Underneath our low average freight rate _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

of low grade freight, coal, iron, lumber, etc., on very long hauls, but

a traffic of great density between the great cities, and innumerable

discriminations in favor of big shippers and big cities. Local rates in

many rural districts are very high, almost as high in some cases as in

the old stage-coach days. Labor is more efficient in this country than

in Europe; for example, it takes, according to Mulhall, 2 men in

England; 3 in France or Germany, and 4½ in Europe on the average, to

produce the same agricultural product as 1 man in the United States. In

manufactures and construction work the ratios of efficiency are nearly

the same; 1 man in the United States does almost as much as 2 men in

England, 3 in France or Germany, and 5 in Italy or Hungary. Again our

Government subsidizes the railroads by paying very large sums for the

carriage of mails, while in Europe the railways are required to carry

the mails free or for a very small payment. Moreover our railway

capitalization, though larger than it ought to be by the amount of

watered stock and fictitious securities, is nevertheless considerably

below the capitalization of European roads. In the United States, the

railways were mostly built through a new country thinly settled in

comparison with Europe, and in many cases not settled at all. The right

of way cost practically nothing as compared with the cost in Europe. The

Government aided the construction of a number of giant systems by

enormous grants of land and loans of money. Few roads were built that

did not receive large donations from the cities and towns which they

pass. And the abolition of grade crossings and other safety requirements

in Europe entail vast expenses from which our roads are comparatively

free.

If Government operation were established in this country under good

political conditions and reasonable safeguards that would secure

efficient management, rates could be lower than they are now; for

hundreds of millions that go for profits on watered stock, legislative

and legal expenses, exorbitant salaries, competitive advertising, and

agencies, etc., etc., would be saved. The abolition of free passes and

freight concessions would permit a further reduction of the tariff; so

that the published rates the general public would pay could be much

lower, and even the ton-mile average would be somewhat lower than at

present.

CHAPTER XXXV.

HINTS FROM OTHER COUNTRIES.

Germany tried private railways for 25 years, and Austria tried them over

a quarter of a century, and they have tried the two methods side by side

ever since the public system was organized. In New Zealand, also, and

Australia the two systems have been tried side by side. And in every one

of these countries where they have thoroughly tried both systems the

conclusion by an overwhelming consensus of opinion is that public

railways serve the public interests best, and also make lower rates and

serve the people at less total cost. Switzerland, after a careful study

of both systems in various parts of the world, came to the same

conclusion, and her people voted 2 to 1 to transfer the railways to

public ownership and operation. All this is very strong evidence, and if

we turn from the tangled web of an international comparison of averages

and look at the principles and causes at work in the case, it will be

clear that public ownership tends to lower rates as well as to conserve

the higher wealth.

In the same country and under similar conditions otherwise than in

respect to ownership and control, public ownership tends as a rule to

make lower rates than private ownership. This tendency results from the

fundamental difference of aim between the two systems. Private monopoly

aims at dividends for stockholders; public ownership aims at service for

all. A normal public institution aims at the public good, while a normal

private monopoly aims at private profit. It serves public interest also,

but such service is incidental, and not the primary purpose. It serves

the public interest so long as it runs along in the same direction and

is linked with private profit, but when the public interest departs from

or runs counter to the interests owning or controlling the system, the

public interests are subordinated.

The conflict between public and private interest is specially strong in

the matter of rates. The rate-level that yields the greatest profit is

much higher than the rate-level that affords the greatest service, or

the greatest service without deficit; and since private monopoly aims at

profit it seeks the higher rate-level. Public ownership aims at service,

not at profit, and therefore gravitates to the lower rate-level, where

traffic and service are greater.[419]

There need be no hesitation, therefore, on economic grounds about

pressing toward the dominance of public interest, either in the form of

regulation, or, when political conditions justify it, in the more

complete form of public ownership. And this dominance of public interest

is the only thing that can eliminate unjust discrimination and establish

an impartial railway service.

The State railways of Germany, Austria, Switzerland, Belgium, Denmark,

and the Anglo-Saxon republics of South Africa and Australasia are

absolutely free from unjust discrimination. There are no complaints or

suspicions on that score. Shippers know to a certainty that their rivals

are paying the same charges that they are. Even the most strenuous

opponents of public railways do not accuse them of favoritism. The

railways privately operated in Holland, Denmark, Sweden and Norway, are

also free from discrimination. Thorough public control, natural honesty,

and lack of overwhelming temptation have combined to produce a pure

administration. In Prussia, the Government, strong as it was, did not

succeed in preventing discrimination on the private railways. President

A. T. Hadley, of Yale, says: “Where the system of granting special rates

becomes deeply rooted a great many are given without any principle at

all, through the caprice or favoritism of the railroad companies and

their agents.” The revelations made before the Hepburn Committee, as to

the practice of railroads in the matter of secret rates were simply

appalling. This is the most indefensible part of the whole system of

railroad management. It is characteristic that Bismarck, who always

chose his fighting ground with skill, made this a main base of

operations in his contest against private railroad policy in Prussia.

The Prussian Cabinet in the argument for the nationalization of the

railways submitted to the Parliament in 1879 made the following

statement:

“The principles of the publicity of the rates and the equal treatment of

all shippers which are embodied in the railroad legislation of all

countries, are liable, as experience has shown, to be circumvented on

account of the competing interests of the railroads, and also by

individual interests which have influence with the managements. The

granting of these secret advantages in transportation in the most

diversified ways to individual shippers, and in particular the so-called

rebate system, is the most injurious misuse of the powers granted to

railroad corporations. It renders government control of rates

impossible, makes the competition between the different lines, as well

as that of the shippers dependent on them, dishonorable and unfair,

carries corruption among the railroad employés, and leads more and more

to the subordination of the railroad management to the special interests

of certain powerful cliques. It is the duty of the government to oppose

this evil, to uphold the principle of the equal treatment of all

shippers, and to enforce the legislative regulations on this subject.

The importance of this problem is only equalled by the difficulty of its

solution.”

The problem was not solved till the railways were nationalized, and then

discrimination disappeared completely. I was not able to find a shipper

in Germany nor anywhere in Europe who knew, or had heard or had even a

suspicion, of the granting of any rebate or concession of any kind by

the German roads. Many of them did not stop with negative statements but

asserted positively that concessions could not be obtained. The nearest

I came in my search for a German fraud was the discovery of an

English-Italian fraud on the German roads. Leading business men in Italy

told me that while they could get no concessions from the German roads

directly, they could do it indirectly on transcontinental shipments by

means of a trick of the English traffic managers. They made their

bargains with the English manager, and he would pay a fictitious claim

for damages in transit, and then write the German office that he paid so

much for damages to the goods and that as it was not known in what part

of the journey the goods were injured the German system must stand its

part of the loss. They have to resort to fraud to get a discount on the

German railways. The principal motives to discrimination are absent and

the dangers to the guilty official are very great. His employers, the

railway management, and the Government back of it, are unalterably

opposed to the granting of unjust favors to any shipper. If a traffic

man should depart from the path of impartiality the public examiners

would be certain to find it out, and the traffic man would lose his job.

The railway management is in the closest touch with the people through

the local and national councils representing commercial bodies, labor,

manufacturing, agricultural, and other industrial interests. The law

requires the railway managers to consult these representative councils,

and their recommendations as to rates, time-tables, and other matters of

public interest are carefully considered and acted upon so far as

reasonably possible.

In France the first railway manager I asked about secret discriminations

said: “There is no such thing in France. The criminal law is very severe

and it would mean imprisonment. There were complaints of favoritism a

dozen years ago, but there have been none in recent years.” Other

railway men told me substantially the same thing. But very different

ideas were expressed by representatives of shipping interests and

others. Here are some of their statements: “The railroads hold

manufacturers and merchants at their mercy. They favor the great, and

put the burdens on the little fellows. The tariffs are full of special

rates, and 80 or 85 percent of these special rates are made simply for

some favored merchant or manufacturer. The minister can reject or

approve a tariff as a whole, but has no detailed power over one bad

rate. If he retires a tariff the old one comes into effect. It is true

that complaints are not made. What is the use? The danger is too great.

Where is the merchant who dare undertake a campaign against the great

companies?” I was assured that the statement of M. Cawes, vol. iv, p.

136, of the “Cours d’Économique politique,” was still true: “The benefit

of reduced tariffs is accorded upon secret approaches and solicitations;

the companies dispense at their will industrial prosperity and ruin.”

The discrimination between localities is very great, owing largely to

the way in which the railways are laid out. And “the companies defeat

the national protective tariff by letting foreign goods ride more

cheaply than French goods.” For example, American wheat from Havre to

Paris pays 18 francs per ton, while French wheat from Ferte-Bernard to

Paris, 37 miles less distance, pays 20 francs a ton. If the nation

desires to favor the importation of foreign products, well and good, but

it is a curious state of things for the Government to adopt a protective

policy and then permit private railways to reverse, overrule, and

nullify that policy.

We have already had occasion to throw a side light on English railroad

methods in describing the way in which Italian rebaters use the

elasticity of the English railway system to get fictitious damages. I

had to go to Italy to find the true character of the English railway

conscience. The railway men in England won’t tell. And nobody else, who

will tell, knows. Yet the English traffic man, though willing to pay

fake damage claims on proper occasions, is innocent of “flying tariffs,”

terminal railway abuses, systematic underbilling, classification

jugglery, and other preferential paraphernalia that belong to an

up-to-date railway system over here. The last case of personal

discrimination in rates that caused any stir was tried about 6 years ago

and the preference was so small that one of our trust magnates, used to

looking at large concessions, would not have been able to find it

without a microscope. Nevertheless a considerable number of complaints

(more than a hundred a year on the average) came before the Board of

Trade and the Railway Commissioners under the traffic acts of 1888 and

1894. The Secretary of the Board of Trade tells me that these complaints

relate chiefly to “high rates, poor facilities, and discriminations.”

About half the complaints charge excessive rates which amount in most

cases, on the face of the complaint, to discrimination between places or

commodities. A large number of complaints concern higher charges for

short hauls than for longer hauls on the same line, and another large

group allege disproportionate charges or higher rates for shorter

distances as compared with the rates on other lines. A fourth group,

containing about 25 percent of all the cases, includes complaints of

delay, overcharges, refusal of facilities or privileges accorded others,

personal preferences in rates, etc. For example the London and

Northwestern charged the complainant 12 cents a ton up to 20 miles for

hauling coal, while charging the complainant’s competitors only 9 cents.

Preferential treatment was alleged in the rates given to rival shipping

companies for the conveyance of goods from Hull to places in Yorkshire.

A coal shipper complained that the Midland Railway had for many years

made a practice of allowing a rebate of 6 cents a ton to large dealers,

and that in the lists of rates furnished the complainant no mention was

made of this rebate or allowance, though other rebates were mentioned.

The Midland replied that the system had been in operation since 1889,

when the company gave notice as required by law, in the public

rate-books, that they would allow a rebate to traders whose annual

tonnage exceeded 25,000 tons.

The English law does not object to the paying of a commission on a large

amount of traffic provided the same discount is given to all shippers

who attain the stated volume of business, but a higher commission to one

big shipper than to another big shipper is vigorously repressed. A case

of this kind was decided by the Railroad Commission in 1901. The court

found that the Midland Railway had given Rickett, Smith & Company, coal

dealers, a preference of ¼ of one percent in rebates on their annual

traffic account, and it enjoined the railway and allowed damages to the

complaining shippers. Some 75 suits were entered by different shippers

for this one cause. In the same report 28 cases are listed relating to

discrimination in brewery traffic, and 16 other applications for

injunctions against undue preference in respect to facilities, rates on

coke, brick, flour and grain, and other commodities to certain shippers

or particular places, and one request from the Inverness Chamber of

Commerce for an order enjoining the railways from selling season tickets

to big shippers (with a traffic worth $1,200 to $5,000 or more a year)

at lower rates than they will sell them to ordinary passengers. This

last application was dismissed by the court. England does not object to

premiums on volume, provided all shippers of equal size receive the same

treatment. That’s the principle the Trusts believe in; if vigorously

worked the principle is a powerful trust builder.

The English Commission has power to enjoin undue preference in rates or

facilities and give damages for the same, to fix reasonable charges in

some cases, and to order rates increased since the revision of 1892 to

be reduced to the previous level on proof of unreasonableness.

In the last report at hand, dated 1903, and relating to the year 1902,

there are 270 odd cases, 95 of which charge undue preference, and as

these matters come first before the Board of Trade, which does not grant

an appeal to the Commission unless it believes there is cause of action,

the probability is that all or nearly all of these applications are

based on a real discrimination.[420] It appears that 72 of the suits are

for damages growing out of the Rickett rebate case; the rest are

scattering. A few examples will show their character: 1. Application for

order enjoining railways to desist from undue preference to

complainant’s competitors through rebates on flour. 2. For injunction

against railways granting preferences to the firm of Leethan & Sons on

their traffic. This case was tried, the preference found, and the

injunction granted. 3. Undue preferences to certain manufacturers of pig

iron in the rates on coke. 4. Undue preference to a certain shipping

company through superior facilities and lower rates than were given to

others on the same goods and the same routes. Case settled before trial.

5. Undue preference to Corral & Company by rebates on coal to certain

stations while refusing to make the same allowances to other shippers.

6. Charging higher rates than E. on coal to the same point. Case tried,

undue preference found. 7. Refusal of allowances for cartage made to

others. 8. Refusal to supply cars in due proportion. 9. Preference of

competing millers and subjecting traffic of applicant to undue

prejudice. 10. Preference of brewers at Burton and Lichfield by low

rates and terminal allowances. 11. Preferences in favor of brick-makers

in Nuncaton and Tamworth by assessing the weights of their bricks lower

than the bricks of complainants. 12. Allowing 93 cents a ton for

services in loading and unloading, etc., and refusing similar allowances

for similar services by other shippers. 13. Undue preference through

higher rates on coal for domestic use than on coal for export, etc.

The English Railway Act of 1888 provides that “no railway company shall

make any difference in the tolls, rates or charges made for, or any

difference in the treatment of home and foreign merchandise, in respect

of the same or similar services.” But this part of the law has been

constantly and vigorously violated as we shall see in a moment. The main

aim of the English Government has been to keep the railways from lifting

the rates or overcharging, and it has carried this to a point which,

with the strenuous provisions against grade crossings and in respect to

fencing and other safety measures, has gone far to discourage English

railway development. The companies submit classifications and schedules

of maximum rates and charges to the Board of Trade, which hears all

objections and tries to arrive at an agreement with the companies. The

agreed tariffs, or, in cases where no agreement is reached, the tariffs

the Board thinks ought to be adopted, are embodied in Bills, introduced

to Parliament, and after hearing if need be enacted into law. Thus

Parliament enacts a tariff of maximum charges, and the law forbids

discrimination, and “whenever it is shown that any railway company

charges one trader or class of traders, or the traders in any district,

lower tolls, rates, or charges for the same or similar merchandise, or

lower tolls, rates, or charges for the same or similar services, than

they charge to other traders, or classes of traders, or to the traders

in another district, or make any difference in treatment in respect of

any such trader or traders, the burden of proving that such lower charge

or difference in treatment does not amount to an undue preference shall

lie on the railway company.” The long-haul abuse is met by a provision

free from any ambiguous “similar circumstances and conditions” clause.

“The Commissioners shall have power to direct that no higher charge

shall be made to any person for services in respect of merchandise

carried over a less distance than is made to any other person for

similar services in respect of the like description and quantity of

merchandise carried over a greater distance on the same line of

railway.” Section 31, provides that if any person believes a railway is

making an unreasonable charge, or treating him in any respect in an

oppressive or unreasonable manner he may complain to the Board of Trade,

which shall endeavor to settle the difficulty by conciliation and

arbitration. If this is not possible, and the case comes within the

jurisdiction of the Railway Commission the Board will give the plaintiff

a certificate to take the matter before the Commission for adjudication.

Under Section 1 of the Act of 1894 complaints may be made of the

unreasonable increase of any rate, directly or indirectly, since

December 31, 1892, and if the Board cannot effect an amicable settlement

the complainant may submit the case to the Railway Commission for

judgment. Some Northampton traders at once began proceedings under this

law, and after 2 years of litigation at a cost to the plaintiffs of

$10,000 they got a verdict, but the companies declined to accept the

case as a test, so that any one who feels aggrieved by an excessive rate

must spend the time and money necessary to carry his case through the

Commissioners’ Court to a decision.

The Board of Trade reports to Parliament every few years all the

complaints presented to it and the disposition thereof. By the last

report at hand, issued in 1902 and covering the years 1899, 1900, and

1901, it appears that nearly 3,000 complaints (2,946) have been filed

from 1888 to 1902,—2,032 related to “unreasonable increase of rates”

since 1892, and in 101 of these cases, when no amicable settlement could

be made, the Board gave certificates of appeal to the Commission, but

only a few of the complaints were carried up. Complaint of excessive

rates (not cases of increase) numbered 423, 88 of them in the last 3

years reported: higher charge for shorter distance than for a longer

haul on the same line, 66, 11 of them in the last 3 years;

disproportionate rates, or higher charge for a given distance on one

line than on another 157, 37 of them in the last 2 years; and 268

miscellaneous cases, 95 of which were entered in the last 3 years. About

4 percent of the complaints relate to canals, the rest are railway

cases. It takes 50 large pages to state the 325 complaints entered in

the last 3 years. A very large part, practically all in fact, are either

in form or in substance, cases of discrimination; even in complaints of

excessive rates the gist of the charge is usually that the rates

complained of are excessive as compared with other rates the companies

make.[421]

A few further concrete illustrations from recent years may be of

interest. 1. Refusal of free cartage to a manufacturer though another

mill further away had the benefit of free delivery. 2. Refusal of

allowance for loading, etc., on private siding though such allowance was

made to a rival firm. 3. Rates on coal from mines at Leigh and Abram to

Winnington, 26 miles, were 50 cents a ton against 42 cents from the mine

at Haydock, 29 miles. 4. Complaints of delay, insufficient facilities,

etc. 5. Fourteen complaints of increased charges for conveyance of small

parcels in freight-train transportation and that companies were not

following a decision of the Railway Commission. One of the complaints on

the ground just stated was filed against the railways generally by the

Co-operative Wholesale Society with practically 10,000,000 people back

of it in interest and sympathy. The companies revised the schedule and

reduced the rates. 6. Refusal to grant complainant the same facilities

for warehousing traffic as are granted to their competitors. The Board

succeeded in removing the preference without trial. 7. A rate of $11.25

on india-rubber goods from Birmingham to Newcastle-on-Tyne against $8.95

on the same goods intended for export. 8. One shipper stated that he was

charged $9.75 for a carload of coal (6 tons) from Cork to Baltimore,

while the Baltimore Fishery Schools were charged only $5.10 for the same

service. After the usual correspondence by the Board of Trade the matter

was settled by the railroads agreeing to give the plaintiff the same

rate as the Fishery Schools. 9. Another shipper alleged that since he

had sent his traffic from Methven via the North British route from Perth

instead of the Caledonian, the company had delayed his traffic at Perth

while other traffic was sent on; that the company had deprived him of

the use of facilities formerly enjoyed, and had stopped his credit. This

reads almost like an American case.

The long and short haul cases also remind one of home in about the same

ratio that a raspberry bush reminds one of a full grown oak. Both

personal preference and the long-haul discrimination are comparatively

rare in England. The greatest resemblance to America is in the rates on

imports. The English railway manager has as good an appetite for foreign

goods as any American manager, and in this matter the law does not tie

him up as it does in so many respects with its maximum rates and large

discretion in the Railway Commissioners to prevent excessive rates and

undue preference. Foreign linen goes from Liverpool to London for $6.10

a ton while home linen pays $9.25 or 50 percent more. Foreign woolen and

worsted goods are carried from Manchester to London for $6.10, against

$9.75 or 60 percent more for English goods. Foreign timber travels from

Hartlepool to Wimeaton for $3.12 a ton while English timber pays $7.50

or 130 percent more. English dressed meats from Liverpool to London

$12.50 a ton, American meat $6.25, just half the home charge. American

cattle slaughtered at the wharf in Glasgow, $11.25 to London, home beef,

$19.25. Cheese goes all the way from New York past Chelford and other

English stations for less than the rate from those stations to London.

“Foreign hops are conveyed from Boulogne, via Folkestone, to London at

$4.37 per ton, while the charge from Ashford, on the same line of

railway and much nearer to London, is $8.75—or just twice the amount for

about half the distance.... The rates for imported butter, cheese,

bacon, lard, and wool from Southampton Docks to London, distance

seventy-six miles, is $1.50 per ton. From Botley in the same county, and

a similar distance, the rate for all these goods is $4.80, or 219

percent more than for foreign stuff. The difference in rates between

Southampton Dock station (foreign) and the Southampton Town station

(home) is as follows: Hops $1.50 and $5; apples $1.25 and $3.22; pressed

hay $1.25 and $2.50; eggs $1.66 and $5. Further, Professor Hunter showed

that while French fruit is charged at the rate of 4½ cents per ton per

mile to London by the South Eastern, the same company charge Kentish

farmers 11 cents per ton per mile, or more than double.”[422] The London

_Times_ declares that “there are no arguments within the range of human

ingenuity that will convince a Sussex hop-grower of the equity of an

arrangement by which foreign hops are brought from the other side of the

Channel for less than he has to pay to get across Surrey.... For nothing

can shake the belief of the home producer, and in our view nothing ought

to shake it, in the argument that if these low rates pay the companies,

he is shamefully overcharged, while if they do not pay, he is still

overcharged to cover the loss and bring up the average.”

It is evident that England is far from being free from unfair

discrimination. A system of maximum rates, with penalties for undue

preference, and a commission able to countermand an unreasonable

increase of rates, is not sufficient.

In Canada a railway commission of three appointed by the Governors in

Council for ten years (but removable at any time by the Governors in

Council for cause) has absolute power over rates, classification, speed,

safety appliances, etc.[423] The railways may submit tariffs, but the

Board can approve or disapprove of them in whole or in part, and

prescribe such rates and classification as it deems best, and the

railroads cannot charge either more or less than the rates authorized by

the Commission. All undue preferences between persons and localities in

rates or facilities is forbidden, but “the tolls for larger quantities,

greater numbers, or longer distances may be proportionately less than

the tolls for smaller quantities or numbers, or shorter distances, if

such tolls are, under substantially similar circumstances, charged

equally to all persons. The Board shall not approve or allow any toll,

which for the like description of goods or for passengers, carried under

substantially similar circumstances and conditions in the same direction

over the same line, is greater for a shorter than for a longer distance,

the shorter being included in the longer distance, unless the Board is

satisfied that, owing to competition, it is expedient to allow such a

toll.” The burden of proof is on the company to show that any difference

of treatment does not amount to an unjust discrimination. And “the Board

may determine, as questions of fact, whether or not traffic is or has

been carried under substantially similar circumstances and conditions,

and whether there has, in any case, been unjust discrimination, or undue

or unreasonable preference or advantage, or prejudice or disadvantage,

within the meaning of this Act, or whether in any case the company has

or has not complied with the provisions of this and the last preceding

section; and may by regulation declare what shall constitute

substantially similar circumstances and conditions, or unjust or

unreasonable preferences, advantages, prejudices, or disadvantages

within the meaning of this Act, or what shall constitute compliance or

noncompliance with the provisions of this and the last preceding section

relating to discrimination, long-haul,” etc. No Supreme Court rulings

can knock out this Commission, for it has clear authority in the law to

interpret its provisions as it deems best, to accomplish the purpose in

view. Whether this law will work well or ill is not yet apparent.

In Holland, where the railways are owned by the State and operated by

private companies under lease from the Government, the Ministry assured

me that unfair discriminations between persons and places do not exist,

and I have every reason to believe they are right. The President of the

Government railways in Denmark said: “There are no discriminations

either on the public or company railroads. It would not be possible to

give such favors in Denmark.” And in reference to my description of some

of the American methods of favoritism, he said that nothing of the kind

had been attempted; and if it should be, every one concerned in the

transaction would be punished, and the guilty officials would lose their

positions.

Railway men and publicists of Norway and Sweden tell me that there is no

discrimination. It would not be permitted. There are no provisions

against it in the law. Nothing of the kind has ever been known.

A high official of the Japanese Government, whom I met in this country a

few months ago, said in answer to a question in which I stated some of

our discrimination methods, large and small: “The government fixes

maximum and minimum rates, and the companies are free between these

limits, except that the Minister keeps control sufficient to compel fair

rates if the companies should try to discriminate or otherwise make

unjust rates. We have had nothing like the Beef Trust or Standard Oil

discriminations you describe, nor any personal favoritism in

rate-making, but the government means to prevent the possibility.”

The railways of New Zealand are not troubled with complaints of

discrimination, nor those of New South Wales or Queensland or Victoria.

And in these boiling and bubbling republics, if there were the slightest

suspicion of a reason for attacking the Government management on this

ground, it would be done by the political opponents of the

administrations. South Australia has had one case of alleged favoritism.

The complaint was that the Railway Commissioner gave a reduced rate on

carload lots of certain goods to certain points, to meet water

competition. A shipper, desiring to send his goods at low rates in the

opposite direction, asked the Commission to give him a reduction equal

to that accorded on the traffic above mentioned. The Commissioner said

he would give the same reductions if the shipments were made in carload

lots. The complaining shipper could not do this, as his trade was not

sufficient. The matter was brought before Parliament, and Parliament

sustained the Commissioner. The Parliament of each of these republics

acts as the people’s board of directors of all public works, calling the

managers to account; and any member, from the remotest rural district,

can ask the Ministry and the railway management any question he chooses,

and compel full disclosure of the facts. Secrecy is practically

impossible.

The Government railways of Natal and Central South Africa are equally

free from secret concessions and favoritisms of every kind. In talking

with the manager of the Central South African Government railway, I

explained the nature of the favors granted to the big shippers in the

United States, using the Beef Trust, Salt Trust, Oil Trust, Fuel

Company, etc., as illustrations, and said: “Suppose a big concern tried

to get special rates or concessions of some kind on your railroads, and

made a secret agreement with the railway management?”

“They couldn’t do it.”

“Why not? Human nature is the same in South Africa as in America.

Suppose they made some traffic man a partner in their profits or brought

pressure enough on him in some way to get a concession?”

“It wouldn’t be possible.”

“Well, why? Suppose it were possible, what would happen?”

“The Government auditors would find it out, and the manager would lose

his position.”

“Couldn’t he cover up the thing?”

“Not for any length of time.”

“The people would have a fit if anything like that were attempted,” said

a member of the manager’s staff.

“You have no attempts to secure preference, then?”

“No it is not even attempted.”

If those who employ and discharge the traffic managers desire

discrimination or aim at results which can be forwarded by

discrimination, then discrimination will exist unless the public control

is strong enough to keep the big shippers and the people in possession

of the railroads from carrying out their purposes.

If, on the other hand, those who employ and discharge the traffic men

are sincerely opposed to discrimination and aim at results that can only

be secured by just and impartial management, then the traffic man who is

guilty of favoritism will lose his job, and the utmost possible

discouragement is put upon unjust discrimination.

Once more the vital conclusions seem to be, the necessity of the

dominance of public interest, and the value of being in possession or

having your own servants in possession instead of merely giving orders

to the servants of another in possession who may or may not obey, and

who are in no danger of losing their positions by disobeying you and may

gain greatly by it—the value of having public interest at the helm to

steer the vessel in a safe course, instead of keeping private interest

at the wheel while public interest stands on a steam tug with a big

whistle and shouts orders through the fog to the steersman on the

passenger liner who is more than half inclined to steer the ship as he

pleases, and gets his pay and employment from men who do not wish the

public orders carried out, and whose instructions vary widely therefrom.

You cannot expect the servants of others to obey your orders as well as

your own servants, especially if the said servants of others are

employed by persons whose interests are largely contrary to your own.

Neither can a commander be as sure of winning a victory at the head of

an army trained in the camp of the enemy owing allegiance to them, and

constantly receiving orders from them, as he could at the head of his

own proper troops.[424]

Is it fair to try to control in your own interest property that does not

belong to you? It is fair to try to exert sufficient control to secure

impartial treatment of persons, places, and industries; but can this be

done without fixing rates, and if this is resorted to will it not result

either in squeezing the life out of railway enterprise or in a vicious

struggle for mastery with new evasions of law and further

intensification of political evils, and corporate control of Government?

You will either deprive the owner of the right to determine the price at

which the product of his plant shall be sold, thus controlling his

profit and sapping his energy and incentive, or you will put a premium

on political corruption by making it necessary for the railroad owner to

control the Government in order to control his business and its profits.

You will check the development of railways and drive capital into

industries where the owners are free to fix prices, or you will check

the movement toward political purity. Public control in some form is

absolutely necessary in order to safeguard the public interest. The only

question relates to the form and degree. Is effective and adequate

public control of transport, with the unity, freedom, and hearty

co-operation that should characterize all business ventures, possible

without public ownership? And if not, isn’t it true that the economic

and governmental changes necessary to make public ownership safe and

successful constitute the essence of the ultimate railroad problem?

If the railways were united into a national system under a great leader

like James J. Hill, or A. J. Cassatt, free to operate the roads on

business principles, untrammelled by the spoils system or any political

control, backed by a public interest that would not tolerate favoritism,

partyism, political influence or graft in any form, working with public

aims and public motives instead of private aims and motives, managing

the roads for the whole people as stockholders instead of for a small

part of the people as stockholders, paid, in common with the whole body

of employees, on the basis of a fixed remuneration plus an additional

compensation proportioned to efficiency, and in constant consultation

with local and national councils representing commercial, manufacturing,

mining, labor, and agricultural organizations and interests, we should

have a railway system and management whose efficiency would astonish the

world, whose methods would bear the light, and whose administration

would be an honor to twentiethcentury civilization.

APPENDIX

A.—THE COAL-CARRYING DECISION, U. S. SUPREME COURT.

Since this book was put in type the United States Supreme Court has

sustained the Interstate Commerce Commission in an important suit

brought by the Commission against the Chesapeake and Ohio Railroad, and

the New York, New Haven and Hartford Railroad under the Elkins Act. The

Chesapeake and Ohio agreed to deliver at New Haven 60,000 tons of coal

at an aggregate cost which, after deducting the market price of the coal

at the mines and the cost of transportation from Newport News to

Connecticut, would leave the Chesapeake and Ohio Railway only about 28

cents a ton for carrying the coal to Newport News, while the published

tariff was $1.45 per ton. Suit was brought by the Interstate Commission

to enjoin the carrying out of this contract. The Government challenged

the right of an Interstate carrier to perform a contract to sell and

deliver merchandise (coal) whenever the price to be received by the

railway is inadequate to cover its actual outlay, plus the published

freight rates, upon the ground that the actual result would be

discrimination and failure to collect the published tariff, in violation

of the Interstate Commerce Law. The answer of the railway company was in

effect that it charged the full rate for transportation, but sold the

coal at less than market rates, at a price in fact which involved a

loss, and that special circumstances justified it in so doing. The

companies maintained that, when acting in good faith, they had, as

dealers, the right to make contracts at a fixed price for sale and

delivery extending over a series of years and then go into the market,

buy the merchandise, and deliver it at destination, notwithstanding that

what they received therefor might not be sufficient to yield them a net

sum equal to the published freight rate, according to which shippers

generally were charged.

In a strong decision rendered February 19, 1906, the Supreme Court

upheld the contention of the Government, declaring that a carrier cannot

deal in the goods it carries in such a way as to evade the provisions of

the Interstate Commerce Act, and therefore a railway cannot buy and sell

and underbid other owners of similar goods who are dependent on the

railroad for the transportation of their goods to market. “The existence

of such a power would enable a carrier, if it chose to do so, to select

the favored persons from whom he would buy and the favored persons to

whom he would sell, thus giving such persons an advantage over every

other, and leading to a monopolization in the hands of such persons of

all the products as to which the carrier chose to deal.... Because no

express prohibition against a carrier who engages in interstate commerce

becoming a dealer in commodities moving in such commerce is found in the

act, it does not follow that the provisions which are expressed in that

act should not be applied and be given their lawful effect.”

The Court quotes an English case, Attorney General v. The Great Northern

Railway, in which the Vice-Chancellor decided on common-law principles

that a railway could not deal in coal because such dealing was

incompatible with its duties as a public carrier and calculated to

inflict injury on the public.

The decision is important, and the railways, it is said, have already

begun to part company with their coal mines. But it must not be expected

that the evil at the bottom of this case can be so easily eradicated. It

will be a simple matter to put the coal mines in the hands of special

companies controlled by the same men who control the railways, and the

coal company and the railway can together continue to do precisely what

the railway alone has been doing in the double capacity of dealer and

carrier.

Within a week of its decision sustaining the Commission in the

coal-carrying case, the Supreme Court has reversed the Commission and

the Circuit Court in the orange routing case. In 1899 all the railways

of Southern California fixed a through rate of $1.25 per hundred on

oranges from California to the Missouri River and the East, reserving

the right to route the freight. The Fruit Growers Association complained

of this as depriving shippers of their right to route their shipments

and as virtually constituting a pooling agreement or combination in

violation of the Interstate Act. The Commission and the Circuit Court

sustained this contention, but the U. S. Supreme Court has now (March,

1906) sustained the railroad plea that they have a right to fix through

rates on condition of determining the routing themselves.

B.—REGULATION OF RATES.

In the Boston _Transcript_ for February 24, 1906, President Hadley, of

Yale University, criticises the Hepburn Bill because it makes “the

decision of the Commission itself final on all questions of fact,” and

he predicts that if such a bill is enacted into law it will be a

failure, although he does not believe it practicable to obtain a better

measure now.

President Hadley bases his prediction of failure on his interpretation

of the experience of England. He says that the English Railway Act,

1873, “had many points of resemblance to the Hepburn bill. It provided

for a commission which, besides ascertaining the rates charged by

railroads and making reports to Parliament concerning their management,

should also be empowered to investigate complaints concerning unjust

rates of discrimination in facilities and give adequate and speedy

relief. It was intended to have the quick jurisdiction of these

Commissioners supplant the slow jurisdiction of the older courts.”

“The twenty-sixth section of the act undertakes to restrict narrowly the

opportunity for appeal from the judgment of the Commission. The

Commissioners themselves may state a case; on the case thus stated, and

no further, the courts on appeal may decide what is the law. This was

intended not only to shut out the retrial of questions of fact, but to

give to the Commission, as far as the circumstances admitted, the power

of deciding which were questions of fact and which were not.”

The Committee of 1883 is quoted as finding that “a case has been made

out for granting to litigants before the Railway Commission a right of

appeal,” and we are told that the Committee were “all agreed that the

attempt to prevent appeals from the Commissioners’ decisions had been a

complete failure.”

President Hadley further says: “Parliament has abandoned the theory on

which the act (of 1873) was based, because the courts did not carry out

the law, but insisted on retrying questions in their entirety, instead

of acquiescing in the attempt to separate the law from the facts.”

And we are told that “the evil effects of the attempt to give the

English Railroad Commission power of fixing rates did not stop here. The

attempted performance of this duty took up so much of their time that

they failed to perform other duties, which under more favorable

circumstances they might have carried out efficiently and usefully. They

did not have that influence on the formation of railroad tariffs which

their experience and high position would otherwise have secured.”

Now as a matter of fact the English law never attempted to give the

Railway Commission power to fix rates, except a very limited power in

relation to through rates when the companies cannot agree, nor was it

intended that the Commission should have anything to do with the

“formation of tariffs.” Rates are fixed, not by the Commission, but by

Parliament with the advice of the Board of Trade. When Parliament orders

a revision of the maximum rates, the railways and the Board of Trade try

to agree on new schedules, and the Board embodies its conclusions in

Provisional Orders or rate bills which are passed by Parliament with or

without amendment as it sees fit. This was true in 1873 and has been

true ever since. The Commission’s duty in this connection was and is to

hear complaints of undue preference, and rates alleged to exceed the

maxima fixed by Parliament. If a through rate proposed by any company is

objected to by any forwarding company, the Commission has power to allow

or reject the rate subject to the limitation that it cannot require a

company to carry at lower mileage rates than it is legally charging for

like business on any other line between the same points. (Sections 11,

12, Railway Act of 1873.) The Commission may also determine the division

of through rates if the companies cannot agree. Since the Railway Act of

1894 the Commission has jurisdiction under Section 1 to order a return

to former rates charged by the company in case complaint is made of an

increase above the rates charged in 1892 (the date of the last

Provisional Orders or tariff revision), and the burden of proof is on

the company to show that the increase is reasonable. This puts a

limitation on the companies’ rate-making power in addition to the limit

of the parliamentary maxima, for no matter how much below the maximum a

rate in actual use in 1892 might have been, it cannot be increased if

the Commission on complaint and hearing forbids it.

Further, it is not the case that Parliament “abandoned the theory of the

act of 1873” in the sense the reader might gather from the statements

made by President Hadley. On the contrary, the Railway Act of 1888

(which resulted from the investigation of 1882, quoted by Hadley)

distinctly provides in section 17 that “no appeal shall lie from the

Commissioners upon a question of fact.” Subject to this provision an

appeal was given to a superior court of appeal, the change being that

under the old law the case went up on a statement by the Commission,

which could therefore itself determine what were questions of law and

what were questions of fact, while under the new law the case went up on

the record and the court above determined what questions of law were

involved. But the new law is exactly like the old in making the judgment

of the Commission final on all questions of fact.

The truth is that England never attempted anything like the system of

regulation embodied in the Hepburn Bill; never delegated to any

commission the power to fix reasonable rates or make reasonable

regulations in place of rates or regulations found on complaint and

hearing to be unjust, but she has done and continues to do the other

thing that President Hadley gives us to understand she has tried and

abandoned, viz., the intrusting of power to a Railway Commission to

render final decision on questions of fact.

In the _Transcript_ of April 1, 1905, President Hadley says he “urged

that a single hearing in the railroad court was better than two

successive hearings by two different kinds of bodies. Mr. Hepburn’s

committee desires to avoid the double hearing, but it undertakes to do

it by eliminating the court instead of the Commission. There is reason

to fear that this plan will not work.”

That may be true. There is reason to fear that no plan for government

control of these giant interests will work so long as the ownership is

divorced from the said control. As stated in the text, one of the ablest

and most honorable of our railroad presidents, in answer to my question

as to what would happen if the Interstate Commission were really given

power to fix rates, replied, “The Commission would have to be

controlled, that’s all.” And when I quoted this to one of the leading

members of the Interstate Commission his comment was, “I always said the

railroads would own the Commission as soon as it was worth owning.”

Even without owning the Commission the railroads can block it pretty

effectually by secret practices, extensive forgetfulness on the witness

stand, persistent persecution of shippers who make complaint, cunning

evasions, and interminable litigation. It is quite likely the proposed

regulation will not realize what is hoped for from it, but we cannot

predict such failure from English experience as President Hadley does

when he says, “The history of English railroad regulation shows that a

similar measure, passed under closely analogous circumstances, failed to

do the good which its advocates expected. The same failure is likely to

be repeated in the United States.” The Hepburn Bill in its scope and

directness is very different from anything that England has attempted.

It is quite likely that England may try some more vigorous measure than

she has yet adopted, but in spite of all her efforts at regulation Mr.

W. M. Acworth, the classic railway writer of England from the railway

standpoint, corresponding to President Hadley in this country, told me a

few months ago that dissatisfaction with the railway situation is so

great in England that “9 out of 10 would vote for public ownership of

the roads if the question were submitted to-morrow.”

The general failure of regulation in England to accomplish what was

expected of it, may suggest a broad conclusion as to this country, but a

specific conclusion from any parallel to the Hepburn Bill is not

possible, because no such parallel has been tried.

President Hadley thinks one hearing is enough, provided it is a hearing

before a court, not before the Commission. Like the railroads, President

Hadley has no use for the Commission. The reason perhaps is the

conscious or subconscious appreciation of the fact that rate-making

involves a vigorous _administrative_ element, which the Commission has

shown a tendency to use with great effectiveness, while a body

constituted as a court, by its very nature and traditions, is loath to

exercise administrative power or in any way disturb its exercise by the

companies except on the clearest kind of proof of the adequacy of the

new rate or condition proposed, which cannot in many cases be obtained

at all except by _bona fide_ trial of the new rate or regulation, since

a rate that is even below the present operating cost may develop traffic

enough to give it ample justification. Courts do not like to trust to

future proof. If rates do not seem justified on existing facts as shown

by accounts presented by the companies, the courts are apt to turn the

new rates down without a trial, as the United States Supreme Court did

in the Nebraska case when the law of that State fixing rates on local

traffic was declared unconstitutional. The companies made the division

between through local costs to suit themselves, and the Court not only

accepted their figures, but neglected to take into account the fact that

lower rates might easily develop new traffic enough to cover the slight

additional margin needed even on the companies’ own showing.

President Hadley says: “What the United States needs is an act under

which the Commission will take part in the making of tariffs and give

effect to the public interest in the general questions of railroad

management, leaving the specific cases of violation to be stopped or

punished by the courts.” Very good. But how is the Commission to take

part in the making of tariffs? If it is to do any more than to give

advice (the efficacy of which is nil when it comes up against the Beef

Trust, Standard Oil, or other big private interest), it must have

authority, general or particular, to fix rates when the railways do not

make them just and reasonable. In England Parliament fixes maximum rates

on the basis of Board of Trade studies, and the commission acts as a

court. The plan has not prevented either discrimination or extortion,

but has taken the life out of the railways to a large extent. In this

country it is proposed to try the plan of letting a public board fix

individual maximum rates when injustice is shown. As there is an appeal

to the Federal courts and as Hadley declares that the courts insist on

retrying questions in their entirety, it would seem that the very system

President Hadley advocates would really come into being under the

Hepburn Bill,—the Commission will have a part in fixing the rates, and

violations of law will really be determined by the courts.

INDEX

[References are to pages.]

ACWORTH, W. M., Appendix B.

ALABAMA MIDLAND CASE, 95.

ARMOUR CAR-LINES, 151, 174–207.

mileage, 175, 188, 190.

speed of cars, 177, 178.

passes, 180.

exclusive contracts, 177, 180, 182, 190.

icing charges, 181–186, 194–196.

espionage, 185.

fixing rates, 186–189.

lax inspection, 188–189.

low minimum carload, 189.

rebates and profits, 190, 191, 194.

cipher code, 197.

AUSTRIA, 315.

BACON, E. P.,

testimony, 111.

BAKER, RAY STANNARD,

on Beef Trust, 153.

BALTIMORE,

discriminated against, 226.

BARBED WIRE CASE, 88.

BASING-POINT SYSTEM, 98, 208 _et seq._

BEEF,

billed for export, 225.

BEEF TRUST. (See ARMOUR.)

controls rates, 152.

runs private cars, 176.

intimidates roads, 177.

discriminations, advantages, etc., 176–207.

shipments of, 179.

favored by rates, 186–187.

Boston books destroyed, 250.

packer and road director, 76.

BELGIUM, 315.

BIDDLE OF SANTA FE,

testimony, 114, 124 _et seq._

in salt case, 169.

BISMARCK, 316.

BLANCHARD, GEORGE R.,

quoted, 107.

on ticket scalping, 20.

“BLIND BILLING,”

Standard’s cars, 75.

BOOKS DESTROYED, 248–250.

BOSTON & ALBANY, 105–107.

BOWIE COMPRESS, 68.

BRICK CASE,

New Jersey to North Carolina, 157.

BROKERS, TICKETS, 20.

CALEDONIAN COAL CO., 126–129.

CALIFORNIA FRUIT TRANS. CO., 180.

CAMDEN IRON WORKS,

rebates, 122.

CANADA, 327.

CANNON FALLS CASE, 212.

CAPITAL CITY GAS COMPANY’S REBATES, 164.

CARLOAD, MINIMUM, 189.

CARLOADS & L. C. L., 156.

CAR-MILEAGE,

Pullman cars, express, refrigerator cars, etc., 58.

oil, 73.

Armour, 175, 188, 190.

Mr. Hill on, 178.

CARS DENIED, 66, 160.

CASSATT, A. J.,

rebates, 77.

testimony, 32–33.

CHAOS OF RATES, 156, 157.

CHARLOTTE, N. C., CASE, 208.

CHATTANOOGA CASE, 97.

CHESAPEAKE & OHIO,

discriminations, 64.

coal-carrying case, Appendix A.

CINCINNATI MAXIMUM RATE CASE, 218.

CIPHER CODE,

Armour, 197.

CITIES,

growth of, at expense of country, 219.

CLASSIFICATION,

flour and wheat, 70.

soap, Pearline, patent medicines, 71.

railroad ties and lumber, 72.

discrimination by, 70, 155.

COAL,

cars denied, 66, 160–162.

loading by tipple, 140.

Chesapeake & Ohio Case, Appendix A.

COCKRELL, COMMISSIONER,

on quantity allowances, 149.

appointed to commission, 290.

COLORADO FUEL & IRON CO.,

rebates, etc., 124–141.

COMMODITY,

rates, 70.

discriminations, 150.

COMMON LAW,

requires impartiality, 1.

CONFISCATION,

fears of, ungrounded, 290.

CONTRACTS,

Armour’s exclusive, 177, 180, 182, 190.

COOLEY, THOMAS M., 43.

as arbitrator, 152.

CORDELE, GA., 100.

CORRIGAN OF CLEVELAND, 34.

COTTON-SEED-OIL CASE, 162.

COYNE BROS., 183.

CUMMINS, GOVERNOR, 117, 211.

DANVILLE, VA., 209.

DAVIES OF CHICAGO,

strawberries carried free, 145.

DAVIS, C. WOOD,

passes cost $33,000,000, 12.

DEAD-HEAD,

passenger cars, 18.

passengers, 2–15, 46, 49, 50, 180.

DECADE OF FEDERAL REGULATION, 104–109.

DEFIANCE OF LAW, 238–240.

DEMURRAGE, 143.

DENMARK, 315, 328.

DENVER,

discriminated against, 92–94, 212, 297–298.

DEPEW, CHAUNCEY,

on pooling, 267.

DEPRECIATION OF LANDS CAUSED BY REBATES, 26.

DISCRIMINATION,

motives for, 23.

history and investigations, 24, 120.

early cases, 25.

varieties discovered by I. C. C. first year, 47.

H. F. Douseman, 54.

passes, 2–15.

reasons for, 2.

C. & O. coal, 64, Appendix A.

great number of, 2.

in facilities, 66.

by classification, 70, 155.

confiscates land values, 26.

Hepburn cases, 27 _et seq._

Standard Oil, 73–76.

beef, 76–83.

between localities, 87–94.

in favor of long hauls, 95–103.

Industrial Commission on, 108.

“all stopped,” etc., 113.

under Elkins Bill, 115–118.

Colorado F. & I. Co., 124.

various other forms, 142–149.

commodity, 150.

horses, cattle, and Jersey brick, 156–157.

to Beef Trust, 151–152.

oranges, 153.

hay and lumber, 154.

routing, 159–160.

refusal to furnish cars, 160–161.

cotton oil case, 162.

division of rates to fake terminals, 166–173.

in refrigerator charges, 181–186.

against independent oil, 201–205.

against non-competitive points, 208–215.

against New England, 217.

against rural points, 219.

against certain cities, 216–217.

in favor of foreign commerce, 221–226.

summary of methods and results, 228 _et seq._

$10 apiece for hams? 232.

defended, 233.

disturbance of business, 236.

“cannot be stopped,” 237.

difficulties of abolishing, 241–251, 272–273.

countries where there is none, 315, 317.

DISTANCE TARIFF, 287, 291, 293, 295.

DIVISION OF RATE. (See TERMINAL RAILWAYS.)

DOLLIVER BILL, 257.

DOLLIVER, SENATOR,

on recent rebates, 116.

non-competitive points, 219.

DOUGLAS, GOVERNOR,

pays his fare, 11.

DOUSEMAN, H. F., 54.

DRESSED MEAT,

rates, 151, 186–189.

billed for export, 225.

“ELASTICITY” IN RATES, 286.

ELEVATOR ALLOWANCES, 62, 148.

Industrial Commission on, 63.

ELKINS ACT,

effect, 110.

in Wisconsin, 121, 122.

discriminations since, 140.

opinions as to efficiency, 252, 253.

only one case under, 253.

ELKINS, SENATOR, 111–112.

EMPIRE CO., 31.

EMPORIA, KAN., 91.

EMPTIES,

returned free for Standard, 33.

Armours’, rushed back and paid for, 175.

ENGLAND, 318–327.

EQUALIZATION OF RATES, 291–296.

ERIE ROAD,

early cases, 28.

ESCH-TOWNSEND BILL,

supporters lost passes, 10.

provisions, 260.

ESPIONAGE, ARMOUR, 185.

EXCLUSIVE CONTRACTS,

Armour cars, 177, 180, 182, 190.

EXPENSE BILL SYSTEM, 62, 143.

EXPORT RATES,

low, 84, 221–226.

not fair to all ports, 86.

on flour, 86.

FACILITIES DENIED, 66, 88, 160.

FALSE BILLING, 61, 144.

FERGUSON, E. M., 199.

FICTITIOUS CLAIMS, 143.

FINK, ALBERT, 267, 271.

FISH, STUYVESANT,

on scalping, 19.

discriminations, 237.

FLAT RATES, 291–295.

FLOUR AND WHEAT, 70.

FOLK, GOVERNOR,

on passes, 6.

FORAKER BILL, 258.

FOREIGN COUNTRIES, HINTS FROM, 313–330.

Austria, Switzerland, Denmark, Hungary, etc., 313–315.

Germany, 313.

France, 317.

England, 318.

Canada, 327.

Holland, 328.

Norway and Sweden, 328.

New Zealand, 329.

Australia, 329.

South Africa, 330.

FOREIGN MANUFACTURES FAVORED, 84.

FRANCE, 317.

FREE CARTAGE, 59.

St. Louis cases, 142.

FREE FREIGHT, NO BILLS, 145.

FREE STORAGE, 60.

GEORGIA,

Railroad Commission cases, 98.

GERMANY, 316.

GLASGOW, 314.

GOVERNMENT,

rates not on mileage principle alone, 287, 291–295.

ownership of railways, 313–317, 328–332.

GOWAN, FRANKLIN B.,

on railway favoritism, 235.

GRAIN,

price controlled by roads, 63.

GRANGER LAWS, 26.

GRANT CHEMICAL CO.,

free cartage, 142.

GROSSCUP, JUDGE,

on discrimination, 233.

GULF PORTS, 225.

HADLEY, A. T., 14, 219–315.

on Hepburn Bill, Appendix B.

HARVESTER CASE, 135.

terminal road, 169.

HAZEN’S SWITCH CASE, 141.

HEARST’S BILL, 260.

HEPBURN BILL, 262, Appendix B.

HEPBURN REPORT, 27.

HILL, JAMES J.,

discrimination, 115, 237.

refrigerators, 175, 178.

HINTS FROM OTHER COUNTRIES, 313–330.

HOLLAND, 328.

HOPE COTTON OIL CASE, 162.

HORSES, CHAOS OF RATES, 156.

HUNGARY, 314.

HUTCHINSON SALT CASE, 167–169.

ICING CHARGES, 181–186, 194–196.

IMPORT RATE CASE, 85.

IMPORTS AND EXPORTS, 84.

INDUSTRIAL COMMISSION,

on discrimination, 108.

on exports, 221.

on elevator rebates, 63.

on passes, 228.

INGALLS, M. E., 104, 239.

INSPECTION,

of Armour cars, lax, 188–189.

INTERSTATE COMMERCE ACT, 41.

effects of, 49.

amendment of, 48, 89.

does not cover express companies, etc., 277.

INTERSTATE COMMERCE COMMISSION,

created, 41.

chapter on, 43.

first report, 43–46.

on long haul, 96, 102.

overruled by Supreme Court, 96.

orders disobeyed, 100, 153.

rates condemned by, 102.

ten years of regulation, 104–109.

complaints received since Elkins Act, 117.

on effect of Elkins Act, 118.

on terminal roads, 170.

railways public facility, 234.

bill before Congress, 261.

criticised, 276.

alleged errors of, 279.

work of, 280.

appointments to, controlled by Senate, 289.

on equalization of rates, 293.

INVESTIGATIONS, 24, 120.

(See INTERSTATE COMMISSION.)

IOWA LONG AND SHORT HAUL CASES, 211.

JAPAN, 328.

JUDSON & HARMON REPORT ON SANTA FE, 133.

KANSAS,

oil fight, 203, 283.

KAOLIN, 225.

KEARNEY, NEB., 90.

KELLOGG ELEVATOR CASE, 148.

KINDEL OF DENVER, 93, 297.

KNAPP, I. E., 204.

KNAPP, MARTIN A.,

government officials have passes, 13.

on government rates, 287.

on distance tariff, 295.

LA FOLLETTE, GOVERNOR,

investigations, 120.

LAKE SHORE,

cuts beef rates, 80.

LARRABEE, GOVERNOR, 27.

LAW, DEFIANCE OF, 238–240.

LAWSON, THOMAS W., 228.

LINCOLN (NEB.) PACKING CO., 82.

LOCALITY DISCRIMINATIONS,

barbed wire, 88.

Grinnell factory, 87.

Norfolk, Neb., 88.

ruining small towns, 89.

promoting towns, 89, 90.

Kearney & Omaha, 90.

St. Cloud, 90.

Emporia, 91.

Spokane, 91.

rails to Colorado, 92.

against Denver, 93.

(See CHAPTER ON LONG-HAUL DECISION, 95–103.)

LOMBARD, JOSIAH,

testimony, 32.

LONG AND SHORT HAUL CASES, 25, 27, 29, 47, 76, 87, 91, 92, 95–103,

208–215.

LONG HAUL,

decisions of Supreme Court, 95–103.

prohibition of abuse, 270.

MAINE,

legislators have passes, 8.

MASS. RAILWAY COMMISSION,

report on Boston & Albany, 106.

MAXIMUM RATE CASE, 218.

McCABE, A. C., 56, 77.

MEAD, J. D., & CO., 184.

“MEM. BILL” METHOD, 163.

MESSAGES,

President Roosevelt’s, 256.

MIDGLEY, J. W.,

testimony, 188, 199.

MIDNIGHT TARIFFS, 76, 147.

MILEAGE PAYMENTS ON CARS,

Pullman, etc., 58.

oil, 73.

Armour, 175, 178, 188.

MILK RATES,

flat, 294.

MILLING-IN-TRANSIT, 145.

MINER, D. W., 163.

MINNESOTA,

investigation, 122.

MISSOURI,

eliminating pass evil, 7.

MOFFAT, E. O.,

elevator allowances, 149.

MONOPOLY ELEMENT IN RAILWAY BUSINESS, 233.

MORAWETZ, VICTOR, 115, 131, 247.

MORGAN, J. PIERPONT, 64.

MORRIS, NELSON,

stock yards, 68.

MORTON, PAUL,

testimony, 81, 84.

reasons for passes, 13.

fuel and iron case, 131.

letter to Roosevelt, 132.

Chicago _Daily News_, 136.

letter from, 138.

NEWCOMB, H. T., 104, 282.

NEW ENGLAND,

high rates, 217.

NEW YEAR’S RESOLUTIONS, 79.

NEW YORK CENTRAL,

early cases, 28.

NEW YORK, NEW HAVEN & HARTFORD RAILROAD,

on peaches, 150.

coal, 217.

NEW ZEALAND, 313, 329.

NORFOLK (NEB.) CASE, 88.

NORTHERN GRAIN COMPANY,

rebates $30,000 a year, 18.

fought La Follette, 122.

OIL. (See STANDARD OIL COMPANY, TEXAS OIL, KANSAS.)

ORANGE,

rate, 153.

routing case, 160, Appendix A.

OUTLOOK, THE,

quoted, 238.

PASSENGER REBATES, 17.

PASSES, 2, 15.

and politics, 3.

Pennsylvania Railroad, 3.

reasons for, 2, 9, 10, 13.

legislators, congressmen, etc., 3, 5, 8, 10.

refused, 5.

Governor Folk on, 6.

Governor Douglas, 11.

jurors, 8.

judges, 9.

auditors, etc., 9.

Missouri, 7.

Maine, 8.

Stickney’s sheriff story, 11; Washington address, 13.

Martin A. Knapp, 13.

Paul Morton on, 13.

A. T. Hadley, 14.

C. Wood Davis, 12.

in foreign countries, 14, 15.

held unlawful, 46.

within a State, 49, 50.

owners of private cars, 180.

PATENT MEDICINE CLASSIFICATION, 71.

PEARLINE CLASSIFICATION, 71.

PENNSYLVANIA RAILROAD,

passes, 3.

passes in 1906, 4.

rebate war, 31.

stand by any rate, 56.

favors foreign trade, 84.

cuts beef rate, 78.

milling-in-transit discrimination, 146.

sued for failure to accord car service, 160.

PENNSYLVANIA STATE CONSTITUTION,

prohibits passes, 3.

PHILADELPHIA,

passenger case, 217.

PHILADELPHIA NORTH AMERICAN,

passes, 4.

stop-overs, 217.

PLACE DISCRIMINATIONS,

long hauls, 208–215.

against St. Louis and other places, 216.

POOLING,

advocated, 265.

difficulties of, 266–270.

PRIVATE CARS,

to favored individuals, 18.

passenger, 58.

freight, 118.

abuses, 174.

advantages, 174–175.

increase of, 198.

PROCTOR & GAMBLE CASE, 155.

PROTECTIVE TARIFF,

for England, 86.

nullifying, 221.

PROUTY, COMMISSIONER,

on the Elkins bill, 112.

on Santa Fe case, 133.

on the Colorado F. & I. case, 139.

on free wheat, 145.

on train loads, 234.

railway officials would not tell truth, 243–247.

commission rates, 284.

PRUSSIAN CABINET STATEMENT, 316.

PUBLIC v. PRIVATE INTEREST, 308.

PULLMAN CARS,

mileage rate, 58.

RAILWAY OFFICIALS,

as law breakers, 238–240.

RATE REGULATION,

pros and cons, 253.

advocated by President Roosevelt, 256.

by Interstate Commission, 261, 274.

by 18 States, 275.

opposed by railroad men, 276, 278, 285.

merits of controversy, 299.

RATE SCHEDULES DECEPTIVE, 148.

RATES,

fixed to suit the Standard, 75.

condemned by I. C. C., 102.

on packing-house products and fruit, 186.

fixed by Government not strictly mileage, 287.

complexity of, 288.

making by “instinct,” 289.

all the traffic will bear, 289.

equalization of, 291–295.

REAGAN CASE, 285.

REBATES,

on tickets, 19.

substitutes for, 57.

New York investigation of, 27.

on beef, 76, 79.

Wisconsin investigation, 120.

to Armours from “C. & A.” and “U. P.,” 191.

Santa Fe car-line, 193–194.

cost to railways, 235–236.

RECORDS DESTROYED, 248–250.

REFRIGERATION CHARGES, 181 _et seq._

REFRIGERATOR CARS, 174–207.

REFUSAL,

to haul goods, 68, 162.

to furnish cars, 66, 160.

REGULATION OF RAILWAYS,

work of I. C. C., 104.

Texas Railway Commission, 105.

efforts at, 254–255.

difficulties of, 264–265, 272–273.

by State commissions, 254–255.

can it succeed? 306.

in England, 319–327.

in Canada, 327.

REMEDIES, 252, 300.

RICE, GEORGE,

story of, 34–36.

denied car-mileage, 74, 75.

RIPLEY, PRESIDENT E. P., 135.

in Chicago _Inter-Ocean_, 137.

letter from, 137.

on packing-house business, 187.

discriminations permanent, 237.

RIPLEY, PROFESSOR W. Z., 116, 208.

ROBBINS OF ARMOUR CAR-LINES, 192.

ROGERS COAL COMPANY,

denied cars, 66.

ROOSEVELT, PRESIDENT,

favors rate regulation, 115.

messages, 256.

ruling on Paul Morton, 135.

letter to Paul Morton, 136.

ROUTING,

fees for, 159.

orange routing case, 160, Appendix A.

by railroads unlawful, 160.

SALT LAKE CITY, 212.

SALT TRUST CASE, 167.

SANTA FE,

early management, 54.

Colorado Fuel Co. case, 124–141.

Hutchinson Salt case, 167–169.

car-line, 191–194.

SCALPING, 19–20.

SENATE COMMITTEE OF 1885, 37–41.

SENATE COMMITTEE OF 1905, 111–117.

SIMMONS HARDWARE COMPANY, 142.

SOAP CLASSIFICATION, 71, 155.

SOCIAL CIRCLE CASE, 100.

SOUTH AFRICA, 329.

SPECULATION IN LAND AND TOWN SITES, 90.

SPOKANE, WASHINGTON, 91, 213–215.

SPRINGFIELD REPUBLICAN,

Pennsylvania passes, 4.

STAMP MILL FROM CHICAGO TO SAN FRANCISCO VIA CHINA, 223.

STANDARD OIL COMPANY,

car-mileage, 73.

barrel discrimination, 73.

underbilling cars at East Boston, 74.

paint out old car-numbers, 75.

control of New England, 75.

shuts out Western oil, 75.

rebate of 1872, 29.

ten advantages, 30.

secures terminals, 31.

private cars, 176.

favored by rates, 200–201.

STATE OWNED RAILROADS,

comparisons, 308–311, 313–315.

STATE RAILWAY COMMISSIONS, 254–255.

STATE TRAFFIC, 142.

ST. CLOUD, MINNESOTA, 90.

STEEL RAILS,

export rates on, 222.

STEEL TRUST TERMINAL RAILROAD, 171.

STEWART, A. T.,

rebates, 28.

STICKNEY, A. B.,

quoted, 87.

story of passless sheriff, 11.

on midnight tariffs, 116.

on passes, 13.

on rebating, 187.

ST. LOUIS,

discriminated against, 216.

STOCK YARD GRAFT, 68.

STOPPAGE-IN-TRANSIT, 60.

STRAWBERRY CASE, 174–175.

“STRAW MAN” SYSTEM, 142.

STREYCHMANS, H. J.,

testimony, 195–198.

SUBSTITUTES FOR REBATES, 57.

SUMMARY OF METHODS AND RESULTS, 228.

SUMMERVILLE CASE, 99.

SUWANEE CASE, 208.

SWIFT AND COMPANY,

indicted, 76.

SWITCH DENIED, 163.

SWITCHING CHARGES, 140.

SWITZERLAND, 315.

TARIFFS,

1000 changes daily, 288.

TAX,

Wisconsin roads, 120.

TERMINAL CHARGES, 59.

TERMINAL RAILWAYS, 118, 166.

logging allowances, 146.

Hutchinson salt case, 167.

International Harvester Company, 170.

Steel Trust, 171.

division of rates, 171.

Illinois Glass Company, 172.

TEXARKANA CASE, 162.

TEXAS AND PACIFIC CASE, 84.

TEXAS OIL DISCRIMINATION, 201.

TEXAS RAILWAY COMMISSION, 105.

TICKET SCALPING, 19–22.

complaint of, by I. C. C., 50–51.

TIES,

shipment prevented, 150.

rebate on, 151.

TRAIN LOADS, 234.

TUTTLE, PRESIDENT,

on division of rate, 171.

cargo-of-flour story, 234.

on pooling, 267.

on the I. C. C., 276.

Worcester Wise case, 292.

on getting rebates, 303.

UNION PACIFIC,

steel rail rate, 72.

UNION STOCK YARDS BEATS RIVALS, 68.

UNITED STATES SUPREME COURT,

Counselman case, 52.

discriminations, 59.

import rate decision, 85.

ruled that I. C. C. cannot fix rates, 92.

long-haul decisions, 95.

Social Circle case, 100.

maximum rates, 218.

on pooling, 270.

reversals of I. C. C., 283, Appendix A.

coal-carrying case, Appendix A.

orange routing case, Appendix A.

VANDERBILT, W. H.,

before Hepburn Committee, 28.

stockholder in Standard, 31.

WATSON OF PORTER BROS., 191.

WILLCOX, DAVID,

criticism of I. C. C., 279.

WISCONSIN,

railroads give passenger rebates, 17.

revelations, 120.

WORCESTER WIRE CASE, 292.

-----

Footnote 1:

See New England Exp. Co. _v._ Maine Central R. R., 57 Me. 188;

Fitchburg R. R. _v._ Gage, 12 Gray (Mass.), 393; Kenny _v._ Grand

Trunk R. R., 47 N. Y. 525; Messenger _v._ Penn. R. R., 8 Vroom (N.

J.), 531; Chicago, etc., R. R. _v._ People, 67 Ill. 11; Wheeler _v._

San Francisco R. R., 31 Cal. 46.

Footnote 2:

Pass discrimination alone, it is estimated, amounts to some 200,000

free transits a day, or over 70 millions in a year. And as for freight

discriminations, the reader who follows this history through will see

that like the leaves of the forest they defy computation. Just a hint

may be given here. Every day that one of the 300,000 private cars is

carried at the present mileage rates, a discrimination is made in

favor of the owner of the private car,—a hundred millions of unjust

discriminations, possibly, in this one item.

Footnote 3:

The New York Central, Baltimore and Ohio, and some other lines

announced the same purpose as the Pennsylvania in respect to passes

after January 1, 1906, but with them as with the Pennsylvania it

appears to be a case of more careful discrimination in the use of

discrimination, and an appreciation of the fact that it is very

important to make a good impression on the public mind just now, in

view of the widespread demand for drastic legislation in the direction

of railroad regulation.

Footnote 4:

A number of the States have laws against passes. The Interstate

Commerce law forbids them. And they are always against the moral law

whether they run beyond the State line or not.

Footnote 5:

In one case it appeared that a leading railroad attorney had been for

years in the habit of supplying jurors with passes. Opposing counsel

brought out the fact that all the jurors in the case on trial had

accepted passes from the railroad company which was the defendant in

the case, and that to have an equal chance for justice his client

would have to give each juror $50 to offset the railroad gifts. The

judge discharged the whole jury.

Footnote 6:

Condensation of statement of Texas Railroad Commission’s Report for

1898, p. 17. See, further, “Bribery by Railway Passes,” _North

American Review_, 138, p. 89; and _Public Opinion_, 26, p. 167, Feb.

9, 1899: “The Pass Evil in Three States” (Indiana, Minnesota, and

Washington).

Footnote 7:

“Railway Passes and the Public,” _Forum_, 3, p. 392.

Footnote 8:

Vol. iv, pp. 456–457.

Footnote 9:

American Railroads as Investments, p. 30.

Footnote 10:

See C. Wood Davis’ article in _The Arena_, vi (1891), pp. 281–282.

Footnote 11:

See the evidence cited below.

Footnote 12:

Report of U. S. Industrial Commission (1900), iv, p. 135.

Footnote 13:

Testimony before U. S. Industrial Commission (1900), iv, p. 490.

Footnote 14:

_Forum_, 3, p. 392.

Footnote 15:

Railroad Transportation, p. 109.

Footnote 16:

In order to test the attitude of the government roads, I did my best

to get passes, trying first through the American ambassadors in

Vienna, Berlin, and Brussels, and afterward by direct appeal to the

railway management. But it was of no use, although I had a letter from

the Chairman of the United States Industrial Commission saying that I

had rendered the government valuable service in connection with the

work of the Commission, and that any courtesies shown me or assistance

afforded me in my researches would be a public service. I had other

strong letters from men of high distinction in the United States and

England, and our ambassador at Berlin had been president of my alma

mater when I was in college, and was specially friendly and helpful;

but I was assured that no amount of influence or pull could secure a

pass or any other personal favor on the State railways.

Footnote 17:

See _McClure’s Magazine_, December, 1905, where Ray Stannard Baker has

stated the leading facts.

Footnote 18:

See, for example, the testimony of Stuyvesant Fish, President of the

Illinois Central, before the United States Industrial Commission,

calling attention to the fact that while railway officials could be

prohibited by law from selling tickets below published rates,

individuals could not be so prohibited, and that some railways sold

their tickets to competitive points to brokers, paying them a

commission for making the sale, out of which the brokers scalped the

rate. (Industrial Commission, 1900, iv, p. 334.)

Footnote 19:

Industrial Commission, iv, pp. 457–458.

Footnote 20:

Hudson, “The Railways and the Republic,” p. 42.

Footnote 21:

Hepburn Report, N. Y. Legislature Investigation, 1879, p. 120.

Footnote 22:

The facts appear at full length in the reports of the Hepburn

Committee, the Select Committee of the United States on Interstate

Commerce, 49th Congress, 1st Session, Lloyd’s “Wealth against

Commonwealth,” and Miss Tarbell’s “History of the Standard Oil

Company.”

Footnote 23:

Tarbell’s “History of the Standard Oil Co.,” pp. 185–190; Lloyd’s

“Wealth against the Commonwealth,” pp. 87–88.

Footnote 24:

The Standard paid nominally 60 cents a barrel, but got a rebate of 49

cents, so that their net rate was 11 cents per barrel against $1.90

for the independents. See report of the Hepburn Committee (N. Y.),

1879, and George Rice’s pamphlet on “The Standard Oil Trust.”

Footnote 25:

Quoted from a synopsis of the Report.

Footnote 26:

Railroad Freights, Ohio House of Representatives, 1879, pp. 159–163.

Footnote 27:

Hardy _v._ Cleveland & Marietta R. R., Circuit Court, Ohio, E. D.,

1887, 31 Fed. Rep. 689; Senate Select Committee on Interstate

Commerce, 49th Congress, 1st Session, p. 199.

Footnote 28:

Besides the references already given on the Rice affair, see the Trust

Investigation of Congress, 1888; the testimony in the Rice case before

the Interstate Commerce Commission, Nos. 51–60, 1887; Decisions of the

I. C. C., vol. 1, pp. 503, 722; vol. 2, p. 389; vol. 3, p. 186; vol.

4, p. 228; vol. 5, pp. 193, 660; State of Ohio _v._ Standard Oil Co.,

49 Ohio St. Rep. 317; Lloyd, chapters xv, xvi, xvii; and Tarbell’s

History.

Footnote 29:

I. C. C., First Report, 1887.

Footnote 30:

Passes (annual in this case) to persons not in the regular service of

the carrier held unlawful. State _v._ Northern Pacific, p. 359, vol.

2, Decisions, 1888.

Footnote 31:

Sale of 1000–mile tickets to commercial travellers at $20 while

charging others $25 illegal. Chicago & Grand Trunk, p. 147, vol. 1,

Decisions, 1887.

Footnote 32:

Paying commissions; selling tickets through brokers at reduced rates;

rate wars, etc. Pennsylvania, New York Central, Wabash, Chicago &

Alton, vol. 2, 1888, p. 513.

Footnote 33:

Discounts to shippers receiving more than 30,000 tons a year illegal.

Providence and Worcester, vol. 1, 1887, p. 170.

Footnote 34:

In many cases the direct rate between two points, X and Y, was found

to be greater than the combination of the rate from X past Y to a

competitive point Z and the local rate back from Z to Y. For example,

goods could be shipped from the Pacific coast to Kansas City and then

back to points west of Kansas City more cheaply than they could be

sent direct from the coast to these intermediate points. This enabled

a shipper informed of the combination rates to get an advantage over

one with less information who relied on the published tariffs stating

the rates between his place of business and the points to or from

which his shipments were to be sent. The Commission took up this

matter in 1887 and the traffic managers of the roads agreed to revise

their tariffs so that the direct local rate should in no case exceed

the through rate plus the local rate back from the terminus or

competitive point. This rule resulted in many material reductions of

the rates to intermediate points; for example, the points between

Denver and the Missouri River on the lines controlled by the Southern

Pacific. See Martin _v._ Southern Pacific R.R. I. C. C. Decisions,

vol. 2, 1888, pp. 1, 4.

Footnote 35:

A higher rate on oil in barrels than in tanks held unjust, vol. 2, p.

365. Report, 1888, p. 128.

Footnote 36:

Report, 1888, p. 112.

Footnote 37:

_Ibid._, p. 114 _et seq._

Footnote 38:

_Ibid._

Footnote 39:

_Ibid._

Footnote 40:

_Ibid._

Footnote 41:

The Commission’s reports, 1889 to 1891, dealt with numerous

discriminations between localities and persons through free

transportation, commissions on the sale of tickets, combination rates,

rebates, free cartage, payment of yardage charges, excessive car

mileage on private cars, discounts for quantity, unfair

classification, distribution of cars, special tariffs, advantage or

disadvantage to particular commodities or methods of shipment, low

rates on goods for export, etc., etc.

Footnote 42:

Report, 1889, p. 10.

Footnote 43:

5 I. C. C. Decis. 69, 1891.

Footnote 44:

_Ibid._; see also 5 I. C. C. Decis. 153, 1892. Case against the

Louisville and Nashville for granting passes to members of the city

council of New Orleans.

Footnote 45:

Investigation of the Commission, 1889.

Footnote 46:

Report, Interstate Commerce Commission, 1889, p. 14.

Footnote 47:

Pages 103–107, I. C. C. Rep. 1895.

Footnote 48:

Report, 1897, p. 61.

Footnote 49:

See p. 20 above.

Footnote 50:

Heard _v._ Georgia R. R., 1 I. C. C. Decis. 428, and 3 I. C. C. Decis.

111. But the United States Supreme Court decided against the

Commission on this point May 1, 1892 (145 U. S. 263), and the B. & O.

tickets for parties of 10 or more at ⅓ less than the regular rates

were sustained.

Footnote 51:

2 I. C. C. Decis. 649, and 3 I. C. C. Decis. 465.

Footnote 52:

This rule of exemption works great injustice under present conditions.

It was built into the common law when people were struggling against

oppressors in high places. But the conditions which made it useful

have long since passed away, and it is now simply a millstone about

the neck of justice.

Footnote 53:

Senate Committee, 1905, iv, pp. 2900–2901. Speaking of an

investigation of rebates on flour from Minneapolis and Duluth, the

Commission says (p. 8, Report for 1898): “All the railway witnesses

denied knowledge of any violation of the statute, and most of the

accounting officers testified to the effect that if rebates had been

paid they would necessarily know about it and that their accounts did

not show any such payments. It was nevertheless fully established by

the investigation that secret rate concessions had been generally

granted on this traffic and that the carrier had allowed larger

rebates to some of the flour shippers than to others.”

Footnote 54:

I. C. C. Rep. 1889, p. 75.

Footnote 55:

See I. C. C. Rep. 1889, pp. 15, 16, 126, 130, 132, 237, 239, 240–242;

Decisions, vol. 3, 1889, p. 89, 25% rebates on coal to certain points;

p. 137, low rates on goods marked for export (10 cents on one hundred

lbs. discount); p. 652, unlawful discount of 50% on emigrants’

movables; Rep. 1890, pp. 111, 190, 192, coal rates; 183, discount for

quantity; 189, export; 101, 192, hogs and hog rates; 184, stock yards;

99, 100, 185–187, oil; 112, 192, wheat and flour; 187, 190, private

cars; 188, special tariffs; and other unjust discriminations relating

to localities, privileges, etc., and not directly in point under the

head we are dealing with.

Footnote 56:

Testimony, U. S. Ind. Com. iv, p. 353.

Footnote 57:

I. C. C. Rep. 1890, p. 25.

Footnote 58:

I. C. C. Rep. 1896, p. 78.

Footnote 59:

_Ibid._, p. 82.

Footnote 60:

Industrial Commission, 1900, iv, p. 442.

Footnote 61:

I. C. C. Dressed-meat Hearing, December, 1901, p. 94; Chicago and

Alton manager to same effect for his road, p. 136.

Footnote 62:

I. C. C. Rep. 1898, p. 6.

Footnote 63:

4 I. C. C. Decis. 1891, p. 630. For example, on one line between

Chicago and New York, “200 stock cars more than paid for themselves

and all repairs, etc., in 2 years, and thereafter earned for the

owners upwards of $100,000 a year on no investment.” See Report Iowa

Railroad Commission, 1891, p. 30.

Footnote 64:

I. C. C. Rep. 1889, pp. 15–16.

Footnote 65:

9 I. C. C. Decis. 1, 1901 Rep., p. 36. As the circumstances were

substantially different in the two cases, the Commission said the

local charge to the drummer was “not necessarily unjust.”

Footnote 66:

An additional charge by the Santa Fe of $2 a car on cattle consigned

to the Union Stock Yards at Chicago, where the Santa Fe had for years

delivered cattle, was held unlawful by the Commission, and its

judgment was sustained by the United States Circuit Court, but

overruled by the Court of Appeals. I. C. C. Rep. 1896, p. 45.

Footnote 67:

Free cartage for a distant shipper and not for a nearer one is

equivalent to a rebate for the former. Hegel Milling Company v. St.

Louis, etc., Railroad, 5 I. C. C. Decis. 1891, p. 57.

Footnote 68:

The railway charged the same rates from the East to Grand Rapids as to

Ionia, although the former was 33 miles a longer distance point on the

same line of road, and in addition gave free cartage to Grand Rapids

companies. Complaint was made in September, 1888; April 26, 1890, the

Commission held the free cartage to be in effect a rebate, and ordered

the railroad to desist from giving free cartage in Grand Rapids. (3 I.

C. C. Decis. 60; I. C. C. Rep. 1896, pp. 37–39; 1897, pp. 94–95.) The

Circuit Court upheld the order October, 1893 (57 Fed. Rep. 1002), but

the Circuit Court of Appeals overruled the decision April, 1896 (74

Fed. Rep. 803), and the United States Supreme Court sustained the

Court of Appeals. (167 U. S. 633, May, 1897.) The Commission made the

mistake of resting the case on the 4th or long-haul section instead of

the 2d or 3d sections relating to undue preference, and the railway

should have been allowed the option of removing the discrimination by

giving free cartage in Ionia or making a lower rate there. The order

to discontinue free cartage in Grand Rapids was arbitrary and

unnecessary.

Footnote 69:

I. C. C. Rep. 1889, pp. 18–19.

Footnote 70:

Commercial Club _v._ Rock Island, 6 I. C. C. Decis. 1896, p. 647.

Footnote 71:

Pennsylvania Millers Association _v._ Reading R. R., 8 I. C. C. Decis.

1900, p. 531.

Footnote 72:

I. C. C. Rep., 1898, pp. 46–47; 7 I. C. C. Decis. 1898, p. 556:

Illinois Central, charging some shippers for storage while others are

not charged for it, unlawful.

Footnote 73:

Industrial Commission, iv, 541.

Footnote 74:

_Ibid._, 543.

Footnote 75:

Investigation of expense bill frauds on grain shipments from Missouri

River points to Chicago and other destinations. I. C. C. Rep. 1896, p.

75, on Santa Fe case. 7 I. C. C. Decis. 1897, p. 240, expense bill

system held illegal.

Footnote 76:

I. C. C. Rep. 1896, p. 79.

Footnote 77:

_Ibid._, p. 77.

Footnote 78:

_Ibid._, p. 80. The Commission has not felt able to declare such an

allowance unlawful (10 I. C. C. Decis. 1904, p. 309), but it seems

clear that substantial preferences may be given in this way.

Footnote 79:

Report, U. S. Industrial Commission, 1900, iv, p. 79.

Footnote 80:

I. C. C. Rep. 1896, pp. 46–48.

Footnote 81:

There is a statement concerning it in the I. C. C. Rep. 1896, p. 81,

but it does not bring out the facts at the core of the matter as

stated to me by the railway men.

Footnote 82:

8 I. C. C. Decis. 1898, p. 316.

Footnote 83:

I. C. C. Rep. 1894, p. 9.

Footnote 84:

It was held in the Nichols case (66 P. A. C. Rep. 768) that where a

shipper orders cars to be delivered at a certain date, the company’s

action in filling subsequent orders before complying with the first is

unlawful. (Oregon Short Line.)

Footnote 85:

Report, Texas Railway Commission, 1896, p. 11.

Footnote 86:

The Commission holds that the difference must not be so great as to be

destructive of competition between large and small dealers. (5 I. C.

C. Decis. 638, following Thurber _v._ New York Central, Delaware &

Lackawanna, B. & O.; and 3 I. C. C. Decis. p. 473, March, 1890; Rep.

1890, p. 87.) Many articles of groceries were so classified as to make

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

unjustly great in violation of the principles of the Interstate Act.

Footnote 87:

Industrial Commission, iv, 207.

Footnote 88:

Paine _v._ Lehigh Valley R. R., 7 I. C. C. Decis. 1897, p. 218.

Footnote 89:

9 I. C. C. Decis. 78; 1901 Rep. 38.

Footnote 90:

5 I. C. C. Decis. 663.

Footnote 91:

7 I. C. C. Decis. 43.

Footnote 92:

8 I. C. C. Decis. 214, 1898. See also 4 I. C. C. Decis. 417. and 7 I.

C. C. Decis. 481, Chicago, Milwaukee & St. Paul case, held that a

higher rate on wheat than on flour is unjust.

Footnote 93:

8 I. C. C. Decis. 304. See also 3 I. C. C. Decis. 400, and 4 I. C. C.

417.

Footnote 94:

4 I C. C. Decis. 1891, p. 733: N. Y. Central, Pa., B. & O., C. B. &

Q., Wabash, Santa Fe, etc.,—a whole page full of railroads.

Footnote 95:

Rice cases, Nos. 51–60, I. C. C. Decis. 1887, 65, 131.

Footnote 96:

Rice _v._ R. R., 4 I. C. C. Decis. 131; 5 _ibid._, 193, 415. Railroads

commenced charging for barrel packages in 1888, and in a case tried in

1892 against the Reading, Boston & Maine, and other roads the

Commission ordered them to cease, but they did not, and damages were

awarded two years later from 1888 to 1894. A similar order to desist

from charging for the barrel was issued against the Pennsylvania in

September 1890 and it complied. I. C. C. Rep. 1895, pp. 33–35.

Footnote 97:

Trust Investigation, Congress, 1888, pp. 531–533, 646–647.

Footnote 98:

Testimony, Rice cases, 1 I. C. C. Decis. 28.

Footnote 99:

See Trust Investigation, Congress, 1888, pp. 598–599.

Footnote 100:

Lloyd’s “Wealth against the Commonwealth,” pp. 427, 480–481.

Footnote 101:

U. S. Industrial Commission, iv, 53.

Footnote 102:

4 I. C. C. Decis. 158.

Footnote 103:

Senate Committee, 1905, 3457.

Footnote 104:

Testimony of McCabe, Pennsylvania traffic manager, I. C. C. Beef

Hearing, Dec. 1901, pp. 101, 102, 103.

Footnote 105:

_Ibid._, pp. 101, 102.

Footnote 106:

Mr. Cost, traffic manager of the Big Four, I. C. C. Beef Hearing, Dec.

1901, p. 105.

Footnote 107:

I. C. C. Beef Hearing, Dec. 1901, p. 114.

Footnote 108:

_Ibid._, pp. 113, 119.

Footnote 109:

I. C. C. Beef Hearing, Dec. 1901, pp. 85, 86.

Footnote 110:

I. C. C. Beef Hearing, Dec. 1901, p. 107.

Footnote 111:

I. C. C. Hearing in the dressed-meat cases, Chicago, Jan. 7, 1902, pp.

152–154.

Footnote 112:

Evidence in the I. C. C. Hearing in the dressed-meat cases, Chicago,

Jan. 5, 1902, pp. 145, 148, 149.

Footnote 113:

Report, Industrial Commission, vol. iv, pp. 69, 493.

Footnote 114:

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 30 / 31 章

Underneath our low average freight rate there are not only vast masses