The fair inference from the terms of the trust agreement is that the promoters looked upon the union of the San Francisco and San Joaquin Railway and the Atchison, Topeka and Santa Fé as a proper and likely outcome of the construction of the former road. This same conclusion is strengthened by consideration of the China Basin lease, concerning which a few words may be said.
The China Basin Lease
The China Basin lease related to a tract of land on the water-front between the foot of Third Street and the foot of Fourth Street in San Francisco. The San Francisco and San Joaquin Valley Railway needed a terminus in San Francisco even before it entered upon construction west of Stockton, because it wished to encourage the shipment of freight from San Francisco up the Sacramento River to the head of its rail line at Stockton. It also looked forward to the day when it should have a railroad of its own to Oakland or to some other point on San Francisco Bay, possibly to the city of San Francisco itself.
According to the precedent set in the southern counties, the San Francisco and San Joaquin Valley should have applied to the city and county of San Francisco for terminal privileges. The piece of property which it desired, however, consisted of certain mud flats at China Basin, control over which had been specifically vested in the State Board of Harbor Commissioners by a law passed in 1878.[477] Not only were the flats in question thus removed from the control of the city, but the State Board of Harbor Commissioners itself had apparently no authority to conclude binding leases of this area covering a substantial period of time, although it did have power to grant temporary permits for the use of water-front property. Before any progress could be made, therefore, it was necessary to apply to the state legislature in order that the powers of the harbor commissioners might be enlarged, after which negotiations could be continued with the commissioners direct.
As a first step toward obtaining a lease of the China Basin tract, Claus Spreckels went to Sacramento in March, 1895, accompanied by other directors of the San Francisco and San Joaquin Valley Railway. With characteristic emphasis he declared to members of the legislature that if the promoters of the new enterprise did not get the mud flats they might as well give up the road.[478] No senator, he said, who voted against his bill could dare to face his constituents again. Senators who voted against the proposed amendment to the law voted to take the bread out of the mouth of the workingman’s child. They voted to keep the unemployed out of work, and they voted for their own damnation.[479]
Necessary Legislation Enacted
There was little opposition in the assembly to giving the Spreckels group what it wanted. Principally the discussion was as to whether it was better to clothe the harbor commissioners in general terms with the power to lease water-front property,[480] or whether the board should be authorized only to lease a described parcel to a specified group of persons.[481] The fear was expressed in the course of the debate lest the tract desired by the San Francisco and San Joaquin Valley Railway might be leased to a corporation controlled by the Southern Pacific, and that other parcels might go the same way. On the other hand, it was pointed out that a provision for a lease to specified parties might prove unconstitutional as an example of special legislation.
In the end the “Gleaves” bill with the so-called “Powers” amendment passed the assembly by a vote of 60 to 9, and the senate by a narrower margin of 21 to 17. In its final form it authorized the State Board of Harbor Commissioners to lease any land belonging to the state which was required for terminal purposes, at a maximum rental of $1,000 a year. No land was to be leased for a longer period than fifty years, not more than 50 acres was to be leased to any one railroad, and no lease was to be assignable without the written consent of the commissioners. As a still further protection, it was provided that the beneficiary of the lease must be a railroad company. Such a company, moreover, must be incorporated within the state of California, and it might not be a corporation which, at the date of the passage of the act, had any terminal facilities in the city and county of San Francisco.[482]
Terms of Lease
Armed with the legislative sanction, Mr. Spreckels undertook negotiations with the Board of Harbor Commissioners and with Mayor Sutro, of San Francisco, and Governor Budd, which lasted from the middle of March, 1895, to the second week in July. In its main outlines the lease finally agreed upon offered to the San Francisco and San Joaquin Valley Railway Company the use of a defined area of 24¼ acres more or less located near the foot of Fourth Street, San Francisco, and bounded upon the water side by the sea-wall and thoroughfare established by the legislature of 1878. In return for this considerable grant, the lessee agreed to reclaim the lands granted from the tide, to place tracks, warehouses, and freight sheds upon them; to pay a nominal rental of $1,000 a year; and in addition, to commence within six months, and to construct and have in operation within ten years, not less than 50 miles in continuous railroad in addition to the mileage already constructed in 1895, one end of which was to be at some point on the Bay of San Francisco south of an east and west line drawn through Point Pinole.