Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1906-01-11
METHODS OF RELATING FAVOR
SHIPPERS DISCUSSED
By Ray Sfannard Baker in December
NCClure'S. Recent Wisconsin In.
veStigafiOn Revealed the Alarm.
ing Extent to Which This Practice
Was Being Carried On.

past Yeas was for he railroad company
to charge the favored shipper the full
freight on his goods, and then at stated
periods send him a check to the full
amount Of the agreed rebate. That was
one way-crude and easily discovered.
Another way was anI is to pay the fa-
vored shipper a so called commission on
his business, as though he were an agent
OF the company. Still another way is to
pay real traffic agent, say at Milwau-
kee, large commission or large salary
which he divides with the favored ship.
per. This method has spread enormous
ly in the past year-to the alarm even Of
the railroads. The Wisconsin investi-
gators found innumerable other devices,
like the under billing and the under.
weighting of freight, the allowance to
the favored shipper Of carriage or switch.
ing charges, or the permission to hold
cars as storage for coal or lumber for a
long time without demurrage, or refund
ing the demurrage, il charged.
The figures show that the St. Paul
railroad paid only about half the amount
OF rebates in 1903 as the Northwestern
railroad, it may be concluded that the
st. Paul is therefore the more vlrtuous.
But figures are proverbally deceptive.
1t was found that sometimes when one
railroad frankly paid cash the rival road
had another more secret, underhand way
OF doing the same thing. In one city
there are two equally important shippers
in the same business. One of them used
one railroad and received large rebates ;
the other. shipping by the other road ,
apparently received no rebates. But the
investigators know that the second ship
per could not have done business for a
month in competition with the first un.
less this great discrepancy in rebates
was somehow eqnalized. Upon insti.
tutng inquiries they found that the local
agent of the second road was empowe cred
to correct the way-bil and deduct Ger.
tain percentage from every f,eght-bill
presented to the favored shipper and to
forward the amount collected as the FULL
payment taking the necessary credit in
the agents weekly report. By this
method no discriminating evidences Of
rebates crept into the books OF the St.
Paul road.
And now the Northwestern railroad
has chosen new methods; it is learning
by experience. When the Wisconsin in
vestigators began work, the North western
railroad stopped paying cash rebates al,
most entirely; but Immediately it began
to issue great many so-called "hekto.
graph tarlfIs"-that is, rate schedules,
not regularly printed, and barely creep.
ling within the fringe OF the law, if they
even do that. And the effect of the
hektograph tariff was to give certain
shippers a Vantage over others-exactly
what the rebate did. Nothing could
show better the progress from the crude
cash rebate to the underhanded device
which accomplishes the same end.
In some cases determinations are the
result OF intentional mistakes in printing
rate.schedues. A defective tariff is
issued to the shippers in which, let us
say, the very natural error of 3, used
for an s. appears-a rate of 33 instead of
3S. When few copies have been print.
ed the error is "discovered," and the
schedule corrected for all ordinary ship.
pers.
Another device shows how the passen
ger and freight departments of railroad
work together in giving rebates. 1t has
long been known that the favored ship
per could often get pass not only for
himself but for his entire family. This
is, OF course, true rebate, for il saves
the shipper just SO much money. But it
is more or less public. therefore unde.
srable. Accordingly, one Wisconsin
railroad, among others, has been en-
ploylng much shrewder device. Ger.
tain large concerns in Wisconsin who
employ travelling men, purchase the
ordinary passenger mileage. book, upon
the cover of which, when the mileage is
used, the railroad will refund 500. But
it was discovered that in the case of Ger.
tain favored shippers. when the cover
was sent back, the railroad refunded 500
in the ordinary way, and then after
wards and secretly they rebated the
ENTIRE ORIGINAL COST OF THE BooK-or
$50. In other words, these favored Wis.
consin industries were able to send out
their entire force of travelling men with.
out paving one cent of railroad fare
while their competitors paid full fares.
A good many business men of Wisconsin
do not know, today, of this insidious and
desplcable competition which is under
mining n dir hroinooc Th;a ;olo