For example, at Cincinnati there is a large buyer of lumber whose yard is on what is called "Hazen's Switch." To get to this switch from the Louisville and Nashville Railroad, cars must go over part of the tracks of the P. C. C. and St. Louis Railway and the Cinn. L. & N. Railway. These roads charge the Louisville and Nashville $6.50 to $9 a car for switching. On lumber originating at some

points the shipper has to pay these switching charges in addition to the freight; while on lumber from other points the Louisville railroad pays the switching charges and the shipper is favored to that extent. 21

21 Sen. Com. 1905, p. 2432.

CHAPTER XX.

FREE CARTAGE, STATE TRAFFIC, DEMURRAGE, THE EXPENSE-BILL SYSTEM, GOODS NOT BILLED, MILLING-INTRANSIT.

IN a recent St. Louis case it appears that the railroads were paying 5 cents a hundred to transfer companies for carting goods across the river from East St. Louis to the depots in St. Louis. They paid the same amount to the Grant Chemical Company for hauling their own goods across the river and also to the make-believe transfer company of the Simmons Hardware Company, the traffic manager of which organized the company's own teams into a little transfer company on purpose to get 5 cents per hundred from the railroads. Other shippers were refused the 5 cent teaming allowance. The Interstate Commission held that the payments to the Chemical Company and the burlesque Simmons transfer company were unlawful rebates.1

Traffic within a State not subject to the Interstate Commerce Act is carried at low rates for favored shippers. Sometimes the shipper pays the full interstate rates in consideration of receiving preferences on shipments within the State to which the Interstate Act does not apply. Allowances and advantages are accorded in handling and storing. Commissions are paid, and goods are billed at less than actual weight. And goods are shipped under false classification or to a false name under the "straw man" system. This system is thus described by Mr. Gallagher, representa

1 I. C. C. Decis. 735, March 25, 1905.

tive of the Merchants' Exchange of St. Louis: "Instead of billing that stuff to the man I have sold it to I bill it to a fictitious man, or straw man. On the bills he is the actual shipper. I do not see him at all, don't know anything about him, but he bills the stuff to the man that I want it to go to, my customer, and it will go through all right, and by and by the straw man sends me a check for a rebate. You cannot find him; at least, I have not been able to do it. That was also described to me by a man who practices it." 2 Some shippers are allowed to let carloads lie 15 days without demurrage, while others have to pay for the car service they get. In the West I found many instances of this. In Butte, for example, one mining company does not have to pay any demurrage, while other companies are charged with demurrage.

Railway purchasing agents are instructed to buy supplies from parties who are large shippers, and these agents buy at prices which afford such shippers all the benefits they would get from a rebate on the freight rates. This is, in fact, only another way of paying rebates. The allowance of fictitious claims is still in vogue.5

Abuse of the "rebilling privilege" or the "expense-bill system" is still in full bloom. Rebilling properly relates to the reshipment of goods received in unbroken carload lots, so as to make them complete a continuous trip at the through rate from the point of origin to final destination. But it appears from a case passed upon this year, 1905, by the Supreme Court of Mississippi, that merchants in Vicksburg receiving freight over the Vicksburg, Shreveport and Pacific Railroad are allowed to use their "expense bills," showing the amount of freight received over that line, in a way that enables them to get reduced rates. Within 90

2 Ind. Com. iv, 54.

8 Sen. Com. 1905, pp. 2284, 2429.

4 Ibid., p. 2432.

5 Ibid., p. 18.

days of the date of any expense bill the holder can ship out over that road an equal quantity of freight not necessarily the same he had received, but anything he chooses. By this means the Vicksburg merchants can get grain by barge and ship it out at 33 cents, while the merchants of Meridian have to pay 10 cents on similar shipments, and the low rate was not available either for merchants in Vicksburg who did not deal with the said specially favored associated line having the through rate.6

In a still more recent investigation (July 1905) by the Interstate Commission at Louisville, Ky., it appears that on presentation of an expense bill for each car of grain from St. Louis at any time within the preceding 90 days, the Louisville dealer may ship an equal amount of grain on to Atlanta at a rate 3 cents per hundred below the tariff from Louisville to Atlanta. One day during the hearing 67 expense bills were presented in evidence, some of which had been altered and the rest duplicated and even triplicated with the result of giving the guilty shippers an unlawful advantage of 3 cents a hundred over their competitors selling grain in the southeastern territory. Many of these bills were admitted to be forgeries from beginning to end, while others were altered by erasing the original words and writing in others. For example, wheat was sent as bricks by erasing the word "bricks" on an incoming bill, writing in the word "wheat" and using the altered bill to forward a car of wheat at the expense-bill discount. Every one of the bills in the bunch we are speaking of was in favor of a single Louisville firm which does an immense business in the Southeast.

In other cases goods are not billed right. Dealers have been known to ship cutlery as iron bolts, and dynamite as dried apples. False billing as to weight is practised both in freight and express shipments. The carrier acts in

6 Sen. Com. 1905, pp. 2484, 2490.

collusion with the shipper in some cases while at other times the carrier is among the defrauded.

Sometimes large amounts of freight are sent without being billed at all. "I know of a point," said Mr. Davies of Chicago, representing 70 fruit associations of that city, "where 150 cases of strawberries were systematically loaded on a car upon which there was never any freight paid, and the rate was 21 cents a crate."

"SENATOR KEAN. How long ago was that?

“MR. DAVIES. A year or two ago. It is done to-day. "SENATOR KEAN. Do you have knowledge of it? "MR. DAVIES. Yes; and so can you, if you go around the freight yards.

"SENATOR KEAN. Is this knowledge of yours a guilty knowledge?

"MR. DAVIES. I just a moment ago told you not, and further, I will offer to this committee the records of my business.

"SENATOR KEAN. But you say you know these things are being done and have made no complaint.

"MR. DAVIES. Have n't I? I would like to show you these papers that have been nursed by the Interstate Commerce Commission for a year."

Mr. Prouty of the Interstate Commerce Commission says:7 “I knew some years ago that a trainload of wheat was transported from Minneapolis to Chicago for nothing. There was simply no record of that shipment on the books of the railroad."

"SENATOR CULLOM. What object had they in doing

that?

“MR. PROUTY. They wanted to prefer that man that had the wheat. Instead of paying a rebate they carried the shipment for nothing."

The power to give or withhold the milling-in-transit privilege is a serious means of discrimination. The Pennsyl

7 Sen. Com. 1905, p. 2912.