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MARCH 24, 1888. THE ARGONAUT. 3

[Rail]way, the possibilities of that were demonstrated. It opened up the de-
velopment of a country greater in extent than that conquered by Cæsar in Europe,
and all at a very small expense, so small that, from the time of the completion of
the road in 1869 up to 1876, at which time the contract required that the road
should be completed, the government saved during that time more money than it
had loaned the company, the road being completed seven years ahead of the con-
tract time.

I do not take into consideration, at all, what the government saved by the build-
ing of the road as regards the stopping of Indian wars. I do not say anything
about that. I am speaking simply of the transportation of the government and
the amount saved, according to the government's own reports.

All this is in the testimony, proven clearly and indisputably. The Pacific Railroad Commission has published all that testimony, and have submitted it to you; not only
has the government made this important saving, but practically, the whole coun-
try was developed by the building of the road, and the advantages in that way to
the government can not be fully estimated. The construction of this road also demonstrated the possibility of constructing other railroads across the continent.
Before this road was built it was generally supposed there was no coal along its
line. Geologists had stated that the country was one where coal could not be ex-
pected to be found, and that was supposed to be one of the difficulties in operating
the road. I don't know that, today, except for the discovery of coal along the
line, the road could be maintained for commercial purposes; but the discovery of
these coal-beds helped the road at once. Large beds of coal were developed upon
the line of the Union Pacific, which made the operation of the road practicable,
and permitted great profits, and the road was a success. It was earning money
largely, and could have paid off the government loan without difficulty had not
its business been diverted; but, as soon as there was a competing line of railroad,
it not only divided the business, but rates were reduced. The value of the road
through this barren country, without competition, was such that the company
could fix substantially its own rates, according to its own judgment of what it
should charge to transact business.

Senator Davis - What competing line do you refer to?

Mr. Stanford - The first competing line was the Atchison, Topeka, and Santa
Fé, which connected with the Southern Pacific Road at Deming. As soon as
that was done, there was a competing line which divided the business and cut
down the rates. Then the Northern Pacific Road was built, and the Short Line
of the Union Pacific Company up into Idaho and Montana toward Oregon, that
took from the Central Pacific Railway a very large portion of its business,
because that road ran from the East. Most of the supplies of that country came
from the East originally, but before that time they were bought at San Francisco,
and then had to be carried back on our line into Idaho, Montana, Washington
Territory, and Oregon. There are now, perhaps, seven hundred thousand people,
all of whom, when we commenced building, we expected to supply, and did sup-
ply for a time, but the construction by the Union Pacific Railroad of that line,
brought supplies for all that section of the country from the East, and the Central
Pacific Road was cut off from that source of revenue. Our whole population in
California west of the Rocky Mountains did not, at that time, exceed one million
five hundred thousand people. That affected the Central Pacific Road seriously.
Now, then, we say that, while we do not deny that the government had a right,
in its discretion, to aid other lines of road, it was not expected at the time we en-
tered into the contract with the government that other lines of road would be
built, and they were built very slowly. A last, in 1864, the government provided
for aid to the Northern Pacific lines. That was after we had entered into our
contract with the government. However, the contract with the government was
entered into under the Act of 1862, and we built the road under that act and the
Amendatory Act of 1864; but we say this, that if the government has derived
such great benefit from the construction of this road, which has developed its
country and has given it facilities of transportation such as were hardly supposed
possible - for it was not thought that this road could be operated as it has been
operated - this constitutes an equitable proposition entitled to great consideration.

The first forty miles of the road were completed with our own means; we
had iron enough to build fifty miles, entirely from our own means. We do not
complain that the government has aided other railroads, but we do say that it
is a circumstance to be considered by the government in settling with us that
their aiding other roads diverted business from us to the extent, which is shown in the
testimony, of many millions of dollars. The injuries we received through com-
petition, which cut down our rates, can hardly be estimated. We were making
money very rapidly, and were preparing a sinking fund by which to pay off this
government loan before the competition commenced, and before the Thurman Act
was passed.

We felt the Montana business going entirely from us, and even the Union
Pacific Road, by constructing through its influence a line from Ogden, U. T., up to-
ward Montana, stopped the business that usually came from the East, and it does
not go over our road at all now. While we rendered a great deal better service,
the government has never paid the rates for carrying the mails that it used to pay
to the stage lines. It paid to Wells, Fargo & Co. one million seven hundred and
fifty thousand dollars per annum for carrying the mails, with a maximum not to
exceed one thousand pounds. As soon as our railroad was completed they re-
quired us to construct a special car, according to the directions of the government,
to carry eighteen tons of mail-matter and two messengers. They had that car
under their contract, whether they filled it or not with mail-matter. Oftentimes,
when the Chinese, Japanese, and Australian mails are being sent across the road
an extra car is required. I have known of two extra cars being used to carry the
mails across the continent, and yet the government has never paid to this com-
pany quite a million dollars per annum for that service, although it was paying
the large sum I mention to Wells, Fargo & Co.

The contract provided that the maximum amount should not exceed one thou-
sand pounds. Now, the reports all show that the Central Pacific Road has lived
up to its contracts in every respect. Neither the government nor the people of
the country, in the construction of this road, have ever been disappointed in a
single expectation. It was not supposed that the time allotted, which was until
1876, to build the road, was sufficient at the time of the passage of the bill, and it
was so stated in Congress, but the reply was that if more was required it could be
given. It has been said that the fact that we built the road so rapidly and at
such extraordinary cost, is not to be considered by the government. I think that
fact should be considered, as I have said that when we commenced to build this
road we thought the local business and absence of competition, would unable us
to charge substantially what we considered a fair price, and that the only compe-
tition would be that of ox and mule teams. At the time of the passage of the
Act of 1864, the Union Pacific Road had made no progress whatever. The country
from the summit of the Rocky Mountains through to Salt Lake was believed to
be almost impassable, and it was thought it would take a long time to construct
that part of the road. However, we proceeded with confidence, thinking that we
should be able to reach Salt Lake before the UNion Pacific Road could possibly
do so, but with the surveys which were made it was ascertained that the diffi-
culties had been exaggerated; that, in fact, there were no great difficulties at all
in constructing the road from Omaha to Salt Lake. The Union Pacific Road then
sent over their engineers to see what kind of country we had to go through.
When they got over the Sierra Nevada and saw what we were doing, saw the
difficulties to be encountered there, they went home and reported that we could
not possibly pass the Sierra Nevada as early as we did by at least two years.
Then it was that they concluded to push on the building. By the construction of
the Union Pacific Road we did actually lose the greater portion of that trade, ex-
cept that immediately on our line of road. Now, consider that at the begin-
ning we intended to build a road over the Sierra Nevada Mountains, because we
could have no connection by water, and no competition of any kind, except that
of mules and ox teams. But when the Union Pacific Road started and was liable
to come in on us, we saw that it would be worse competition than to have had a
vessel go round by Cape Horn, and it was a work of necessity, the act of Congress
allowing two roads to build from opposite directions. It was not voluntary
on our part, and we were compelled to make sacrifices in order to meet the Union
Pacific Road in Utah. With the Union Pacific Road that was not the case. The
extraordinary efforts they made were voluntary, and were made for the purpose
of securing as much of the line as they could for themselves. There is a wide dif-
ference, therefore, between the two companies and the circumstances surrounding
them in that respect.

Senator Hearst - You spoke a while ago of your end of the line, the Pacific
end of the line, coming up to Utah and capturing the trade mostly of Washington
Territory, Idaho, and Montana. How much of that trade was cut off by the Utah
Northern and the Utah Southern Roads?

Mr. Stanford - Everything, so far as supplies were concerned, which naturally
started from this side to go west. That was all lost to us. Aside from the com-
petition caused by these competing lines of railroad, we should have had estab-
lished our sinking fund; and except for the interference by the Thurman Bill it
would have been ample to meet obligations, and up to the present time we have
met every obligation. There has never been a claim against the Central Pacific
which has not been promptly discharged. Every department of the government
can certify that they have never had occasion to find fault with us in a single
instance in that respect, and the government has received all the benefits it ex-
pected, and a great deal more. The agreement between the Central Pacific Rail-
road Company and the government constituted a contract. Each party to the
contract covenanted to perform certain things. All those things which the gov-
ernment agreed to give the company, were to become the property of the company
that built and maintained the road, held it subject to certain governmental uses,
paid to the government five per cent. of the net proceeds, and allowed the govern-
ment to retain one-half the value of the charges for government transportation.
It fully performed its contract. If the company had given to charity all it re-
ceived from the government, or had sunk it in the ocean, either would have been
the right of the company as far as its relations with the government were con-
cerned. All the government had the legal or moral right to claim was that the
company should perform the obligations of the contract. That it has done. From
the day of the organization of the Central Pacific Railroad Company down to this
year, it has performed every obligation, public or private, which it ever undertook
to perform. In regard to the savings of the government, it can easily be shown
that the difference between what has actually been paid out for this much better
service, and what they were paying out on an average from 1850 to the present
time, is seven million dollars a year that they saved; and when you con-
sider the benefit in the development of the country it has caused, it is impossible
to overrate it. Besides this, we saved to the government in all other cases. It
submitted to a discount in parting with its bonds, except to these railroads,
and in their case the government has demanded the face of their paper, and are
collecting six per cent. interest upon it, so that at the date of the maturity of the
bonds, if we are called upon to pay, we shall pay twenty million dollars to the
government for that which we never had one penny. That is the six per cent. in-
terest on the seven million dollars, the difference between the value of the
bonds the government loaned us and the amount we realized. At the end of
thirty years, the date of the maturity of the bonds, this will amount to about twenty
million dollars.

[end first column][second column]

The chairman - And you have realized as much from the bonds as the United
States did from bonds it sold directly for its own benefit?

Mr. Stanford - We realized more, because we held on to them as long as we
could. We had faith in the ultimate success of our government in the war, and
we hypothecated those bonds, and in that way got a much better price than we
otherwise should. We did not sell any bonds at forty cents on the dollar, but one
time the currency was down so low that it took three dollars in currency to buy
one dollar in gold, and you know all our business over there was done on a gold
basis. Then the cost of our supplies was enormous. We had two engines on the
road that cost us sixty-five thousand dollars, which could be placed there to-day
for fourteen thousand dollars. It order to push this road forward rapidly, we had
a great deal of the iron sent across the isthmus, and we had to pay sixty dollars a
ton for that. The war risks were very great, insurance was very high, and we had
to meet all of them. Thus, our road cost, no doubt, fully double what it would cost
had it been built before or subsequent to the war, and built in the manner con-
tractors would ordinarily build a road, but it was not optional with us. We had
to build it in that way or lose what we had invested, and therefore we made the
sacrifice.

Senator Butler - When do your bonds mature?

Mr. Stanford - In about ten years from the present time. Now we are here,
not because we are derelict of our obligations to the government, but because, as
the evidence shows, our business has fallen off very much, owing to reasons I
have stated, and the probability is that we shall be unable to meet our obligations
at maturity. It was anticipated that the government business would alone pay
more than the interest. That would save the interest, and pay a large amount in
addition. In all the debates in Congress you will observe that they discuss this
question. They said: "We are paying out eight million dollars annually for
transportation west of the Missouri river, and the laws of 1862 and 1864, required
that one-half of the amount due us on account of transportation, should go to our
credit with the government, and the other half we were to receive in cash." They
said: "We have been paying out eight million dollars; one-half of that will
be employed to protect the government, and the company will have the other four
million, and can make that amount of money." As matters turned
out, the government has paid out less than one million dollars, and that did not
pay the interest on the bonds. The government in that respect was disappointed, but
it was owing to the fact that the great benefit expected by the railroad company in
doing the government business was not realized, although the government has had
the service performed at a rate cheaper than ever before. The government has
lost nothing by reason of that fact. On the contrary, it has been the gainer, be-
cause, had the business been paid for at that same rate, it would have put into our
treasury four million dollars a year, and we should have had that amount to
our credit to settle this indebtedness. But contemplate, for a moment, the condi-
tion of that country when we first went into it. In the eighteen hundred miles
from the Missouri to the Sierra Nevada, there was not a navigable water-course.
There was no settlement, except that of the Mormons in Utah. The government
has had opened for settlement all that country, and if we pay these bonds at
maturity, the government will enjoy these great benefits, without having ex-
pended a dollar in money. It is enjoying those benefits now, and will for all time
to come. You are all more or less acquainted with the history of these times. It
was considered a very doubtful enterprise when first initiated, so much so, that in
California, until the end of 1864, no one would have anything to do with it. It
was regarded as a hazardous enterprise, and to such an extent that, in San Fran-
cisco, all the stock for which we could get subscriptions amounted to ten shares,
valued at one thousand dollars. At Sacramento some stock was subscribed for,
caused by the local feeling and pride existing there, and they were willing to do
something, but in San Francisco, but ten shares of stock were subscribed for, and that
subscription was made by a foreigner, a Frenchman. Nobody had any confidence
in it. It was a most reckless enterprise. I have been led to say much more than I
had expected to when I began, but I wanted to show you the circumstances under
which we commenced to build that road. It was with the idea that we were not
to have competition; that we would command country which would probably de-
velop, and if we could get over the mountains at all, that the enterprise would be
a great success, and the subsequent history of that line shows that in this respect
we should have made no mistake. And the reason the fortune of the road now is
not ample security to the government arises entirely from the fact that by the
government's own acts competing lines have been constructed, and the business
injured to such an extent that it is doubtful if we have the ability to pay. Of
course, it was never supposed that the railroad would pay off the bonds at matu-
rity. I do not know of any railroad in the country which pays its bonded indebt-
edness, except by issuing new bonds, and that is the way we expected to do, be-
cause the government bonds and the first-mortgage bonds mature at the same
time. As it is, we have our private sinking fund, and it is now between nine
and ten million dollars. Gradually it will take care of these first-mortgage bonds,
and every dollar that goes into that fund adds so much to the advantages the
government has.

The chairman - That sinking fund you will take care of yourselves?

Mr. Stanford - Yes, sir; and I want to impress upon you the facts that before these
roads came in competition with the business we were then doing, we were able to
pay dividends, and we would have been able to pay off the government debts so
far that we would have no difficulty in renewing a loan to meet it, and were
ourselves providing a sinking fund for that purpose. When the government
passed what is known as the Thurman Bill, and took the management of the sink-
ing fund and the payment of the debt out of our hands, we could not make the
provision required, and also have another fund, and it is not our fault that we do
not make that sinking fund. As things have turned out, we could not have
carried out the terms of that sinking fund, but according to the earning capacity
of the road at that time it would not have been any trouble at all.

Senator Butler - What do you mean by your "private sinking fund?" The
fund to take care of your bonds?

Mr. Stanford - I mean the fund the railroad company set apart to meet its ob-
ligations - obligations that are prior liens to that of the government. But the
Thurman Bill provided a sinking fund, which I call the public fund.

The chairman - What was the effect of that Thurman Bill sinking fund?

Mr. Stanford - It disappointed its promoters. The mode of investing the
fund was a failure, and even if the business had not fallen off by reason of com-
peting lines, this defect in the bill rendered it worse than useless.

That fund was not accumulated. The Secretary of the Treasury has invested
the money which the company has paid under the Thurman Act in government
bonds, and paid an average premium therefor of thirty-four percent. There has
been paid in by the Central Pacific Company, under the Thurman Act, three mill-
ion one hundred and sixty-eight thousand six hundred dollars. The loss on which,
in interest and premiums, up to August, 1887, was one million six hundred and
twelve thousand nine hundred and sixty-six dollars. In fact, all the interest on
the fund has been lost, and for all practical purposes, there is less money in that
sinking fund than the amount paid in by the company by over five hundred thou-
sand dollars.

The chairman - That is on account of the purchase of bonds at high prices?

Mr. Stanford - Yes; the government bought these bonds at a premium of one
hundred and forty cents. They took the money that we paid in to buy these
bonds at maturity; they will only pay off the debt at the rate of one hundred
cents on the dollar, so that there is about six hundred thousand dollars of value
to us less in that fund than we have put into it.

Senator Butler - By reason of these high premiums?

Senator Stanford - Exactly. For a long time during the construction of the
road we borrowed all the money necessary on our own credit. We used the first-
mortgage bonds and the government bonds as collateral, feeling confident at the
time that they would not depreciate in value. We held them as long as possible,
and when we could not help ourselves we sold them, and we sold our first-mortgage
bonds. We realized seventy-two cents on the dollar for each class of bonds, but
there was a time when we sold our bonds and realized only a little more than forty
cents on the dollars.

Senator Hiscock - You mean in gold?

Mr. Stanford - Yes; that is the kind of money we used in constructing the
road. As I have said, the government itself submitted to the sacrifice of it
s bonds in every case, except in dealing with these Pacific railroads. They alone
had to take those bonds and suffered the loss, and they are now drawing six per
cent. In all other cases, the government sold their bonds in the market for what
they could get, and in every instance lost the discount themselves. Now, it seems
to me that the magnificent results which have been attained by the government,
should fairly be taken into consideration in dealing with these questions. That
point I will not argue. The counsel will present all those things to you; but my
object in addressing you now was to disabuse your minds of the popular notion
that the Central Pacific Road had not lived up to its obligations, that it has
made large amounts of money at the expense of the government; whereas, the
fact is, it has never made a dollar at the expense of the government, and all the
value that the company has had, and whatever of wealth it has gathered, has
come from its own creation. Every dollar of the government bonds, and every
dollar of the first-mortgage bonds, went into the construction of the road, and that
has developed the country and created values, and for a time this road was very
valuable. It was earning largely in excess of the requirements of a fund neces-
sary to meet the government debt and its own first-mortgage bonds. The stock
was selling at a high price, and nobody anticipated the disaster that afterward be-
fell it in consequence of the construction of these competing lines of railroad. It
is said that we issued a large amount of stock due. We did, but it affected nobody
but the stockholders. If the stock of the Central Pacific Road were to-day
gathered in, and all, excepting even shares, were destroyed, it would not make any
difference to the government, or any one else in the world, except to the stock-
holders themselves. The value of the property does not depend on the number
of shares that are outstanding. They are mere evidences of title, and nobody is,
or can be, interested in them, except the stockholders and me. Stockholders are
not complaining. The testimony will show that we built other railroads. We
did; we built about six thousand miles of railroad to help level up the country,
but we did not do it at the expense of the government. We did not do it at any-
body's expense but our own, realized from our own resources. For instance, we
planned a railroad, and we concluded to issue so much stock and so many bonds.
we had a contract company to do the work. Now, who was wronged by that?
Nobody. It was of no consequence to anybody in the world. The great public
were interested in railroads, but if made no difference about the stock
issues, or who issued it, provided the railroad was built, except to the stock-
holders. We built, as I say, about six thousand miles of railroad in that way,
and transportation is, consequently, cheap all throgh the country.

Senator Hearst - Speaking of equities, the loan that the government granted to
give you a foundation and a credit by which you were able to do this work at the
start, you admit is an equity from the government, at least?

Mr. Stanford - Of course. As I have said, and as is well known, the govern-
ment paid out nothing. their loan was the credit which they gave us. If they
had paid out the money, the debt we owe would not be so much. In other
words, if they would have parted with twenty-seven million dollars. it would

[end second column] [begin third column]

have been worth a great deal more than we received, and, up to this time,
they have been having the benefits of the roads without paying anything
but the payment of interest. The principal is in their own pockets. The in-
terest they required us to pay back. If the government never gets another
dollar back, it will have saved over two hundred million dollars, against what
it is now paying for the service, prior to the construction of this road. How
much value it has been to the government to have eighteen hundred miles of coun-
try developed, I shall not undertake to say, but the population has grown, other
railroads have been built, and all this is a consequence of the construction of this
road. I do not believe that one of the other lines of road would have been built
through that country to-day, if this road had not been a pioneer and shown the
possibility of its being done. With double the land grant, the Southern Pacific,
the Atlantic and Pacific, and the Northern Pacific have been pushed forward, but
the impulse came from the construction of our road. The Northern Pacific Road,
running through a magnificent section of the country, with twice the land grant
that the Central Pacific had, only completed its road in 1883, while we completed
our road in 1869, during a part of which time the government bonds and the first-
mortgage bonds, together, did not equal the face value of either one. All these
results have followed from the construction of the road. The early construction
of the Central Pacific Road was a matter compulsory on the part of the company,
and the sacrifices it made, or was compelled to make, in order to perserve that
which had already been expended upon the road. But I don't care to go into that
matter further. I have stated substantially all that I desire, which is, that we
have made no money at the expense of the government; that all we derived from
the government went into the constructuion of the road, as can be easily ascer-
tained; and these vague and uncertain stories - that the company has made money
at the expense of the government - have no foundation, except in the wild rumors
started some years ago. Instead of the projectors having made money at the ex-
pense of the government, it was made entirely out of values which were created
by the company, and because we developed an empire.

Last winter Congress passed an act directing commissioners to inquire into certain
equities between the company and the government. That act said they should
examine and ascertain how much more it cost the company to give the use of this
railroad to the government seven years earlier than the contract required. It said
they should ascertain what sacrifices were made by the country on the bonds
which were loaned and what discounts paid. It said they should ascertain the
amount of business which was diverted from the road by reason of the construc-
tion of other roads. Congress demanded an enquiry into these equities. In read-
ing the report of the commission one would suppose this question of equities
originated entirely with the company, and that it had no foundation because the
equities did not really exist. That is fairly to be implied from what they have
said. The contrary is the case. Congress specified the equities, admitted their
existence and directed the inquiry. Our Mr. Haymond will discuss all these
things more carefully. There is a great deal to be said about them. It is the
history of a great work from the conception, and can not be disposed of in a few
minutes, and my object was simply to place the company in a fair attitude at this
time so that you might consider the case without prejudice. If we to-day had the
business that we fairly had a right to anticipate, and that we once enjoyed, there
would have been no occasion for this investigation. We should have been able to
pay the debt in full. But, as it is now, we think that we are fairly entitled to
have the equities considered. Instead of a strong creditor, we will reap all the
advantages which we supposed we would reap from this contract and more, now
the government has a debtor to deal with. The question is, whether it will
be as just as individuals dealing with one another would be under the same cir-
cumstances. The money to meet all these equities has been saved to the govern-
ment already many times over. It has saved the difference between what it
would pay out and what it has actually paid out, amounting to over two hundred
million dollars, and it has obtained advantages in other ways which I am going
to describe. Even the land grant it gave us has doubled the price of every alter-
nate section, so that the government has actully given us nothing in that direc-
tion. The land was worth nothing before the railroad was built, and now it is
worth a great deal.

The chairman - So that the government did not help you in the building of the
road?

Mr. Stanford - They helped to give us credit.

The chairman - But they did not furnish you money?

Mr. Stanford - No, not during that time. we have sold some of these lands,
but the government has not been very liberal with us even in that respect. There
is a popular impression that we have neglected to take out land patents so as to
avoid taxation. There has never been a time since our road was completed, that
we had not money to pay for surveys, but we have not, as a rule, sold lands
granted to the road between Ogden and Sacramento until we had them ourselves.
The settlers go in and occupy them, and when the time comes that we obtain a
patent from the government, we convey to those people at the credited prices,
without reference to any improvements that have been made, so that we have
saved nothing in the way of taxes on these lands, and besides we have suffered, no
doubt, a very large amount - our land agent estimates it at five million dollars -
by not having those patents issued to us by the land department at the time when
we had money there to pay for the survey. I do not think we have had a single
patent issue for three years. We have demanded patents from the beginning, and
the government has refused to comply with its contract. The law provided that
as soon as the line of road was definitely fixed, the government should cause
all the granted lands to be surveyed. The surveys have not yet been made. The
other roads across the continent, passing through a better country, have sold
their lands in advance of the surveys, but in our case we have not been able to
get the money for the lands, because the lands have not been patented to us.
Now, if we are required to pay this debt by arbitrary requirements, the
burden will fall chiefly upon the people of Utah and Nevada. They can not
very well escape using the road. The other business upon which we antici-
pated making large profits to enable us to meet our obligations to the govern-
ment, has been substantially destroyed by the acts of the government itself.
The government has had all the advantages it anticipated and much more.
Its lands along the line of the road have doubled in value, and if the bonds
are paid at maturity, it will not have cost the government one cent for the con-
struction of this road. In closing, I desire to say to the committee, that every
statement I have made to-day, or that is contained in my testimony, as given be-
fore the commission, is supported by other evidence, given before the committee;
so that there has been, and can be, no contradiction. If Congress will allow the
company the equities fairly due it, they may want to modify the terms of payment
considerably. I was doubtful whether to ask, in this, if any arrangement had
been made for the payment of balances that might be found due. the first thing
is to ascertain what is due, and I want a court. I don't care whether you take the
present existing court, or whether it is appointed; but I want a full, thorough,
and impartial examination of all matters in controversy. There have been so
many rumors in regard to this whole subject, and so many loose statements, that
a court should investigate it, in order to satisfy everybody as to what is fair be-
tween the company and the government. That there are equities, Congress itself
has recognized, by directing the commissioners to make inquiries into them.

COMMUNICATIONS.

Tariff Tinkers.

EDITORS ARGONAUT: You have a tariff tinker who signs "B;"
who writes with an assurance of having probed this problem to the very
bottom.

He says it will put wool on the free list, which will have the double
effect of "giving wool-growers in this State a home-market for their
product." I suppose they have no home-market for their product now,
according to "B," but the manufacturers must buy cheap Australian
wool. How amazingly that will help the wool-growers in this State.
He - "B" - reminds me of the fellow who could sell his cake and eat it.
Forty years ago, the tariff-tinkers, who were the ancestors of "B," tried
the same thing. But the wool-growers amputated the heads of their
sheep, took off the skins, sold them to the tanners, boiled down the meat,
extracted the tallow, and fed the meat to the hogs. What an amazing
effect it will have on the wool-growers to bring in Australian wool
at one-half the price of California wool! How it will increase the value
of California wool, and help the wool-growers of California!

And then he talks so wisely about iron, which we ought to make here,
when we have only a little iron ore, and small quantities of dear coal.

Let me give one illustration of the wisdom of this Solomon:

"According to the New York [italics] Financier [/italics], the Belgian iron-masters,
who are competing so successfully with England, even for England's
home-trade, are preparing to strike for the American trade. The Bel-
gian iron-master pays his rollers about fifty-four cents a day, his blast
furnace-men about forty-three cents, while his puddlers get about five
dollars a week. With these wages, he hopes to make inroads into
American in spite of the duty."

It would be well for one-idea "B." to look at the several sides of this
question.

In 1842, when the Whigs inaugurated the tariff, the country was
wretchedly poor. No farmer could get anything but "trade" for his
crops - oats fifteen cents a bushel, wheat fifty cents, corn thirty cents,
butter eight cents, eggs six cents a dozen. In 1846, the tariff measures
were repealed by the casting vote of George M. Dallas, who was elected
with the Democratic slogan of "Polk, Dallas, and the tariff of '42."
"B." seems to think that Polk, Dallas, and those chaps knew a heap
more about the tariff than we who saw the terrible results of the tariff of
1846, in the last years of the administration of James Buchanan, when
the government was obliged to borrow money to pay its current expenses
. In 1857, the writer was interested in a little cutlery manufactory in New
York. The tariff-tinkers, in 1857, shut us up. From 1842 to 1846, Amer-
ican industries were protected. When the war broke out, the tariff was
again inaugurated. What bosh to say the stupendous and extraor-
dinary ability of the country to pay war expenses and the debt since, was
not due to the protecton of our industries.

God have mercy on the country when the tariff tinkers get control!

SAN FRANCISCO, March 12, 1888. ........................................... H.

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