CHAPTER IV.
FREIGHT DISCRIMINATION.
We come now to a kind of discrimination that enables a railway manager to determine which of the merchants, manufacturers, mine owners, etc., on his line shall prosper and which shall not; what cities and towns shall grow, what States shall thrive, what industries shall be developed.
The purpose of discrimination may be (1) to keep business from going to a competing line; (2) to increase revenue by creating new business for which, if necessary, rates may be dropped very low, as anything above the cost of handling on new business will add to income; (3) to simplify and solidify traffic; (4) to favor persons who, through political influence or other power may aid or injure the road, or who, through friendship, marriage, business or civic relation, or otherwise, have a “pull” with the management; (5) to advance the interests or enhance the value of a business, or property, or place, in which the railway or its officers or their friends are interested; or (6) to kill or injure a place or person or business that has incurred the enmity of the railways or their allies.
As a result of the play of these motives our railroad history is full of unfair discriminations between persons, places, and industries in the United States, and between domestic and foreign trade. The methods and forms are many and have grown more numerous with each succeeding epoch, but the predominant forms vary in the different strata. We still have plenty of living specimens of the species that prevailed in earlier periods, but the leading forms now are comparatively recent evolutions.
The history of discriminations would fill many volumes. The Hepburn Committee (1879) appointed by the New York Legislature collected about 5000 cases of discrimination. It was shown to be a common thing for railroads to give favored shippers discounts of 50, 60, 70, and even 80 percent from the regular rates. The special contracts involving favors in force for one year on a single railroad, the New York Central, were estimated at 6000. The United States Senate Committee of 1885, the Congressional Committee of 1888, the Interstate Commerce Commission, 1887–1905, the United States Industrial Commission, 1900–1902, the Wisconsin investigation in the fall of 1903, the United States Senate Committee of 1905, the State railroad commissions, the courts, and other investigating bodies have brought to light additional thousands of discriminations. We shall select some examples illustrating various methods of discrimination.
CHAPTER V.
THE EARLY YEARS, HEPBURN REPORT, ETC.
One of the discriminations most complained of in early years was the charging of lower rates for a long haul than for a short haul on the same line—less for the whole than for a part.
For example, the rate from New York to Ogden was $4.65 per hundred, while $2.25 per hundred carried the same freight all the way from New York to San Francisco. The railroads charged more if the car stopped part way than if it went on to the Pacific,—more than twice as much, in fact, for the part haul as for the full distance, so that the extra charge for not hauling the car on from Ogden to Frisco was greater than for hauling it the entire distance from ocean to ocean. They seemed to be willing to take off half for the privilege of hauling the car another 1000 miles. These methods are still in practice.
The C. B. & Q. hauled stock from points beyond the Missouri River to Chicago for $30 a car, while charging $70 a car on much shorter hauls to points in Iowa. The Northern Pacific charged twice as much from New York to points a hundred miles or more east of Portland, as from New York clear through to Portland. Freight was shipped from New York State to Council Bluffs and then back to Atlantic, Iowa, 60 miles west of Council Bluffs on the Rock Island, for less than the charge direct to Atlantic. From Chicago to Kankakee, 56 miles, the Illinois Central charged 16 cents per cwt. for fourth-class goods, while it carried the same goods to Mattoon, 116 miles farther on, for 10 cents per cwt. The grain rate on the Pennsylvania Railroad from Chicago to Pittsburg was 25 cents in 1878, while the same road would carry the grain clear through from Chicago to New York for 15 cents. Glassware paid 28 cents a hundred from Pittsburg to Chicago, and only 14 cents from Philadelphia to Chicago, half the rate for nearly double the distance. A tub of butter from Elgin, Ill., to New York, 1000 miles, paid 30 cents, while the freight on the same tub from points 165 miles out of New York City was 75 cents. The railways put the farmers of Western New York further from market than their competitors in the West. By such arrangements as this it was claimed the railroads had caused a depreciation of $400,000,000 in the value of improved lands in New York, Pennsylvania, New Jersey, Maryland, and Delaware, while the area of improved lands in those States had increased 4,500,000 acres.[[20]]
The evils of unjust rates and railway favoritism for persons and places were earnestly discussed in the press, and in State legislatures, and in Congress. One of the examples of discrimination that caused much discussion in Congress was the Winona case. Cotton paid $1 a bale from Memphis to New Orleans, 450 miles; from Winona to New Orleans, 275 miles, travelling possibly in the same train with the Memphis bales, the rate was $3.25 per bale. Another example adduced in Congress was the 75 cent rate from New York to New Orleans, while points half way paid $1.00 for the same service.