The Globe-republican., 1905-04-13
Comptroller Of Treasury Clashes with
Interior Department
SECRETARY S0RELY CRITICISED.
Accepted Rebates From Southern Pa
cific on Freight Contractors En-
gagged in Work in the West Under
the irrigation and Reclamation Act.


Washington, April 1.-THE compt-
roller Of the treasury has rendered
decision in which he criticises the
proposed action of the secretary OF
the interior in accepting rebates from
the Southern Pacific railroad on
freight of contractors engaged in work
in the west under the irrigation and
reclamation act. In communication
to the comptroller on March 20 last
the secretary of the interior says:
ON October IS, 1904, the depart
ment approved contract with the
Southern Pacific company providing
for certain concessions to contractors
under the reclamation act in the
freight rates on their plant and ma
terials shipped to and from the work
on the projects, Other contracts of
similar character have since been ne
gotiated with the principal roads. The
concessions in rates are brought to
the attention of the bidders on the
work of the reclamation service in
order that they make due allowance
for such concessions in their bids.
1.-The attention of this Office has
been called to request of Sherer &
Company, contractors on the Salt
river project, who desire to be advis-
ed whether they can obtain the bene-
fit of concessions on some shipments
soon to be made by them.
These contractors made their
bids before any concessions had been
arranged with the Southern Pacific
Company, so that their bids do not
provide for any benefit to the United
States and accordingly this Office has
decided that the contractor is not en-
titled 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 case the benefits
Of the concession of rates on the ship
ments may be taken by the govern
ment and credited to the project.
The comptroller in the course of his
reply says:
If | may be permitted to express
an opinion as to the legality of such
transactions, when considered in re.
Iation to sections and % of the in
terstate commerce acts of February
4, 1887, and 1889, would say that it
is extremely doubtful If either can be
maintained BY what authority the
government can contract with rail-
road that contractors plant shall re-
ceive rebate in freights not appli-
cable to other shippers, is beyond my
comprehension. If this right exists, 1t
might as well extend to flour, hay and
other commodities and the vehicles
used by a contractor in making deliv-
cry to the government. But, grant
ing such right exists, when covered
by contract, and such rebate taken in
to consideration when the contract Is
made, by what stretch Of authority
can the government step in where the
contract between 1t and the contract
or has been entered into and the
amount to be paid for the work and
the materials is fixed and liquidated
and receive or take from the price re-
bate is beyond my comprehension.
The government. above all 9TH
ers, should not be party to a viola
ton of either the letter or spirit of
the interstate commerce act as re-
CARDS the question of rebates. It
should not engage in questionable
transactions in order that a saving of
few dollars may be had, especially
when this saving results in the tear.
ing down of law which experience
proves Is very difficult, Is not impos,
Sible, 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 million dollars in
the next seven years. In the course
of his response to this letter the
comptroller says that the amount OF
these rebates being large is a cogent |
reason why the government should
make no mistake by being a party or
a beneficiary of the violation of the
law prohibiting the giving Of discrim.
mating rebates. He says:
advise that before you take re.
bates from railroads on the carriage
Of property belonging to the govern
ment 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 as to
the legality of such contraction. Let
me repeat, attach no special signif-
canoe to the willingness of the rail
roads TO grant the rebates In ques.
ton.
Dutch Squadron Sighted.
Walfevrpdan Island ~ lava Anril