MIDNIGHT TARIFFS AND ELEVATOR FEES.
“Midnight tariffs” or “flying tariffs,” changed while you wait,[212] are
used to give rebates and preferences all wool and a yard wide, strictly
gilt-edged and in accord with the statutes made and provided for the
publication and observance of schedule rates.
When a big shipper gets ready to send a large amount of freight the
railroads will suddenly make lower rates, publish them just in time to
fulfil the law, and the moment the shipment is made the lower rates are
withdrawn. For example a miller contracted for 17,000 bags of flour. At
400 to the car, 17,000 bags will make quite a string of freight. He went
to the railroad folks and got a cut rate of 5 cents a hundred on that
amount. They slapped in one of these “midnight tariffs,” published it,
and gave notice of withdrawal just as soon as the contract was
filled.[213]
In the spring of 1905, a grain merchant who owned large elevators,
accumulated about 20,000,000 bushels of corn. When he got ready to ship,
the railroads reduced the tariff 2 cents per bushel, so that he could
ship at a low rate.[214]
In some cases discriminations are the result of _intentional mistakes_
in printing rate schedules. A tariff is printed with a 3, perhaps, in
place of an 8, so that a rate of 38 appears as 33, or a rate of 82 as
32. After a few copies have been printed and sent to favored shippers
the error is conveniently discovered and the schedule is corrected for
all ordinary shippers.
The payment of elevator or commission fees continues to be a means of
discrimination beyond the reach of the law as it stands to-day. Some
lines which have buyers on their roads who own elevators at terminal
points allow an elevator charge or commission to their buyers, usually
1¼ cents per hundred, which constitutes practically a rebate or
preference not accorded to other shippers. Other lines which have no
elevators pay a rebate to their buyers equal to the elevator
charge.[215]
A judgment has been obtained for $5,600 damages in favor of the Kellogg
Elevator against the Western Elevator Association and the four trunk
lines—the New York Central, the Erie, the Lackawanna, and the Lehigh—on
the ground of conspiracy to ruin the business of the Kellogg Elevator by
discrimination in freight rates in favor of the elevators in the
Combine. The charge was that the railroads contracted to pay the
elevator trust ½ cent per bushel for all grain shipped on their rails
from Buffalo, whether it was elevated from lake vessels by the Elevator
Trust or not. So, in effect, the Elevator Trust was given a rate of ½
cent per bushel cheaper than the Kelloggs could get, and also that
premium on the Kelloggs’ business. The verdict of $5,600 was for three
weeks’ operation of the conspiracy. The Kelloggs claim that the annual
damage to them from discriminating rates amounts to $50,000 or $75,000.
The case is now pending on appeal to the Supreme Court of New York.
In the investigation now going on in Kansas City (July, 1905) it appears
that some elevator men get double rebates, while others get no
allowances at all from certain roads. E. O. Moffat said he got 1¼ cents
a hundred from the Union Pacific, Rock Island, Burlington, Santa Fe,
Alton, and Missouri Pacific, but got nothing from the Milwaukee. That
railway he believed paid an allowance to the Simonds-Shields Company but
refused to allow him anything, though he is a heavy shipper.[216]
M. H. McNeill, representing the Chicago and Great Western, admitted that
the custom was a senseless one and a wrong one, but said it had been
started at Omaha and had to be adopted at Kansas City. E. P. Shields of
the Simonds-Shields Company was asked by Commissioner Cockrell: “When
such allowances are made are not opportunities for discrimination and
the granting of rebates opened up?”
“Certainly,” he replied.
“I believe there are some abuses to-day regarding the matter of
allowances which ought to be corrected,” said the witness.
“Do you believe double or triple allowances have been made in Kansas
City?” asked Mr. Barry.
“I don’t know of my own knowledge,” replied the witness, “but I suspect
that they have been.”