CHAPTER X.

DENIAL OF FAIR FACILITIES.

THE refusal to furnish cars in fair proportion is a familiar form of discrimination all through this period, usually in combination with other forms of preference. In Kansas, on the line of the St. Louis and San Francisco Railway, were two coal companies whose plants were of about equal capacity, and several individual shippers. The railway and its officials became interested in one of the coal companies, and by rebate and other process it was given rates which averaged only forty percent of the rates charged other shippers. The result was that all the other shippers were driven out of business, part of them being hopelessly ruined before giving up the struggle. In addition to rate discrimination the railway practised gross favoritism in the distribution of cars. For example, during one period of 564 days, as was proven in court, the road delivered to the Pittsburg Coal Company 2,371 empty cars to be loaded with coal, although such company had sale for, and capacity to produce and load, during the same period, more than 15,000 cars. During the same time this railway company delivered to the Rogers Coal Company, in which the railway company and C. W. Rogers, its vice-president and general manager, were interested, no less than 15,483 coal cars, while 466 were delivered to individual shippers. In other words, the coal company owned in large part by the railway and its officials, was given 82 percent of all the facilities to get coal to market, although the other shippers

had much greater combined capacity than the Rogers Coal Company.

During the last four months of the period named, and when the Pittsburg Coal Company had the plant, force, and capacity to load thirty cars per day, they received an average of one and one-fourth cars per day, resulting as was intended, in the utter ruin of a prosperous business and the involuntary sale of the property, while the railway coal company, the railway officials, and the accommodating friends who operated the Rogers Coal Company, made vast sums of money; and when all other shippers had thus been driven off the line the price of coal was advanced to the

consumer.

Another railway interested in a coal mine furnished cars in abundance to that mine and to others that would sell their product to the mining company in which the railway was interested, but systematically failed to furnish cars to other operators.1 One operator, after being forced for years in this way to sell his product to the railway mining company at a very low price, was obliged to build a railway of his own in order to reach other lines of railroad and so have a fighting chance for cars.

In Arkansas a coal mine owned by the Gould interests was able to ship its product to market at very low rates, while the owners of an adjoining mine were forced to haul their coal to the same market in wagons because the rates charged them from the coal railway were so high as to absorb the whole value of the coal at destination.

A big capitalist in the West got hold of great oil fields on the Pacific slope, wonderful prospects, contracts to supply big cities, etc. Some one told him he had better see the railroads before he made his contracts. He thought

1 It was held in the Nichols case (66 P. A. C. Rep. 768) that where a shipper orders cars to be delivered at a certain date, the company's action in filling subsequent orders before complying with the first is unlawful. (Oregon Short Line.)

the transportation question would be all right and went ahead. When he got his contracts made and wanted to ship the oil, he asked for cars, and then he found the transportation question was not all right. He could not get the cars.

Sometimes a railroad has goods to certain consignees.

arbitrarily refused to haul A case of this kind came before the Texas Railway Commission in the case of the Independent Compress v. Chicago, Rock Island and Texas Railway Company. The Bowie Compress, located at the same station with the Independent, had some sort of pull which caused the railroad to refuse to haul cotton to that station unless consigned to the Bowie Compress. The railway also allowed compression charges out of the through rate on cotton shipped to the Bowie Compress, refused freight from points of origin, and reshipped the cotton from the Bowie press at through rates, while refusing such concessions to others.2

The refusal to deliver at a certain place may be as effective sometimes as the refusal to deliver at all. When in 1890 Mr. Nelson Morris tried to establish competitive stock yards in Chicago to get rid of the graft of the Union Stock Yards owned largely by railway interests, the Vanderbilts being in the lead, his enterprise was loudly applauded by the stock raisers of the West; but the railroads made short work of Morris. They simply refused to deliver to his yards the cars shipped there. They did not recognize any such place as the Morris yards and calmly hauled all cars to the old terminal. If Mr. Morris wanted them he must come and get them and pay switching charges. This ruined the venture.

Big shippers may be given an undue advantage by excessive difference between the rates on carloads and lessthan-carloads. On June 29, 1898, the Western railroads

2 Report, Texas Railway Commission, 1896, p. 11.

8 The Commission holds that the difference must not be so great as to be

advanced their less-than-carload rates to the Pacific Coast to a minimum difference of 50 cents a cwt. above the carload rate; and " on a great many commodities the difference is greater than the profit on the goods." The Interstate Commission regards a moderate reduction on carload shipments as fair, but will not sanction lower rates for cargo or trainload quantities than for carloads.5

destructive of competition between large and small dealers. (5 I. C. C. Decis. 638, following Thurber v. New York Central, Delaware & Lackawanna, B. & O.; and 3 I. C. C. Decis. p. 473, March, 1890; Rep. 1890, p. 87. Many articles of groceries were so classified as to make the difference between carload rates and less-than-carload rates unjustly great in violation of the principles of the Interstate Act.

4 Industrial Commission, iv, 207.

5 Paine v. Lehigh Valley R. R., 7 I. C. C. Decis. 1897, p. 218.

CHAPTER XI.

CLASSIFICATION AND COMMODITY RATES.

CLASSIFICATION and commodity rates afford many examples of discrimination in the period we are studying. We find furs and fur scraps classed as double first-class, while hats and fancy products, for which these commodities constitute raw material, were first class.1 Celery was classed with peaches and grapes, instead of with cauliflower and asparagus, lettuce and peas.2 The charge for beans and peas (70 cents) was almost double the charge on tomatoes (44 cents). Flour for export was carried at much lower rates than wheat. Before 1886 wheat was carried from Texas, Missouri, and Kansas at 15 cents per hundred lbs. less than flour, without regard to distance. From 1886 to the end of this middle period the rates on wheat for export show a difference of 4 to 11 cents per hundred below the rates on flour. As the profit to American millers on flour for export is from 1 to 3 cents per hundred it is clear that such discrimination is prohibitive upon American millers in favor of English and other foreign millers. The public policy and good railway policy seem to require the same rate on export wheat and export flour.4 Corn was carried between Kansas points and Texas points for 7 cents

1 9 I. C. C. Decis. 78; 1901 Rep. 38.

2 5 I. C. C. Decis. 663.

8 7 I. C. C. Decis. 43.

4 8 I. C. C. Decis. 214, 1898. See also 4 I. C. C. Decis. 417, and 7 I. C. C. Decis. 481, Chicago, Milwaukee & St. Paul case, held that a higher rate on wheat than on flour is unjust.