We have dug down through the geologic epochs of discrimination, and have examined the living varieties. The predominant forms have changed, but none of the species we find among the fossils of the earlier strata have become extinct, though some of them, ticket scalping and the direct rebate for instance, are much less in evidence than formerly.

Passes^[344] and other personal discriminations^[345] still prevail, and the assortment of favoritisms in freight traffic is larger than ever. Here is a list of more than 60 forms of discrimination that are now in use, many of them constantly and others as occasion may demand:—

Passes.

Ticket brokerage.

Private passenger-coaches.

Gifts of stock.

Tips on the market.

Secret rates.

Rebates.

Elevator and compress fees.

Commissions to favored shippers as though they were agents of the company, to secure for it their own freight.

Salaries to favored persons as nominal employees, or fees for nominal services.

High salaries or commissions to real traffic agents who divide with favored shippers.

Cash contributions to shippers in the guise of payments to “encourage new industries.”

Paying “transfer allowances” to some shippers for carting their own goods.

The “strawman” system.

“Expense bill” abuses.

Loans to dealers and shippers or consignees to increase shipments or divert them from other roads.

Combination rates of which informed shippers may take advantage.

Making the published rate cover the price of the goods as well as the freight for some shippers.

Flying rates, or “midnight tariffs.”

Terminal or private-railway abuses—unfair division of rates, etc.

Private-car abuses—big mileage rates, excessive icing charges, exclusive contracts, etc.

Espionage, giving some shippers inside information of the business of other shippers.

Maintaining or paying for the maintenance of tracks or other property belonging to the shipper.

The long and short haul abuse.

Unjust differences in the rates accorded different places to favor certain localities, or individuals who have business interests located there.

Unduly low rates to “competitive points” in general, as compared with local rates, building the cities at the expense of the country.

Unfair classification.

Use of different classification for local and for through traffic.

Laxity of inspection in case of special shippers, enabling them to get low rates on mixed goods in carloads billed at the rate appropriate to the lowest product in the mass.

Intentional mistakes in printing tariffs, a few copies being run off for favored shippers, after which the mistakes are discovered and corrected for the ordinary shipper and the Interstate Commission.

Fictitious entries in the “prepaid” column of the freight bill.

Instructions to agents to deduct a certain percentage from the face of the bill when collecting for specified shippers.

Payment of fictitious claims for damage, delay, or overcharge.

Making a low joint rate (or single rate either) on a given commodity when shipped for a purpose confined to a few shippers, while other shippers using the same commodity for other purposes have to pay much higher rates.

False billing,—

Not billing at all—carrying goods free.

Excessive difference in the rates for large and small shipments.

Unfair discrimination between shipments in different form—barrels and tanks for example.

Charging more when the freight is loaded in one than when it is loaded in another way practically identical so far as the railway is concerned.

Favoritism in switching charges, demurrage, etc.

Direct overcharges, causing loss through delay and expensive litigation, or through excessive payments.

Withholding cars.

Delay in carriage and delivery.

Refusal to deliver at a convenient place.

Difference in time allowed for unloading.

Refusing privileges accorded others,—

Selling or leasing terminal or other rights or properties to favored shippers so as to exclude others absolutely.

Refusing shipments to or from certain persons or certain places.

Failing to run advertised trains or taking other special action in order to interfere with plans of an opponent, e. g., to keep people from going to mass meeting at which he is to speak.

Unfair difference in the service accorded different places.

Cutting off part or whole of a customary service.

Side-tracking cities and towns, or depriving them entirely of railroad facilities.

Arranging stop-overs so as to drive business to other cities.

Arbitrary routing of shipments.

Payments for routing.

Guarantee by railroad against loss upon shipments over its line.

Unreasonable differences in the commodity rates on different articles.

Prohibitive rates on special commodities or special shipments.

Unreasonable differences between the rates on the same goods going and coming between the same places.

Special rates on goods for export.

Special rates on imports.

Even this long list does not cover the whole field. The cases on record do not exhaust the possibilities of discriminations. The following bit of testimony shows how easy it is to invent new ways of passing railroad moneys into the treasuries of favored shippers,—ways that would not be interfered with by any law short of public control of the purchase and sale of merchandise. Mr. Gavin, the agent of the Vandalia line, was being examined by the Interstate Commerce Commission in March, 1901. On the question as to how business could be got by giving advantages to shippers without cutting rates Mr. Gavin said: “There is nothing to prevent my going down to the packing-house and paying $10 apiece for hams if I wanted to; if I did not want to cut a rate, there is generally a way out of the hole.”

“Commissioner Clements. A good many ways; and it is your belief that a good many of these have been practised, is it not?

“Mr. Gavin. I do not know. I would not like to say.

“Commissioner Prouty. If you bought hams enough at $10 apiece the packing-house could give you the traffic at full rates?

“Mr. Gavin. Yes, sir.

“Commissioner Prouty. Have you ever known that to be done?

“Mr. Gavin. No, sir; but I say there are lots of ways out of the woods.”

Almost everybody agrees, in public, that railway favoritism ought to be stopped.^[346] It disturbs the fair distribution of wealth, undermines industrial justice, business morals, and political honesty; builds monopoly; wastes resources, and causes enormous loss to the railroads as well as to the persons and places that are discriminated against.

Railway discrimination breaks down the equality of opportunity that is one of the fundamental rights recognized in every country. It tends to separate success from merit and industry, and make it depend on fraud and favoritism. Judge Grosscup touched a vital point when he said to the Boston Economic Club, March 11, 1905: “Any difference in rates permitted by law, even though based on the bulk of the tonnage handled, is a direct and effective blow, by the nation itself, at the principle that every man, whatever his present business size, shall be given equal conditions and equal opportunity.... In this country there is no such thing as size to a business man. The man of little size expects to get big. He has a right to get big. He has a right to have the atmosphere of equal opportunity and equal conditions in which to grow, and excepting, of course, some unit, such as a ton or a car, the charge ought to be the same for the little as for the big shipper.”^[347]

The railways are public highways, they exercise governmental powers and fulfil governmental functions, and it is an atrocious misuse of social power to employ these so as to give special advantages to a few members of the community. The Interstate Commission says: “The railroad is justly regarded as a public facility which every person may enjoy at pleasure, a common right to which all are admitted and from which none can be excluded. The essence of this right is equality, and its enjoyment can be complete only when it is secured on like conditions by all who desire its benefits. The railroad exists by virtue of authority proceeding from the State, and thus differs in its essential nature from every form of private enterprise. The carrier is invested with extraordinary powers which are delegated by the sovereign, and thereby performs a governmental function. The favoritism, partiality, and exactions which the law was designed to prevent resulted in large measure from a general misapprehension of the nature of transportation, and its vital relation to commercial and industrial progress. So far from being a private possession, it differs from every species of property, and is in no sense a commodity. Its office is peculiar, for it is essentially public. The railroad, therefore, can rightfully do nothing which the State itself might not do if it performed this public service through its own agents, instead of delegating it to corporations which it has created. The large shipper is entitled to no advantage over his smaller rival in respect to rates or accommodations, for the compensation exacted in every case should be measured by the same standard. To allow any exceptions to this fundamental rule is to subvert the principle upon which free institutions depend, and substitute arbitrary caprice for equality of right.”^[348]

The losses to the railroads cannot be estimated accurately, but we have some interesting hints. Franklin B. Gowan said in 1888: “The gross receipts of the railroads of this country, in round numbers, are eight hundred millions of dollars per annum, and I verily and honestly believe that one hundred millions of dollars annually are taken out of the pockets of the people of this country by unjust railway discrimination, and turned over to this privileged class—and this is equal to a tax of two dollars per head paid by the people for the sake of building up the new aristocracy of wealth that in this free country arrogate to themselves the position of the nobility of the older countries. It is utterly impossible that there can be any success attending a monopoly of natural products without the aid of the unjust discrimination of railroad companies. And only when such discrimination ceases will all people be placed on terms of equality.”

If the losses were more than $100,000,000 a year when the total income of the railroads was $800,000,000 a year, the losses now with an income of about $2,000,000,000 a year are probably, at least, $200,000,000 a year, allowing for all the saving that is claimed to have resulted from the Elkins Act. A railroad officer who says his road has constantly disregarded the Interstate Commerce Law declares that in more than one year the net revenues of his company “would have been increased by more than 15 percent if no rebates had been paid to favored customers.” The hundreds of millions which the transportation systems of this country have, during the period from 1887 to 1905, earned and repaid to the men who controlled the large industrial products of the country—coal, iron, grain, salt, sugar, oil, provisions, and lumber—belonged equitably to employees and stockholders (or to the people). “And the history of this period may be repeated as often as the whim or the interest of a traffic manager or owning director prompts or requires.”^[349]

The losses through the disturbance of business, interference with the relation between energy and industry on one side and success on the other, depression of localities, and ruin of individuals, are beyond computation.

Most shippers would be glad to do away with discrimination if they could be sure that there would be a square deal all round, fair play, and no concessions to their rivals. And most railroad men would be glad to be protected against the discriminations that are forced upon them by the shippers, and by competition among the roads, if they could be sure that the published rates would really be adhered to by their competitors.

Law after law has been passed to prevent unjust discriminations, and yet in spite of the contrary statements of some witnesses,^[350] it is perfectly clear that they have not ceased, and that comparatively little has been done in that direction.

Railroad men in high position declare that discriminations always will exist. President Ripley of the Santa Fe says: “The situation is practically remediless. I think it will always be.”^[351] President J. J. Hill of the Great Northern says: “You may say there shall be no discrimination. But that condition will never exist. If there were no discrimination the people would come down here in great throngs and ask you to authorize discrimination. We have to discriminate.”^[352] When I asked President Fish of the Illinois Central how discriminations could be stopped he said: “Tell me how to enforce the Ten Commandments and I’ll tell you how to stop discriminations.” Another railroad president, whose name I am not at liberty to give, said in reply to the same question: “Discriminations will never cease so long as there is competition among the railroads, or political favors and protection can be secured thereby, or railways and railway men are interested in other businesses than transportation.” President Hill also recognizes the factor of special self-interest in addition to the influence of competition. He says: “I think that every railway officer in this country should be disqualified from having any interest, directly or indirectly, in any large producer of traffic, whether it is a coal mine or a factory or a mill or anything else, on a line of railway where he is on the pay roll.”

“Senator Clapp. And the reason for that suggestion is what?

“Mr. Hill. That he cannot be fair to the other fellow and punish himself.

“Senator Clapp. And the opportunity is such that it cannot be detected and prevented?

“Mr. Hill. It is so easy, if there is a great demand for coal in one direction, or for some commodity in one place, for him to help one fellow and forget the other.”^[353]

One of the gravest dangers lies in the fact that men who are largely interested in the great industrial corporations control certain railway lines and have large influence with many others. The interlocking of railroad interests with other industrial interests is a cause of discrimination second only to the pressure of railroad competition for traffic that is used by shippers as a means of extorting the favors they desire.

A railroad executive writing in The Outlook for July 1, 1905 says: “Notwithstanding the violations of the Interstate Commerce Law have been open and notorious, and indictments have been numerous and prosecutions not infrequent, no railroad officer has ever been incarcerated. For my own part, the penal liability for such disobedience has never in any wise deterred my purpose to secure my company’s share of tonnage by whatever means competitors employed. I have the reputation of a law-abiding citizen in my home city—am well known—of good personal character. I flatter myself that a jury could not be found which would commit me as a felon because I directed the payment of a rebate to a shipper—a transaction which did not inure to my financial advantage. Could a jury be found that would exact a felon’s punishment for such men as Mr. Stuyvesant Fish, or Mr. Secretary Paul Morton, or Mr. Marvin Hughitt for disobeying a statute in order that the revenues of the company by which he was employed might not be decimated?” He had previously said that the revenues of the railroads have been decimated by hundreds of millions through the granting of discriminations, but he argues that the revenues of any particular railroad that should refuse concessions would be decimated still more largely. The truth of this contention is strongly illustrated by the following incident. Some years ago Judge Taft (now Secretary of War), as receiver for the “Cloverleaf” Railroad from Toledo to St. Louis, appointed Mr. Samuel Hunt of Cincinnati, a well-known and successful railroad manager, and required him to comply strictly with the Interstate Law. In doing this Mr. Hunt was obliged “to disregard many outstanding rebate obligations of his predecessor in the receivership, thereby giving offence to many patrons of the road and their friends, the result of which was a decrease of the gross earnings of the road within twenty months of more than $340,000.” The sacrifice of hundreds of thousands of dollars, the loss of the good-will of shippers, the harsh criticism of competitors, and broken health were the results of Mr. Hunt’s earnest efforts to obey the law. M. E. Ingalls, President of the Big Four, said a few years ago to a convention of State railroad commissioners: “Men managing large corporations, who would trust their opponent with their pocket-book with untold thousands in it will hardly trust his agreement for the maintenance of tariffs while they are in the room together.

“The railway official who desires to be honest sees traffic leave his line.

“The result is these men in despair are driven to do just what their opponents are doing. They become lawbreakers themselves.

“No one is going to try and send his competitor to prison. Besides, there is the fear that he himself may have committed transgressions which in turn will be discovered and punishment inflicted upon himself.

“Unless some change is made, the small shippers of the country will be extinguished, and a few men of large capital will control the entire merchandise business. And railways ... will be seized upon by large capitalists and combined into one monstrous company.”