We have seen in Chapter III how President Mosher of the Northern Grain Company fought La Follette’s railroad reforms because of his deep sympathy with, and appreciation of, the rights of railroads that were paying his company $30,000 a year in secret rebates. Another man who bitterly opposed La Follette, denouncing him as “an inciter,” a demagogue, etc., was an officer of one of the refrigerator companies that carries beer for a big Milwaukee brewery. At the very time this official condemned La Follette, his company was receiving from one to three thousand dollars a month in rebates from a single one of the Wisconsin railways, in addition to the mileage profits on the cars. No wonder the brewers and their allies opposed all progressive railroad legislation when they were getting $73,240 a year in mileage rentals, and many thousands more in secret rebates or commissions from the Chicago, Milwaukee, and St. Paul alone. These men were strongly of opinion that there was law enough already.

An investigation in Minnesota a little before that of Wisconsin showed precisely the same sort of facts, namely, enormous amounts in rebates were paid by the Great Northern, the Northern Pacific, and other Minnesota railroads. But in the Minnesota cases, to forestall further agitation and publicity, most of the railroads paid the additional taxes demanded by the State.

The railroads do not by any means confine their rebate operations to the States in which their lines are located. The case of the Camden Iron Works, recently before the Interstate Commerce Commission, shows that a railroad will reach half across the continent with a rebate in its hand to grasp important shipments. In this case the Northern Pacific gave R. D. Wood & Co. of Philadelphia, the owners of the Iron Works, a rebate of 5 cents a hundred on 1,500 tons of iron pipe. The Great Northern, the Canadian Pacific, the Delaware & Hudson, and other roads had agents on the spot trying to get the business away from the Pennsylvania, which would naturally have taken the shipment, but the 5 cent rebate carried the day and the iron went via the B. & O., the Great Lakes, and the Northern Pacific. The rebate was paid by a check for $1,500, and no one but the traffic managers knew of the transaction, which would probably never have come out except for the complaint of a traffic agent on the Pennsylvania, who had offered a rebate of 1 cent a hundred but did not get the business and was therefore blamed by his superiors.

CHAPTER XIX.
THE COLORADO FUEL REBATES AND OTHER CASES.

In the Colorado Fuel and Iron Case, investigated by the Commission in 1904 and 1905, it was shown that the Santa Fe has persistently violated the Interstate Act, the Elkins Act, and the injunctions issued by the United States Circuit Court. The Santa Fe tariff filed with the Interstate Commission May 24, 1903, and in effect till November 27, 1904, made the rate on coal from the Trinidad district, Colorado, to Deming, N. M., $4.05 a ton; but Mr. Biddle, General Traffic Manager of the Santa Fe, testified that during all this time $1.15 of the $4.05 was always paid back by the railroad to the Colorado Fuel and Iron Company, a concern in which the Standard Oil people are largely interested. Similar favors were shown the Colorado Company in respect to shipments from its mines at Gallup, N. M., giving that company a decided advantage over competitors, who were obliged to pay the full rate.[[180]]

It made a difference, also, who was to get the coal. The Santa Fe carried Colorado Fuel and Iron Company coal to the El Paso and Southwestern for $2.90 a ton, while charging $3.45 a ton for hauling the same coal from the same mine to the same point, Deming, when the billing was to the Southern Pacific. The El Paso could get coal on a rate of $2.90, while the Southern Pacific must pay $3.45 and the published tariff rate was $4.05. Anybody on the line of the El Paso who stood in with the management could get the $2.90 rate, while his competitors might be paying $4.05.

Mr. Biddle testified as follows, December, 1904, in answer to the questions of Mr. Field: “I say the freight rate we got from the Southern Pacific was $3.45 at the time we were accepting $2.90 on coal destined to the El Paso and Southwestern.”

“Mr. Field. That is to say, at that time you were charging the Southern Pacific Railroad Company $3.45 per ton for transporting coal (to Deming), when you were charging the El Paso and Southwestern Railroad Company only $2.90?

“Mr. Biddle. Yes, sir.

“Mr. Field. And all upon a published tariff which showed a rate of $4 to Deming?