The differentials in the case of merchandise southbound varied. On first-class the rate from San Francisco to valley points was 5 cents per hundred pounds higher than the rate from Stockton. On second-class the differential was 3 cents, and on third and fourth classes it was 2 cents per hundred pounds. Groceries and supplies for country stores generally fell in classes two, three, and four. These figures compared with Southern Pacific differentials of 5 cents on classes one and two, and 4 cents on classes three and four.[496] Here again the relative position of San Francisco was improved, not unnaturally to the satisfaction of dealers in that city. It is clear from the facts set forth in the last few pages that the San Francisco and San Joaquin Valley Railway accomplished a considerable reduction in rates, at least for a time, in the San Joaquin Valley. When we bear in mind that this was the principal purpose for which the road was built, and when we recall that after all its promoters escaped without considerable financial sacrifice, it is hard to avoid the conclusion that the enterprise was justified, and may be considered to have been worth what it cost. The company did not fulfil the hopes of its projectors; it failed to maintain its independence, and only for a few years served as an aggressive competitor of the system which San Francisco business men so cordially disliked. But it did do something to relieve the mercantile community, at no great expense to the persons who invested in it, or to the city which promoted it, and so, in a modest way the railroad may be considered a success. CHAPTER XIX OPERATING CHARACTERISTICS OF THE SOUTHERN PACIFIC LINES Proprietary and Leased Properties Let us now leave the general questions of rates and competition in California, and return again to the more intimate history of Southern Pacific development, and particularly to the story of the later years. The present chapter describes the organization and operating characteristics of the Southern Pacific system after 1885; the chapters next following take up that all-important financial problem which faced the Central Pacific in the later nineties—the repayment of the government debt. A glance at the annual report of the Huntington lines shows that from the point of view of ownership the system, as early as 1885, was divided into two parts. The first of these was known as the “proprietary companies,” and included the Southern Pacific Railroad of California, the Southern Pacific Railroad of New Mexico, the Southern Pacific Railroad of Arizona, Morgan’s Louisiana and Texas Railroad and Steamship Company, the Louisiana and Western Railroad, the Texas and New Orleans Railroad, the Galveston, Harrisburg and San Antonio Railway, and the Northern Railway. The second was known as the “leased companies,” and its principal components were the Central Pacific Railroad, the California Pacific Railroad, and the Oregon and California Railroad.