The San Francisco call., 1908-08-13
Commission Cannot Fine Offend
ing Carriers Because 1t
Never Made Rates
Failure of Board TO Fix Tariff of
Fares and Charges Takes
Away Its Power
southern Pacific VIII Be Found
Guilty, but Sz9,OOO,OOO
Fine Goes GIimmering

The threatened fine of stupendous
proportions which has hung heavy
over the head of the Southern Pacific
will be no S2o, ZOO, 600 controversy to
disturb the serenity of the upper
court There viii be no appeals,
no reversals, no momentous de-
cisions to rend the populace in
twain. But the rebating inves-
tigation, like the modern romance,
is to have happy end. The railroad
IS to be found guilty for the satsfac-
ton of the public, but there will be
no punishment and that will satisfy
the corporation. Then the curtain viii
go down with all hands eontented-
The responsibility for the outcome
must be placed, according to the at
torney generals Office, with the COM
missiOners who were in Office prior to
January OF this year. for 1t was not
until that time that the state board es-
tablished rates in legal manner. All
these facts were brought out yester-,
day during the closing arguments in
the rebate investigation. A sugges-
tion was made. however. that under the
law Of 1878 those parties Disseminated
against could, through the district at
torneys Of the various counties. bring
suit against the corporation The law
or 1873 provides for q hne OF $1,000
for each discrimination.
HAS STOPPED REBATING
Even though the hearing is about
10 terminate without sensational re-
suits. it is stated by all involved that
the investigation has stopped rebating
within the state and has paved the way
for legislation strengthening the hands
OF the commission.
The present investigation was begun
early in the year by the railroad
board upon motion OF Commissioner
Loveland- Il developed innumerable
cases Of rebating on the part Of the
Southern Pacific. which Attorney Peter
+. Dunno and General Freight Agent
c. ". Luce explained on behalf of the
corporation as prompted by ~dissimi-
lar circumstances and conditions"
The concluding arguments were be-
gun yesterday Assistant Attorney
General BENJAMIN and Attorney o. K.
Gushing. representing the California
Trafic association. addressed the COM
mission. Dunno viii speak for the
railroad today and Attorney General
Webb viii conclude for the state
At the outset Benjamin announced
--s 4s..,-
that the commission in the past had
neglected 10 establish rates in legal
manner. He took the position that it
was not enough 10 approve the sched-
ule. AS the Determinations occurred in
1906 and the rates were not established
legally by The commission until 1908,
he held that no penalty could be i'm
posed
The assistant attorney general placed
the blame upon the former commits
sioners, but took occasion in the after
noon 10 modify his remarks. recalling
that Commissioners Summerland and
Irwin came within the purview of his
criticism In censuring the board Ben
jamin said;
"As far as having complied with the
mandate Of the constitution this com
mission has probably never complied
up 10 January OF this year, or even par
tally compiled with, that part Of the
law commanding them to- establish
rates for freight and passengers"
CITES LAW OF 1878
Benjamin then spoke at length of the
law passed IN 1873 creating a trans
portation commission This statute. he
held. was only in part repealed, and
that only by Implication. by the state
constitution adopted the following year
BENJAMIN took the position. and Cush-
ing supported his contention. tnat the
district attorney could proceed under
that act. 1t imposes penalties for dis
elimination either below or above the
general run Of rates. The supreme
court is said to have upheld the act
bat such proceedings as the attorney
general recommends would traverse
new ground. II is not yet known
whether any OF the shippers will un-
dertake to press the matter further.
Benjamin spent the remainder of his
argument in shattering the plea OF the
company that the special rates were
made TO meet ''dissimflar circumstances
and conditions. He quoted copiously
from interstate commerce and court
records to show that corporations had
been found guilty on cases exactly
parallel TO those involving the Southern
Pacific. Both he and Gushing laid down
the principle that the only circum-
stances that could enter into the max
ing OF a rate were those affecting the
carrier and not the man who pays the
freight.
Ii is probable that the hearing will
be concluded tonight, and then the
commission viii take the case under