By this contract the railroads had agreed with this company of citizens as follows:
1. To double freight rates.
2. Not to charge them the increase.
3. To give them the increase collected from all competitors.
4. To make any other changes of rates necessary to guarantee their success in business.
5. To destroy their competitors by high freight rates.
6. To spy out the details of their competitors' business.
The increase in rates in some cases was to be more than double.[55] These higher rates were to be ostensibly charged to all shippers, including the thirteen members of the South Improvement Company; but that fraternity only did not have to pay them really. All, or nearly all, the increase it paid was to be paid back again—a "rebate."[56] The increase paid by every one else—"on all transported by other parties"—was not paid back. It was to be kept, but not by the railroads. These were to hand that, too, over to the South Improvement Company.
This secret arrangement made the actual rate of the South Improvement Company much lower—sometimes half, sometimes less than half, what all others paid. The railroad officials were not to collect these enhanced freight rates from the unsuspecting subjects of this "contract" to turn them into the treasury of the railroads. They were to give them over to the gentlemen who called themselves "South Improvement Company." The "principle" was that the railroad was not to get the benefit of the additional charge it made to the people. No matter how high the railroads put the rates to the community, not the railroads, but the Improvement Company, was to get the gain. The railroads bound themselves to charge every one else the highest nominal rates mentioned. "They shall not be less," was the stipulation. They might be more up to any point; but less they must not be.[57]
The rate for carrying petroleum to Cleveland to be refined was to be advanced, for instance, to 80 cents a barrel. When paid by the South Improvement Company, 40 cents of the 80 were to be refunded to it; when paid by any one else, the 40 cents were not merely not to be refunded, but to be paid over to his competitor, this aspiring self-improvement company.[58] The charge on refined oil to Boston was increased to $3.07; and, in the same way, the South Improvement Company was to get back a rebate of $1.32 on every barrel it sent to Boston, and on every barrel any one else sent. The South Improvement Company was to receive sums ranging from 40 cents to $1.32, and averaging a dollar a barrel on all shipments, whether made by itself or by others. This would give the company an income of a dollar a day on every one of the 18,000 barrels then being produced daily, whether its members drilled for it, or piped it, or stored it, or refined it, or not.