“Private cars,” owned by the railroads but chartered for private use, were the subject of discrimination of another kind. For example, a commercial salesman travelled with his assistant over the Northern Pacific in a private car stocked with samples. For the first trip he paid 15 round-trip fares between St. Paul and Portland, but for subsequent trips the road charged 15 local fares from point to point where stoppages were made. As theatrical and other parties in private cars were usually carried for 15 round-trip fares it was alleged to be unfair to charge the drummer local rates.[[65]]
Terminal charges for delivery at certain places were made a means of discrimination.[[66]] Free cartage for some shippers and not for others,[[67]] or for one town and not for another, gave a decided advantage to the favored shippers.
To get the business of B., a Pittsburg dealer in beer, the B. & O., with the approval of Wight, one of its general officers, gave B. 3½ cents per hundred for hauling his own beer from the station, while K., another beer dealer there, received no such concession, but paid the same freight rates and hauled his beer at his own expense. Wight was indicted and convicted before the district court for violation of Section 2 of the Interstate Act, and the United States Supreme Court sustained the decision in 167 U. S. 512, May, 1897, holding that the cartage allowance in one case and not in the other was a discrimination under the 2d section of the Commerce Act.
In Grand Rapids, Michigan, free cartage had been in vogue for 25 years, but in Ionia, near by, no free cartage was afforded by the railroads, although the station was nearer the centre or main delivery area of the city than in Grand Rapids. This had the effect of a discrimination against the merchants of Ionia amounting to about 2 cents per hundred lbs.[[68]]
In June, 1889, the Commission asked most of the leading roads, 585 in number, for information about free cartage delivery. From the answers it appears “that 65 railroads allowed free cartage delivery or equalizing cartage allowances, and 389 railroads do neither; 200 companies only switch cars over to mills and manufacturers. No company furnishes free cartage delivery at all stations, but as a rule, only at a few stations. The estimated cost of free cartage delivery will average about 2½ cents per hundred pounds. Where an allowance is made for switching or for equalizing distances from shippers, the average cost is about $2 per car or $2.50.”[[69]]
Denial of the stoppage-in-transit privilege at one locality while allowing it to others is unlawful.[[70]] Differences in the time allowed for unloading may amount to a substantial preference. At Philadelphia 96 hours was allowed for unloading, against 72 hours at interior points, for coal, coke, or iron, and 48 hours for other goods. With demurrage charges of $1 for each day’s delay in unloading beyond the allotted time, the difference between 48 and 96 hours would mean $2 a car.[[71]]
Free storage is another method of favoritism, sometimes used systematically and extensively, as described by the Commission. “A shipper sends a carload of freight to a specific destination consigned to his order by arrangement with the carrier. The freight is kept in the car or freight house or some warehouse which the carrier controls, and on orders of the shipper or his agent issued from time to time the freight is delivered in small lots to designated persons. These persons are the actual consignees, and the shipper is enabled by this means to avoid paying the higher less-than-carload rate and to reap other advantages through this privilege of storage. Such special facilities as storage, handling, cartage, distribution, and reshipment of less quantities, either without charge or at extremely low compensation for the character of the service, amounted substantially to providing a shipper with branch business houses.”[[72]]
Overbilling and underbilling have been found to be very convenient substitutes for the rebate. A bill of lading may acknowledge the receipt of 70 barrels of flour; 65 only are shipped, and the railway pays damages for the loss of the 5 non-existent barrels. On the other hand railroads have been known to suggest to millers that they ship flour on the generous plan of shipping 200 barrels and billing 125.[[73]] Some shippers have been allowed to ship only 4 boxes of peaches to the hundred lbs., while others were permitted to ship 6 boxes to the hundred lbs. “That is the billing. Sometimes peaches are billed 4 boxes to the hundred lbs. to one point, and 6 boxes to the hundred lbs. to a point 350 miles farther on.”[[74]] At another time the cashier of an important firm is made a nominal agent for the railway company, and under the name of commission to him an enormous rebate is allowed for all the business his employers send over the line. Or again, the railway company purchases from a favored trader its supplies of the goods in which he deals, at a fancy price.
The “expense bill system” has proved to be an instrument of preference and fraud. On presentation of an “expense bill” showing payment for shipments into Kansas City the railroads would allow reshipment of an equal weight from Kansas City to Chicago at the balance of the through rate from the point of origin to Chicago.[[75]] This gave grain from the West an advantage over grain grown near Kansas City. When the rate from Kansas City to Chicago was 20 cents on wheat and 17 cents on corn the grain carried on the balance of the through rate under the expense bill system was carried 8 to 10 cents less than grain grown in Missouri and Iowa.[[76]]
Not satisfied with the discounts obtained on actual expense bills, shippers altered bills and forged new ones to enlarge their traffic at the cut rates. In this way “expense bills showing a high balance were constantly substituted for those showing a low balance.”[[77]]