The Birmingham age-herald., 1905-02-12
Mt Underwood Makes Important Contribution on Subject of
 Rate Legislation
DISCUSSES INIQUITIES OF
 PRIVATE CAR SYSTEMS
Panama Canal Commission Trying to Do Away With All Favoritism In Awarding Contracts
 For Supplies.

1 Washington, February 1l.-(Srecial)- Representative Underwood of the Bir- mingham district in a speech in the House made a decided contribution to the sub
 ject of railroad rates legislation. Mir. Un- derwood said in part:
 "As far as the till goes it is an im- provement on the present law. It does not give the commission power to initiate the making of freight rates or interfere with the railroads in the transaction of their business so long as they conduct their business fairly and justly to all persons interested. But where it is found that discriminating rates have been given and l injustice done to individuals or communi- ties. the commission Is given the power
 to set aside such unjust rates and de- clare reasonable and just rates in place thereof It does not seem to me that this is drastic -egislation nor that which unjustly interferes with the conduct of private enterprises. 1t seems to me that the bill, as far it goes, only seeks to see that equal and exact justice Is done between the carrier of freight and the l shipper
 l "I shall vote for the bill for this reason but 1 am not entirely satisfied with it's terms, because l believe when we are en- acting legislation of this kind we should endeavor to cover the whole scope of the question before the House ant not leave l important matters untouched to oe cov- cred by future legislation. Some time ago | Congress enacted a law that prohibited railroads from allowing rebates to per sons who shipped freight over their roads. 1 The railroads established regular rates l for the transportation of freight but before this law was enacted some large
 shippers demanded and received from | he railroads a return of portion of the freight paid. This was known as rebates
 Had Great Advantage.
 Ut can easily be seen that where one l shipper had a part of the freight rate returned to him and the other shipper was compelled to pay the entire freight rate the one having the rebate or getting the benefit of the returned freight charges had great advantats in the market oyer his competitors and in this
 way was enabled to undersell him and l control the business. It was through the railroads granting rebates that the great monopoly of the Standard Oil company was built and the small competitors en- l gagged in the shipment of oil were driven l from the market and destroyed. Now, l l do not suppose that any one will contend | that this was not unjust or unfair use of the power to make and fix freight rates, and all will agree that the law enacted that prohibited the granting of l rebates is a just and fair one. As mat 1 ter of fact, the probabilities are that the transportation companies themselves 1 do not desire to grant these rebates, but | large shippers, such as the Standard OH company were enabled to threaten rail- road managers with withdrawing thein entire business from their roads and ship their products by competing lAes If the
 rebates were not granted to them as against other competitive shippers. But it 1 has been decided that the law that pro- I hibts the granting of rebates does not apply to private cars And therefore the l interstate commerce commission had no 1 power to regulate rates given to or the | transportation of cars owned by other persons than the railroad companies. Now 1 the Standard oil company has it's great
 oil tank cars, belonging to that company i and not to the railroads. in which It
 ships it's oil throughout the United 1 States.
 Owns Refrlgeratlng Cars.
 l "The American Packing company, known as the beef trust owns it's re- frigerating cars in which 1t ships beef from the slaughterhouses to the distribut- 1 ing markets The railroads can no longer
 under the present law. give these two great corporations rebates over other com 1 petitiors in the carrying of freight, but as private cars are not regulated by the pres ent law they can allow them any amount | of rental for the cars that they see fit. l In other words the Standard Oil company pays the railroad companies the regular rate of transporting its oil, and then the railroad company turns around and pays l it a rental for the use of the ear belonging l to It. This rental could be at a rate that would not give the oil company discri- minatory advantage over it's competitors, or this rental can be placed so high that | it gives them a distinct advantage In I shipping Tn other words, 1t gives them rebate in a different way from the old | method. As a matter of fact, l under stand that before the law prohibiting re- bates was passed no rental whatever was demanded from the railroads by these great companies for the hauling of their private cars. but since the law has been passed prohibiting rebates rentals take the place of rebates they are prohibited 1 by law from receiving.
 Private Terminal Tracks.
 1 Again, the law intended to prevent un- l just determinations is evaded by private