One of these Wisconsin concerns, the Northern Grain Company, received from the Northwestern Railroad alone $151,447 rebates in five years, or over $30,000 a year, partly as refunds on the passenger mileage books of their travelling men and partly as cash rebates on their business. The president of the Northern Grain Company is O. W. Mosher, who was a State senator in 1901 and 1903 and fought the railroad reforms proposed by Governor La Follette. He vigorously defended “individual liberty” and the right of the railroads to “control their own property,” and it is easy to understand his earnest opposition to railroad regulation since it has come out that “individual liberty” and railroad laissez faire meant $30,000 a year to his company.
The Deadhead Passenger Car.
Along with the less-than-carload lots of deadheads travelling on trip passes or annual passes, or transportation with a rebate attachment, there are carload lots going deadhead in private passenger cars.
In a tour to the Pacific coast and back a score of private cars at different times were attached to the various trains I was on. A friend who went a year or so later counted nine private cars on his journey in California, four of them being attached to the same train at the same time, and in the whole 9000 miles he travelled the total number of private cars ran up to 54. Any trust or railroad magnate or governor of a State may have a private car with his retinue, while the lesser deadheads ride in the ordinary cars or Pullman coaches; and the common people pay for it all.
Ticket Scalping.
For many years the railroads aided and abetted the ticket scalpers, paying commissions on the sale of tickets,[[18]] or making arrangements so that scalpers could get tickets from the railway offices for less than the regular prices. Railroad offices have been known to sell tickets systematically to scalpers at 33, 50, and 66 percent off, or ⅔, ½, and ⅓ of the regular rates. The scalper shared the discount with the passenger, and the railway prevented some other line from getting the traffic.
In some cases scalpers induced conductors not to cancel tickets taken up, so that they could be resold in the scalping offices, the profits being divided with the conductors. In 10 States where statutes were passed against scalping, the brokers and the railroads practically nullified the law. And by collusion with these brokers the railroads secretly violated the Interstate Commerce Act.
A mass of facts upon this subject appears in the expert testimony pro and con before committees of both Houses of Congress, notably in January, 1898. It was shown that at that time 346 newspapers, substantially all the railway and steamship passenger lines of the United States, the laws of 10 States, the long example of Canada, the resolutions of numerous national, State, and mercantile associations, the resolutions of the railway commissioners of 19 States, the insistent and repeated views of the Interstate Commerce Commission, the lesson taught by every other railway country of the earth, the due protection of the large organizations to whom special fares are granted and of the railways granting them, the due observance of law, and the best moral sense of all the commercial world, were all arrayed on the honest side of every phase of this question. Ticket brokerage was defended by not over 3 railroads and 560 ticket brokers. The two organized bodies of scalpers, the American Ticket Brokers’ Association and the Guarantee Ticket Brokers’ Association, stood behind the scalping business.
George R. Blanchard, former commissioner of the Joint Traffic Association, says in his testimony before the United States Industrial Commission (IV, 623): “There are two organized bodies of scalpers: the American Ticket Brokers’ Association and the Guarantee Ticket Brokers’ Association. They have their directors, officers, and agents, rules and regulations, and they adopt resolutions and discuss and decide questions of cut fares.”
One railroad president told me that most of the tickets the scalpers sold they got directly from the railroads. Another railroad president has given similar testimony before the Industrial Commission, and also stated that he did not believe the railroads could stop the scalping trade in unused tickets.[[19]]