Omaha daily bee., 1908-02-16
BIG REBATES PAID
Government to Prosecute Southern
Pacific and Its Officials,
LAM ~ = THERS EVIDENCE
~ .Ce Commerce Commission
~ Makes Investigation.
SPECIAL RATE ARE GRANSTED
Refunds Amount from $4,000 to
$4,000 a Month for Long Period.
NO IMMUNITY FOR LUCE
During Taking of Testimony Mr.. Lane
Refused to Accept Statement
SPECIAL RATE ARE GRANsTEl
IMMUNITY FOR I
NO
During Taking of Testimony Mr.. Lane
Refused to Accept Statement
from General Agent
Under Oath.


WASHINGTON, Feb 15.-Prosecutions
are to be instituted by the government
against the Southern Pacific company and
against certain officials of that railway or
ganization on allegations that they paid
rebates to shippers.
Information 20 be basis of the prosecu-
| tions was obtained by Franklin X. Lane of
the Interstate Commerce commission last
autumn, in the course Of an extensive in
qury made by him into the affairs of the
! Southern Pacific company.
| BY direction of the Interstate Commerce
commission, Commissioner Lane visited the
Pacific coast and for several weeks con-
Quoted his inquiries into the alleged charges
of rebating which had reached the commits
| sion. Commissioner Lanes report of hds
investigation, including a transcript of the
testimony taken by him in a formal hearing
as an Interstate commerce commissioner,
was made public today. The report has
been approved by the commission and a
! transcript Of the report and the evidence
adduced at the hearing has been trans
mitted to the Department of Justice for
"such prosecutions under the law as may be
warranted"
No Immunity for Luce.
| Collateral with this proposed action by
the government the railroad commission of
| California has been furnished, at its own
request, with a transcript of the report and
evidence and has indicated to the Inter
state Commerce commission its purpose TO
prosecute alleged violations of the Cali
| fornia law that may be shown by the re-
port. The testimony taken by Commits
sioner Lane was voluminous and in the
A. axrfa ctNy rnf
to tn everbatim testimony are made as
basis for the several paragraphs of the
report One of the particularly interesting
features of the transcript of the evidence
was developed Just at the conclusion OF
the formal hearing when Commissioner
Lane refused to place on the witness stand
@. w. Luce, general freight agent of the
Southern Pacific railroad as witness
under oath. The request that Mr.. Luce give
sworn evidence In the case was made fy
p. T.. Dunno. counsel for the Southern Pa
cliffs company. Commissioner Lane declined
| to administer the cath to Mr. Luce becnuse.'
he frankly stated he did not wish to accord
10 Mr.. Luce by administering an oath to
him and taking his testimony immunity
from prosecution for violations OF the law.
He offered to receive a statement from Mr.,
Dunno respecting the rebate practices of
the Southern Pacific company and enter
It as a part of the record of the case but
he made 1t clear that this statement was
not to be made under oath.
Many Rebates Granted.
In the course of his report Commissioners
Lane says that his inquiry was conducted
in San Francisco on the second, third and
fourth days Of October, 1907, and that from
the evidence adduced he finds:
| ''The existence of an extensive system
| contain shin
pers on interstate business by the Southern
Pacific company The record dlscloses
list of los firms corporations and individ-
uals who enjoy what are known as 'spe-
cial inside rates-less than the rates pub
lished to the general public--on the move
ment of certain designated traffic between
points within the state of California.
THAT shippers paid the full published
rates in the first instance and We're allowed
the refund on claims which went through
the auditing department under instructions
from the traffic department that such
special rates should apply upon interstate
shipments without traffic authority.
Large sums Refunded.
THAT such refunds amount in various
months Of the years 1906 and 1901 to from
$50 600 to $4,000 per month.
THAT such refunds, given to one firm,
amounted to the sum of 81, ,994 during the
period from April 1906 (the date of the San
Francisco fire. when all previous records
were destroyed, to September a. 1907, and
such refunds to other shippers ranged in
amounts from s1S6sO to s2225l.
THAT such refunds or discounts from the
regular rates have been continued for
long period and up to the date OF the hear
ing in October. 1907.
Of auFh atQta alinDQrg to
whom such refunds were allowed. were
large interstate shippers.
''That one of such shippers admitter at
the hearing that the granting OF such In
side rates on the state movement influenced
the routing OF subsequent interstate ship
ment of such traffic over the rails Of the
Southern Pacific company.
''That in one instance the general freight
agent of the Southern Pacific company
provided by voucher dated July 81, 1906,
for the payment to an interstate shipper
Of one-half of the local rate, which such
4 shipper had paid to another railroad from
the point OF origin to a Southern Pacific
terminal, where the traffic began its inter-
state journey over the Southern Pacific
lines.
Details of Understanding.
''That there existed for years an under
standing between the Southern Pacific and
the Santa Fe and certain shippers of dried
fruit, that traffic which moved into points
OF concentration for transcontinental ship
ment should be entitled at the end Of the
shipping season TO a refund of one-half OF
the local state rate charged at the time
of the original movement
THAT the voucher books containing the
so-called refunds on state shipments also
contained records OF refunds given upon
interstate shipments
THAT some of such refunds upon inter
state business were paid by special written
direction Of freight officials after the
claims had been denied by the auditing
department
The justification offered by the Off
cials and representatives of the Southern
Pacific company for the practices revealed