The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-04-03
REBATE INDICTMENTS FOUND.
NEW YORK CENTRAL AND SUGAR
TRUST MUST ANSWER.
Federal Grand Jury Has Completed the
First Stage OF It's Work-No IndIvid'
uals Yet Accused-Win Soon Take
Up the Charges or Illegal Pooling.

'No
1t was learned at the Federal Building
yesterday. but not announced officially,
that indictments nave been found against
the New York Central and Hudson River
Railroad and the American Sugar Refining
Company for combining to give the sugar
company rebates in various forms on all
its through westbound freight. No indi-
viduals have 80 far been indicted,
The Federal Grand Jury, it is believed,
found the indictments some time ago,
although they have not yet been formally
handed down. They continue their de-
alterations to-day or tomorrow, and will
then go into the transactions between the
trust and the eleven other railroads named
In the complaint filed by William r. Hearst
at Washington. These proceedings, 1t Is
said, will lead to indictments against the
other roads.
The New York Central Railroad was
accused with the other roads Of giving the
American Sugar company rebates OF from
7 to is per cent. on its through westbound
tonnage. This amounted to from two to
five cents per 100 pounds to Chicago. The
rebates we're paid, it is charged, in the form
of transfer and trucking charges to j. f.
Bendernagel, superintendent of the Ameri-
can Sugar company's refineries in Brooklyn,
although 90 per cent. of the sugar was
dumped directly into cars in the company's
refineries. Other forms the rebates took
were lighterage charges, paid to Lowell M.
Palmer. The railroads, although paying
the trust for lighterage, did the job them
selves, it was asserted. Other DISCUSSES
given the rebates were damage claims,
readjustment Of revenue, overcharge re-
turns and the like.
Besides P. T. Riley, the traffic manager
of the trust, who, it was asserted, got up
the rebating arrangements between rail-
roads and trust, Palmer, r. N. Parker,
present traffic manager for the trust; Ben
dernagel, H. T. Leeming, former assistant
to Riley, and several subordinates in the
traffic department of the trust have testified.
The indictments, it is understood, charge
the two corporations with combining to
give the sugar company lower rates than
the tariff rates in discrimination against
other companies, This is a misdemeanor
under the Elkins law, punishable by a fine
of from 81 900 to 500, COO for each offence.
1t is understood that more than one specific
offence is charged in the Indictments.
The investigation will 10Y enter the
more problematical stage of determining
whether the price the sugar company paid
the trunk ines for the rebates was also an
infraction of the Elkins law or not. 1t is
known that the roads entered into a pooling
agreement to divide all Of the enormou
through westbound freight among them
selves in return for the under charges.
Each road got its percentage Of the traffic,
which totalled 700, 900 tons a year, or nearly
40 per cent. of the total through westbound
freight.
This agreement has existed for years, it
is known, being readjusted on the COM
plant of this road or that from time to time.
From 1901, when the present agreement went
into effect, the Central got about 2S per
cent. of the through tonnage. Next came
the Pennsylvania with a little more than
20 per cent, and so on down the line.
The case against the Pennsylvania will
soon be investigated. The other roads
against which the Grand Jury is taking
evidence, either for rebating or being con-
cerned in the pool, are the Erie, West Shore,
Lehigh, Delaware. Lackawanna and Wes-
tern, Jersey Central. Reading. Baltimore
and Ohio. Chesapeake and Ohio, the Central
Railroad Of Vermont and the New York,
Ontario and Western.