The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1908-02-16
REBATE PROSECUTION
FOR SOUTHERN PACIFIC
continued irom - -

CONTINUED nom First Page)
shipped from California producing
points to concentration points within
that State. at the REGULAR California
local rate. Then new billing would take
them on the Interstate journey 10 the
East IL was too dangerous TO grant a
rebate on the interstate trip, but the
road seemingly mad no fear of conse-
quences in violating the State law and
so a large proportion OF the lacal rate.
commonly half, was paid back to the
shipper. on the business from the point
OF production to that Of concentration.
Scheme Works Smoothly.
After time this scheme worked 50
smoothly that the traffic officers Of the
road appear TO have become reckless,
and they went TO giving rebates on in
terstate business as Well. This brought
them within the prohibitions Of the in
terstate commerce act, and complaint
being made, investigation brought cut
documentary evidence of the violation
Of both the state and Interstate laws.
As a result. the road now faces prose-
cution in both Federal and State courts
The imprisonment penalty for rei1t-
ing is likely 10 be enforced ia lAe-e
cases, un.isr the Interstate commerce
law, probably for the drsG iiDe. While
the cases viii be sent t0 the district
attorneys for the district involved the
Department or Justice VIII take 8 hand
in them. Il IS slated. and the expectation
is that Frank b. kellogg. special at
torney for tie Government Ia the Harri-
man prosecution. and Milton d. Furdy.
assistant to the Attorney General, viii
be brought into the prosecution by way
Of making sure that no opportunity OF
success be overlooked.
Wtat Commission Found.
The commission says in its investiga-
ton IL discovered:
]. The existence Of an extensive sys-
tenn Of preferential rates granted TO GER
tain shippers on State business by the
Southern Pacific Company. The record
discloses Il list of JOS firms. corpora
items, and individuals who enjoy what
are known as special inside rates
less than the rates published to the
general public-on the movement Of GER
tain designated traffic between points
within the STATE OF California.
2. That shippers paic the fun pub
lished rate in the first instance and
were allowed the refund upon claims
which went through the auditing depart
ment under instructions from the traf.
fiC department that such special rates
should apply upon intrastate shipments
without tariff authority
9. That such refunds amounted in va
rious months ~ the years 1906 and 1sOI
20 from 5000 TO $4,000 per month
T. That such refunds given 10 one firm
amounted 10 the sum OF 1854 durina
the period from April 1906 Cthe date OF
the San Francisco IRE when all pre-
Nlous RECORDS were Destroyed TO Sep
/ TENDER q. 1907, and such refunds "a
other shippers ranged in amount from
/ $1,000 10 S-2Z5i-
Continued Until October, 1907.
D That such refunds or discounts from
| the regular rates have been continued
/ for long period and up 10 the date OF
the hearing I'm October, 1907.
6. That many of such State shippers
to whom such refunds were allowed
were large interstate shippers.
Z. That one OF such shippers admitted
at the hearing that the granting OF
such inside rate on IRE State move
meut Influenced the routing OF subsc-
qUent interstate shipment OF such tTaf-
ne over The rails OF the Southern pa
/ cific Company.
S. That in one instance the general