
at all. The agreement is that the
status of rates should be maintained.
The conditions between the Southern
Pacific and Central Pacific are on a
mileage basis. As I understand It,
earn road would like to be on the same
plane whep It comes to a matter of
rates. The Southern Pacific wowld want
to be as Independent as the Western
Pacific or any other line.
"As the matter stands there are
hankers who, through Kuhn, Loeb &
JCo. are willing to take up $126,000,000
lof Union Pacific stock. If this syndi
cate should fail the Union Pacific
, would simply be out of pocket 1 per
i cent for commissions."
"How about the jterms of the lease,
i which, I understand, runs for 999
years?" asked Mr. Eshleman. "Does It
in any way affect the conditions of the
'■ agreement?"
"I don't suppose a hundred year*
more or less would make much differ
ence," replied Judge Lovett.
"Do you know what the attitude of
the attorney general was toward ac
ceptance of the agreement?" asked Mr.
"I understand that unless some agree
ment had been reached there would
have been further legal steps taken In
the matter of dissolution," said the
: witness.
"What effect on competition would
there be if the Central Pacific remained
under control of the Southern Pacifier ,
asked Mr. McCutcheon.
"The Southern Pacific and Central
Pacific lines are connecting lines,
rather than competing lines."
"Will not the combination of Cen
tral Pacific and Union Pacific Interests
mean that traffic will be obtained at
the expense of the Southern Pacific?"
asked Mr. Eshleman. "Doesn't this
give you complete control of the situ
•I hold no brief for the Southern
Pacific, but I have a very warm feeling
for it," said Judge Lovett amidst a
burst of laughter. "I don't want to
appear to be boosting Southern Pacific
•'ls one of the conditions upon which
the Union Pacific insists, an interest in
the Benicia line?" asked Mr. Eshleman.
"We have an understanding and
want to uso the road according to that
agreement," deftly sparred Judge
"The public is In some doubt re
cardias Uio matter of competition,"
THE San Francisco CALL
Judge Robert S. Lovett on the witness stand testifying yesterday at the
hearing before the railroad commission* which is considering the terminal merger
agreement. Below is Attorney Charles S. Wheeler of the Western Pacific
listening to the evidence. From sketches made at the hearing by a staff artist
of The Call
1 said Commissioner Thelen. "Can you
explain, Judge, anything that will en
lighten us on this subject?"
"The Union Pacific will be in a po
sition to make rates, establish its own
I train service, look to efficiency and
equipment, and Iβ absolutely free to
S act. The Southern Pacific on the
I other hand will naturally be disposed
to carry all the traffic that It can move,
and it may move thie via El Paso. The
linee are to be absolutely Independent
! lines, but there will be no cutthroat
competition. Regarding our central
California route the trains would bet
ter go via Benlcia."
"If you gave the same privilege to
the Western Pacific wouldn't that be
an advantage to the people of the
etate?" asked Commissioner Thelen.
"Tee, the same advantage that would
accrue to the people of the state of
New York if the New York Central,
Erie, Leckawanna and other systeme
were permitted to use the Pennsyl
vania terminals."
"How do you know that the deal
into which you have entered 1s a good
bargain?" asked Commissioner Eshle
"I am in so much doubt as to it be
ing a good bargain that I have doubts
as to its outcome as a bargain." was the
quick reply. "The Southern Pacific has
heretofore sent all of its traffic over
the Union Pacific to Ogden from this
part of the state and the struggle that
will follow will not be a loss to the
Southern Pacific but to the Union Pa
cific. There Iβ going to be a change
in the movement of traffic and I don't
know whether the Union Pacific is go
ing to be benefited.
"So far as the public Is concerned
it might be a good thing for all rail
roads to use the same terminals, but
for the Union Pacific to concede this
would amount almost to confiscation."
In answer to a question put by the
commission. Judge Lovett during the
afternoon related the history of the
pu-chase of Southern Pacific stock by
the Union Pacific.
"The Union Pacific purchased 70,000
shares of etock of the Southern Pacific
and later increased this purchased to
90,000 shares," he said.
Attorney Wheeler asked Judge Lovett
to explain how the Union Pacific ar
ranged for the subscribing of its $126,
--000,000 bond issue,
"After many conferences with the
board of directors," said Judge Lovett,
"it was decided to write the company's
principal bankers, Kqhn, Loeb & Co,,
to learn under what terms they would
organize a syndicate. The offer, of
course, included the stipulation that
the sale of the bonds must have the
approval of the attorney general and
the federal and state bodies controll
ing the railroad. The answer was
that the banking company would ask a
commission of 1 per cent en 11,260,000 \
in addition to $320,D00 for expenses.
"I will illustrate this syndicate plan
for underwriting bond issues. In 1837,
I think it was, the Union Pacific ar
ranged with a syndicate to underwrite
a bond issue of 175,000,000. The rail
road agreed to pay a commission of 2*£
per cent. At that time I told Mr.
Harriman that I did not thins it neces
sary to pay this commission. Mr. Har
riman replied that he had to have the
money immediately and that this com
mission was necessary.
"The syndicate succeeded in selling
only $4,000,000, β-nd the balance the
syndicate had to take itself. Another
time an issue of 182.000,000 of bonds
was underwritten by a syndicate or
ganized for that purpose and the un
derwriters succeeded in selling: every
"In other words, Judge Lovett." said
Mr. Wheeler, "the bankers stand com
mitted to take this $126,000,000 bond
Judge Lovett replied that the bankers
pledged themselves to do so.
Mr. Wheeler asked: "Prior to the so j
called merger, what ■were the relations j
of the Union Pacific in regard to ter
minals in California at Junction
Judge Lovett answered in substance: I
"The Union Pacific terminated at!
Ogden and had no terminals in Cali
"What was the effect of the merger '
in regard to the working and manage- I
ment of the Union Pacific and South- J
em Pacific T' asked Mr. Wheeler.
Judge Lovett answered: "The effect!
of the merger was to work the Union I
Pacific and the Southern Pacific as one j
line. Union Pacific traffic was taken i
from Ogden as Southern Pacific traf
fic, that is all. As a result of the merger
of the Union Pacific and Southern Pa- i
ciflc the two roads became prefer- j
entially connected. The Union Pacific's
policy in respect to through line main
tenance naturally dominated the policy j
of the Southern Pacific.
"The present situation under the
merger is that the Southern Pacific has I
two lines to the east —one to Ogden. ;
connecting with the Union Pacific, and ;
another south and east to El Paso, with |
steamship lines in the gulf."
Judge Lovett said that he thought
that if a road built, operated and main- j
tamed a line that road should have the j
control of it and the right to lease or
sell Its use under certain conditions
specified by the government. In answer i
to a. question as to whether the merger
of the two railroads was a violation of
the Sherman anti-trust law. Judge
Lovett said:
"I am not practicing law, but will
give a layman's opinion. I rented a
room in a hotel the other day. I think
I have the exclusive right to use
that room. You rent offic.es, Mr.
Wheeler, ap<i you have the right to the
exclusive use of thoee offices. This is
the same principle we have here. We
have bought one-half interest In tUTs
railroad. We feel that it is not an
J infraction of the anti-trust law if we
! protect our property right. Our road
should not be invaded by another road
without our consent."
Asked if the Union Pacific would be
willing to handle Western Pacific traf
fic-, Judge Lovett said: "We would be
delighted to do it for a proper rate."
This statement evoked considerable
Judge Lovett admitted that the
Southern Pacific received 10 times as
much ai the Western Pacific per ton
mile in certain territories. He said
that half of the cost of freight charges
to the shipper was collected by the
Southern Pactflc, no matter how sliort
the haul wae when the freight was
subsequently turned over to the West
ern Pacific. He said that the Southern
Continued on Pace 18, Column a
Miss Corinne Dillman of
Sacramento Becomes Mrs.
Joseph Upham Pearson
Groom for Years Holder of
Coast Record for 220
Yard Dash
— i mt
Piepatrti to The Ctll)
SACRAMENTO, Feb. 19.—A pretty
■wedding was celebrated here tonight
when Miss Corinne Dillman became
the bride of Joseph Upham Pearson, a
young business man of this city. The
ceremony took place at 6:30 o'clock in
the home of the bride's parents in N
street. A large platform had been
constructed at the rear of the house,
and there the wedding supper was
served. Both the residence and the
addition were profusely decorated with
spring blossoms and greens, pink being
the predominating color.
The bride, who was given in marriage
by her father, wore a robe of Ivory
satin with embellishments of rose point
lace and pearls and a tulle veil fast
ened to her coiffure with a wreath of
orange blossoms. She carried a shower
bouquet of lilies of the valley and white
orchids. Her matron of honor, Mrs.
Ritchie Sale of this city, was also
gowned in white, as was the maid of
honor. Miss Ila Sonntag of San Fran
The bridesmaids were Miss Eleanor
Baldwin. Miss Nina Heilbron and Miss
Priscilla Williamson of Sacramento
and Miss Emily Huntington of San
Francisco. The costumes of the brides
maids were white and pink, and all th*
attendants carried showers of pink
rosebuds. Dr. Robert Pearson attended
his brother as best man and the ushers
were Samuel H. Jones. George Pollock,
John Reese and 11 J. Dillman Jr.
About 60 guests witnessed the affair,
at which Rev. Charles L. Miel. pastor of
St. Peter's Episcopal church of San
Francisco, officiated.
Mr*. Pearson is the only daughter
of Mr. and Mrs. Charles F. Dillman
of this city. Her father Is connected
with the D. O. Mills bank. The bride
received her education at the Sacred
Heart convent in Menlo Park. She
made her debut about two seasons ago
and has since been prominent In the
activities of the younger set of San
Francisco and Berkeley as well as
this city.
Mr. Pearson Iβ secretary of the
Farm Investment company of
Sacramento and is associated with J.
M. Henderson Jr. of the Sacramento
bank. He is a graduate of the Univer
sity of Washington, where he was
affiliated with the Phi Gamma Delta
fraternity. For two years he held the
coast record for the 220 yard dash
with a mark of 21 2-5 seconds, and was
the star sprinter of the Washington
team, having accomplished the 100
yard dash in 10 seconds flat.
On their return from a fortnight's
honeymoon, whose destination they are
keeping secret, Mr. and Mrs. Pear
son will make their home in Sacra
mento, where the former's brother in
law and sister. Dr. and Mrs. Andrew
Henderson, also reside.
More tKan
a weeK
The largest circulation ever attained
by any magazine in the United States
that is bought at its full, regular price
for its contents alone. It is never in
cluded in cut-rate "club" offers. Pre
miums are never given to its readers
to influence them to buy it.
Independence Square, Philadelphia
rtah Senate Famn Bill Affecting Men
and 'Women Alike
SALT LAKE Feb. 19.—Every
citizen of Utah who is eligible to vote,
but who does not, will be compelled to
pay a poll tax of $3, under the terms
of a bill passed by the senate today.
The tax will be asaeesed against
women as well as men.
We*t Virginia MUltla Chief and Wife
!\'arrowly Escape
CHARLESTON. TV*. Va, Feb. 19.—In
cendiaries fired today the house occu
pied by Major J. B. Payne of the West
I Virginia national guard, on duty in the
martial law zone at Dokota, not far
from Paint creek. Major Payne and
Mrs. Payne narrowly escaped death.
Mrs. Re*e Awarded 9250 —Mrs. Blanche
Rees, wife of Colonel Thomas H. Rees.
U. BL A., was awarded $250 damages by
a jury in Judge Hunt's court yesterday.
Mrs. Rees sued J. B. Cruz and W« W.
Anderson for $2,.~Q | J damages for in
juries sustained by failing through a
wooden sidewalk at Pine and Belden
streets last July.
PAGES 11 TO 18
Oakland Employe Believed
to Have Started Blaze by
Striking Match
Victim Penned in Walled
Structure Is Burned to
/OAKLAND. Feb. 19.—James Hobart,
a laborer, was burned todeath this
afternoon in a fi>e which destroyed
three oil tanks of the California Oil
Burner company In Water street near
Broadway. He was 35 years old, un
married and lived over the stables of
the ell company at Twenty-second
street and San Pablo avenue.
Hobart's retreat was cut off by the
flames, which are believed to have
been started by himself through the
lighting of a match.
An explosion gave the flrst intima
tion of the fire to Patrolman Rumetsch,
who turned in the alarm. As distillate
oil generates gas when confined in a
limited space, it is thought that the
explosion and the subsequent blaze
were brought about by Hobart lighting
a match to find his , way about between
the tanks. He had gone in through
a skylight to see that the oil was
running freely into the tanks from a
iflsarby car.
When the firemen arrived they were
informed by Rumetsch that the man
was inside, and desperate efforts were
made to rescue him. The charred body
of the victim was found within a few
feet of the outside wall. The only
avenue of escape lay through the sky
light by which Hobart had entered,
and bis path to this , was cut off by the
He had been in the employ of the
company eight years.
George C. Morgan and James Taylor
are the owners. The loss to the com
pany will reach $1,000.
National Banks Mint Sot Pay TMtI-
dends Before Deducting Loiwi
WASHINGTON, Feb. 19.—Lawrence
O. Murray, comptroller of the cur
rency, announced today that he In
tended to stop the practice by national
banks of paying dividends when their
earnings did not warrant it. He ordered
the national bank examiners to aacer
tain what banks are paying dividends
from net profits before all losses and
bad debts are deducted. The comp
troller said he -wished to Induce the
banks to strengthen themselves by the
accumulation of a substantial surplus.
Marln Count r Sheriff Searching f«r
Band of Darin* Thiers*
(Special DUpttch to The Call)
SAN RAFAEL, Feb. 19.—A new clans
of thief has made hie appearance.
Sheriff J. J. Keating today began search
for men who for the last week have
been removing gas engines from the
launches at anchor in Green Brae
creek. The latest victim Iβ A. P. .<t.
Clalr, who lost an engine last night.

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