The complaints made to the Interstate Commission in the last few years[[176]] and the facts brought out in the investigations of the Interstate Commission from March, 1903, to the present time, and in the Hearings of the Senate Committee, 1905, abundantly confirm the opinions of these witnesses.
The Elkins Bill became law in February, 1903. In December of the same year the Interstate Commerce Commission reported that they believed the payment of rebates was largely discontinued, but that pressure upon the companies to maintain published rates had “begotten a new crop of expedients for the purpose of favoring particular shippers.”[[177]] Private-car abuses and terminal-railway abuses especially have “grown up much more intensely and to an aggravated degree since the Elkins Act than ever before.”[[178]] In 1902, in consequence of the exposure of wholesale rebates in the dressed-meat traffic, etc., temporary injunctions were issued against 14 leading railroads of the West, and while the matter was still before the court the Elkins Bill was passed, settling the injunction question in favor of the Commission. The railroads, convinced that rebates were dangerous, for the time at least, turned their attention to methods of discrimination not so subject to injunction or other judicial disorder. To these they have given their main allegiance, though they have by no means abandoned the rebate.
CHAPTER XVIII.
THE WISCONSIN REVELATIONS.
In 1903, as stated in a previous chapter, Governor La Follette began an investigation of the railroads in Wisconsin, in relation to illegal deductions from the gross earnings returned by them as a basis for taxation. The investigation covered the period from 1897 to 1903, and it was found that $10,500,000 of illegal tax deductions had been made in that time, about $7,000,000 of which was in the form of unlawful rebates and discriminations. Every railroad of any importance in the State had paid rebates every year in large amounts both on passenger traffic and freight business. Here is a table of the rebates paid in violation of the Interstate Commerce Act and the Elkins Law by the leading railways in Wisconsin, so far as brought to light by the investigation:[[179]]
| Illegal Rebates Paid to Shippers in Wisconsin, 1897–1903. | ||
| Freight. | Passenger. | |
|---|---|---|
| Chicago, Milwaukee & St. Paul | $1,346,237. | $170,968. |
| Chicago & Northwestern | 3,023,810. | 614,361. |
| Chicago, St. Paul, Minneapolis & Omaha | 515,323. | 64,559. |
| Wisconsin Central | 244,492. | 82,475. |
| “Soo Line” | 464,041. | 39,807. |
| Burlington | 366,105. | |
| Other Railroads | 158,677. | 489. |
| $6,118,689. | $972,661. | |
These figures represent only part of the rebates really paid, and do not touch in any way the vast amount of favoritism which does not take the rebate form nor appear in any cash item.
Part of the Wisconsin rebates were paid on State business, but far the larger part was on interstate traffic. The Elkins Law, instead of putting an end to the payment of rebates, as so many railroad men have declared, had no effect whatever, apparently, on the volume of rebates paid. Here is the monthly record of rebates paid in 1903 by one of the principal railroads operating in Wisconsin:
| January, 1903 | $37,000 |
| February | 57,000 |
| March | 47,000 |
| April | 36,000 |
| May | 25,000 |
| June | 13,000 |
| July | 101,000 |
| August | 32,000 |
| September | 46,000 |
| October | 9,000 |
| November | 666 |
| December | 2,032 |
The Elkins Act went into effect February 19, 1903; yet the rebates in February and March were larger than in January; and the rebates for July were nearly three times the January figure. It is clear, however, that when the light of publicity was turned on by the investigation, which began September 29, 1903, the rebate payments that could be checked up on the books dropped from $46,000 in September to $9,000 in October, $666 in November, and $2,032 in December. Instead of paying cash rebates the railroads began to issue a great many “midnight tariffs,” that is, rate schedules printed on purpose to give favored shippers advantages over others and then revoked or superseded as soon as the purpose has been accomplished, so that the midnight tariff has, in a different way, done exactly what is done by the payment of the cash rebate.
The impotency of the Elkins Law is still further shown by the fact that the total rebates paid by the railroads in 1903 were greater than the rebates of 1902. The Northwestern road, for example, jumped from $212,075 rebates in 1902, before the Elkins Law, to $410,476 in 1903, mostly after the Elkins Act took effect.