Evening journal., 1909-11-18
UNCLE SAM MOVES
TO STOP REBATINC
Federal Officials And Railroad
Agents Will Meet This
Week
PLAN A SYSTEM
TO HANDLE CLRL..S :

WASHINGTON, Nov. lS.-One OF the
most important moves ever undertaken by
the Government authorities looking TO
the final suppression OF railroad rebating
Will take form at a meeting In Washing
ton this week. a committee of %. repre-
scnting the freight loss and damage
claim agents OF the railroads. viii meet
with Prof Henry c. Adams. IN charge Of
statistics and accounts for the Interstate
Commerce Commission. IN the effort TO
agree upon a complete system for hand
Inns these claims. now recognized as a
medium through which most OF the rchat-
ing Is accomplished.
IL is the belief OF tho railroad reguiat-
ing authorities. OF the Department of
Justice and Of most shippers that rail-
road rebating by the old and direct meth
ods has largely though not entirely. dis
appeared. But tho allowance Of excessive
claims for loss, damages, delays In trans
mission etc, has developed into an ex-
tensively used system for indirectly giy-
ing rebates, IN many cases amounting 70
a large proportion OF the tariff rate Of
freight This method has been under the
scrutiny OF the authorities for long time.
and It Is now believed that through It's
control Of the accounting process OF the
railroads the Interstate Commission Is
In the way OF perfeotlng a system that
viii about stop these abuses.
The method OF rebating through allow
ance Of claims Is simple and effective;
anu the worst feature Is that, the trans
action once completed It Is practically
impossible to prove that tho allowance
was excessive. A shipper pays the tariff
rate OF freight. say, on seven carloads
OF sugar. II il duly delivered to him,
taken into his warehouse and sold 10 his
trade. Meanwhile he has rendered a claim
TO the carrier, alleging that the. sugar IN
number OF barrels had been damaged
by water. that certain barrels had been
broken. etc Tho claim is audited and al
lowed. and by the time the Government
comes. N it ever does. 20 inquire whether
tho claim was legitimate, tho sugar has
been sold and eaten. and there isn't a
shred or evidence whethsr the claim was
really a rebate.
Some OF tho roads have been apparently
sincere in their wish that all rebating
practices be stopped. Tho theory on which
the Federal authorities have been work.
ing Is that the business 81 auditing vor-
flying allowing and paying claims should
Lc completely divorced from the traffic
department; that that department should
have no voice in a. but that II should be
exclusively an affair OF the accounting
force Of tho road. BY this method the
traffic officials. with whom all rebatins
agreements must originate would be ex-
Guided from participation In the proceed
ings and It would be practically impos.
sible 20 carry out such agreements
The ultimate purpose is 70 carry thii
complete Independence OF the accounting
department to the extent Of making th'
responsible accounting officials swor
agents Of the Government 80 that thei
ssGuicscence or collusion in allowing a
Legitimate claim would amount 10 ma
feasanoe and perjury. Such a project
however cannot ho made effective at thi
time. probably il can never be until lal
IS secured authorizing g. Meanwhile thl
effort Is 10 secure cooperation OF the &C
counting and claims officials in every pos
sihle way to establish the best check OF
claims. to safeguard against their helms
. ANAANAHANN NH AAA| AAA WAMAAAA"H gnu NH
make sure that, those which get allowed
represent only actual damage.
In the effort TO develop such a system
the Commission has had the cooperation
OF the loss and damage officials OF the
roads. A committee OF 90. selected by
geographical divisions and made through
ly representative OF the interests and con-
ditions throughout the country, has been
named in behalf Of these officials ana Il Is
this committee which f. 70 meet hers for
the purpose OF perfecting the scheme OF
control over claims OF all kinds.
There Is wide divergence OF opinion
among authorities as to the extent OF re-
batting now carried on. IL is not difficult
TO get very circumstantial stories OF great
robating operations which are still carried
on but the authorities have commonly
found on investigation that the facts
could not be established. and probably
didn't exist. About all the old-ume pro,
cosses have been eliminated; but the losi
and damage claims only become the more
important and serious as Il Is realized
that they represent tho one remaining
comparatively safe method OF giving IA.
vors. and that they constitute the mos
difficult method to detect and prevent.
one practical plan which is being work.
ed out Is 70 improve methods OF packing
loading and handling freight. 50 that the
actual damages IN transit shall be great
ly lessened. This would reduce the oppor-
tunity to use this class OF claims as a
cover for fraudulent allowances.