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THE PACIFIC RAILROADS.
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THE RIGHTS OF THE PEOPLE IGNORED.
The controversy as to rates on the Union Pacific is not between two railroads
only. They are parties on the record, hut the people are the main party in interest.
The issue rises above the conflicting interests of the companies. It involves
the good faith of those corporations to the government, on the one hand, and
to the people on the other.
Congress has not simply to inquire whether one railroad suffers unjustly by the
acts of another, but whether the people suffer by the acts of either or both; whether
the laws of the United States are to be sustained or violated; and whether obligations
incurred in accepting subsidies are to be fulfilled.
WHAT THE BO ADS WERE TO BE.
The original scheme of a continental road, starting in the great plains at the
100th meridian, and extending to the Pacific—with branches diverging from its east¬
ern end to widely separated parts of the country—was a grand conception, worthy
of statesmen. It opened alluring prospects, conciliated rival interests, and was
strong in the promise held out to the people.
There was to be a main line and branches. By the act of July 1, 1862, Congress
incorporated the Union Pacific Railroad Company, and provided for its branches.
The 12th section of that act says:
u The track upon the entire line of railroad and branches shall be of uniform
width, to be determined by the President of the United States, so that, when com¬
pleted, cars can be run from the Missouri River to the Pacific coast; the grades and
curves shall not exceed the maximum grades and curves of the Baltimore and Ohio
Railroad; the whole line of said railroad and branches and telegraph shall be oper¬
ated and used for all purposes of communication, travel, and transportation, so far
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as the public and government are concerned, as one connected, continuous line."
(See U. S. Statutes at Large, vol. 12, pages 489 to 498.)
In other words, the main road and branches should pro-rate with each other.
This act had been passed in the darkest days of the war. It was not till 1864 that
the time seemed ripe for the actual construction to begin. Then Congress acted
again.
THE PROMISE.
The promise of equal advantages and facilities to separated and emulous sections
of the country was repeated, with emphasis, in the act of July 2, 1864. (See United
States Statutes at Large, vol. 13, 356 to 365) .
4 4 Section 15. The several companies hereby authorized to construct the aforesaid
roads are hereby required to operate and use said roads and telegraphs for all pur¬
poses of communication, travel and transportation, so far as the public and the govern¬
ment are concerned, as one continuous line; and in such operation and use to afford
and secure to each equal advantages and facilities as to rates , time and
transportation, without any discrimination of any kind ill favor of the
road or business of any or either of said companies, or adverse to the road or business
of any or either of the others."
These were glorious words. They meant fair dealing to all interests. They
secured the passage of the act.
.♦
• THE KANSAS PACIFIC LINE TO CHEYENNE.
By this act of July 2, 1864, the branch roads were authorized to connect with the
main line at points west of the original initial point—100th meridian. Subsequent
acts confirmed this westward connection to be made by the Kansas branch. Finalty,
the act of March 3, 1869, required the connection of this branch (now the Kansas
Pacific) to be made with the Union Pacific Railroad at Cheyenne.
In all this the original conception of connected and continuous roads, all to be of
the same gauge, (as fixed by President Lincoln,) and
ALL TO PRO RATE WITH EACH OTHER,
Was never lost sight of. The last act of the series, the act of March 3, 1869, (under
which the final connection was made with the Union Pacific.) pointedly and expressly
provides that **all provisions of law for the operation of the Union Pacific Railroad,
its branches and connections, as a continuous line, without discrimination, shall
apply " to the Kansas Pacific line as extended to Cheyenne. (See Statutes at Large,
vol. 15, page 324.)
The public never misunderstood or misconstrued any of these acts. They can be
read but one way. They meant what they said—a junction at Cheyenne, and equal
rates on the main line and connecting branches.
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VIOLATION OF LAW.
The connection was made at Cheyenne September 1, 1870. The people of Colo¬
rado and Kansas, and of the country south and east of Kansas—the people everywhere
—supposed that a line to Utah, Nevada, California, etc.,'a line of '• equal advantages
and facilities as to rates, time and transportation," had been opened. So said the law.
But the Union Pacific Railroad Company ignored and defied the law. It refused
the use of its line on the fair and equal terms required by the acts of Congress.
It not only refused an equal pro rata tariff with the Kansas Pacific, but established
and has maintained prohibitory rates west of Cheyenne. On the very road whose
organic acts require it to be operated and used "without any discrimination of anjr
kind," unlawful and injurious discriminations are practised against the people.
FREIGHT DISCRIMINATION ON THE UNION' PACIFIC.
From a late tariff of this road a few leading articles are selected, as examples of
discrimination, intended to cut off traffic from or to the Kansas Pacific.
A R T ICLE S.
Agricultural Implements
Bacon
Beans
Beef (mess)
Coal Oil
Earthenware
Furniture
Grain
Hides
Lard -.
Live Stock
Lumber
Powder
Sugar
Excess on 14 cars for 516 miles over 1.032 miles, $1,054 40.
For a single train of cars, one thousand and fifty-four'dollars and forty cents
more for half than for the whole length of the road!
Kansas can ship no bacon, mess beef, grain, live stock, etc.. via Cheyenne to
Utah and other Territories or States west. The corn farmer of Kansas, the beef and
hog packer, the live hog dealer, the dealers in improved breeds of cattle, etc., are all
Between Omaha and
Ogden, 1,032 miles,'
per car of 20,000 lb.
Betw'n Cheyenne and
Ogden, 516 miles,
per car of 20,000 lb.
Excess of charge for
516 miles over 1,032
miles.
$219 50
$220 00
$ 50
245 00
290 00
45 00
245 00
326 00
81 00
245 00
326 00
81 00
245 00
326 00
. 81 00
168 50
220 00
51 50
219 50
220 00
50
117 50
206 40
88 90
168 50
382 00
213 50
245 00
326 00
81 00
168 50
240 00
71 50
117 50
187 50
70 00
330 00
438 00
108 00
245 00
326 00
81 00
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(shut out "from the markets of Utah, Montaua, Nevada, and other regions. The
dealers in earthenware, furniture, and other merchandise are similarly treated.
On freight traffic per 100 pounds like discriminations are practised by the Union
Pacific Railroad. Examples are here given:
ARTICLES.
Beans
Beef (mess)
Butter .. /.
Coal Oil
Cheese—
Coffee
Earthenware
Fence Wire
Fish, dried or salted
Glass, window
Grain
Hides, green
Iron and Nails
Lead
Paints
Soap, common
Sugar
"Vinegar
Between Omaha and
Ogden, 1,032 miles,
cents per 100 lbs
Between Cheyenne and
Ogden, 510 miles, cents
per 100 lbs
i
i
Excess per 100 lbs. for
510 miles over 1,032
milpa
122 4
163
404
1224
163
404
2074
219
114
1224
191
684
2074
219
114
1224
163
404
1224
219
964
1224
163
404
1224
163
404
1224
191
684
1224
163
404
1224
163
404
1224
163
404
1224
163
404
1224
191
684
1224
191
684
1224
163
404
1224
163
404
These rates are simply prohibitory of any shipments from the line of the Kansas
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Pacific to points on the Union Pacific west of Cheyenne. They are intended to com¬
pel all commerce with the region west of Cheyenne to traverse the entire line of the
Union Pacific Railroad.
On all freight traffic from Sacramento and San Francisco, intended for points on
the Kansas Pacific Railway, or via that road to points east or south of its eastern ter¬
minus, and on all traffic destined to the Pacific coast, the same system of destructive
discrimination is practised. On ale and beer, bacon, bitters, canned goods, candles,
coal oil, dried fruit, earth paints, hardware, iron and nails, liquors (in wood), stoves
and sugar, for example, the charge is greater between Cheyenne and San Francisco
than between Omaha and San Francisco. The Central Pacific Railroad (from Ogden
west) charges the same rates, whether the goods are from Omaha or Cheyenne.
PASSENGER TRAFFIC.
The same system of discrimination is practised in passenger as in freight
charges. The " local" rates of the Union Pacific Railroad are on first class:
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Omaha to Ogden, 1,032 miles $77 40
Cheyenne to Ogden, 516 miles 46 50
or 7.50 cents per mile from Omaha to Ogden, and 9.01 cents per mile
from Cheyenne to Ogden.
On through business from the seaboard via Omaha to San Francisco, the Union
Pacific pro rates with companies east of the Missouri River, and receives fares :
First Class. Emigrant.
Omaha to Ogden $54 00 $21 60
A reduction from local fares of 23 40 55 80
The Kansas Pacific Company claims that, as Cheyenne is a main connecting
point, through rates should be established with it, as follows :
First Class. Emigrant.
Cheyenne to Ogden. $27 00 $10 80
But the rate charged by the Union Pacific on passenger traffic from the Kansas
Pacific destined for San Francisco is (between Cheyenne and Ogden) :
First Class. Emigrant.
On through tickets $46 50 $46 50
The rate should be 27 00 10 80
Overcharge $19 50 $35 70
There is a large emigrant travel from the seaboard cities westward, on which the
•' emigrant" rate from New York to San Francisco is $60, of which the Union Pacific
receives $21 60 from Omaha to Ogden.
On the same class of business coming from the Kansas Pacific the Union Pacific
charges a fare of $46 50 between Cheyenne and Ogden, which is $24 90 more for 516
miles than for 1,032 miles.
The mere statement of the preceding facts is enough, without argument, to show
that the rates are intended to destroy all commerce which does not pass over the
entire line of the Union Pacific Railroad; and that, if we may judge by its tariffs,
neither passengers nor shippers have any rights that the Union Pacific Railroad is
bound to respect. ^
The Central Pacific Railroad carries goods and passengers without discrimination
for or against the Kansas Pacific.
FALSE EXCUSES FOR GREAT WRONGS.
The Union Pacific Railroad Company pretends to justify these discriminations
by the cost of constructing and operating the west half of its road (from Cheyenne
^o Ogden). This pretense is not sustained by the facts; but admitting, only for argu¬
ment, that the road was costly to build, the extra cost was compensated by extra
subsidies. The company received of United States bonds $32,000 and $48,000 per
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mile on that part of its road. On this immense sum it pays interest only in transpor¬
tation service- Taking into view the whole length of road (1,032 miles) the subsidy,
measured by the present debt of the company to the United States for the principal
of bonds received, amounts to $26,392 per mile, which it enjoys as almost a free gift.
The pretense that the grades are so heavy as to greatly increase the operating ex¬
penses is not well founded. Vernon's American Railroad Manual, a standard au¬
thority, says (page 540) : liIt may be specially noted here that although in passing
the mountain ranges the Union Pacific Railroad attains an altitude of more than
8,000 feet above the sea, yet the grades do not exceed 80 feet to the mile, and compare
favorably with those prevalent on the Pennsylvania and Baltimore and Ohio Rail¬
roads."
The charter of the road says: the grades and curves shall not exceed the
maximum grades and curves of the Baltimore and Ohio Railroad."
A comparison would show that the maximum grades are as great on the Kansas
Pacific as on the Union Pacific, and that the aggregate of grades in proportion to
mileage is as great on one road as on the other.
The rates are practically prohibitory, and intended to be so. If only arranged
jn view of Increased operating expenses, they would have some reasonable relation
to through rates. It is absurd to pretend that a car load of bacon, for example, can
be carried 1,032 miles, from Omaha to.Ogden, for $245. but cannot be carried 516
miles, from Cheyenne to Ogden, for less than $290. On a through car, the pro rate
from Cheyenne to Ogden is $122.50; but a car of Kansas bacon, from the Kansas
Pacific, coming to the Union Pacific at Cheyenne, must pay this $122 50 and $167 50
more to reach the same point. It is an insult to common sense to say that such
charges are based on operating expenses. The tariff is not made to secure compen¬
sation for service, but to cut off the people along the line of the Kansas Pacific
from the trade of Utah and westward; and this is the result, greatly to the injury
of Colorado, Kansas, and all States southward and eastward.
The allegation that heavy grades and operating expenses justify the Union Pacific
in its excessive charges on traffic from and to the Kansas Pacific, is refuted by the
official statement of the earnings and expenses for the last two years. (See New
York Financial and Commercial Chronicle, February 14. 1874.)
PRETENSES EXPLODED BY FACTS.
Union Pacific Railroad.
Gross earnings ....
Expenses
1872.
$8,892,605 53
4.800,573 48
1873.
$10,266,103 66
5,043,212 36
Net earnings
$4,092,032 05
$ 5,222,891 30
Increase in gross earnings 1873 over 1872
Increase in net earnings 1873 over 1872 —
1,373,498 13
1,130,859 25
The expenses were only about 54 per cent, of the earnings in 1872, and less than
50 per cent, in 1873. No road east of the Missouri can make as good a showing.
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The government directors of the Union Pacific may well sav. as they do in their
report of December 1, 1873, to the Secretary of the Interior:
The road is not an expensive one to operate. In this regard it can be kept
below the average of roads in the United States."
BOND SUBSIDIES TO PACIFIC RAILROADS.
Indebtedness for principal and interest, December 31, 1873 :
Companies. Principal. Interest.
Union Pacific $27,236,512 00 $6,002,588 87
Central Pacific 25,885,120 00 7,112,811 97
Kansas Pacific 6,303,000 00 1,141,499 81
Central Branch U. P 1,600,000 00 567,914 99
Western Pacific 1,970,560 00 476,545 94
Sioux City and Pacific 1,628.320 00 480,569 95
$64,623,512 00 $15,781,931 53
A total of more than eighty millions, principal and interest. The interest is pay¬
able in transportation service for government. Owing to the great saving to gov¬
ernment which has been the result of the construction of the roads, the service
account is not enough to pay the interest.
It will be seen that while the United States bond subsidy of the Union Pacific
($27,236,512) amounts to $26,392 per mile of road, the bond subsidy of Kansas Pacific
($6,303,000) only amounts to $8,407 per mile, taking into view the entire line, 745
miles, from Kansas City to Cheyenne. The bond subsidy of the Union Pacific is thus
more than three times as much per mile as that of Kansas Pacific; and the land sub¬
sidy is nearly one-half greater.
The road that received least from the government has faithfully performed its
duty. The road that received most has repudiated the obligations prescribed in the
laws, and which it incurred in accepting the public bounty.
A REMEDY NEEDED.
The Union Pacific Railroad should be made to perform its duty, and pro rate with
the Kansas Pacific. This for the benefit of the people, who are entitled to equal rates
and choice of routes over these roads.
The Kansas Pacific Company has asked Congress to pass an act enabling either
company to sue the other, and any one of the people to sue either, in the local courts,
to compel the roads to respect the fifteenth section of the act of July 2,1864. If the
companies are to be compelled, by suits brought, to operate their roads as required
by law, such an act is necessary, in order that the important questions of jurisdiction
and service of process may be unequivocally settled by statute. At present, any suit
brought to enforce the law may fail through technicalities, even after it shall have
reached the Supreme Court of the United States.
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The Kansas Pacific has asked nothing for itself that it is not willing to concede to
the Union Pacific. It but asks an act fair to both companies.
QUESTIONS OF GOOD FAITH.
The Kansas Pacific Railway received United States bond subsidy on 394 miles
only. To reach Cheyenne, as required by law, 351 miles were built without bond
subsidy. To aid in effecting this, company bonds, secured by first mortgage, were
sold. The purchasers of these bonds believed that the connection at Cheyenne would
insure the " equal advantages and facilities " promised by the acts of Congress. Good
faith to the purchasers of the company bonds requires that the acts of July 2, 1864,
and March 3,1869, be enforced.
The United States bonds, $6,303,000, are a second lien on 394 miles. To pay
interest on the first mortgage and keep the government lien good, the Kansas Pacific
needs the benefit of through connection, guaranteed in the law when the road was
built. Good faith requires this. The United States Treasury has an interest in having
justice done, so that the government lien may hereafter, as heretofore, be preserved.
March. 31, 1874.