“Neither way.”
But the railroad officials in this case refused to commit oil-perjury. Asked what mileage they paid the Combine they replied: “Three-quarters of a cent a mile.”
When Rice asked what the railroads would charge him for bringing back his empty cars if he shipped in tanks, he was told he would have to pay 1½ cents or more a mile. He found that if he tried to sell his oil in California it would cost him $95 to get the empty tank car back, while the railroads paid the Standard for the privilege of hauling its empties back. Rice saw that from the South he could get return loads of turpentine, but the railroads absolutely refused to give him rates.[[97]]
Besides all this the Standard was accorded the privilege of systematic underbilling. According to the testimony before the Commission in 1898 by the Boston & Albany agent in East Boston, the centre of the Standard Oil business in New England, the Combine’s tank cars, which usually weigh from 35,000 to 50,000 lbs., were ordinarily billed at 24,000 lbs. Out of 14 cars sent over another road from East Boston to Newport, R. I., at least half were billed and paid for on the basis of 24,000 lbs. to the car, although their average weight was shown to be 48,550 lbs. per car. It was claimed that these underbillings were clerical errors. In considering the motives and reliability of such a claim we must not forget the curious habit shown by these clerical errors of piling up in great bunches in the Standard Oil business, and the still more curious fact that all the errors are in favor of the Trust—none against it. Long before the Commission had found that the railroads leading from the oil fields were in the habit of “blind billing” the Standard cars at 20,000 lbs., though the actual weight was frequently 30,000, 40,000, 44,000 or more.[[98]] Rice complained of this to the Commission in July, 1887. Immediately all the old numbers on the 3000 tank cars of the Oil Trust were painted out and new numbers painted on, so that the cars mentioned in the railroad accounts could no longer be identified with the cars on the tracks.[[99]] The Standard has some very oily ways, and knows how to use a pot of paint and a brush as well as a rebate.
The Standard desired to fix the rates on oil to New England, the South, and the West, and as usual the railroads let it have its way. The result was a practice of adding the Boston rate to the local rate on shipments of oil into New England, which puts the independent refiners at a great disadvantage. The rate on corn from Cleveland to Boston is 15 cents per hundred lbs., and to New Haven the same, but the rate on petroleum from Cleveland to Boston is 24 cents, and to New Haven it is the Boston rate, 24 cents, plus the local rate, or a total of 36 cents from Cleveland to New Haven. Now the Standard Oil has got large warehouses in East Boston, and they bring their oil by boat and store it there, and then they get the freight rates simply from Boston down to the Connecticut point, whereas the Western refiner who has no storehouse has to pay first the Boston rate, and then this local rate also to the other point, even though the oil may go direct, so that the rates are practically prohibitive to the Western refiners.[[100]]
To shut out the oil fields and independent refineries of Colorado and Wyoming, the Standard resorted to terrific discrimination in rates. The Chicago and Northwestern Road would bring a carload of cattle from Wyoming to Chicago for $105, but for a car of 75 barrels of oil the freight was lifted to $348. The rates from the Western fields to San Francisco were also put very high, and the Standard built great storehouses on the Pacific Coast, which it fills from the Eastern fields, the freight rates from the East being suddenly lowered when it wishes to refill the said storehouses, and put back again as soon as they are full. The people of California are compelled to buy Eastern oil for the profit of the Trust, instead of buying Colorado oil, because the freight on the latter is prohibitive.
Aside from these sudden fainting spells of the oil tariff at convenient seasons for the Standard, the ordinary arrangements showed thoughtful care for its comfort. The regular rate on oil from the Colorado oil wells to the Pacific Coast was made 96 cents per hundred, while the rate from Chicago through Colorado is only 78½ cents per hundred.[[101]]
The Chicago pork-packers generally had things their own way in this period, but apparently not always. In 1890 the Commission decided that the railroads were discriminating against the Chicago packers by lower rates from the Missouri River on hog products than on live hogs.[[102]] Even then, however, they were receiving rebates from the railroads which made questions of tariff rates comparatively insignificant.
In 1891 the Federal Grand Jury indicted Swift & Co., the Chicago packers, for having received $5,000 a month in rebates from one road alone, the Nickel Plate. Compared to the train loads of their cars passing east and west on other lines, their traffic on the Nickel Plate was light.
In his testimony to the Senate Committee this spring, Mr. Davis said: “A few years ago one of the Chicago packers was a director on a Western railroad. He was a large receiver of live-stock from Kansas City, upon which the freight rate was $54 per car. A rebate of $25 was paid to the packer at the time of shipment, and it was the custom to file claims for the remaining $29, which were allowed on the grounds of some imaginary loss or damage to the stock in transit. The same party paid rebates amounting to from $30,000 to $50,000 a month for every month in the year. On putting down on a piece of paper the amount of $10,000, and after placing this under the eyes of a superior officer, he would leave and subsequently look for that amount in currency by express, and would then proceed to divide it among certain favored shippers.”[[103]]