Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1908-02-17
Government Will Sue the
Southern Pacific.
Commissioner Lanes InYesti-
cation Shows Rebating
Which will Be Alleged and Form
Basis Of Suit.

Washington, Feb 16.-ProSecutionS
are to be- Instituted by the government
against the Southern Pacific Railway
Co, and certain officials of that or
sanlzatiOn on allegations that they
paid rebates TO shippers
Information which is to be used as
q basis for these prosecutions was OBJ
tanned by Franklin *. Lane OF the In
terSt,te Commerce Commission last
autumn in the course Of an inquiry
made by him into the methods of tho
Southern Pacific Co. BY direction Of
the Interstate Commerce Commission,
Commissioner Lane visited the Pacific
coast and for several weeks conduct
ed his inquiries into the alleged
charges of rebating which had reached
the commission. Commissioner Lanes
report of his investigation, including
Il transcript of the testimony taken
by him in y formal hearing as an In
terState Commerce commissioner was
made pubic Saturday. The report has
been approved by the commission and
Il transcript Of the report and of the
evidence adduced At the hearing has
been transmitted to the department of
justice Tor such prosecution under tho
lew rs may be warranted. Collateral
with this proposed action by the gov
eminent the railroad commission of
California mas been furnished at its
own request with transcript Of the
report and evidence and has indicated
to the Interstate Commerce Commits
sion its purpose to prosecute alleged
Violations Of the California law that
may he shown by the report.
,f no i,,1,lo rly i,,tl N
features of the transcript of the evil
dence was developed just at the con-
clusion of the formal hearing when
Commissioner Lane refused to place
the witness, G. w Luce. general
freight agent of the Southern Pacific
Co, as witness under oath. The re-
quest that Mr.. Luce give sworn testi-
mOny in the case was made by p. F.
Dunno, counsel for the Southern Pa
cific Co. Commissioner Lane declined
to administer the oath to Mr.. Luce be-
cause. he frankly stated, he did not
wish to accord to Mr.. Luce by admin
istering an oath to him and taking
his testimony, immunity from prosecu-
ton for violations of the law.
In the course Of his report, Commits
sOner Lane says:
ne record tlSClOStS al list OIL lUo
firms, corporation and individuals
who enjoy what are known as special
inside rates'-less than the rates pub
lishcd to the general public, on the
movement OF certain designated traf-
tic between points within the state OF
California.
THAT shippers paid the full pub
lished rate in the first instance and
u
which went through the auditing de-
partmcnt under instructions from the
traffic department that such special
rates should apply upon intra-state
shipments without tariff authority.
That such refunds amounted in va
rious months of the years 1906 and 1897
To from 100000 to $4,000 per month.
That such refunds or discounts from
the regular rates have been continued
for long period and up to the date
of the hearing in October. 1907.
THAT thereSXisted for years an I'M
derstan ling between the Southern
Pacific 60. and the Santa Fe Co. and
certain shippers of dried fruit that the
traffic moved into points Of concentra-
ton for continental shipment
would be entitled at the end Of the
SnlpplnS SCuSOn 10 Il refund 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 ship
ments aso contained records Of re-
funds given upon interstate ship
ments."
1t is known that by instruction Of
Attorney General Bonaparte the dis
trict attorneys have already taken up
the case to be instituted for the pur-
pose of bringing the formal procetd-
ings as soon as possible. Names of the
officials against whom the prosecutions
will be directed are not disclosed and
probably will not be until the indict-
ments by federal grand juries have
been returned. 1t is indicated as likely
that the proceedings of the department
of justice will be directed not only
against the Southern Pacific CO., ana
officials of that company. but also
against shippers who have enjoyed.
according 20 the allegations made, re-
bates from the railway company.