The Armours in their turn made “allowances” to favored shippers. Streychmans had to make up “allowance statements” “showing the number of cars shipped by the shippers and giving him a rate of 60 percent of the tariff rate.” A “rebate of $15 to $25 a car” was paid back. The last statement Mr. Streychmans put in typewriting before leaving the Armour service in California was for a rebate of 45 percent to Alden Anderson, Lieutenant-Governor of California. The witness saw on the office file statements of rebates to the Southern California Fruit Exchange of $10 a car on 1904 shipments of oranges, etc. A number of shippers in California got rebates amounting to 45 to 50 percent of the icing charges. They paid the actual cost of icing plus a bonus of $10 to Chicago, $15 to New York, and $20 to Boston. The cost and bonus together were ordinarily less than half the tariff charges. For instance, the Armour ice tariff to Boston from Southern California was $120, the cost $38, and the bonus $20,—$58 total, or a little less than half the tariff. The full tariff rates were collected and the difference paid back. Shippers not in on the secret-rebate arrangement paid the full rates and got no discount.
From Portland, Ore., to Chicago the Armour icing charge was $45, because the Northern Pacific cars are there to compete; but further south, at Medford, Ore., where there is only the Southern Pacific, in league with the Armours, the icing charge to Chicago is $75.
When possible the car-line runs the cars without ice, sometimes for long distances, but charges the shippers for icing just as if it had been done.
Some of the railroads pay a bonus for the Armour business, the St. Paul, the Northwestern, and the Grand Trunk, for example; in other words, the Armour lines not only charge extortionate rates for icing and get a mileage on their cars loaded or empty, but in some cases sell their tonnage to the railroads. In California, however, the witness believes there is a traffic commission to settle questions of the division of traffic between the Santa Fe cars and the Armour cars on the Southern Pacific.
Mr. Streychmans as a confidential clerk was supplied with a secret code for use in his correspondence. The inside title-page says: “Transportation Department, General Offices, 205 La Salle Street, Chicago, Ill. Cipher code No. 100; for exclusive use between themselves and H. Streychmans. July 1, 1902. Armour Printing Works, Chicago.”[[291]]
Some of the cipher words and their meanings are as follows:—
Launching—Can make rebate.
Laundry—Force payment higher rebates.
Laura—Handle rebate matters very carefully.
Laurus—Pay rebates.