The intricacies of classification afford boundless opportunity for favoritism. Classification is always more or less arbitrary by necessity, and is frequently more arbitrary than necessary. One industry or wholesale trade is often charged two or three times as much as another for the same service. The New York Railroad Commission found the railroads charging twice as much on dry goods as on coffee or sugar and protested against the rule as utterly indefensible, but the railroads refused to comply with the request for a change. Iron and coal cost less to transport than grain, yet the ton-mile rates on iron and coal from Pittsburg have been at times for years together from 2 to 5 times the rates on grain from New York to Chicago.
In 1890 the Interstate Commerce Commission ordered the railroads to transfer soap from the 5th to the 6th class. In 1900 the railroads changed it back to 5th class in carload lots, and from 4th to 3d class in less-than-carload lots, but if shipped in mixed lots with dressed beef it goes as 5th class. So that Armour, Swift & Co., of the Beef Trust, have been able to ship soap in less-than-carload lots at much lower rates than their competitors.[[231]] The Commission ordered the roads to cease their excessive discrimination on less than carload lots, etc. The roads refused to obey. The Circuit Court has sustained the order of the Commission.
Under the Illinois Central tariffs at one time it made a difference of $40 a car if a man shipped a peck of potatoes in a car of 16,000 lbs. of strawberries. If there were no potatoes in the car so that it was not a mixed load, it cost $40 more than if there were a peck of potatoes in with the strawberries.[[232]]
The classification of castor oil on the Lake routes affords a curious example of the freaks of tariff classing. Vegetable castor oil is 5th class, or 16½ cents a hundred, from Cleveland to Chicago, while mineral castor oil takes a rate of 25 cents a hundred.[[233]]
The law has not yet definitely touched the favoring of large shippers by excessive difference in the rates on carloads and less than carloads. There is not more than 5 percent difference in the cost of transporting goods in carload lots and less-than-carload lots, and yet the rates vary from 30 to 80 percent, as a rule, and sometimes 150 percent.[[234]]
In a famous case three years ago, involving the rates on 400 commodities from the Middle West to the Pacific Coast, the Commission held that a differential between carloads and less than carloads, which is at once more than 50 cents per hundred and more than 50 percent of the carload rate, is prima facie excessive, and puts the railroad on the defensive to show special reason why so great a difference should be made.[[235]] The difference between the carload rates and less-than-carload rates, involved in this complaint, was held to be excessive in many cases.
On the Yazoo and Mississippi Railroad and the Illinois Central, 1 horse can go 667 miles for $36 and 4 horses pay $99, while 25 horses can take the trip together for $100. This encourages social habits. The first horse is billed at 2,000 lbs. no matter what he really weighs; the second is billed at 1,500 lbs.; and each additional animal counts 1,000 lbs. The rate is double first-class, or $1.80 per hundred, which the Commission says is twice the fair rate.[[236]]
In a recent case it appeared that the Texas and Pacific was charging 42½ cents per hundred lbs. on cattle from Fort Worth to New Orleans, and $15 a car additional on a shipment of less than ten carloads. This addition of $15 a car was held unreasonable.[[237]] For 17 years the road made a much lower rate—34 to 40 cents per hundred lbs., without any $15 a car additional. In March, 1903, the rate was raised to 42½ cents, and in October of the same year the additional charge of $15 a car was imposed. The distance is 500 miles. The distance from Fort Worth to Kansas City is about the same, while to St. Louis it is 700 miles. The rate on cattle from Fort Worth to Kansas City is 36½ cents, and to St. Louis 42½ cents, without any $15 addition. The Commission held the $15 charge to be an unjust discrimination between the large and small shippers, and against New Orleans in favor of St. Louis.
Discriminative rates are made oftentimes without any intent to prefer one shipper to another, but simply to make things move. For example, a business man of Greensboro, N. C., wanted to build a smoke-stack of New Jersey brick, but the rates from New Jersey were too high. “A quotation was made me by the stack builder, whose office is in New York, and I remarked to him, ‘That price is prohibitive; I cannot pay that price for that stack.’ He said, ‘That is the best I can do; but if you will tell me what you can afford to pay for that stack in competition with home-burned brick, I will see what I can do with the railroad people.’ He wanted to know how soon it would be necessary for him to give me a reply, and I said, ‘I want to know within ten days.’ He said, ‘All right; I will take it up with the railroad people.’ His quotation included the delivery of the brick and the erection of the stack at my plant. It would require something like 50 carloads of brick to build that stack. Within a week he had his price revised, and gave me a satisfactory quotation and took my contract for the stack.”[[238]]
The railroads, having regard to what the traffic would bear, gave the builder a special rate in order that the New Jersey brick might move over their lines to North Carolina.