The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1908-02-20
Gates Practically Charges c.
& @. With Defrauding
Two Other Lines.
REMARKABLE CASE,
DECLARES MR.. LANE
In Absence 'of Chief Officials
Railway Employees Decline to
Comment on Testimony.
Session to Be Continued
To-Day and Then Court
May Take Hand.
DMITTING under oath that with.
the consent and conriyance uf

a DMITTING under oath that with
IN the consent and connivance uf
~ Alex P. Gilbert, assistant gem
eral freight agent of tina
Chesapeake and Ohio Railway, he had
devised scheme to give to w. r.
Johnston, HIS employer. an undue ad-
vantage over his competitors by liter
ally defrauding the Seaboard Air Line
and the Atlantic Coast Line, H o.
Gates. member Of the city Council OF
Richmond, laid evidence of most
sensational character before Hon,
Franklin *. Lane, of the Interstate
Commerce Commission in the rebate
cases yesterday.
BY testifying, Mr.. Gates is immune
from criminal prosecution for violation
of the Hepburn law. Minor officials OF
the Chesapeake and Ohio, one Of whom
declared that he was merely ma
chine put there to do the bidding OF
his superiors went on the stand and
corroborated the statements OF Mr..
Gates. and thereby saved themselves
from further trouble with the Federal
government. Mr.. Gilbert. however.
may later appear before grand jury
in the United States Court.
Although it was stated that W. II.
Johnston was not aware OF the Gates
Gilbert scheme he also may be subject
to a fine. Other shippers and railroad
men will be examined by Commissioner
Lane to-day.
Two Schemes Worked by Gates.
Starting without single request to
delay, the examination developed start
ling facts in the first half hour of
the session. Mr.. Gates was the star
witness. He said that rebates gener-
ally were paid up to twelve years ago.
when the roads announced that the
full published rates must be observed.
Being 4 practical rate man. he figured
it out that grain shipped into Rich
mond based on the Lynchburg rate AMI
reconsigned to Carolina points. would
carry q less tariff for the latter half
OF the journey. This practice, how
could not compete with dealers in the
West. Something had to be done. At
this point his faithful and loyal en-
ploye seized upon the valley rate''
proposition, as he said, with the ap-
proval of Mr.. Gilbert.
In this undertaking Mr.. Gates Prov
ed that he was a genius. He knew
that on grain shipped from Valley
points through Richmond to North
Carolina the charge from Richmond
south was less than If the shipment
had originated here. Technically and
legally speaking, somebody was guilty
of false billing In word. the
Johnston establishment loaded grain
in this city, shipping it direct to North
Carolina. The agent and billing clerk
OF the Chesapeake and Ohio testified
that this freight went through appar-
entity on reconsiSnment. when as
matter of fact, it started from Rich
mond. To do this is was necessary
for Mr.. Gilbert to give an order to his
subordinates. The records We're falsi-
RnI Va orc
to the Seaboard Air Line and the At
lantic Coast Line on waybills which
alleged that they had come from
Staunton. generally. The result Of
this was that Mr.. Johnston had an
undue advantage over his competitors.
that the Chesapeake and Ohio secured
all of his business from the West, and
that the Seaboard and Atlantic Coast
Line handled the shipments at an es-
timated loss OF 5 cents per hundred,
or SIS a car. On an average these
latter roads got one car q day, the
loss being about $3.50 Il month
No Other Case Like 1t.
'"rhis Is the first case of the kind
on record" said Mr.. John III. Marble.
special counsel for the Interstate Cons
| nerce Commission. who conducted the
Investigation. From the bench Com
missioner Lane fo-;ed the admission
| that the deal IildUe ny NiulSs o't'A ~ q
| bert mulcted the Seaboard and the At
| Iantic Coast Line out of large sums OF
money in the course of a year, Chief
| Clerk Chappell. of the Chesapeake and
Ohio freight station. and Billlng eClefS
| Jones, of the same office, admilted
| that they would not accept local cars
from other dealers on the same basis.
and that they accepted the Johns ton
consignment only on a special order
from MI. Gilbert. Mr.. Gates, who did
the heavy work. selected the car NUM-
bers on reconslgnment at random On
one occasion he sent solid CARLOAD
of loose yra,n ssom Richmond to Win-
ston, Salem in flat car, flguratively,
at least
To the uninitiated mind the question:
of waybills. bills OF lading. reconslsn-
ment and the like are vexed and COM
plicated But 1t was plain. from the
Chesapeake and Ohio records, produced
by tho company and seized by the
commission as exhibits. that the johns
ston grain went out from Richmond on
waybills which made, 1t appear to tns
Seaboard and the Atlantic Coast Linz,
the victims, that 1t came here from
Staunton, the shipper thus getting tna
benefit OF the through rate. An inSes.
| tigatlon OF the files again substantlatsog
! Mr.. Gates, for 1t showed that In puck.
ing car and waybill numbers from tha
| air he frequently hit upon others some
I OF them calling for whiskey, some toa
empty barrels, but none for gfain ~.
Ithough the Chesapeake and ONO ala
\ not actually give rebates 10 Mr, Jonh'
I :.
i Arth a va Il N