New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-03-22
GREAT FRAUDSALLEGED
RAILROADS COMPLAIN.
Commerce Commission to Investigate
Charges against Shippers Here.

Washington March 21.-The Interstate Com
merce Commission will hold hearing Friday
morning I'm the United States Court rooms New
York City, which may produce sensational de
veopments A number of the largest CONNER
cial houses Of New York will be on trial before
the commission for "persistently underbiling
and misrepresent:ng freight shipped by railroad
from that city to other points in Eastern terri
tory" and certain officials Of the railroads that
are said to have been so defrauded win ACT as
prosecuting witnesses. If the charges are sus-
tained, member Of the commission is authority
for the statement that criminal prosecutions
will follow. Chairman Knapp viii preside at the
inquisition. and Will be assisted by Commission
ers PrOuty and COckreII and. possibly, Mr.
Clements The commissioners will leave Wash
tngtOn for New York tomorrow afternoon.
The magnitude Of the case which the commits
sion is about to ventilate may be judged from
the fact that combined complaint from all the
great railroads entering New York has been
made against the practices OF large shippers
The roads have lost hundreds Of thousands of
dollars yearly through the frauds, their man
ayers assert and, although they have employed
many inspectors and secret police to investigate
the cases, and have caught many shippers red
handed in deception, the swindlng persistentIy
continues, they declare
IT would be an injustice to divuIge the names
entered
last complaints" said high official OF the Inter
state Commerce Commission to-day for il I
did they would be bOycOtted by the shippers
There have been many complaints registered
from time to time. however, that II is fair to
announce that the protest comes from practically
the combined railroad interests terminating at
New York. From the evidence presented to the
commission, the frauds perpetrated upon the
roads by the shippers may be many thousands
OF dollars yearly. These consist in the main Of
false representations regarding the contents Of
boxes and crates shipped by rail. For instance
a shipper will send a box to the railroad billed
TO Boston and state the bill of Iading that
II contains cotton goods. AS matter Of fact IL
contains silk or velvet millinery. which would
require higher rate. There is nothing on the
outside Of the box to give cIew to its contents
and unless the railroad authorities open il thew
cannot know the fraud which has been perpe-
trated upon them. From the evidence presented
to us It seems that the railroads in New York
have employed a force OF detectives. perhaps
a hundred in number, that has been engaged in
collecting evidence against this class Of swind-
lers They have opened thousands Of boxes and
discovered hundreds OF frauds. Some Of the
biggest shippers in New York are implicated.
AT the hearing Friday I suppose that the
main evidence will be submitted by the railroad
detectives During the last few weeks the COM
mission has had agent. P. ]. Farrell, work
ing on the case in New York, and it is probable
that his evidence will be submitted to the com
mission at Fridays hearing. I doubt that any OF
the shippers will be represented. They will come
forward later. 1 presume. Before taking any
action will OF course give them a chance TO
be heard Often the most damaging evidence
may be disprOved In the case Of the men who
have been deliberately defrauding the railroads,
however I DO not believe they will care 10 be
heard. The less they say the better IL will proba-
bly, be for them.
About three or four years ago the Interstate
Commerce Commission made similar investi-
cation in New York and found much evidence
of this sort of crooked work We did not make
any prosecutions at that time. however. merely
contentiug ourselves with warning the shippers
whom found guilty of the frauds that repe-
ttion Of the offence would be followed by GRIM
inal prosecution. They promised to reform, and
for time. I believe, dessted from the practices
which were charged against them But the re-
| form was short lived. Like a great many other
people who believe that cheating a railroad IS
perfectly legitimate and proper they persisted in
making false statements the character OF
their shipments, and the protest which we are
investigating is the result
The only official announcement that could be
obtained regarding the case from the Office OF
the commission was contained in the following
bulletin
on reports 10 the commission that many
shippers I'm and about the citv of New Yorx
have been persistently underbilling and mis-
representing freight shipped by railroad from
that city and other points I'm Eastern territory.
the commission has ordered an investigation and
set the matter down for hearing al the United
states courtrOoms. New York city. on Friday.
March 2S. at i0:30 a. m. II is expected that some
mighty interesting developments Will take place.
indicating frauds on the part OF shippers which
/ amount to forced rebates from published tariff
rates.
p ] Farrell. attorney. who has been col
lecting evidence I'm this city for the Interstate
Commerce Commission. said last evening AT the
Park Avenue Hotel:
In advance OF the sitting of the commission
ON Friday it would not BE proper for me to give
the names OF any New York shippers who have
been violating the law 10 obtain lower freight
rates than they are entitled to receive ON goods
shipped into the district east of Chicago and
north of the Ohio River. II may he said. how
ever, that some Of the largest business houses
i'm the city have been persistent vtolators Of the
law I'm that respect for some years
Goods shipped by New York houses into the
I district / have mentioned are divided into six
classes and two additional subdivisions. really
into eight classes. for freight charges on goods
Of the first class. which include many lines Of
drygoods for instance, the freight charges may
be - cents hundred pounds TO a certain point
I'm the district, while on goods Of the lowest class
IL may be only - cents. or One-third Railway
inspectors have found that goods OF the first
class have been shipped from this city, in many
/ cases so marked that the freight rates for lower
I classes would he charged
Large business houses i'm this city have ship
ping clerks who we'll acquainted with the
law as the railroad officials. When such
shipping clerks persistently place wrong labels
I on packages of goods sent by freight, they do
II for the purpose Of getting cheaper rates than
the shippers are entitled To receive the goods
In that way they force the railroads TO disCrm-
mate i'm freight charges against the honest ship
.They are taking great risks. too. for under
the F,llsins law thew are liable on detection 10
ha, md NOT rg4r,- rh7v,