The times., 1899-10-06
DISCRIMINATION IN Rates
More Facts Brought Out in the In
dusirial Investigation
Members of the Interstate Commerce
Commission as Nitnesses-Isheet OF
Halfway Competitfen-The COnsOl-
fdation Tendency - The Public
Supervision of Roads Imperative.

The Industrial Commission at yester-
DAYS session took up the subject of alleged
discrimination by railways in transporta-
tion and freight rates. and listened to tes-
tinony from Mr.. Knapp, Mr.. Clements,
and Mr.. Prouty, OF the Interstate Com
merce Commission, on various phases Of
the question under consideration. Senator
Mallory set the ball rolling by asking Mr..
Knapp If any determinations were prac-
ticed by the railroads at the present time, /
10 which question Mr.. Knapp promptly re-
piled in the affirmative. In what form
are the Determinations made against in
dividuals2r enquired Senator Mallory.
Generally speaking, Of course, by some I
sort Of secret arrangements which result
in one person getting more favorable rates
of transportation than some one else under
the same condition" replied Mr.. Knapp
The methods by which that result can be
accomplished are numberless. ! think il
can be fairly said at the present time that /
the payment of rebates TO shippers is
comparatively rare, and where concessions
OF some sort are made they are brought
determinations are more frequent than
during good times, for the reason that
business is harder to get. Profits have
been cut down to so small a margin that
ordinarily the companies cannot afford 10
give any discriminating rate. Discrimina-
tions are granted a shipper not because of
any desire TO favor a particular individual,
but only in order TO secure the freight. 1t
is. OF course. natural that the largest ship
pers get the special rates"
Mr. Knapp thought that the laws pro-
hibiting pooling and trusts should not be
applied TO railroads. The railroad is
natural monopoly" said he, and in the
nature OF things there can be competition
only in restricted sections of the country.
Where there is competition there is al
ways discrimination in rates, and the pub
lie consequently suffers. Railroads should
be allowed 20 enter into agreements on
the question of rates. but Congress and
State Legislatures should have power TO
prevent excessive rates. The important
thing is to prevent this discrimination. II
cannot be prevented when corporations
are sharply competing with one another IN
contiguous territory"
Mr.. Knapp said he believed that Gov
ernmental ownership Of railways would
result in wholesale Determinations in rates
on account Of partisan abuses. The po-
litical pull" said he, would, under such
a system give one section many large ad-
vantages over another" Mr.. Knapp then
paid his respects to the pass system. The
practice is still very largely followed. In
the latter part Of November, 1888, for IN
stance" said he "a train load OF passen-
gers, with only one exception, was brought
TO Washington from Chicago, free OF
charge The train was filled with MEN,
bers Of Congress and their families. IL
the practice Of giving free passes were
stopped / am satisfied that the public
generally would get lower passenger rates
Determinations and issuing OF passes
should be made misdemeanors ana pun
ished as such in the courts. Then and
only then, would the practice cease.
Mr.. Clements. another Interstate Com
rnerce Commissioner, followed Mr. Knapp,
Railway rates" said he, 'are not, in my
opinion, excessive in this country gen
orally al the present time. The average
rate, / think, is satisfactory. The real
trouble is that the rates are too high at
non-competing points and too low al COM
peting points This abuse can be remedied
by amending the interstate commerce law
SO as TO enforce the long AID short haul
decision" Mr.. Clements agreed with Mr..
Knapp that competition brought about
discrimination in rates and also concurred
in Mr. Knapp's opinion as 10 the proposed
remedy OF making such acts misdeneanors,
punishable as are other crimes
Mr. Prouty. the last witness Of the day,
attacked the Determinations IN export and
domestic rates For instance" said he
ION many lines the freight rates on goods
shipped from Chicago or farther West. TO
New York or Boston, or Philadelphia, or
Providence, is higher than the rate on the
same goods from Chicago to Liverpool, or
London. or other European ports. The
only person benefited by such discrim-
rc ion Cf
can exports. l believe that trusts are
largely responsible for the determinations
in freight rates In regard TO railway
consolidation, think il is, on the whole.
favorable TO the public. In my own terri
tory Of New England, for instance, there
has lately been perfected a large scheme
Of consolidation. Since il has become cp-
erative ] have had fewer complaints IL
regard TO rates than before, and a VERY
small number when compared with tht
numerous protests from other sections O
The country. The freight rate in New Eng
land however, IS higher than anywheri
else on the Continent II is nearly twie'
as heavy as the average rate ! think IN
tendency nowadays is clearly toward rail
way consolidation along all through lines
II the management consolidates many ran
roads il viii then be able TO do away wltl
these rate determinations In that case
tremendous power. They viii operate an
control perfect transportation monopoly
They viii have the power do not say tn
inclination. but the power-to crush ou
all competition, and to increase or decreas
the tariff rate al will Ii viii be entirel
in their hands Such power viii, in m
opinion, carry with it awful responsible
fly"
Don't you think that this tendency 10
ward large. consultations, asked Com
missioner Clarke, makes public superyis
ion Of railways imperative?"
Il do, most emphatically," replied Nj
Prouty. Il think public or Governments
supervision is the only means by which ID
tremendous power resulting from consoli
dation can be properly and wisely re
strained"
The.Industrial Commission VIII continu
its sessions today. and Mr.. N. B. Kelley
Secretary OF the Trades Union, and Fran
Lee, both OF Philadelphia, will testify q
the hearing.
a