counts from the published rates, and that shippers did not know at all what rates their competitors and neighbors were getting. They were not satisfied with the system, but they were afraid to complain, for if they made complaint they would lose whatever advantages they possess and become marked men for railway persecution. The Railroad Commission of Massachusetts advertised for shippers who were not satisfied to come and make complaint; but they did not do so, for the reason that any shipper who complained of a railroad would be apt to fare a good deal worse afterwards than before; his goods would be delayed, his facilities would be cut off and whatever reductions he was getting would be stopped, and he would have to pay the full published rates. He might also be involved in costly litigation, and he did not dare to say anything.

"The Railroad Commission was asked by the legislature about these discriminations on the Boston and Albany, and a report was handed in by the Commission (1900) saying that the reductions from the published rates averaged 40 percent, and that in different cases they ran from 10 to about 73 percent — fully confirming what the shippers had said. It was admitted, however, that this report was not written by the Railroad Commission. They had passed the question over to the Boston and Albany, and a high official of the road had written the reply. The Railroad Commission admitted that they did not know anything about it. They, however, handed in the report of the railroad official as being true, and it was admitted, both by the railroad, and by the Commission, that these discounts on local rates were being given. The railroad official claimed that the special rates were 'open to all shippers sending freight under similar circumstances and conditions,' which may be true if we understand circumstances and conditions' to include the relations of the shipper to the managers, and his pull with the railroad, but cannot in any other way be made to square

6

with the statements of shippers and the other evidences in the case."

While favored shippers were receiving discounts of 10 percent to 73 percent from the published rates, other shippers, and some doing considerable business, declared that they got no discount at all. During the legislative investigation the matter was put to Samuel Hoar, attorney and director of the Boston and Albany, and he said: “I suppose it is true that no shipper knows what his rival is getting. I suppose it is true. it is true. But what of it? What has that to do

with the lease?"

The receipts per ton-mile on all classes of freight were less than one-half the average of the published rates to the various stations on the road for the cheapest class of freight, viz., coal. And the lowest published local rate on coal was higher than the average rate on all commodities.

"The interstate-commerce law was passed in 1887 and the Interstate Commerce Commission was established to abolish the evils of unjust discrimination, but the work has not been accomplished. The Interstate Commerce Commission has told us year after year that the discriminations are still going on; and that they cannot be stopped under present laws at least." 4

Mr. George R. Blanchard of New York, former commissioner of the Joint Traffic Association told the Industrial Commission that "Discriminations against persons result from secret rebates, combination of rates on inward material and outward products, so as to affect the through charges; favoritisms in terminal facilities; quicker time in transit; unequal or hidden allowances in weights; dissimilar stor

4 "The exaction of the published rate is the exception. . . . Men who in every other respect are reputable citizens are guilty of acts which, if the statute law of the land were enforced, would subject them to fine or impris onment." See Rep. 1898, pp. 5, 6, 18, 19; Rep. 1899, p. 8.

5 Report, vol. iv, 1900, p. 625.

age periods in cars or warehouses; preferences in supplying cars; differences in special charges, such as switching, loading or unloading, or in cartage allowances; the leasing of elevators to or making elevator contracts with large handlers of grain, to their exceptional advantage; the grant of undue allowances under the fictitious guise of commissions, etc."

Summing up the evidence gathered in its great investigation, 1900-1901, the United States Industrial Commission concludes that the main effect of the Interstate Act has been to concentrate the benefits of discrimination in fewer hands, which tends to build up trusts and combines. It found discriminations everywhere prevailing. It says: "There is a general consensus of opinion among practically all witnesses, including members of the Interstate Commerce Commission, representatives of shippers, and railway officers, that the railways still make discriminations between individuals, and perhaps to as great an extent as before. In fact, it is stated by numerous witnesses that discriminations were probably worse during the year 1898 than at any previous time.

"It is claimed that direct rebates and secret rates are still frequently granted; commissions are paid for securing freight; goods are billed at less than the actual weight; traffic within a State not subject to the Interstate Commerce Act is carried at lower rates; allowances and advantages are made in handling and storing, etc. Several witnesses refer to the practice of shipping goods under a false classification. Sometimes this is done without the knowledge of the railways, but in other cases they apparently connive. Thus fine hardware may be shipped as some low-class kind of iron.

"The representatives of the railways declare that so long as competition exists the attempt to get traffic by secret

6 Ind. Com. iv, pp. 6, 349, 359.

rates must continue. It is thought generally that there has been a considerable improvement in the situation during the year 1899. . . . In the latter part of 1898, Messrs. Cowen and Murray, receivers of the Baltimore and Ohio Railroad, addressed a letter to the Interstate Commerce Commission declaring that the practice of granting rates below the published tariffs was so general as seriously to reduce the revenue of the railroads. More than 50 percent of the traffic, at least on certain roads, was affected. The receivers expressed a determination to coöperate in the enforcement of the law. Later, conferences were held between the Interstate Commerce Commission and railway officers, which led to a general attempt to reduce the extent of the evil. Many witnesses, however, including representatives of the railroads, think that the improvement is only temporary, and that when the present rush of traffic has ceased discriminating rates will be granted more and more."

The investigations of the last five years show that these witnesses were right in thinking the cessation of hostilities to be only a temporary truce.

CHAPTER XVII.

THE ELKINS ACT AND ITS EFFECTS.

THE "Elkins Act," approved Feb. 19, 1903, amended the Interstate Act in some important particulars. It provides that any failure to publish rates and charges, or any departure from the published tariffs, or any offer or grant of any discrimination, rebate, concession, or device of any kind whereby transportation is obtained at a less rate than the tariffs published and filed with the Commission, shall be a misdemeanor of the corporation as well as of the officers or agents concerned. Every shipper also who solicits or accepts any such rebate, concession, or discrimination is guilty of a misdemeanor. In each case, whether the suit is against the railway company, or its officials, or a shipper, the punishment is a fine of $1,000 to $20,000 for each offence, the imprisonment clause of the Interstate Act being repealed.

Under these provisions the railroad companies themselves may be attacked, in addition to the suits against the guilty officials provided for by the Interstate Act, and shippers may be convicted by showing that by any device they have obtained a lower rate than the published rate, without proving that some one else paid more than the defendant, as was formerly necessary.

The act also expressly authorizes the United States Circuit courts to restrain by injunction or other appropriate process any departure from published rates, or any discrimination forbidden by law, without prejudice to the