Western roads give saw-mills operating on their lines and having logging roads an allowance of 2 to 4 cents per hundred lbs. on the through rates. Roads east of the Mississippi decline to make any such allowance, so that the Western mills enjoy an advantage of 60 cents to $1.80 per 1000 feet in the through freight rates.[[211]]
CHAPTER XXI.
MIDNIGHT TARIFFS AND ELEVATOR FEES.
“Midnight tariffs” or “flying tariffs,” changed while you wait,[[212]] are used to give rebates and preferences all wool and a yard wide, strictly gilt-edged and in accord with the statutes made and provided for the publication and observance of schedule rates.
When a big shipper gets ready to send a large amount of freight the railroads will suddenly make lower rates, publish them just in time to fulfil the law, and the moment the shipment is made the lower rates are withdrawn. For example a miller contracted for 17,000 bags of flour. At 400 to the car, 17,000 bags will make quite a string of freight. He went to the railroad folks and got a cut rate of 5 cents a hundred on that amount. They slapped in one of these “midnight tariffs,” published it, and gave notice of withdrawal just as soon as the contract was filled.[[213]]
In the spring of 1905, a grain merchant who owned large elevators, accumulated about 20,000,000 bushels of corn. When he got ready to ship, the railroads reduced the tariff 2 cents per bushel, so that he could ship at a low rate.[[214]]
In some cases discriminations are the result of intentional mistakes in printing rate schedules. A tariff is printed with a 3, perhaps, in place of an 8, so that a rate of 38 appears as 33, or a rate of 82 as 32. After a few copies have been printed and sent to favored shippers the error is conveniently discovered and the schedule is corrected for all ordinary shippers.
The payment of elevator or commission fees continues to be a means of discrimination beyond the reach of the law as it stands to-day. Some lines which have buyers on their roads who own elevators at terminal points allow an elevator charge or commission to their buyers, usually 1¼ cents per hundred, which constitutes practically a rebate or preference not accorded to other shippers. Other lines which have no elevators pay a rebate to their buyers equal to the elevator charge.[[215]]
A judgment has been obtained for $5,600 damages in favor of the Kellogg Elevator against the Western Elevator Association and the four trunk lines—the New York Central, the Erie, the Lackawanna, and the Lehigh—on the ground of conspiracy to ruin the business of the Kellogg Elevator by discrimination in freight rates in favor of the elevators in the Combine. The charge was that the railroads contracted to pay the elevator trust ½ cent per bushel for all grain shipped on their rails from Buffalo, whether it was elevated from lake vessels by the Elevator Trust or not. So, in effect, the Elevator Trust was given a rate of ½ cent per bushel cheaper than the Kelloggs could get, and also that premium on the Kelloggs’ business. The verdict of $5,600 was for three weeks’ operation of the conspiracy. The Kelloggs claim that the annual damage to them from discriminating rates amounts to $50,000 or $75,000. The case is now pending on appeal to the Supreme Court of New York.
In the investigation now going on in Kansas City (July, 1905) it appears that some elevator men get double rebates, while others get no allowances at all from certain roads. E. O. Moffat said he got 1¼ cents a hundred from the Union Pacific, Rock Island, Burlington, Santa Fe, Alton, and Missouri Pacific, but got nothing from the Milwaukee. That railway he believed paid an allowance to the Simonds-Shields Company but refused to allow him anything, though he is a heavy shipper.[[216]]
M. H. McNeill, representing the Chicago and Great Western, admitted that the custom was a senseless one and a wrong one, but said it had been started at Omaha and had to be adopted at Kansas City. E. P. Shields of the Simonds-Shields Company was asked by Commissioner Cockrell: “When such allowances are made are not opportunities for discrimination and the granting of rebates opened up?”