The San Francisco call., 1909-01-13
Railroad Commission Finds
Much Unjust Discrimination,
but Only One to PenaIize
Long and Exhaustive Opinion
Says Hartman Line Was
Guilty of Unfairness
"We're POwerless," Says Board,
"but It's the Fault of Our
Predecessors"

The state board of railroad commits
sioners, IN an exhaustive decision rem,
dered yesterday afternoon, found the
Southern Pacific and the Santa Fe
railroads guilty of unlawful rate dis
| crimination. The Santa Fe was fined
$1,000, but no penalty was assessed
against the Hartman line on the
ground that the proper legal founda-
ton had not been laid by former COM
missions.
The specific case on which the Santa
Fe was fined grew out of its contract
with the Associated oil company by
which it carried petroleum from Bak-
ersfeld at 25 cents barrel while the
legal and established rate was 37.S
cents a barrel. This contract between
company was first exposed by Inter
state Commerce Commissioner Franklin
X Lane. It was afterward referred
to in a letter from Francis j. Heney
to President Roosevelt. The presi-
dent incorporated it in one of his mes
sages to congress. It showed on its
face that it had been approved by
President Ripley of the Santa Fe COM
pany and for that reason was the sub
ject of special comment.
It is understood that the Santa Fe
will force an appeal to the courts on
the ground that the supreme court
has decided that the railway commits
sion may establish merely maximum
rate.
EXPOSURES BY LANE
The investigation was begun on April
of last year, following the exposures
incident to the hearing conducted by
Franklin X Lane. The commission
has found the Santa Fe guilty on seven
specific counts It has found the
Southern Pacific guilty Of unjust dis
elimination in three cases and OF
discrimination which can not be prop
erly classed as unjust" on three other
counts The complaint against the
Salt Lake. San Pedro and Los Angeles
railroad was dismissed on the ground
that there had been no Illegal discrimi-
nation.
The opinions in each case were unan-
imous and bear the signatures of Com
missioners Irwin, Loveland and Sum-
nleTldnQ. AFTER Llcy 1dQ DCCh 6iNCh
out, Commissioner Loveland explained
the legal points involved at some
length. He said that there had been
no intention to render "a Judge Landis
s2s. OOO, 600 decision" but merely an en-
deavor TO reach a just conclusion which
would put to the test the present laws
on railroad regulation.
The decision quotes at length from
court and railroad board decisions and
makes an extensive inquiry into the
powers Of the commission as prescribed
in the constitution and Statutes Of the
state The commissioners found that
very few rates had been legally es
tablished prior to January l, 1908, and
the shipments under investigation had
taken place before that time. Rates
had been approved" and filed" but
Attorney General Webb had advised the
board that this did not conform to
the requirements that the rates be
Established"
COMMISSION POWERLESS
This. it was said, made the commits
sion powerless in all but the oil case
/ to act under the provisions of the
lconstitution, which prohibit a deviation
from an established rate. The board
turned, however, to the law of 1873,
which makes discrimination in the mat
ter Of railroad rates unlawful. 1t was
under this law that the Southern Pa
cific case was adjudged. Conviction
under the laW opens the way for the
/ aggrieved shipper to bring suit The
penalty upon conviction in court is
! 81, 600 on each case, but as the fine
goes to the school fund and the shipper
must bear the expense of the prosecu-
tion, it is unlikely that anything fur
ther will come of the matter.
The three cases Of unjust discrimi-
nation" Of which the Southern Pacific
was found guilty follow:
]. The rate of SIPS a ton on sand
from Lake Majella to San Francisco
given the Illinois Pacific glass works
against the rate Of s1.65 charged the
Pacific Coast glass works.
2. The lower rates given to Simon
| Newman than to his competitors on
merchandise from San Francisco to the
town of Newman.
3. The store door delivery or drayage
allowance given the Walsh coal COM
pany of San Jose, against the rate
charged the Keystone company of the
same city.
The cases of discrimination which
can not be properly classed as unjust
as there was no competition between
the parties" are enumerated as follows:
!. The lower rate given the Illinois
and the Pacific glass works, as against
the rate given the Henry CowelI lime
Lake Majella to San Francisco.
2. The lower rate on lumber given the
Iona Prieta lumber company than to
Healy- -Tibbitts.
3. The lower rate given the Salinas
Valley lumber company than to J. L.
/ Howard
CONSTITUTION FOR SANTA FE
The Santa Fe was found guilty on the
/ oil case under the terms of the state
constitution. IT was found that a rate
| Of 37.S cents a barrel from Bakersfield
to San Francisco had been established
by the commission in 1902 after COM
plant had been lodged by certain ship
pers.
The Associated oil company shipped
at 25 cents barrel. The penalty may
be assessed up to $4,000 for each ship
ment Had the commission cared, it
might have rivaled Judge Lands de-
cision. as a large number of shipments
were made at the reduced rate. It was
on this that the 5000 fine was imposed.
The other cases against the Santa Fe,
like those against the Southern Pacific,
in the view of the commission, could be
q dealt with only under the law Of 1878.
The Santa Fe was pronounced guilty of