The Commission had plenty to do. Complaints of unreasonable rates and unjust discriminations between shippers, commodities, and places poured in upon it, and vigorous decisions against favoritism and excessive rates poured out upon the railroads. During 1887 and 1888 the Commission dealt with cases of passes issued in contravention of law,[[30]] preferential fares for drummers,[[31]] commissions on the sale of tickets,[[32]] discounts on freight rates to large shippers,[[33]] discrimination by combination rates,[[34]] by preference of tank shipments of oil,[[35]] by unfair distribution of cars,[[36]] by underbilling,[[37]] false classifications,[[38]] commissions to soliciting agents,[[39]] etc. Underbilling, false classification, false weighing, and commissions to soliciting agents were investigated by the Commission in 1888 at New York, Buffalo, Detroit, Chicago, Omaha, Lincoln, and Washington.[[40]] All these methods of discrimination were found widely prevalent, and new legislation was asked for imposing a penalty on shippers who fraudulently obtained reduced rates.
When Congress met for the session of 1889 it was believed that the law had greatly reduced the number of passes issued, straightened out a part of the long-haul discriminations, and accomplished a good deal in the way of suppressing rebates, but it was clear that much remained to be done. In one way or another all over the country secret discriminations were still being made for the benefit of favored shippers. Congress therefore in March, 1889, amended the Interstate Commerce Act by adding to the fine a penalty of two years’ imprisonment in the penitentiary in case of unlawful discrimination, and pronouncing the same penalties against shippers and their agents who secure advantage by false billing, false classification, etc., or by soliciting or otherwise inducing a railway to discriminate in their favor, or by aiding or abetting any such discriminations. It was also provided that 3 days’ notice must be given in case of any reduction of rates, and that homeless and destitute persons, as well as preachers, might be favored with low fares.
The stringent provision for imprisonment did not prove any more effective than the milder law that preceded it, less so apparently, for the following years were flooded with unfair discriminations.[[41]]
CHAPTER VIII.
EFFECTS OF THE INTERSTATE ACT.
An investigation by the Commission in May, 1889, concerning passes, and covering 27 railroads, showed that passes were issued freely to expressmen, telegraph men, press men, managers of excursions, attorneys, persons contracting with the railroads in consideration of advertising, shippers, members of legislative bodies, United States, State, and municipal officers, officials of steamship and steamboat lines, etc. These passes were chiefly limited to a State, but to some extent were good for interstate journeys. Of State passes the larger numbers were issued to members of legislatures and drovers; “complimentaries” came next, with United States and municipal officers, newspapermen, and shippers, in the order named.
The Commission said: “The Interstate Commerce Act was intended to end all the abuses attending free transportation of persons, and to a considerable extent it has done so. But very largely the carriers, especially the strong systems, where the abuse has been greatest, have tried to avoid the law by falling back on State protection, and issuing passes within the limits of each State. Three of the large railroad systems, when called on by the Commission to make an exhibit of the passes issued by them, declined to do so on the ground that the passes were limited to the bounds of the State, and therefore not within the jurisdiction of the Commission. If the New York Central and Pennsylvania railroads can thus issue passes at discretion it is impracticable to enforce the laws against their competitors.”[[42]] By issuing to a favored individual a pass good in Pennsylvania, another good in Ohio, another for Indiana, another for Illinois, etc., the Pennsylvania Railroad can give the beneficiary as full freedom of its lines as any interstate pass could give.
Pass making went merrily on all over the country, with a complaint now and then to let in the light, but no effective crusade against the disease. The Boston and Maine, for example, issued passes in Maine, New Hampshire, Vermont, and Massachusetts, to public officers of the States and the United States, members of legislatures, and railroad commissions, agents of ice companies, milk contractors, newspaper men, etc.[[43]] The Commission recorded its protest and declared that the “similar circumstances” of the Interstate Act do not relate to the social or official position of the passenger;[[44]] but the pestilence is beyond the reach of the national board, and after eighteen years of Federal prohibition our railroad business is still honeycombed with political and commercial passes, as we have already seen in the second chapter of this book.
Ticket scalping, “an obvious evasion of the law,” and the payment of commissions on the sale of tickets in addition to salaries, so that the brokers were tempted to cut rates dividing their commissions with their customers, continued in full bloom in spite of the Federal law. The commissions were $1 from New England points to Chicago; $1 from Chicago to the Missouri River; and $1 from the river to Denver. In addition to such definite amounts some roads paid 10 percent on their receipts for the passage, making a total commission of $4 or $5 or more in some cases for the sale of a single ticket.[[45]] “In cases of commissions of only $1 for short distances there may be little or no inducement for the agent to divide with the passenger, but in cases of cumulative commissions for long distances the temptation to divide is stronger, and the probability of abuse is so great that the impropriety of putting the opportunity before the agent is manifest. It is not unusual for a single company to pay a sum of $100,000 or even more in a year, and the aggregate entailed reaches millions of dollars. This money is illegitimately spent; it is paid in excess of salaries to agents for the purpose of taking business from competitors, and when competitors all do it, it is difficult to see how any benefit can accrue from it to any company.”[[46]]
In 1890 the Commission reported that scalpers were supported by the railroads. They found 15 scalping offices in Chicago, 9 in Cincinnati, 13 in New York, 7 in Kansas City, etc. In 1895 they found that scalping “was steadily enlarging in scope and volume.”[[47]] In 1897 the “vicious practice” was still in full swing, though New York, New Jersey, and eight other States had passed stringent laws against it.[[48]] But it has now been largely reduced, though by no means abolished, and the diminution has come, not because the law acquired sufficient vigor to get itself enforced, but because the railroad presidents combined to stop the practice, which was recognized to be injurious to railroad interests.[[49]]
In respect to other forms of discrimination between passengers the Commission ordered that rates for groups or parties must not be lower than the regular fare for one passenger multiplied by the number of persons in the party,[[50]] and that although separate cars might be provided for colored persons, they must have equal accommodations with white people who pay the same fare.[[51]]