The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1906-08-05
PASSING OF The
RAILROAD REBATES
An Expert View of the New
Rate Law
BOTTOM OF Discomfort
Some Estimates of the Extent to
Which Special Privileges Were
Granted to Shippers In
the Past.
From the New York Times.

does In the fact that the passage of th is
law heralds a period of enforcement of
statutes which in many respects had been
allowed to become dead letters. 1t has
been universally admitted that not the
rates themselves, but the discrimination
between shippers, has been the founda-
ton of the discomfort which has found
expression in the enactment of a new law
governing the relations OF railroads and
other transportation companies and ship
pers. The new law, by imposing the
penalty of imprisonment for infractions
of the law and by clarifying certain fea-
lures of the old law, which were more or
less obscure, has gone long way in the
direction of forcing the railroads to deal
fairly with all shippers, without unjust
discrimination. Such in spirit was the
intent of the law. The new law differs
not in the intent but in the method of
carrying It out.
That strlcter enforcement of the law
regulating the relations of the railroads
and shippers rather than radical changes
in the law itself was what was needed
Is very clearly shown by the results of
certain recent prosecutions under the old
law. OF late shippers have been called
railroads, in breaking the law of the
land against special privileges to indi-
vdual shippers.
Railroads and shippers must be treat
ed alike in cases wherein they violate
the law. This is so both under the law
and under any code of morals. Both ship
pers and the railroads must understand
that however artful the scheme there is
equal intelligence which will uncover and
expose its negligence. And If railroads
and shippers doubt this they will do well
10 remember that they are playing against
stakes of large fines and judgment Of i'm
prisonment. And in playing the game they
take all the Chances Thus Judge Nc
Pherson of the United States court in
passing sentence recently upon shippers
and railways convicted at Kansas City
Of infringing the law against rebates
gave expression to the equal responsible
ity of shippers and the railroads.
Improvement Already.
Even In advance of the operation of the
new law there has been Il vast better
ment in the matter Of the abolition of re-
bates. Some railroad officials of wide ex-
perience even go to the extent OF saying
that rebates are a great diminution both
IN the amount and and the frequency of
such Illegal faVors to shippers. Any ac-
curate estimate of the extent to which
rebates were granted to shippers during
tlle time when the system was very gem
orally followed by the railroads. in many
cases with a freedom which showed that
the law against them was regarded as
dead letter, seems impossible. Some rail-
road officials have made estimates which
they declare to be conservative, although
startling in amount. 1t is the belief of
some railroad presidents that the rebates
granted by the railroads in the past have
amounted on an average to not less than
per cent OF the gross earnings OF the
railroad, or to about $100. 600. 900 a year
Others inclined to greater conservatism
say that the amount which is probably
being saved to the railroads by the dis
continuance Of rebates is about $50, Co.,
600 a year. Joseph Ramsey, Jr. formerly
president OF the Wabash railroad is
among the railroad men of wide expert
ence who believe that the amount exceeds
$50, 900. 900
Savings of Rebates.
The amount the railroads are saving by
the abolition of rebates means practi-
cally just so much added to their net
earnings, except In the cases where rates
are reduced in some proportion cores
ponding to the amount OF the rebates
previously allowed to shippers Such re-
auctions seem particularly probable In
cases where practically all the shippers
on certain lines were given a concession
from the published rate. 1t is said by
railroad men that in some instances, al
though rebates were given, there was no
discrimination, inasmuch as all shippers
had come to know and to demand the
rebates which in the beginning were
granted only to favored few. 1t is in
teresting to recall that some months ago
movement was under way among a
number of railroads in the Central West.
to make a reduction of about 10 per cent
in the rates on large number of com
modities for the purpose, 1t was privately
explained, of giving to shippers as low a
rate as they had actually enjoyed while
rebates were allowed.
Estimated at Per Cent
The estimateso per cent OF the rail-
roads gross earnings as the amount of
the rebates granted annually to shippers.
while very large, does not seem impos-
sble when viewed in the light of the
statements on the subject of rebates made
by the railroad men who are In position
to speak authoritatively. One well known
railroad president said last week that in
the past rebates granted by one railroad
about whose affairs he was personally
informed amounted to fully 10 per cent
of the roads gross earnings. ! n referring
to this fact he pointed out that the abol-
ton of rebates was an event of great
Importance to the stockholders of the rail-
roads. Any probable reduction Of rates
by the interstate commerce commission
under the authority recently conferred
upon II would. in his opinion, he said.
fall far short of the amount which in
past years had been allowed the ship
pers in the form of rebates
President A. B.. Stickney of the Chicago
Great Western Railway company, one OF
the railway men who took the most adj
yanced position in regard to amended rail-
road legislation, has prepared an interest
ing abstract of the provision OF the old
interstate commerce act and of the law
which has just been put on the statute
books. In laying emphasis on the fact
that the important parts OF the new law
are the sections which strengthen the
hands of the government against the
granting of rebates by the railroads.
rather than those which provide for the
direct regulation of rates. Mr.. Stickney
says in his comments ON the abstracts of
the two laws:
ut is evident that the time has come
when both carriers and shippers must
obey the interstate commerce law. The alb
stract does not embrace the provisions
which empower the commission, under
certain specified conditions. to determine
the reasonableness of rates. because the
prime purpose OF the law is not the maxi
ing OF rates by the commission. but to
prevent one shipper deriving an advan-
tage over another shipper
In further discussion of this point Pres
ident Stickney says:
~I..1. - fCu L. ~ In Inn