The condition of things in 1890 is shown by the reported statement of a Chicago railroad manager quoted by the Commission. “The situation in the West is so bad that it could hardly be worse. Rates are absolutely demoralized, and neither shippers, passengers, railways, nor the public in general make anything by this state of affairs. Take passenger rates for instance; they are very low; but who benefits by the reduction? No one but the scalpers.... In freight matters the case is just the same. Certain shippers are allowed heavy rebates, while others are made to pay full rates.... The management is dishonest on all sides, and there is not a road in the country that can be accused of living up to the Interstate Law. Of course when some poor devil comes along and wants a pass to save him from starvation, he has several clauses of the Interstate Act read to him; but when a rich shipper wants a pass, why, he gets it at once.”[[57]]
Complaints and investigations from time to time in subsequent years showed the continuance of these conditions. For one concern a large number of cars of corn were carried from Kansas City to St. Louis at 6 cents per hundred lbs. while the tariff was 15 cents.[[58]] In the traffic to Chicago one firm shipped all the grain over one road, and another firm “had the rate” on another line. It was clear that these shippers had advantages that enabled them to keep other shippers out of the field.[[59]]
A wholesale grocery house getting 25 percent rebate on its shipments established branches in various cities. Through a disagreement with one of the railroads that thought it was not getting its share of the business, the rebate enjoyed by one of the branches was withdrawn, and the branch in that city went out of business. A leading dry-goods firm declared that so long as it secured a rebate of 25 percent it had no objection to existing methods of rate-making.[[60]]
The International Coal Company declared, in a suit against the Pennsylvania Railroad for damages, that it was driven out of business by discrimination, its rival receiving rebates of 20 cents per ton in 1898–9 and 10 cents per ton in 1899–1900.
The railroads show a disposition to back each other in disregarding the law. Mr. McCabe, traffic manager for the Pennsylvania lines west of Pittsburg, said the Pennsylvania system would stand by any rate made by its connecting lines.[[61]]
CHAPTER IX.
SUBSTITUTES FOR REBATES.
Numerous substitutes for the direct rebate were used. In some cases $10 a car was paid on shipments of flour from the Northwest under pretence of paying for the cost of loading the car above the minimum weight.[[62]] Railroads paid 50 cents for the loading of each private stock car, and ¾ of a cent for every mile the car was hauled, loaded or empty. Yardage was also paid to the car-line for keeping the cattle in its charge in its own yards, at the rate of 3½ cents per hundred lbs. for all cattle hauled to its yards. “The amount of these rebates,” said the Commission, “more than pays the entire cost of the improved stock cars within 2 years, besides covering operating expenses.”[[63]]
Twenty-six railroad companies operating in the territory extending in different directions from Chicago, and engaged in the business in which discriminations by allowances of car-mileage were supposed to exist, were summoned to make a showing of the allowances paid by each of them for car-mileage for the different classes of cars furnished by shippers, car companies, and individuals, or connecting lines. A single railroad company paid car-mileage to 65 different companies or firms owning cars, of which number 54 were shippers and the rest fast freights. The Commission found that the mileage paid on private cars yielded a profit in many cases of 25 percent, 50 percent, and even more.
“The rates allowed for car-mileage were shown to be as follows: For ordinary freight cars, a uniform rate of ¾ of a cent a mile; for Pullman palace cars, 3 cents a mile; for Pullman tourist sleepers, 1 cent a mile; for ordinary passenger cars exchanged with other companies, 3 cents a mile; for baggage, mail, and express cars exchanged with other companies, 1½ cents a mile by some roads, and 3 cents a mile by others; for refrigerator cars used for carrying dressed beef, 1 cent a mile in some cases, and in other cases ¾ of a cent a mile; for furniture cars, oil-tank cars, palace live-stock cars, and other cars owned by private individuals and companies, ¾ of a cent a mile. Some companies pay mileage on tank cars both loaded and empty, and some only when loaded. For palace horse-cars no mileage is allowed on some roads, shippers in such cars paying for the car.
“The cost of the investment in cars, and the amount of mileage allowed for their use, show that the investment is very profitable. Refrigerator cars cost from $900 to $1000; private cattle-cars cost about $650; oil-tank cars about $610; cars used for the transportation of live hogs about $500; ordinary freight cars from $450 to $500. Repairs on the cars are made by the railroad company in whose use they are when repairs are required. The life of a box car averages 15 years, and of a refrigerator car 8 years.”[[64]]