Note 497 — Chapter XIX

The relations between the Southern Pacific Company and the proprietary companies were governed by what was known as the “omnibus” lease, under which the Southern Pacific agreed to operate and to maintain the properties of the proprietary companies, to pay all fixed and other charges, including interest on bonds and floating debt, and to divide the surplus net profits between the parties to the agreement in stipulated proportions. In 1896 the percentages for division of profits were as follows: Southern Pacific Railroad of California, 44 per cent; Southern Pacific Railroad of Arizona, 10 per cent; Southern Pacific Railroad of New Mexico, 6 per cent; Louisiana Western Railroad Company, 7 per cent; Morgan’s Louisiana and Texas Railroad Company, 23 per cent; Southern Pacific Company, 10 per cent.