CHAPTER XXIII.

DISCRIMINATION BY CLASSIFICATION.

The intricacies of classification afford boundless opportunity for

favoritism. Classification is always more or less arbitrary by

necessity, and is frequently more arbitrary than necessary. One industry

or wholesale trade is often charged two or three times as much as

another for the same service. The New York Railroad Commission found the

railroads charging twice as much on dry goods as on coffee or sugar and

protested against the rule as utterly indefensible, but the railroads

refused to comply with the request for a change. Iron and coal cost less

to transport than grain, yet the ton-mile rates on iron and coal from

Pittsburg have been at times for years together from 2 to 5 times the

rates on grain from New York to Chicago.

In 1890 the Interstate Commerce Commission ordered the railroads to

transfer soap from the 5th to the 6th class. In 1900 the railroads

changed it back to 5th class in carload lots, and from 4th to 3d class

in less-than-carload lots, but if shipped in mixed lots with dressed

beef it goes as 5th class. So that Armour, Swift & Co., of the Beef

Trust, have been able to ship soap in less-than-carload lots at much

lower rates than their competitors.[231] The Commission ordered the

roads to cease their excessive discrimination on less than carload lots,

etc. The roads refused to obey. The Circuit Court has sustained the

order of the Commission.

Under the Illinois Central tariffs at one time it made a difference of

$40 a car if a man shipped a peck of potatoes in a car of 16,000 lbs. of

strawberries. If there were no potatoes in the car so that it was not a

mixed load, it cost $40 more than if there were a peck of potatoes in

with the strawberries.[232]

The classification of castor oil on the Lake routes affords a curious

example of the freaks of tariff classing. Vegetable castor oil is 5th

class, or 16½ cents a hundred, from Cleveland to Chicago, while mineral

castor oil takes a rate of 25 cents a hundred.[233]

The law has not yet definitely touched the favoring of large shippers by

excessive difference in the rates on carloads and less than carloads.

There is not more than 5 percent difference in the cost of transporting

goods in carload lots and less-than-carload lots, and yet the rates vary

from 30 to 80 percent, as a rule, and sometimes 150 percent.[234]

In a famous case three years ago, involving the rates on 400 commodities

from the Middle West to the Pacific Coast, the Commission held that a

differential between carloads and less than carloads, which is at once

more than 50 cents per hundred and more than 50 percent of the carload

rate, is _prima facie_ excessive, and puts the railroad on the defensive

to show special reason why so great a difference should be made.[235]

The difference between the carload rates and less-than-carload rates,

involved in this complaint, was held to be excessive in many cases.

On the Yazoo and Mississippi Railroad and the Illinois Central, 1 horse

can go 667 miles for $36 and 4 horses pay $99, while 25 horses can take

the trip together for $100. This encourages social habits. The first

horse is billed at 2,000 lbs. no matter what he really weighs; the

second is billed at 1,500 lbs.; and each additional animal counts 1,000

lbs. The rate is double first-class, or $1.80 per hundred, which the

Commission says is twice the fair rate.[236]

In a recent case it appeared that the Texas and Pacific was charging 42½

cents per hundred lbs. on cattle from Fort Worth to New Orleans, and $15

a car additional on a shipment of less than ten carloads. This addition

of $15 a car was held unreasonable.[237] For 17 years the road made a

much lower rate—34 to 40 cents per hundred lbs., without any $15 a car

additional. In March, 1903, the rate was raised to 42½ cents, and in

October of the same year the additional charge of $15 a car was imposed.

The distance is 500 miles. The distance from Fort Worth to Kansas City

is about the same, while to St. Louis it is 700 miles. The rate on

cattle from Fort Worth to Kansas City is 36½ cents, and to St. Louis 42½

cents, without any $15 addition. The Commission held the $15 charge to

be an unjust discrimination between the large and small shippers, and

against New Orleans in favor of St. Louis.

Discriminative rates are made oftentimes without any intent to prefer

one shipper to another, but simply to make things move. For example, a

business man of Greensboro, N. C., wanted to build a smoke-stack of New

Jersey brick, but the rates from New Jersey were too high. “A quotation

was made me by the stack builder, whose office is in New York, and I

remarked to him, ‘That price is prohibitive; I cannot pay that price for

that stack.’ He said, ‘That is the best I can do; but if you will tell

me what you can afford to pay for that stack in competition with

home-burned brick, I will see what I can do with the railroad people.’

He wanted to know how soon it would be necessary for him to give me a

reply, and I said, ‘I want to know within ten days.’ He said, ‘All

right; I will take it up with the railroad people.’ His quotation

included the delivery of the brick and the erection of the stack at my

plant. It would require something like 50 carloads of brick to build

that stack. Within a week he had his price revised, and gave me a

satisfactory quotation and took my contract for the stack.”[238]

The railroads, having regard to what the traffic would bear, gave the

builder a special rate in order that the New Jersey brick might move

over their lines to North Carolina.

The heart of the railroad problem The history of railway discrimination in the United States, the chief efforts at control and the remedies proposed, with hints from other countries · 第 23 / 31 章