CHAPTER XVII

IN THE INTEREST OF ALL

The difference in freights against Rice was so great, as the Interstate

Commerce Commission found, after taking hundreds of pages of testimony,

that he had to pay $600 to $1200, "or more," on the same quantity his

opponent got through for $500. These discriminations were made, as the

commissioners say, "on no principle.... Neither greater risks, greater

expense, competition by water transportation, nor any other fact or

circumstance brought forward in defence, nor all combined, can account

for these differences."[414]

The railroads had, of course, to give some reason, and they put forward

the plea that it was much more expensive and dangerous to carry Rice's

shipments, which were in barrels, than those of the combination, which

were in tank-cars.[415] This excuse for charging him rates at which

he could not ship at all did not stand examination by the Interstate

Commerce Commission.

But he did not wait for that. When he found the railroads were so fond

of tank-cars, he set about getting them. He wrote the general freight

agent and the president of the road that he would build tank-cars, and

asked what his rate would be then; but he got no answer. He wrote other

roads, but got no answer. He asked the general manager of the Queen

City and Crescent Route the same question. After a correspondence of

five months with him and other officials, in which he was shuttlecocked

from one to another and back again, he had not only not succeeded in

getting any tank-car rates, but at the end of that protracted exchange

of letters the general manager wrote: "I was not aware that you had

asked for rates on oil in tank-cars."[416] Rice wrote the Louisville

and Nashville: "I will build immediately twenty tank-cars if you will

guarantee me ... as low a net rate as accorded any other shipper."

Commenting on his failure to get answers, the commissioners say:

"Complainant did not succeed in obtaining rates. The denial of his

right was plain, and stands unexcused.... What reason there may have

been for it"--the refusal of rates--"we do not know, but find that they

were not just or legal reasons."[417]

How history is made! One of the reasons given by the solicitor of the

oil trust[418] for its success is its use of the tank-car, with the

obvious inference that its would-be competitors had no such enterprise.

And Peckham, in his valuable and usually correct "Census Report on

Petroleum," in 1885, says that the railroads require shippers to use

tank-cars![419]

Determined to keep in the field and to have tank-cars, if tank-cars

were so popular with the railroad officials, Rice went to the leading

manufacturers to have some built. He found they were glad to get his

contract. After making arrangements at considerable trouble and expense

to build him the cars, they telegraphed him that they had to give it

up. Bankers, who had promised to advance them money on the security of

the cars, backed out "on account of some supposed controversy which

they claim you have had with the Standard Oil Company and various

railroads in the West. They feared you could not use these cars to

advantage if the railroads should be hostile to your interests."[420]

Through the all-pervading system of espionage, to which cities[421]

as well as individuals were subject, his plans had been discovered

and thwarted. The espionage over shipments provided for by the

South Improvement scheme has now extended to business between

manufacturer and manufacturer. Why should it stop at unsealing private

correspondence in the post-office in the European style, and making its

contents known to those who need the information for the protection of

their rights to the control of the markets?

Rice, who was nothing if not indomitable, finally got ten cars from the

Harrisburg works. But this supply was entirely inadequate, and he had

to continue doing the bulk of his business in barrels. What a devil's

tattoo the railroad men beat on these barrels of his! They made him pay

full tariff rates on every pound weight of the oil and of the barrel,

but they hauled free the iron tanks, which were the barrels of his

rivals, and also gave them free the use of the flat-cars on which the

tanks were carried.[422] Hauling the tanks free, on trucks furnished

free, was not enough. The railroads hauled free of all charge a large

part, often more than half, of the oil put into the tanks. In the exact

phrase of the Interstate Commerce Commission, they made out their bills

for freight to the oil combination "regardless of quantity." This is

called "blind-billing."

Of the 3000 tank-cars of the combination only two carried as little as

20,000 pounds; according to the official figures there were hundreds

carrying more than 30,000 pounds, and the weight ran up to 44,250

pounds, but they were shipped at 20,000 pounds.[423] A statement put in

evidence showed that shipments in tank-cars actually weighing 1,637,190

pounds had been given to the roads by the combination as weighing only

1,192,655 pounds. Cars whose loads weighed 44,250, 43,700, 43,500,

36,550 pounds were shipped as having on board only 20,000 pounds. At

this rate more than one-quarter of the transportation was stolen.

The stockholders of the road were paying an expensive staff of

inspectors to detect attempts of shippers to put more in their cars

than they paid for, but these shippers paid for three car-loads and

shipped from four to six regularly, and were never called to account.

This "blind-billing," the Commission said, was "specially oppressive."

It was done by the roads in violation of their own rule. It had

been mutually agreed among them, and given out to the public, "that

tank-cars shall be taken at actual weight."[424]

When Rice was trying to get the roads to allow him to use tank-cars,

he asked how the charge on them was calculated. Of those that answered

none answered right. None of them gave him the slightest intimation

that there was any such practice as "blind-billing." On the contrary,

they assured him he would have to pay for every pound he shipped.

The Missouri Pacific replied with a "statement not warranted by the

facts," as the Commission softly put it. They said they charged

for the "actual weight," while, as the Commission shows, they made

shipments "regardless of quantity." Rice asked the Newport News

and Mississippi Valley Railroad for tank-car rates. "A tank-car is

supposed to weigh (carry) 20,000 pounds; if it weighs more, then we

will charge for it." At the same time the agent wrote Rice this, he

was hauling cars containing 35,000 pounds "with no additional charge."

"If this statement was made in good faith," the Commission says, "it

is difficult to account for it, and it is not accounted for." "Had he

(Rice) provided himself with cars for tank shipment, and been charged

as he was told he would be, the discrimination against him would have

put success in the traffic out of the question."

When they wanted to turn some new screw in freight rates against Rice,

the railroad officials would whip themselves around the stump by

printing a new tariff sheet on a type-writer, and tacking it, perhaps,

as one of the Interstate Commerce Commission said, on some back door in

their offices. This they called "publishing" their rates, as required

by the Interstate Commerce law. To Rice, asking for tank-car rates,

they would send this printed sheet, showing that if he shipped by

tank-car he must pay for every pound, and they held him off with this

printed, official, and apparently authentic tariff, though shipping

44,000 for 20,000 pounds for the trust. This was done after the

Interstate Commerce Act went into force.[425]

One of these roads assured Rice that its rates had been fixed "by the

special authority of the National Railway Commissioners." The fact was,

as the Commission declares: "The Commission never investigated coal-oil

rates, or gave special authority for their renewal; it never sanctioned

any difference in the rates as between tank-car and barrel shipments,

and had never, up to the date of this letter, had its attention called

to them in any way."[426]

The representative of the combination was called as a witness before

the Interstate Commerce Commission. "We pay for exactly what is put

in the tanks,"[427] he testified. "In fact, this was never done,"

says the Commission.[428] Even the railroad officials, who could go

any length in "blind-billing" for him, could not "go it blind" on the

witness-stand to the extent of supporting such a statement. "Our price

per tank-car was not based on any capacity or weight; they have been

made simply per tank-car."[429]

"What, generally, is the object of false billing?"

"I suppose to beat the railroad company."[430]

In defence of the discrimination against the barrel shippers, a great

deal has been made of danger from fire, damage to cars from leakage,

and trouble of handling in the case of barrel shipments, but the best

expert opinion which the Interstate Commerce Commission could get

went against all these plausible pretences.[431] The manager of the

tank line on the Pennsylvania roads showed that the risks were least

when the transportation was in barrels. Another reason given for the

lower rates on tanks was that they returned loaded with turpentine

and cotton-seed oil from the South; but, as the Interstate Commerce

Commission shows, this traffic was taken at rates so astonishingly low

that it was of little profit;[432] and the commissioner of the Southern

Railway and Steamship Association informed the Commission that the

return freight business in cotton alone, brought back by the box-cars,

to say nothing of other freight, was worth more than these back-loads

of turpentine in the tank-cars.[433] It was, consequently, the box-car

in which barrel shipments were made, and not the tanks, on which the

railroad men should have given a better rate, according to their own

reasoning. Turpentine and cotton-seed oil are worth three or four times

more than kerosene, and it costs no more, no less, to haul one than the

other; but the railroads would carry the cotton-seed oil and turpentine

for one-third or one-fourth the rate they charged for kerosene. The

Commission could not understand why the rates given by the roads on

these back-loads of turpentine and cotton-seed oil were so low. "This

charge, for some reason not satisfactorily explained to the Commission,

is made astonishingly low when compared with the charge made upon

petroleum, although the cotton-seed oil is much the more valuable

article."[434]

The newspapers of the South have contained many items of news

indicating that the men who have made the oil markets theirs have

similarly appropriated the best of the turpentine trade, but nothing is

known through adjudicated testimony. The trustees of oil have always

denied that there was any connection between them and the Cotton-seed

Oil Trust, although the latter shipped its product in the oil trust's

cars. The reasons, therefore, for the "extraordinarily low" rates made

on the turpentine and cotton-seed oil shipped North in its tank-cars

must remain, until further developments, where the Commission leaves

it--"not satisfactorily explained." The railroads said they made

the rates low for tanks because of the enticing prospects of these

back-loads, in which there was no profit to speak of; but they

extended these special rates to points from which there was no such

back-loading.[435] Rice saw how the cost of sending his oil South could

be reduced by bringing back-loads of turpentine at these "astonishingly

low" rates. He found there was still turpentine in the South he could

buy; but the railroads would not so much as answer his application for

rates.

"They absolutely refused."

"Was this refusal since the Interstate Commerce decision in your case?"

"Yes, sir; since that decision."[436]

It might have been thought this would have been enough--hauling the

tank itself free; furnishing the flat-cars free for many tanks;

carrying free a quarter to a half, "or more." But there was more than

this. The railroads paid the combination for putting its tank-cars on

their lines. For every mile these cars were hauled, loaded or empty,

the roads paid it a mileage varying from 3/4 to 1-1/2 cents. This

mileage was of itself a handsome revenue, enough to pay a profit of 6

per cent. on its investment in the cars. But when Rice asked what the

railroads would charge him for hauling back his empty tank-cars, he was

not told that he would be paid for their use, as others were. He was

told that he would be charged "generally a cent and a half a mile,"

or, "we make the usual mileage charge on return of empty tanks." "This

last statement," the Interstate Commerce Commissioners say, "was not

warranted by the facts."[437] The vessel which contains the oil of the

combination "receives a hire coming and going," Mr. Rice's lawyer said

before the Committee of Congress on Commerce; "that which contains

Rice's oil pays a tax." When Rice tried to sell his oil on the Pacific

coast he found that if he shipped in tank-cars he would have to pay $95

to bring the empty car back, which others got back free.

The representative of the oil combination was questioned about all this

by the Interstate Commerce Commission.

"Are you allowed mileage on tank-cars?"

"No, sir."

"Neither way?"

"Neither way."[438]

But the railroad officials again could not "blind-bill" him as far as

this. Asked what mileage they paid him, they replied:

"Three-quarters of a cent a mile."[439]

When the freight agents who did these queer things at the expense of

their employers--_i.e._, their proper employers, the stockholders--were

put on the stand before the Interstate Commerce Commission to explain,

they cut a sorry figure. "It was an oversight," "a mistake," said one.

Another could only ring confused changes on "I think it is an error....

I cannot tell why that is so.... It is simply an error.... I cannot

tell."[440] There were never any errors, suppositions, oversights for

Rice.[441] Referring to this, the Commission says, caustically:

"The remarkable thing about the matter is that so many of these

defendants should make the same mistake--a mistake, too, that it was

antecedently so improbable any of them would make. The Louisville and

Nashville, the Cincinnati, New Orleans and Texas Pacific, the Newport

News and Mississippi Valley, and the Illinois Central companies are

all found giving out the same erroneous information, and no one of

them can tell how or why it happened to be done, much less how so many

could contemporaneously, in dealing with the same subject, fall into so

strange an error. It is to be noted, too, that it is not a subordinate

agent or servant who makes the mistake in any instance, but it is the

man at the head of the traffic department, and whose knowledge on the

subject any inquirer would have a right to assume must be accurate. In

no case is the error excused."[442]

The cases in which Rice prosecuted the railroads before the

Interstate Commerce Commission are among the most important that

have been tried by the Commission. The charges made by Rice were

conclusively proved, except as to some minor roads and circumstances.

The Commission declared the rates that were charged him to be illegal

and unjust, and a discrimination that must be stopped. It ordered the

roads to discontinue using their power as common carriers to carry

Rice's property into the possession of a rival. "The conclusion is

irresistible that the rate sheets were not considerately made with a

view to relative justice."[443]

The facts of these discriminations--"unjust," "illegal," and

"abhorrent"--are on the records as judicially and finally determined.

But one of the combination said before the Pennsylvania Legislature, at

Harrisburg, as reported in the Harrisburg _Patriot_, February 19, 1891:

"I say to you all, in good faith, that since the passage of the

Interstate Commerce law, and the introduction of that system, we have

never taken a rebate. I mean we have taken no advantage over what any

other shipper can get. I make the statement broadly, and I challenge

the statement to the very utmost, and will pay the expenses of any

litigation undertaken to try it."

When it was found that this practice of charging the preferred shipper

for only 20,000 pounds when it shipped 25,000, 30,000, 40,000, or

44,000, was going to be investigated by the Interstate Commerce

Commission, there were intellects ready to meet the emergency. A pot

of paint and a paint-brush furnished the shield of righteousness.

Each car being known by its number, and only by its number, all the

old numbers of the 3000 tank-cars of the oil trust were painted

out, and new numbers painted on. Whether its mighty men left their

luxurious palaces in New York, and stole about in person after dark,

each with paint-pot and brush, or whether they asked employés to do

such work, the evidence does not state. The device was simple, but

it did. Rice was suing for his rights to use the highways before

the Interstate Commerce Commission, and before the Supreme Court of

Ohio, through the Attorney-General of the State, who had found the

matter of sufficient importance to use his official power to institute

suits in _quo-warranto_ against two railroads. It was necessary that

evidence should be forthcoming in these suits to prove what his rate

was in comparison with the others. The only way this could be done was

by comparing the actual size of the cars with the size given in the

freight bills, or manifests. The cars are known in the bills only by

their numbers, and without its number no car could be identified. The

report of Congress reprints the following from the testimony of the

representative of the trust before the Interstate Commerce Commission:

"Has there recently been any general change in the numbering of the

cars?"

"Yes, sir; there has been quite a general renumbering, repainting, and

overhauling."

"When did that change take place?"

"I think it was commenced some time in July; it may have been later."

The result of that renumbering made it practically impossible to

identify any car as connected with any shipment made before that time.

The cars were there, looking as fresh and innocent as good men who

have donned robes of spotless white earned by the payment of generous

pew-rent. The cars showed even to the unassisted eye, as the Interstate

Commerce Commission said, how much larger they were than was pretended.

There were still the accounts of the railroads, showing that these cars

had been "blind-billed" as containing only 20,000 pounds, but the cars

mentioned in the manifesto could no longer be identified with the cars

on the tracks. The sin of "blind-billing" was washed out in paint. Rice

went to the Interstate Commerce Commission with his complaint in this

case in July. Immediately the repainting and renumbering took place.

"It was commenced some time in July; it may have been later."[444]

In such cases time is money, and more. "Seest thou a man diligent in

business, he shall stand before kings. He shall not stand before mean

men."

The members of this combination have many thousand tank-cars engaged

in carrying their oil, and some of them have another kind of tank-car

travelling about the country. Under the head of the "Gospel Car" the

_Daily Statesman_, of Portland, Oregon, printed the following article,

Sunday, December 13, 1891: "THE GOSPEL CAR.--The mission car 'Evangel'

arrived yesterday, and was side-tracked on the penitentiary switch. A

song service attracted many people during the morning. There will be

services at 10.30 this morning, and in the afternoon, at 3 o'clock, a

Sunday-school will be organized. This will be the first Sunday-school

ever organized from the gospel car, which has been on the road since

last spring. The 'Evangel' is sixty feet in length, ten feet wide, and

seats nearly one hundred people. It is the generous gift of"--several

New York millionaires, the most important of them belonging to the

oil trust--" ... to the American Baptist Publication Society. The

reverend gentleman who was in charge of the 'Evangel,'" the _Statesman_

continued, "will visit the smaller towns along the railway, and conduct

evangelistic meetings in the car." One of these cars was in Chicago

early in 1893, and was admiringly described by the Chicago press.

Though corporations have no souls they are ready to help save the souls

of others, for the railroads give these cars free hauling, and the

messages and the packages of its occupants are franked by the telegraph

and express companies. The contents of this tank-car are distributed

by its donors to the people without money and without price. It is

conceivable that by making it so "cheap" and by multiplying the

"Evangel" into an evangelical tank line of thousands of cars, the

donors might drive the churches, which have no tank-cars, out of the

business, as they have done the tankless refiners, and ultimately add

to their monopoly of the Light of the World that of the Light of the

other World.

Tho effect of all this on the family co-operation at Marietta does

not need to be described. Its head told Congress that if he had had

no difficulty in getting the same freight as others he could have run

his refinery to its full capacity, and could have increased his works

largely.

"Are not your expenses less than theirs?"

"Yes, sir.... I am running very moderately now.... One-third to

one-half generally."[445]

"I am virtually ruined," he says still later in a statement of his

condition in a circular to the public, urging them to petition

Congress to make the imperfect Interstate Commerce law operative. He

is virtually ruined, though he has won his cases before the Interstate

Commerce Commission, and that Federal tribunal has ordered the roads to

give him his rights on the highways; but it has been a barren victory.

His circular is entitled "My Experience Very Briefly Told." Its opening

sentences give us in a phrase the secret of the significance of Rice's

story, and dignify his appeal to the public. They show how thoroughly

adversity had driven home into this plain man's mind a great civic

truth which his fellow-citizens have not yet learned, probably because

they have not yet had adversity enough. His solitary and fruitless,

although successful, struggle taught him that the citizens of industry

can no more maintain their rights acting singly than the citizens of

government. He had learned that "competition," "supply and demand,"

"eternal laws of trade," were catchwords as impotent in the markets to

give individuals their rights, if unassociated, as the incantations of

royalty and loyalty, and law and order, to save people from their king

until they made themselves a People. Persons fail; only a People can

get and keep freedom. This Rice had begun to learn from his failure to

enforce single-handed rights which all the courts declared were his,

but which no court could secure. In his card to the people, he said:

"I am fighting for my rights and for my existence (which happens to be

in the interest of all) single-handed and alone, at my own expense and

time lost.... I am here ... to do what I can to get the Interstate

Commerce Act amended at this present session of the Fiftieth Congress,

to cure existing evils, and all I ask is that you will take hold and

assist me by your signature and approval to the enclosed petition.

You are subject to the same influences, and now is your time, my

fellow-countrymen, to come forward and assist a little to stop this

nefarious work."

"In the interest of all." This is exactly the relation which the

struggle of this common citizen bears to the general welfare. The

investigation by the Ohio Legislature in 1879;[446] the removal by the

United States Court of the railroad receiver who agreed to pay the

oil trust $25 out of every $35 freight collected from Rice;[447] the

refund ordered by the Supreme Court of Ohio from a pipe-line company

which had charged Rice 15 cents extra on every barrel he shipped to

pay it to his competitors;[448] the successful prosecution, by the

Attorney-General of Ohio before the Supreme Court, of the railroads

discriminating against Rice;[449] the cases before the Interstate

Commerce Commission from its beginning till now, involving hundreds of

railroads, and decided, so far as it did decide, on almost every point

in Rice's favor;[450] the disruption, as far as forms go, of the oil

trust in Ohio by the Supreme Court of the State ousting corporations

from the right to become members of such combinations and to pool their

earnings therein;[451] the investigation of the oil trust by Congress

in 1888 and 1889, devoted in large part to the various aspects of

Rice's experience--these are some only of the public functions which

had to be invoked in the ineffectual attempt to protect this one man on

the high-road and in his livelihood, and they show how little his was

merely a "private affair."

When the amendment of the Interstate Commerce law was before Congress

in 1889, eminent counsel were employed by Rice to explain the defects

of the law to the committees, and petitions to Congress through his

instrumentality were circulated all over the country, and numerously

signed. Though a poor man, who could ill afford it, he gave time

and money and attention, frequently spending weeks at Washington,

discussing the subject with members, and presenting petitions. The

act was amended in partial accordance with these petitions and

recommendations.

To obtain the elementary right of a stockholder, never withheld in the

course of ordinary business--to vote and receive dividends on stock in

the oil trust which the trustees had sold and he had bought in the open

market--Rice had to sue through all the New York courts from 1888 to

1892. The Court of Appeals decided that there had been no lawful reason

for the denial of his rights, and ordered that they be accorded him.

This was another barren victory. The trust had meanwhile ostensibly

been dissolved; but the dissolution has every appearance of being like

that of its progenitor, the South Improvement Company, a dissolution

"in name" only; not in reality. In place of the old trust certificates

listed on the New York Stock Exchange, new certificates have been

issued which were selling in the spring of 1894 at about the same

quotation as the former ones.

In this case the trust asked the New York courts to deny Rice his

rights because he had in other matters, and as to other parties,

appealed to other courts. His other suits had been against the

railroads, not against the oil combination. He acted on the defensive,

and went into court only to save himself from commercial strangulation.

In all of them that went to trial he was successful, with but one or

two exceptions. He was so successful that even the judges who heard his

case and decided in his favor were moved to outbursts of unaffected

indignation on the bench. The only result aimed at or procured was that

the courts decreed that these common carriers must in the future give

this citizen his legal rights on the railways; not that he must have

the same rates as his opponent, but only that the difference in their

favor shall not be "excessive," "illegal," "unjust."

Because of this attempt to secure the fair use of the highways side by

side with it, the trust pleaded in the Supreme Court of New York that

his appeal to courts as a shipper was a reason why the courts should

withhold his rights as a stockholder.

In making this plea the trustees described themselves as having been

for years persecuted by the independent of Marietta, and moistened the

dry pages of their legal pleadings with appeals for the sympathy of the

courts and the public. He has "diligently and persistently sought to

become acquainted with" our "methods of business and private affairs;"

"he has used efforts to injure" our "business"; "he is attempting to

harass, injure, and annoy" us; "he has ever since ... 1876, when he

first engaged in business, ... maintained a hostile attitude, and

been engaged in hostile transactions and proceedings against" us, ...

"for the purpose of injuring" us and our "business"; he "has been

uninterruptedly prosecuting ... a series of litigations ... in the

courts, as well as before the Interstate Commerce Commission, and

before an investigating committee of Congress ... for the purpose of

harassing and annoying" us.[452] And when in 1891 Rice was appealing

to the Attorney-General of New York to bring suit in the name of the

State against the oil combination in New York, like that which had been

successfully brought in Ohio, he was publicly stigmatized in court as

a "black-mailer" because he had once named a price at which he was

willing to sell his refinery and quit. So the citizens of Nashville

were called black-mailers for competing, and the citizens of Buffalo

for bringing a criminal conspiracy to justice.

It is this dancing attendance upon State legislatures, courts,

attorney-generals, Congress, the Interstate Commerce Commission, as

shown in this recital, which the modern American business man must add

to Thrift, Industry, and Sobriety as a condition of survival.

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