Los Angeles herald., 1908-06-02
S. P. INDICTED
FOR REBATING
RAILROAD ACCUSED ON 20
COUNTS
FRUIT COMPANY FAVORED BY
HARTMAN LINE
Federal Grand Jury Returns Charges
Against Big Transportation Line.
Important Points In
voIved

In a partial report issued by the fed
eral grand jury yesterday indictments
were returned against the Southern Pa
cinc company for alleged rebating.
The alleged recipients of rebates are
the Harris-NewmarK company of Los
Angeles, Tung Hob and Hong Hob of
Los Angeles and the Penn J'ruit COM
pany of Riverside.
The report contains also three IN
dictments for alleged land fraud.
In connection with the latter indict-
ments the following Los Angeles citi-
zens We're arrested: Herbert c. Oak
ley and John w. Oakley, each of whom
furnished $2500 bail; Paul T.. McPher-
rim, who furnished $1,000 bail, and Hiram
w. Blaisdell, president of the Blaisdell
Filtration company, who furnished $500
bail.
1t is said these alleged land frauds
are similar to the oregon land fraud
case recently tried before United States
Commissioner William Van Dyke.
The indictments against the Southern
Pacific involve twenty-nine counts.
Fruit Company Named
The first Indictment, which is against
the Penn Fruit company of Riverside,
includes three counts. Between Janu-
ary and May, 1906, it is alleged that
this concern shipped 1881 boxes of
fruit to various points, receiving for
this a refund of $256.21 on August 20,
1906.
In the second indictment are alleged
rebates on shipments of rice between
Los Angeles and San Francisco, the
rebates being given to Tung Hob ana
Hong Hob. the rice coming from Hong
kong originally.
Fifteen counts are contained in the
third BILL which alleges that the Har-
is-Newmark company received rebates
on shipments of hides from points In
Arizona and Texas June Il. 1906.
The grand jury has adjourned until
Friday of this week, when 1t Will con-
tinue its Investigations
Another partial report may be made
at any time during this term of court.
United States District Attorney Oscar
Lawler made a statement against the
concerning the indictments against the
Southern Pacific for rebating. He said:
There are three indictments against
the Southern Pacific company. each of
which is based upon transactions
brought out at the hearing before In
terstate Commerce Commissioners
Franklin. X. Lane at San Francisco in
October, 1907
''The first consisting of three counts,
charges the granting of rebates to and
practicing discrimination In favor of
the Penn Fruit company, an orange
packing concern at Riverside, Cal, and
departing and deviating from the es-
tablished tariff in reference to ship
ments of fruit by the Penn company.
The fruit company named has pack
ing house at Riverside, accessible to
the tracks of both the Southern Pa
cific and the Santa Fe railroads.
Like all the fruit shipping concerns
ii was required to bring it's fruit to the
railroad for interstate shipment. Dur
ing the year 1906 it purchased large
amount of fruit at Arlington on the
line of the Santa Fe and shipped 1t
over the latters track to the line of the
Southern Pacific, for which service 1t
was, of course, required to pay the
local freight to the Santa Fe. At the
end of the season the Southern Pacific
company paid back to the Penn Fruit
company 80 per cent of the cost or
hauling the oranges referred to from
Arlington. That season the Southern
Pacific got all of the Penn company's
business, except only such as involved
shipments to points not accessible over
the Hartman lines.
Favored One Company
For making this payment the rail-
road company is charged with rebating.
AS like consideration was not shown
any other fruit shipping concern at
Riverside, it also constituted dis
elimination in favor of the Penn COM
pany and against the other packing
firms similarly situated; the interstate
commerce law forbids such favoritism,
the railroad company is further ac-
cused of violating the law in that re-
spect.
1.-THE law also required the tariffs
published and filed to set forth all
terminal charges and rules, which In
any manner affect the totals of freight
rates, whether by deduction or addi-
tion. AS no provision is made in the
tariffs for such payment the indictment
also charges a departure from the
tariff.
1.-THE second indictment charges the
granting of rebates to Harris, New
mark & Co. of this city, on account of
the shipment of hides from points in
New Mexico and Arizona to Los An
geles 1t contains fifteen counts. each
of which covers separate shipment of
hides upon which the lawful tariff of
ST per hundred pounds was paid, and
upon which, after the rebating of the
freight at that rate, the railroad COM
pany granted a rebate of 10 cents per
hundred pounds.
Gave Rebates to Chinese
1.-The third indictment is based upon
rebates granted by the railroad COM
pany to Chew Pack, Sun Wing Wo
and Kwong On, three local Chinese
firms, and contains eleven counts. The
Chinese firms named during the year
1906 imported a large amount of mer-
chandise, particularly rice, wine and
beans. from China by way of San
Francisco; this merchandise was
shipped over the Southern Pacific from
San Francisco to Los Angeles in bond,
the entry for consumption having been
made by the importers through the
custom house at Los Angeles. The
government contends that until they
reached the importers these shipments
were foreign commerce, and therefore
subject to the regulation OF federal
legislation.
''It is understood that the railroad
company contends, however, that they
ceased to be foreign commerce imme-
diately upon arrival at San Francisco
and that the transportation from that
city to Los Angeles is local matter
with which the federal government
has no concern.
Questions of law having a material
and importan bearing M IN the ex-
nf t.s.f u a. H# fAdaT9I