The Birmingham age-herald., 1908-02-16
Commissioner Lane Has Some Strong Evidence Against
 Southern Pacific
RELATING PRACT TICE IS
 KEPT UP FOR MANY YEARS.
Commerce Commission Will Take Up Suit Against Hartman Lines at Early Date To Stop
 Relating To Favorites.

Washington, February 15-Prosecutions
 are to be instituted by the government
 against the Southern Pacific company and
 against certain officials of that railway organization on allegations that they
 paid rebates to shippers
 Information, which is 10 be basis for
 these prosecutions, was obtained hy Franklin K. Lane of the interstate com meree commission last autumn in the
 course of an extensive inquiry made by
 him into the affairs of the Southern pa-
 cife company.
 1 By direction of the interstate commerce commission Commissioner Lane visited the l Pacific coast and for several weeks con- 1 dueted his inquiries into the alleged
 charges of rebating which had reached
 the commission. Commissioner Lanes re-
 port of his investigation, including d
 transcript of the testimony taken by him l in d formal hearing as an interstate
 commerce commissioner. was made public
 today. The report has been approved by
 the commission and transcript of ths report and of the evidence adduced 1t
 the hearing has been transmitted to the department of justice for such prosesu- tions under the law as may be war-
 ranted'
 l Collateral with this proposed action bv
 the government, the railroad commission | of California has been frrnshed at it's l own request with a transcript of the re- port and evidence and has indicated to
 the interstate commerce commission it's purpose 10 prosecute alleged violations of
 the California law that may be shown by l the report.
 Feature of Evidence.
 One of the particularly interesting fea- l lures of the transcript of the evidence was developed at the conclusion of the
 formal hearing, when Commissioner
 Lane refused to place on the witness
 stand G. W. Luce, general freight agent
 of the Southern Pacific company as d
 witness under oath The request that MT.
 Luce give sworn testimony in the case l was made by P. F. Dunne, counsel for
 the Southern Pacific company. Commis- 1 soner Lane declined to administer the
 oath to Mr. Luce because, he frankly 1 stated. he did not wish to accord to Mir. l Luce by administering an oath to him and tafihg his testimony immunity from 1 prosecution for violations of the law. He | offered to receive a statement from MT. | Luce respecting the rebate practice oe l the Southern Pacific company and enter I 1t as q part of the record of the case. l but he made it clear that this statement
 was not to be made uNler oath. i In the course of his report Commis-
 sioner Lane says that his inquiry was 1 conducted in San Francisco on the second. l third and fourth days of October. 1907, and
 that from the evidence adduced he finds.
 Commissioners Findings.
 That there exists an extensive sys-
 tenn of preferential rates granted certain shippers of interstate business by the Southern Pacific company. The record
 discloses list of 1OS firms, corpora
 tions and individuals who enjoy what are
 known as special Inside rates less than
 the rates published to the general public, l on the movement of certain designated l traffic between points within the state of l California.
 That shippers paid the full published rate in the first instance and were al- l lowed the refund upon claims which
 went through the auditing department un-
 der instructions from the traffic depart
 ment that such special rates should ap- | ply upon interstate shipments. l That such refunds amounted in va
 rious months of the years 1906 and 1907 to l from $S0,000 to s5o,oo0 per month. That such refunds given to one firm | amounted to the sum of S23, ,994 during tho 1 period from April, 1906 (the date of the San Francisco fire, when all previous rec l ords were destrowed) to September 24, 1 1907 and such refunds to other shippers ranged in amount from NS,690 to $22,251. That such refunds or discount from l the regular rates have been continued for long period. and up to the date of the hearing in October, 1907
 That many of such state shippers to
 whom such refunds were allowed were 1 large interstate shippers.
 Shippers Admission. | That one of such shippers admitted at the hearing that granting of such inside rate on the state movement influenced tho routing of subsequent interstate shipment of such traffic over the rails of the South | ern Pacific company.
 | That there existed for years an under 1 standing between the Southern Pacific | company and the Santa Fe company and certain shippers of dried fruit that the l traffic which moved into points of con centration for transcontinental shipment
 should be entitled at the end of the ship | ping season to refund of one-half of
 the local state rate charged at the time of the original movement.
 That the voucher books containing the Y alled refunds on state shipments also itained records of refunds given upon interstate shipments.
 That some of such refunds upon inter- state business were paid by the written directions of freight officials after the claims had been denied by auditing de- partment."
 It is known that by instructions of At torney General Bonaparte, the district att | torneys have already taken up the cases | to be instituted for the purpose of begin