New-York tribune., 1905-04-11
ATTACKS REBATES TO U. S.
Controller Thinks Government
Should Not Take Them.

Washington April IO-The Controller of the
Treasury has rendered decision In which he crit-
cses the proposed action OF the secretary OF the
| Interior in accepting rebates from the Southern
paciec T2aiIroad on freight contractors engaged
in work in the West under the Irrigation and Rec
lama tion act In a communication to the Controller
on March 20 the Secretary Of the Interior says;
on October 13 1884, the department approved
vidng for certain concessions TO contractors uhuer
the Reclamation act IN the II Ileg1dt ign fro T t6a @ vor
On the projects other contracts of similar charac
ter since have been negotiated with the principal
roads THESE concessions in rates are brought 10
the attention of all bidders on the WoLh OI .Ee
due allowance for such concessions In their DIGS
The attention this office has been called TO To-
request of Sherer & Co. contractors On IS fbr &
thew can obtain the benefit of concessions on some
shipments soon to be made by tneHi ma, befora anv
These contractors made their Dlds DeIoIe eHy
concessions had arranged with the Soutne5nn "a
Pacific Company so that their bids do not provide provide
ingy, this office has decided that the coH'i"'Oi -
not entitled to such benefits
The communication goes on to state that the
railroad company, however is willing TO make the
concession TO help along the work on the project
as much as possible in the benefits of the con-
cession of rates on these shipments may be taken
by the government and credited to the project
The Controller in reply, says;
If may be permitted to express an opinion as
to the legality of such transactions when GonsideIea
in relation Sections and z or the drIeISttii5
saw that it is extremely doubtful if either be
maintained. BY what authority the government t I
can contract with railroad that a contractor S
plant shall receive rebate in treightS not ttppCa-
PIE TO other Shippers Is Deyono my td t tIor
hay and other commodities and the vehicles USED
by contractor in making delivery to the govern
ment. But granting such right exists when Gov
cred by contract and such rebate taken INTO con
stretch Of authority the government can step IN
has been entered into. and the amount TO be pald
for the work for the work and the materials, is
fixed and nquidated, and receive or take from the
price because of railroad rebate. is beyond my
The government above all Others should not be
party to violation of either the letter or spirit
of the Interstate Commerce act, as regards the
question of rebates 1t should not engage in ques-
tionable transactions in order that a saving OF
ing results in the tearing, down Of a law which ex
perence proves very difficult if not absolutely inn
possible. to enforce
The Interior Department replied to this letter, IN
ssting on the legality of their proposed action and
stating that the rebates in question probably would
amount to 100000 in the next seven years. In
the of his response to this letter the Con-
troler says that the of these rebates being
large is cogent reason why the government should
make no mistake by being party to beneficiary
Of the violation of the law prohibiting the giving
Of discriminating rebates. He then says:
The carriage storing or handling Of PToPerty
free or at reduced rates for the United states Is
allowable under Section q of the amended Inter
! state Commerce act.
What constitutes the carriage of property for the
United States?
| Nothing short OF carrying property under a con-
tract with the United States for its carriage. in
any event, in my judgment. be considered a
carrying of property for the United States. There
must be a mutuality in the contract of carriage,
right of action by the carrier against the United
States or vice versa, in a case of breach Of con-
| tract of carrage-certanly nothing short of this
can constitute carriage Of property by a railroad
/ for the United States.
! For the above reasons, and many others which
might be urged, If you Will pardon the suggestion
1 advise that before you take rebates from rail-
roads the carriage Of property belonging to the
government contractors shipped by them, and paid
/ by them at the regular rates, you lay all the
facts before the Attorney General and procure his
opinion to the legality of such transaction. Let
repeat l attach special significance to the
willingness of the railroads to grant the rebates in
question