New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-04-27
TRAFFIC CLUB DINNER
INGALLS, ON RAILROADS.
History of the Secret Rebate, Its
Causes and Effects.

FttSburg 2S.-Ihree hundred OK 'i"IO
railroad presidents presidents freight agents
traffic managers and other officials. besides manu-
facturers and all classes of shippers OF he!sht'
were guests Of the Traffic Club, OF Pittsburg. To-
night its fifth annual dinner at the Hotel
I Scheney
The features of the dinner were the speeches
/ Of the clubs president. w A. Terry, genera
/ freight agent Of the Pirtsburg Lake Erie road;
Melville f ingalls,, chairman Of the board OF ~
/ rectors of the Big -Four system. and ChatIeS -
! Hamlin, corporation counsel OF Boston
President Terry fl lis address az welcome 70 tAe
guests. presented many suggestions TO both snip
! per and carrier as to their duties toward eae"
! other further spirit OF cooperation. ana a's'
advised that each interest BE Represented On '"'
( Interstate Commerce Commission.
J. NJ BelleviIle general freight agent OF tie
} Ptttsburg Plate Glass Company. was then pro
sented postmaster, and introduced MT- InsaI'''
| Mr. ingalls, said in part.
Until the passage of the Interstate Commerce law
in 1885 il was the custom among all the raiINagS
20 make secret contracts, selling Their Ndhspot -
ton to wholesale bidders at the best prices pos
sible trying thereby build up the industries OF
the country and secure returns tor thet stoch 49,
/ way of conducting business When competition sQ'
I too severe pools were made, by which the pusl-
/ ness divided and the rates secured. 49,,
/ For fifteen years a contract existed between tAe
Lousviiie for a division Of the business, by which
in round terms put in 81 per cent for dong INC
certain terms. The question of violation OF the
was violation Of the common law. but FOR f{teen
wears tina. pool so-caIled existed ana saved hun
dreds and hundreds of thousands Of dollars to the
railways and protected the shippers by steady ana
reasonable rates There were also many others IN
When the Interstate Commerce law was passed
in 1856 prohibiting pooling such arrangements were
all ended. and the railways endeavored to conduct
/ their business by agreement under that law
graduaIiy the competition for business increased
One line would endeavor TO get more business. and
/ more and the result that the system Of re
bates grew into tremendous proportions. Published
/ diSTPRarded
existence among the different lines,
The situation became so acute in 1885. said Mr.
Ingalls,, that, fearing bankruptcy, a meeting was
called Of all the lines north of the Ohio and east
. az the Mississippi! river The meeting took place
/ in New York and a committee was appointed and
/ struggled for weeks 10 draw up an agreement by
/ which the roads could maintain their tariff and at
/ the time comply with the law. The Joint
/ Traffic Association agreement finally drawn
In the months following said Mr. Ingalls, rates
were better maintained than they had been for
years before. 1T was never for instant thought
bv any Of US that there was any danger from the
Sherman law socalled." said Mr.. ingalls,. In fact
/ had been told by the author Of that famous law
when it was passed that il did not apply to rail-
| ways" He went on:
We were brought into the courts however by
SaipPerS %h9 We're opposed 10 any maintenance or
Were aware Of IL the Supreme Cour, had decided
Missouri agreement that it was in conn.ct with
'' As S me MAJ: law and Illegal
mens whicp they tried 70 keen but eact anasse
underworld to secure as macb business ne noss5Io
FL ~. ili3 doa9 on me best terms he could make
co6sa ara S9nfraSs than on Pu5e tariffs with
of dollars were paid out without Toacher or re-
cept by franc managers and solicitors and 10 the
any complaint of misuse Of these funds. In no
many millions On bandid were mere nave oeen so
record SUI" d
way in the S"hg the sae Rs 81 r9
ties OF the railways had drifed to Wall street. and
were coniroled by cNques. who used them perhaps
! not Tor investment so much for counters In
ing In 1889 some Six or seven or TIES men p'Y r.
The hope OF saving the railways and the business
dubbed the community Of interests TINT tuev
all the railways Of the United states and thercby
produce Joint ownership and through it a main
The failure OF this plan Mr.. Ingalls, attributed to
| nternecine warfare among the chiefs for the con-
troll OF certain properties during which skele-
| tons in their closets were laid bare that the
public could sec what was being done The dis
satisfaction created among the people by stock
Juggling finally took form in the Northern secur-
ties case. SIR. ingalls, said;
II 1t had not been for that suit few would
this country and while they would have naintain
rates they would have made and unmade states
latures and In the end no one knows what tho re-
The decision OF the courts was against thi. com
bination but instead of accepting the situation.
10 enable them go or and manage their proper
ties legally they continued to temporzc with var-
Gus deals and subterfuges 10 avoid the effect OF Il.
Mr.. ingalls, referred 10 the Increase Of prejudice
against corporations and railways in particular by
| the life insurance disclosures He said that tho
men who have received favors and free transporta-
ton are the loudest In preaching reforms and rail-
! road legislation. He thought President Roosevelts
| remark that he is about the best friend the rail
roads have TO be pretty near true"
ReveTting 70 rebates Mr.. Ingalls, said that somc
might have been granted that shippers might crush
out competitors. but that there are always dis
honest men In every profession" He defended re
batting and secret reductions not being contrary
| to public sentiment at the beginning. Railways
were considered by the great Of the people to
| be private corporations, managed like mercantile
houses. and permitted TO sell their transportation
! for the best prices possible. The advantage III
! movement Of cars East West also cited as
having logical effect
Part Of Mr.. Ingalls's advice the owners and
managers OF railroads TO solve the present problems
| was as follows:
You must manage your railways so as to placats
| the puDnc. While being conservative and protecting
| your interests, you must give the public the con-
| sideration that IS due them You must re- ason hnd
explain your situation 10 Congress, legislatures
10 CITY soTSIhineits, 10 commercial bodies
you must show that the railways of this country
are not overcaptalized. that not for an instant
could they be- reproduced for their present bonds
and stocks
BY patience and time the legislation of Congress
be harmonized. II will not do TO have forty TX
passing fOrty-six different acts SO far as 1t
is possible, all legislation in reference rates
should be left 20 Congress. but the states should
exercise their full power to repairs con-
dltion OF the property. etc.