The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1908-02-21
PROSECUTE SOUTHERN
'PACIfvC FOR REBATING

Washington, Feb. l9.-Prosecutione arc
10 be instituted by the government against
the Southern Pacific company and against
certain officials of that railway organiza-
ton on allegations that they paid rebates
to shippers.
information which is the basis OF the
prosecutions was obtained by Franklin X.
Lane, Of the Interstate Commerce COM
mission. last autumn in the course of an
extensive Inquiry made by him into the
affairs of the Southern Pacific company.
BY direction of the Interstate
commission, Commissioner Lane visited
the Pacific coast, and for several weeks
conducted his Inquiries Into the alleged
charges Of Rotating which had reached
the commission.
In the course Of his eport Commissioner
Lane says that his inquiry was conducted
in San Francisco, on the I'd, Sd and 4th
days of October. 1907. and that from the
evidence adduced he finds:
The existence Of an extensive system of
preferential rates granted certain ship
pers on Interstate business by the South
ern Pacific company.
The record discloses a list OF los firms:
eorportlons and individuals who enjoyed
what are known as special inside rates
less than the rates published to the gen.
srai publlc-on the movement of certain
designated traffic between points within
the state of California.
".s ShAPPSLS pau lNe luI puDliSiCN
rte IN the first instance and were allowed
the refund on claims which went through
the auditing department. under instruc-
tons from the traffic department. that
such special rates should apply upon In
GRITTY.
months of the years 1906 and 1907 to from
$4,000 to $4,000 per month.
an Tha6 such n refunds giy .ss at to one nEm
period from April. 1906 (the date of the San
Francisco fire, when all previous records
We're Destroyed, to September "a. 1907, and
amount from 1850 to s s2,2si. Ai'ss1 :"
That such refunds or discounts from the
T5egnlar rates have been continued for a
hearing in October, 1901.
Ihat many of such state shippers to
whom such refunds were allowed were
large interstate shippers.
Many Of the shippers admitted at the
nearing that the granting of such inside
rate on the state movement Influenced the
routing of subsequent Interstate shipment
of such traffic over the rails of the South
ern Pacific company.
In one Instance the general freight agent
by voucher, dated July 81, 1906. for the
payment to an Interstate shipper of one
nan on the local rate, which such shipper
mad paid to another railroad from the
point. of origin to a Southern Pacific ter
m,nai, where the traffic began It's inter-
state journey over the Southern Pacific
iIiSS
That there existed for years an under
standing between the Southern Pacific
company and the Santa Fe company and
certain shippers Of dried fruit that ira fife
which moved into points Of concentration
for transcontinental shipments should be
entitled to a refund at the end Of a snip
ping season 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 shipments We're paid by special d.
rection Of freight officials after the claims
had been denied by the auditing depart
mem.
The Justification offered by the officials
and representatives of the Southern Pa
c.f1c company for the practices revealed
was that In general they were made neces-
cary. to secure traffic which shippers
would move otherwise were such rebates
not granted.
In view of the foregoing 1T is directed
that a copy of the transcript of the tes-
ttmony In this matter be forwarded to the
districts attorneys of the United States for
the several judicial districts wherein Of
lenses against the act to regulate com
MERGE was committed as shown by this
record, and that such officials be request
ed TO institute such prosecutions under
the law as may be warranted.