Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-02-16
TO PROSECUTE THE
SOUTHERN PACIFIC
Instructions Issued by the At
torney General.
GIVING REBATES CHARGED
Action to Be Brought Against Ger
tain Railway Officials.
NAMES ARE NOT YET DISCLOSED
Information Obtained by Interstate
Commerce Commissioner Lane
in San Francisco.
GIVING REBATES CHARGED
Action to Be Brought Against Ger
tain Railway officials.
NAMES ARE NOT YET DISCLOSED

Prosecutions are to be instituted by
the government against the Southern
Pacific company and against certain Of
ficials of that railway organization on
allegations that they paid rebates to
shippers.
Information which is to be used as
basis for these prosecutions was OBJ
tanned by Franklin h. Lane of the in
terstate commerce commission last au-
tumn. in the course of an extensive
inquiry made by him into the methods
of the Southern Pacific company. BY
direction of the interstate commerce
commission. Commissioner Lane visited
the Pacific coast. and for several weeks
conducted his inquiries into the alleged
charges of rebating which had reached
the commission. Commissioner Lanes
report of his investigation. including
transcript of the testimony taken by
him i'm formal hearing as an inter
public last night The report has been
approved by the commission. and
transcript of the report and OF the evil
dence adduced at the hearing mas been
transmitted to the Department of JUS
tice for such prosecutions under the
law may be warranted.
Collateral with this proposed action by
The government. the railroad commission
of California has been furnished at It's
own request. with a transcript of the
port and evidence and has indicated to the
pose to prosecute alleged violations of the
MIA law that may be shown by the
report.
attorney Generals Instruction.
II is known that by instruction of At
torney General Bonaparte the district at
torneys already have taken up the cases
TO be instituted for the purpose of begin
ming the formal proceedings as soon as
possible Names of the officials against
whom the prosecutions will be directed
are not disclosed and probably will not be
until indictments by federal grand juries
have been returned. 1t is Indicated as
likely that the proceedings of the Depart
ment Of Justice will be directed not only
against the Southern Company and soffi-
clals of tnat company, but also against
shipperP who have enjoyed. according to
the allegations made. rebates from the
railway company.
The testimony taken by Commissioner
Lane was voluminous and in the course of
the report extensive references to the
verbatim testimony was made basis
for the several paragraphs OF the report.
One of the particularly interesting fea-
lures OF the transcript of the evidence
was developed just at the close 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 a witness
under oath. The request that Mr.. Lane
give sworn testimony in the case was
made by p. F. Dunno. counsel for the
Southern Pacific company Commissioner
Lane declined to administer the oath to
M Luce. because. he frankly stated. he
did not WISH to accord Mr.. Luce by ad-
ulinistering oath to him and taking
his testimony. immunity from prosecu-
t1on for violations of the law. He Of
fered to receive statement from Mr..
Luce respecting the rebate practice of the
Southern Pacific
part of the record in the case, but he
made il clear that this statement was not
to be made under oath.
What Mr.. Lane Discovered
In the course of his report. Commits
sioner Lane says that his inquiry was
conducted in San Francisco on the sec
ond. third and fourth days of October
1907. and that from the evidence adduced
he found:
of preferential rates granted to certain
shippers on state business by the South
crn Pacific Company. The record dis
closes list OF los firms. corporations and
individuals who enjoy what are known
as special inside rates-less than the
rates published 10 the general pubic-on
the movement of certain designated traf-
nc between points within the state of
California.
That shippers paid the full published
rate in the first instance and were al
lowed the refund upon claims which went
through the auditing department under
instructions from the traffic department
that such rates should apply upon in
traState shipments without tariff author
ity.
THAT such refunds amounted i'm var.
GUS months of the years 1906 and 1907 to
from $4,000 to $4,000 per month
That such refunds given to one firm
amounted to the sum of $23.99i during
the period from April. 1906 uhe date Of
the San Francisco fire. when all previous
records were destrOyedD, to September "a.
1907, and such refunds TO other shippers
ranged in amount from S13.69O to 500 25l
That SUcE refunds discounts from
the regIla" rates have been continued for
long period and up to the date OF the
hearing in October. 1907.
That mary of such state shippers to
whom such refunds We're allowed were
large interstate slippers
That one CT such shippers admitted at
the hearing ;r.dt the granting of such in
side rate on ,h@ statement Influenced the
routing OF subsequent interstate shipment
OF such traffic over the rails of the South
ern 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 in
terstate shipper of one-half of the local
rate which such shipper had paid to an
other railroad for the MOVEMENT from
point of origin to Southern Pacific
terminal, where the traffic began its in
terstate journey over the Southern Pa
Cific lines.
Long Existing Understanding.
That there existed for years an un-
Outstanding between the Southern Pacific
Company and the Santa Ee Company
and certain shippers of dried fruit that
the traffic which moved into points of
concentration for transcontinentaI ship
ment should be entitled at the end of the
SDlDDlnR q refund nf
the local states rate charged at the time
OF the original movement.
THAT the voucher books containing
the so-caled refunds on state ship
mcnts also contained records of refunds
given upon interstate shipments.