The St. Louis Preserving Company at Granite City, Ill., also gets large rebates in the form of divisions of rates with a toy railroad the company controls.[[258]]
Rate divisions have also been made by the railroads with boat lines[[259]] belonging to or in league with large shippers, with “tap roads” belonging to lumber companies,[[260]] etc., and this method of securing a practical rebate is being rapidly adopted by large concerns all over the country. A division of rates with a private line is not necessarily unfair but if there is a desire to give an unfair advantage, this system affords a cloak for it.
CHAPTER XXVI.
PRIVATE-CAR ABUSES.
Some of the worst discriminations now prevailing are connected with the private-car system.
The private car originated in the need for special equipment for particular purposes. It was clear that the transportation of live-stock, fruit, vegetables, and other perishable products might be facilitated by the use of special cars. When the inventors of improved stock cars and refrigerator cars went to the railroad managers, they were informed that the railroads had no money with which to make experiments in such lines, but if cars that would do the work proposed were constructed the railroads would be glad to hire them for a fair rental. So the cars were built by private companies and used by the railroads on a mileage basis. The fact that such special cars are needed in different parts of the country at different seasons, their use in any large numbers being confined on some roads to a few weeks in each year,[[261]] makes the local ownership of such cars by the several railroads, less convenient and economical than their ownership by car companies able to distribute the cars to advantage throughout the country so that each section may have the cars it needs, at the proper time, without unnecessary duplications of equipment.[[262]]
To move the Georgia peach crop the Southern Railway would need about 3,000 refrigerator cars. The shipments occupy about six weeks, beginning about the middle of June. The Pere Marquette Railroad moves about 2,000 carloads of fruit under refrigeration from Michigan points mostly in September and October, and would need about 1,000 cars for the work. These and other roads might well hesitate to invest the sums required to provide expensive equipment when it would have to be idle the greater part of the year; but this is easily done by a car company whose cars can be employed in the orange trade from California and Florida in the winter, in the Georgia peach traffic in June and July, and in the Michigan and New York fruit business during the fall.[[263]]
The railroads began long ago[[264]] and still continue paying mileage rates for the use of stock cars, tank cars, and refrigerator cars, the three chief kinds of private cars. This would be all right if the mileage rate were fair, but serious injustice results when the mileage is so great as to give the owners of the cars a practical rebate of large amount on all their shipments in such cars, as is the case with all three classes of cars above named,[[265]] and especially with the refrigerator cars of the Armour Car-Lines which are operated in the interest of the Beef Trust. The railroads allowed at first a mileage rate of ¾ of a cent a mile when the car was loaded. After a little the car companies got the roads to pay the mileage on the cars both ways, loaded or empty. The mileage rate on refrigerator cars was raised from ¾ of a cent to 1 cent over most of the territory west of Chicago and St. Louis, and the 1 cent rate also applies to the movement of refrigerator cars between Chicago and New England via Montreal.[[266]] From Chicago to New York over the Vanderbilt lines is about 1,000 miles; so the mileage on a refrigerator car amounts to $7.50 each way, or $15 for the trip.
The car companies have secured various concessions from the railroads besides the payment of mileage loaded or empty. They require the railroads to run their cars at high speed in special trains. The average run of the freight cars owned by the leading railroads is 25 miles a day. The average run of the private tank cars (Standard Oil mostly) is 66 miles, private stock cars 72 miles, refrigerator cars 108 miles, and refrigerators operated in the beef trade 135 miles per day.[[267]]
There is evidence that Armour often makes his cars run 300 miles and even 400 miles a day. He compels the railroads to push his cars day and night whether loaded or empty. Most freight cars are loaded both going and coming, which greatly lowers the cost of transportation, but Armour requires the railroads to rush his cars back empty at full speed without waiting for any return load. Ordinary freight trains go on a side-track and wait till the Armour cars go by. The railroads sometimes even side-track passenger trains in order that a meat train may be rushed by to make a little more profit for the Beef Trust. Armour’s system of checking his cars by means of his agents stationed at icing points along the principal roads keeps his central office constantly informed of the whereabouts of every car. If a train has lost time, if an Armour car is side-tracked anywhere the Armour office asks over the wires: “What’s the matter?” And if a railroad agent does not do as Armour bids he may lose his position as a consequence. More than one railroad man, high in authority, has been dismissed because he did not obey the Beef Trust. If offences accumulate, some day the railroad finds that Armour has diverted his entire business to a rival line which will hurry his cars and otherwise obey his orders. What chance has the small shipper against such a system? He may own private cars, but he cannot make them run, nor can he obtain exclusive contracts such as Armour has on many roads, nor make the railroads collect excessive icing charges for him, nor hold up the roads in any other way; on the contrary, they are more likely to hold him up.
The result of high speed and the mileage rate loaded or empty, is that refrigerator cars earn for their owners an average of $25 a month, and cars engaged in the export meat trade from Chicago frequently get $30 and upward per month from the railroads in mileage. This is enough to pay the whole cost of the refrigerator car in 3 years, and its maintenance in the meantime.[[268]] Private stock cars in some cases net their owners 50 percent a year on the invested capital, repaying the cost of the cars in 2 years, above operating expenses.[[269]] The average mileage of through stock trains on the principal lines exceeds 100 miles a day, yielding to the owner of such cars over 60 cents a day. This is three times what the railroads pay each other for railroad cars in use on a road other than the owning railway. A railroad receives 20 cents a day for each day that one of its own freight cars is on another road, while the same railroad pays the car companies 60 cents a day for the use of a stock car, and $1 a day for the use of an Armour refrigerator car in the dressed-beef business.[[270]] Yet a well built modern freight car costs more than the average private stock car, and nearly as much, many of them quite as much, as the average refrigerator car.[[271]]