The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1879-10-12
RAILROAD REBATES.
How Manufacturers Were Driven
Out of Business.
THE STANDARD OIL COMPANY
Further testimony Before the Legislative
Committee on Railroads.

The members Of the Legislative committee ap-
pointed to investigate the management Of railroads
in this State continued their seemingly
labors yesterday morning In the rooms OF the Cham
Der of Commerce. No. GO william street. Several
witnesses examined the drift of their testimony
bearing upon the question the rebatsd and cut rates
allowed by railroads to certain favored or
corporations. and the discrimination In favor of
some localities over others. One oil rehner, who
claimed to have been driven out OF the business by
the Standard Oil Company. gave his experiences. and
the editor Of railroad journal was sworn Is an ex-
pert to testify concerning the state of the grain and
cotton trades and the former unjust differences the
railroads made between individuals
Mr. Joseph W. Guppy again took the stand whom
the ommittee was called to order. Ex-Judge Ship
man first questioned him in regard to the propo-
sitions made to him by the Sickles party. Mr.
Sickles was the one who made the proposition;
witness made no advances to MIR. Gould any one
else offering to go back on the party who made the
corrupt PROPOSAL" Mr.. Gould learned of It from
Mr.. II. u. Pratt.
Mr.. Guppy next made some explanations Of his
former testimony. H. did not want to admit that
the contract with the jefferson Car Company was
"a direct fraud" the Erie Railway The
contract. he SAID. was entered into in good
faith. and 1t was done to procure
the Brooks Locomotive Works new industry was
created ut Dunkirk and the business OF the road
was benefited; witness thought the contract wise
measure. but the stock OF tho company issued
without compensation not costing MIR. Gould any
thing; 1t was aftcrward turned in for its full par
value in Mr. Goulds settlement; the total amount
of the securities handed in the Gould settle
ment was between s5.OOO.OOO and s6.OOO.o0O nom-
inally.
Q. Thy Mr.. sterne)-whst was their actual WORTH
A. Well. should have hated to give over $500, 900
for them.
In answer to Chairman Hepburn's question Wit
ness said the funded debt from 1874 to 1878 had in
creased Sal. 24l.3s9 50.
Joseph D. Dudley. hardware merchant of Buffalo,
was next called to testify. He said that he was
largely interested in the Empire Oil Works there;
another oil refinery there larger than his; he
got rebates from the railroad company that he
knew Of
Mr. sterne-Oh. then we have called the wrong
man. We will excuse you. tLaughtor.)
FREIGHT REBATES.
Harlan A. Pierce editor OF a railroad journal then
took the stand He testified in regard the freight
rates to Liverpool from different ports In the United
States. Mr.. Sterne said that he desired to show that
the commerce of New York was being gradually de.
stroyed by determinations In favor Of Philadelphia
pool. The given for it by tho railroads was
the difference in freights-a difference which
Mr.. Storne claimed did not exist. The witness then
named tho various rates charged at different times
Charter parties could be made In Europe. he said.
for vessels to sail direct to either Of the ports named
Q. How does the through rate to Liverpool com.
pare with the added to the prevailing rate
from Chicago? A. 1t In considerably less.
9. Have you heard complaints that some dealers
had no transportation facilities while others had?
two houses Controlled the grain trade Of Now YORK.
because Of two and half cents Ave cents per hun
drod pounds lowor freight ratos than any one else
Hoyt Co. w. '''- '''
q. Did they not sometimes have an actual surplus
In their own market? A. Yes; they sometimes
commodatcd other merchants, allowing them to
ship their waybills; that state OF Affairs how
over. does not in regard to these rebates;
it existed up to the beginning Of the movement Of
the crops OF this year. but worst in the winter
OF ls77-s since the crops have been moving freely
this fall the capacity OF the railroads taxed
and no one, 80 tar as known. has got any rebates;
rates have been uniform to all parties owing to the
inability OF the roads transport all the fraight
offered to them; the cause Of the cutting in the
spring was tho inability to get freights enough to
keep the roads busy by such rebates the rivals Of
the favored parties have the close Of the canal.
been almost thrown out Of business.
In regard to cotton. Mr. Pierce said that pool had
been formed by the buyers in the Southwest, tho
Southwestern railroads and the sellers in New York
to bring forward cotton to sell or to ship to Liver
pool. II there was profit II to be divided
equally between the buyers. the sellers and
who had no apparent official business or position.
but who fixed the freight arrangements with the
railroads. II there loss in the transaction it
was to DO made up by rebates the freight bills.
Ii the provision trade also special were given
to certain large houses The abuse here had existed
longer than in the Grain trade.
.. Have YOU made any estimates with regard to
the cost Of the elevated road? A. asked q man to
make the estimates for me- and all know 10 merely
hearsay.
After . brief cross-examina alton by Judge Shin.
man. in which no now facts were elected the witness
excused.
Abraham Wolff banker. of the firm Of Kuhn.
Loeb Co.. testified that the election for Erie d.
not rccollect the name OF tho person for whom the
proxies were given; tho stock sto ID In their name
on the books although not actually owned by them;
stock could stand in their without their hsv-
ing any interest whatever IT. when requested do
so the Arm frequently voted gave proxies stock
quest made for the OF the stock to vote on; Il
was very seldom that proxies commanded price;
their hrm had been offered any thin for them
y. Do you pay for stock you buy on orders and
then hold the stock till you reimbursedY A.
Yes; but generally only one hour
Mr.. Shipman thought tho testimony with regard
to proxies was irrelevant.
II think" said Chairman Hepburn. that we have
heard that proxies were frequently bought and
sold"
Mr.. shipman-oh. yes; but not in my time.
Isaac L. Hewett. OF Brooklyn, was the next and
last witness. He had bcen operating IN petroleum
oil ~ merchant ana manufacturer from 1863 to
1905 tho capacity of his refinery was 800 900 barrels
OF oil year and the profits OF the firm from
Soo.ow 10 Sio,vW yearly Their prosperity began to
dwinde In 1857 the limo OF the iirst rumor OF the
railroads agreeing with the Southern Improvement
Company to pool all the oil that carried to the
scaboard, then to charge higher prices aud even up
nothing else caused the trade TO decline; within
few months they discovered that tho Southern I'm
provcncnt Company had grappled tho entire trans
portaton OF oil from the West to the seaboard: there
was drawba or inside transportation rate to those
representing the standard OIL Company OF from
cnty conts to 81; that difference DESTROYED the
business OF all who not absorbed into the
Standard OIL Company; the effect was to reduce the
tilers nn1a slla NJ niix
few persons; In 1869 witness went 10 Cleveland,
Ohio. TO nee how things Stood aud had an interview
with Mr.. Rockafc.loe, president OF the Standard OIL
Company; lao found that large share OF the rcnn.
ing interost had been compelled to sell out to the
hockaieiocs; there was no difficulty about getting
oil to market but at so much higher than the
other company paid that 1t made competition i'm
possible; when he wanted to sell out his refinery
he found no ono was anxious to buy: Rock afciloe
oiIcred him hfty cents the dollar Of the construc