The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-03-22
new HUNT FOR REBATE FRAUD
COMMERCE COMMISSION TO GIVE
HEARING HERE FRIDAY.
Shippers Are Charged With Undertaking.
and disappearing Freight shipments
mi by Inference the Railroads Are
Charged With Hinking at the Practice.

WASHINGTON, March 2l.-The Interstate
Commerce Commission will begin an in
vestigation in New York on Friday which
the Federal authorities expect will de-
velop sensational evidence tending to chow
a relationship between the railroads enter
ing the city and certain shippers whereby
the latter got privileges that practically
amount to violations Of the a~nti-rebate
law. The shippers are charged with unoer-
billing and misrepresenting freight ship
merits, and by inference the railroads are
charged with winking at the practice. The
commission made the following
ment In the matter to-day:
Upon reports to the commission that many
shippers In and about the city OF New York
have been perslstently undertaking end mis-
representing freight shipped by railroads
from that city and other points In Eastern
territory the commission has ordered an
investigation and set the matter down for
hearing at the United States court rooms, New
York city, on Friday. March 20. at 1880 A. NJ.
1t Is expected that highly interesting develop
ments will take place, Indicating frauds on the
part Of shippers which amount to forced
rebates from public tariff rebates,
1t was explained at the offices OF the COM
mission to-day that the projected inquiry
is based Upon complaint comm from
various sources" although it was made
clear that the railroads did not bring the
case to the attention OF the authorities The
complaint made is In substance as follows:
1t is alleged that certain shippers have
been in the habit of undertaking shipments
by misstating the character Of commodities,
the object being to have their freight so
ella ssihed as to secure a rate lower than
that given competitors. For example, a
-ls1n - VATtl Nnann a nNnaInnnlnnf ~
fine cutlery as bar iron. The underbilling
also extended to weights, although as a
general proposition it was confined to what
Is officially described as a "misdescription
Of property"
This abuse is In the nature OF a rebate,
and several cases of the kind have recently
been reported, notably one at Louisville
and one at Cincinnati. According to in
formation received by the Interstate Com
MERGE Commission, the practice has been
quite general in New York, and every rail
road entering the city is involved.
Chairman Knapp OF the Interstate Com
merce Commission said to-day that he
regarded the forthcoming investigation
as one Of considerable Importance. He
could not tell just how long it woald con-
tlnue or whether the hearing at New York
would be extended.
The Federal Grand Jury yesterday re-
sumed its investigation into the alleged
infraction OF the Elkins anti-rebating law
by the American Sugar Company and the
trunk lines running out Of New York. 1t is
known that the Grand Jury has documen-
tary evidence by the bushel tending TO show
that rebates OF . to 5 cents a hundred pounds
on westbound freight were secured by the
trust.
These consist OF checks for transfer
charges which the roads paid although
shippers of other commodities got none)
lighterage charges and various payments
made under the head, "Readjustment of
Revenue"
Of NJ the M' r Americs sne g grsser' c Sfsrls mana 9 ges
with the Grand Jury for two hours. 1t is
understood that he gave information show
ing that the alleged rebating arrangements
have been In force eince January 1, 1905,
when he took Office,