The Saint Paul globe., 1905-04-11
BLAME GOVERNMENT
| FOR TAKING REBATES
Officials Condemn Preferential
Freight Contract With the
Southern Pacific

WASHINGTON, April 10-The
comptroller of the treasury has rem
dered decision in which he criticises
the proposed action of the secretary of
the interior in accepting rebates from
the Southern Pacific on freight of con-
tractors engaged in work in the west
| under the irrigation and reclamation
act In communication to the comp
troiier on March 20 last the secretary
| of the interior says:
"On Oct. 13. 1904, the department
approved contract with the Southern
Pacific providing for certain conces-
sions to contractors under the recla-
nation act on the freight rates on their
plant and materials shipped to and
from the works projected. Other con-
tracts of similar character have since
! been negotiated with the principal
roads. The concession in rates was
brought to the attention of all bids for
work in the reclamation service in or
der that they may make due allowance
Tor such concessions in their bids. The
attention of these officers. has been
called to a request of .Speer & Co, con-
tractors on the Salt river project. who
desire TO be advised whether they can
obtain the benefit of concessions on
some shipments soon to be made by
them.
Bid Made Prior to Agreement
These contractors made their bids
before any concessions had been ar
ranged with the Southern Pacific, so
that their bids do not provide for any
benefits that they can use, and accord
ingly this Office has decided that the
contractor is not entitled to such ben
efits"
The statement goes on to state that
the railroad companies are willing to
help along the work on the project as
| far as possible in case the benefits in
concession in rates on these shipments
may be taken by the government and
credited to the project. The comp
troller in his reply said:
If l may be permitted TO express an
opinion as TO the legality of such
transactions when considered in rela-
tion to sections 20 and % Of the inter-
state commerce acts of Feb. T. 1887,
and 1883, would say that it is ex-
tremely doubtful if either can be main
tanned BY what authority the govern
ment can contract with railroad that
contractors plant shall receive a re-
bate in freights not applicable to other
Shippers is beyond my comprehension.
III this right exists il might as we'll eX-
tend TO flour. hay and other commodi-
ties and the vehicles used by a con-
tractor in making delivery to the gov
4oAl SuCH eX-
ISIS when covered by contract and
such rebate taken into consideration
when the contract is made, by what
stretch or authority can the govern
ment step in when the contract be-
tween 1t and the contractor has been
entered into and the amount to be paid
for the work. or the work and mate
rials, is fixed and liquidated and re-
| ceive or take from the price because Of
railroad rebate, is beyond my COM
prehension.
Jerks Up Government
The government. above all others,
snouid not be party to q violation of
either the letter or spirit Of the inter-
state commerce act as regards the
question of rebates. II should not en-
gage in questionable transactions in
order that saving of a few dollars
may be had, especially when this saw
Ing results in the tearing down of
law which experience proves very diff
ficult, If not absolutely impossible to
| enforce"
The interior department replied to
this letter, insisting on the legality of
their proposed action and stating that
the rebates in question probably would
| amount to $1,00O,000 in the next seven
years In the course of his response
TO this letter the comptroller saws that
4
large is cogent reason why the gov
ernment should make no mistake by
being party or a beneficiary of the
violation OF the law prohibiting the
giving of discriminating rebates. He
then says:
.The carriage, storing or handling
OF property free or at reduced rates for
the United States is allowable under
section 22 of the amended interstate
commerce act.
What constitutes the carriage of
property for the United States?
Nothing short of carrying property
under contract with the United
States for its carriage, in any event in
my judgment, can be considered as a
carrying of property for the United
States. There must be mutually in
the CONTRACT of carriage, a right of ac-
ton by the carrier against the United
States, or vice versa in case of a
breach of the contract of carriage
certainly nothing short OF this can con-
stitute carriage of property bv a
railroad for the United States
For the above reasons and many
others which might be urged, if you
will pardon the suggestion. | advise
that before you take rebates from rail-
roads on the carriage of property be-
longing TO the government contractors
shipped by them and paid by them at
the regular rates, that you Law all the
facts before the attorney general and
procure his opinion as to the legality
OF such transaction.
Let me repeat: 1 attach no special
significance to the willingness of the
railroads to grant the rebates in ques-
tion."
"BIack Handv or IesIo,,s,,