CHAPTER XVII

IN THE INTEREST OF ALL

The difference in freights against Rice was so great, as the Interstate Commerce Commission found, after taking hundreds of pages of testimony, that he had to pay $600 to $1200, "or more," on the same quantity his opponent got through for $500. These discriminations were made, as the commissioners say, "on no principle.... Neither greater risks, greater expense, competition by water transportation, nor any other fact or circumstance brought forward in defence, nor all combined, can account for these differences."[414]

The railroads had, of course, to give some reason, and they put forward the plea that it was much more expensive and dangerous to carry Rice's shipments, which were in barrels, than those of the combination, which were in tank-cars.[415] This excuse for charging him rates at which he could not ship at all did not stand examination by the Interstate Commerce Commission.

But he did not wait for that. When he found the railroads were so fond of tank-cars, he set about getting them. He wrote the general freight agent and the president of the road that he would build tank-cars, and asked what his rate would be then; but he got no answer. He wrote other roads, but got no answer. He asked the general manager of the Queen City and Crescent Route the same question. After a correspondence of five months with him and other officials, in which he was shuttlecocked from one to another and back again, he had not only not succeeded in getting any tank-car rates, but at the end of that protracted exchange of letters the general manager wrote: "I was not aware that you had asked for rates on oil in tank-cars."[416] Rice wrote the Louisville and Nashville: "I will build immediately twenty tank-cars if you will guarantee me ... as low a net rate as accorded any other shipper." Commenting on his failure to get answers, the commissioners say: "Complainant did not succeed in obtaining rates. The denial of his right was plain, and stands unexcused.... What reason there may have been for it"--the refusal of rates--"we do not know, but find that they were not just or legal reasons."[417]

How history is made! One of the reasons given by the solicitor of the oil trust[418] for its success is its use of the tank-car, with the obvious inference that its would-be competitors had no such enterprise. And Peckham, in his valuable and usually correct "Census Report on Petroleum," in 1885, says that the railroads require shippers to use tank-cars![419]

Determined to keep in the field and to have tank-cars, if tank-cars were so popular with the railroad officials, Rice went to the leading manufacturers to have some built. He found they were glad to get his contract. After making arrangements at considerable trouble and expense to build him the cars, they telegraphed him that they had to give it up. Bankers, who had promised to advance them money on the security of the cars, backed out "on account of some supposed controversy which they claim you have had with the Standard Oil Company and various railroads in the West. They feared you could not use these cars to advantage if the railroads should be hostile to your interests."[420]

Through the all-pervading system of espionage, to which cities[421] as well as individuals were subject, his plans had been discovered and thwarted. The espionage over shipments provided for by the South Improvement scheme has now extended to business between manufacturer and manufacturer. Why should it stop at unsealing private correspondence in the post-office in the European style, and making its contents known to those who need the information for the protection of their rights to the control of the markets?

Rice, who was nothing if not indomitable, finally got ten cars from the Harrisburg works. But this supply was entirely inadequate, and he had to continue doing the bulk of his business in barrels. What a devil's tattoo the railroad men beat on these barrels of his! They made him pay full tariff rates on every pound weight of the oil and of the barrel, but they hauled free the iron tanks, which were the barrels of his rivals, and also gave them free the use of the flat-cars on which the tanks were carried.[422] Hauling the tanks free, on trucks furnished free, was not enough. The railroads hauled free of all charge a large part, often more than half, of the oil put into the tanks. In the exact phrase of the Interstate Commerce Commission, they made out their bills for freight to the oil combination "regardless of quantity." This is called "blind-billing."

Of the 3000 tank-cars of the combination only two carried as little as 20,000 pounds; according to the official figures there were hundreds carrying more than 30,000 pounds, and the weight ran up to 44,250 pounds, but they were shipped at 20,000 pounds.[423] A statement put in evidence showed that shipments in tank-cars actually weighing 1,637,190 pounds had been given to the roads by the combination as weighing only 1,192,655 pounds. Cars whose loads weighed 44,250, 43,700, 43,500, 36,550 pounds were shipped as having on board only 20,000 pounds. At this rate more than one-quarter of the transportation was stolen.

The stockholders of the road were paying an expensive staff of inspectors to detect attempts of shippers to put more in their cars than they paid for, but these shippers paid for three car-loads and shipped from four to six regularly, and were never called to account. This "blind-billing," the Commission said, was "specially oppressive." It was done by the roads in violation of their own rule. It had been mutually agreed among them, and given out to the public, "that tank-cars shall be taken at actual weight."[424]

When Rice was trying to get the roads to allow him to use tank-cars, he asked how the charge on them was calculated. Of those that answered none answered right. None of them gave him the slightest intimation that there was any such practice as "blind-billing." On the contrary, they assured him he would have to pay for every pound he shipped. The Missouri Pacific replied with a "statement not warranted by the facts," as the Commission softly put it. They said they charged for the "actual weight," while, as the Commission shows, they made shipments "regardless of quantity." Rice asked the Newport News and Mississippi Valley Railroad for tank-car rates. "A tank-car is supposed to weigh (carry) 20,000 pounds; if it weighs more, then we will charge for it." At the same time the agent wrote Rice this, he was hauling cars containing 35,000 pounds "with no additional charge." "If this statement was made in good faith," the Commission says, "it is difficult to account for it, and it is not accounted for." "Had he (Rice) provided himself with cars for tank shipment, and been charged as he was told he would be, the discrimination against him would have put success in the traffic out of the question."

When they wanted to turn some new screw in freight rates against Rice, the railroad officials would whip themselves around the stump by printing a new tariff sheet on a type-writer, and tacking it, perhaps, as one of the Interstate Commerce Commission said, on some back door in their offices. This they called "publishing" their rates, as required by the Interstate Commerce law. To Rice, asking for tank-car rates, they would send this printed sheet, showing that if he shipped by tank-car he must pay for every pound, and they held him off with this printed, official, and apparently authentic tariff, though shipping 44,000 for 20,000 pounds for the trust. This was done after the Interstate Commerce Act went into force.[425]

One of these roads assured Rice that its rates had been fixed "by the special authority of the National Railway Commissioners." The fact was, as the Commission declares: "The Commission never investigated coal-oil rates, or gave special authority for their renewal; it never sanctioned any difference in the rates as between tank-car and barrel shipments, and had never, up to the date of this letter, had its attention called to them in any way."[426]

The representative of the combination was called as a witness before the Interstate Commerce Commission. "We pay for exactly what is put in the tanks,"[427] he testified. "In fact, this was never done," says the Commission.[428] Even the railroad officials, who could go any length in "blind-billing" for him, could not "go it blind" on the witness-stand to the extent of supporting such a statement. "Our price per tank-car was not based on any capacity or weight; they have been made simply per tank-car."[429]

"What, generally, is the object of false billing?"

"I suppose to beat the railroad company."[430]

In defence of the discrimination against the barrel shippers, a great deal has been made of danger from fire, damage to cars from leakage, and trouble of handling in the case of barrel shipments, but the best expert opinion which the Interstate Commerce Commission could get went against all these plausible pretences.[431] The manager of the tank line on the Pennsylvania roads showed that the risks were least when the transportation was in barrels. Another reason given for the lower rates on tanks was that they returned loaded with turpentine and cotton-seed oil from the South; but, as the Interstate Commerce Commission shows, this traffic was taken at rates so astonishingly low that it was of little profit;[432] and the commissioner of the Southern Railway and Steamship Association informed the Commission that the return freight business in cotton alone, brought back by the box-cars, to say nothing of other freight, was worth more than these back-loads of turpentine in the tank-cars.[433] It was, consequently, the box-car in which barrel shipments were made, and not the tanks, on which the railroad men should have given a better rate, according to their own reasoning. Turpentine and cotton-seed oil are worth three or four times more than kerosene, and it costs no more, no less, to haul one than the other; but the railroads would carry the cotton-seed oil and turpentine for one-third or one-fourth the rate they charged for kerosene. The Commission could not understand why the rates given by the roads on these back-loads of turpentine and cotton-seed oil were so low. "This charge, for some reason not satisfactorily explained to the Commission, is made astonishingly low when compared with the charge made upon petroleum, although the cotton-seed oil is much the more valuable article."[434]

The newspapers of the South have contained many items of news indicating that the men who have made the oil markets theirs have similarly appropriated the best of the turpentine trade, but nothing is known through adjudicated testimony. The trustees of oil have always denied that there was any connection between them and the Cotton-seed Oil Trust, although the latter shipped its product in the oil trust's cars. The reasons, therefore, for the "extraordinarily low" rates made on the turpentine and cotton-seed oil shipped North in its tank-cars must remain, until further developments, where the Commission leaves it--"not satisfactorily explained." The railroads said they made the rates low for tanks because of the enticing prospects of these back-loads, in which there was no profit to speak of; but they extended these special rates to points from which there was no such back-loading.[435] Rice saw how the cost of sending his oil South could be reduced by bringing back-loads of turpentine at these "astonishingly low" rates. He found there was still turpentine in the South he could buy; but the railroads would not so much as answer his application for rates.

"They absolutely refused."

"Was this refusal since the Interstate Commerce decision in your case?"

"Yes, sir; since that decision."[436]

It might have been thought this would have been enough--hauling the tank itself free; furnishing the flat-cars free for many tanks; carrying free a quarter to a half, "or more." But there was more than this. The railroads paid the combination for putting its tank-cars on their lines. For every mile these cars were hauled, loaded or empty, the roads paid it a mileage varying from 3/4 to 1-1/2 cents. This mileage was of itself a handsome revenue, enough to pay a profit of 6 per cent. on its investment in the cars. But when Rice asked what the railroads would charge him for hauling back his empty tank-cars, he was not told that he would be paid for their use, as others were. He was told that he would be charged "generally a cent and a half a mile," or, "we make the usual mileage charge on return of empty tanks." "This last statement," the Interstate Commerce Commissioners say, "was not warranted by the facts."[437] The vessel which contains the oil of the combination "receives a hire coming and going," Mr. Rice's lawyer said before the Committee of Congress on Commerce; "that which contains Rice's oil pays a tax." When Rice tried to sell his oil on the Pacific coast he found that if he shipped in tank-cars he would have to pay $95 to bring the empty car back, which others got back free.

The representative of the oil combination was questioned about all this by the Interstate Commerce Commission.

"Are you allowed mileage on tank-cars?"

"No, sir."

"Neither way?"

"Neither way."[438]

But the railroad officials again could not "blind-bill" him as far as this. Asked what mileage they paid him, they replied:

"Three-quarters of a cent a mile."[439]

When the freight agents who did these queer things at the expense of their employers--_i.e._, their proper employers, the stockholders--were put on the stand before the Interstate Commerce Commission to explain, they cut a sorry figure. "It was an oversight," "a mistake," said one. Another could only ring confused changes on "I think it is an error.... I cannot tell why that is so.... It is simply an error.... I cannot tell."[440] There were never any errors, suppositions, oversights for Rice.[441] Referring to this, the Commission says, caustically:

"The remarkable thing about the matter is that so many of these defendants should make the same mistake--a mistake, too, that it was antecedently so improbable any of them would make. The Louisville and Nashville, the Cincinnati, New Orleans and Texas Pacific, the Newport News and Mississippi Valley, and the Illinois Central companies are all found giving out the same erroneous information, and no one of them can tell how or why it happened to be done, much less how so many could contemporaneously, in dealing with the same subject, fall into so strange an error. It is to be noted, too, that it is not a subordinate agent or servant who makes the mistake in any instance, but it is the man at the head of the traffic department, and whose knowledge on the subject any inquirer would have a right to assume must be accurate. In no case is the error excused."[442]

The cases in which Rice prosecuted the railroads before the Interstate Commerce Commission are among the most important that have been tried by the Commission. The charges made by Rice were conclusively proved, except as to some minor roads and circumstances. The Commission declared the rates that were charged him to be illegal and unjust, and a discrimination that must be stopped. It ordered the roads to discontinue using their power as common carriers to carry Rice's property into the possession of a rival. "The conclusion is irresistible that the rate sheets were not considerately made with a view to relative justice."[443]

The facts of these discriminations--"unjust," "illegal," and "abhorrent"--are on the records as judicially and finally determined. But one of the combination said before the Pennsylvania Legislature, at Harrisburg, as reported in the Harrisburg _Patriot_, February 19, 1891:

"I say to you all, in good faith, that since the passage of the Interstate Commerce law, and the introduction of that system, we have never taken a rebate. I mean we have taken no advantage over what any other shipper can get. I make the statement broadly, and I challenge the statement to the very utmost, and will pay the expenses of any litigation undertaken to try it."

When it was found that this practice of charging the preferred shipper for only 20,000 pounds when it shipped 25,000, 30,000, 40,000, or 44,000, was going to be investigated by the Interstate Commerce Commission, there were intellects ready to meet the emergency. A pot of paint and a paint-brush furnished the shield of righteousness. Each car being known by its number, and only by its number, all the old numbers of the 3000 tank-cars of the oil trust were painted out, and new numbers painted on. Whether its mighty men left their luxurious palaces in New York, and stole about in person after dark, each with paint-pot and brush, or whether they asked employés to do such work, the evidence does not state. The device was simple, but it did. Rice was suing for his rights to use the highways before the Interstate Commerce Commission, and before the Supreme Court of Ohio, through the Attorney-General of the State, who had found the matter of sufficient importance to use his official power to institute suits in _quo-warranto_ against two railroads. It was necessary that evidence should be forthcoming in these suits to prove what his rate was in comparison with the others. The only way this could be done was by comparing the actual size of the cars with the size given in the freight bills, or manifests. The cars are known in the bills only by their numbers, and without its number no car could be identified. The report of Congress reprints the following from the testimony of the representative of the trust before the Interstate Commerce Commission:

"Has there recently been any general change in the numbering of the cars?"

"Yes, sir; there has been quite a general renumbering, repainting, and overhauling."

"When did that change take place?"

"I think it was commenced some time in July; it may have been later."

The result of that renumbering made it practically impossible to identify any car as connected with any shipment made before that time. The cars were there, looking as fresh and innocent as good men who have donned robes of spotless white earned by the payment of generous pew-rent. The cars showed even to the unassisted eye, as the Interstate Commerce Commission said, how much larger they were than was pretended. There were still the accounts of the railroads, showing that these cars had been "blind-billed" as containing only 20,000 pounds, but the cars mentioned in the manifesto could no longer be identified with the cars on the tracks. The sin of "blind-billing" was washed out in paint. Rice went to the Interstate Commerce Commission with his complaint in this case in July. Immediately the repainting and renumbering took place. "It was commenced some time in July; it may have been later."[444]

In such cases time is money, and more. "Seest thou a man diligent in business, he shall stand before kings. He shall not stand before mean men."

The members of this combination have many thousand tank-cars engaged in carrying their oil, and some of them have another kind of tank-car travelling about the country. Under the head of the "Gospel Car" the _Daily Statesman_, of Portland, Oregon, printed the following article, Sunday, December 13, 1891: "THE GOSPEL CAR.--The mission car 'Evangel' arrived yesterday, and was side-tracked on the penitentiary switch. A song service attracted many people during the morning. There will be services at 10.30 this morning, and in the afternoon, at 3 o'clock, a Sunday-school will be organized. This will be the first Sunday-school ever organized from the gospel car, which has been on the road since last spring. The 'Evangel' is sixty feet in length, ten feet wide, and seats nearly one hundred people. It is the generous gift of"--several New York millionaires, the most important of them belonging to the oil trust--" ... to the American Baptist Publication Society. The reverend gentleman who was in charge of the 'Evangel,'" the _Statesman_ continued, "will visit the smaller towns along the railway, and conduct evangelistic meetings in the car." One of these cars was in Chicago early in 1893, and was admiringly described by the Chicago press. Though corporations have no souls they are ready to help save the souls of others, for the railroads give these cars free hauling, and the messages and the packages of its occupants are franked by the telegraph and express companies. The contents of this tank-car are distributed by its donors to the people without money and without price. It is conceivable that by making it so "cheap" and by multiplying the "Evangel" into an evangelical tank line of thousands of cars, the donors might drive the churches, which have no tank-cars, out of the business, as they have done the tankless refiners, and ultimately add to their monopoly of the Light of the World that of the Light of the other World.

Tho effect of all this on the family co-operation at Marietta does not need to be described. Its head told Congress that if he had had no difficulty in getting the same freight as others he could have run his refinery to its full capacity, and could have increased his works largely.

"Are not your expenses less than theirs?"

"Yes, sir.... I am running very moderately now.... One-third to one-half generally."[445]

"I am virtually ruined," he says still later in a statement of his condition in a circular to the public, urging them to petition Congress to make the imperfect Interstate Commerce law operative. He is virtually ruined, though he has won his cases before the Interstate Commerce Commission, and that Federal tribunal has ordered the roads to give him his rights on the highways; but it has been a barren victory. His circular is entitled "My Experience Very Briefly Told." Its opening sentences give us in a phrase the secret of the significance of Rice's story, and dignify his appeal to the public. They show how thoroughly adversity had driven home into this plain man's mind a great civic truth which his fellow-citizens have not yet learned, probably because they have not yet had adversity enough. His solitary and fruitless, although successful, struggle taught him that the citizens of industry can no more maintain their rights acting singly than the citizens of government. He had learned that "competition," "supply and demand," "eternal laws of trade," were catchwords as impotent in the markets to give individuals their rights, if unassociated, as the incantations of royalty and loyalty, and law and order, to save people from their king until they made themselves a People. Persons fail; only a People can get and keep freedom. This Rice had begun to learn from his failure to enforce single-handed rights which all the courts declared were his, but which no court could secure. In his card to the people, he said: "I am fighting for my rights and for my existence (which happens to be in the interest of all) single-handed and alone, at my own expense and time lost.... I am here ... to do what I can to get the Interstate Commerce Act amended at this present session of the Fiftieth Congress, to cure existing evils, and all I ask is that you will take hold and assist me by your signature and approval to the enclosed petition. You are subject to the same influences, and now is your time, my fellow-countrymen, to come forward and assist a little to stop this nefarious work."

"In the interest of all." This is exactly the relation which the struggle of this common citizen bears to the general welfare. The investigation by the Ohio Legislature in 1879;[446] the removal by the United States Court of the railroad receiver who agreed to pay the oil trust $25 out of every $35 freight collected from Rice;[447] the refund ordered by the Supreme Court of Ohio from a pipe-line company which had charged Rice 15 cents extra on every barrel he shipped to pay it to his competitors;[448] the successful prosecution, by the Attorney-General of Ohio before the Supreme Court, of the railroads discriminating against Rice;[449] the cases before the Interstate Commerce Commission from its beginning till now, involving hundreds of railroads, and decided, so far as it did decide, on almost every point in Rice's favor;[450] the disruption, as far as forms go, of the oil trust in Ohio by the Supreme Court of the State ousting corporations from the right to become members of such combinations and to pool their earnings therein;[451] the investigation of the oil trust by Congress in 1888 and 1889, devoted in large part to the various aspects of Rice's experience--these are some only of the public functions which had to be invoked in the ineffectual attempt to protect this one man on the high-road and in his livelihood, and they show how little his was merely a "private affair."

When the amendment of the Interstate Commerce law was before Congress in 1889, eminent counsel were employed by Rice to explain the defects of the law to the committees, and petitions to Congress through his instrumentality were circulated all over the country, and numerously signed. Though a poor man, who could ill afford it, he gave time and money and attention, frequently spending weeks at Washington, discussing the subject with members, and presenting petitions. The act was amended in partial accordance with these petitions and recommendations.

To obtain the elementary right of a stockholder, never withheld in the course of ordinary business--to vote and receive dividends on stock in the oil trust which the trustees had sold and he had bought in the open market--Rice had to sue through all the New York courts from 1888 to 1892. The Court of Appeals decided that there had been no lawful reason for the denial of his rights, and ordered that they be accorded him. This was another barren victory. The trust had meanwhile ostensibly been dissolved; but the dissolution has every appearance of being like that of its progenitor, the South Improvement Company, a dissolution "in name" only; not in reality. In place of the old trust certificates listed on the New York Stock Exchange, new certificates have been issued which were selling in the spring of 1894 at about the same quotation as the former ones.

In this case the trust asked the New York courts to deny Rice his rights because he had in other matters, and as to other parties, appealed to other courts. His other suits had been against the railroads, not against the oil combination. He acted on the defensive, and went into court only to save himself from commercial strangulation. In all of them that went to trial he was successful, with but one or two exceptions. He was so successful that even the judges who heard his case and decided in his favor were moved to outbursts of unaffected indignation on the bench. The only result aimed at or procured was that the courts decreed that these common carriers must in the future give this citizen his legal rights on the railways; not that he must have the same rates as his opponent, but only that the difference in their favor shall not be "excessive," "illegal," "unjust."

Because of this attempt to secure the fair use of the highways side by side with it, the trust pleaded in the Supreme Court of New York that his appeal to courts as a shipper was a reason why the courts should withhold his rights as a stockholder.

In making this plea the trustees described themselves as having been for years persecuted by the independent of Marietta, and moistened the dry pages of their legal pleadings with appeals for the sympathy of the courts and the public. He has "diligently and persistently sought to become acquainted with" our "methods of business and private affairs;" "he has used efforts to injure" our "business"; "he is attempting to harass, injure, and annoy" us; "he has ever since ... 1876, when he first engaged in business, ... maintained a hostile attitude, and been engaged in hostile transactions and proceedings against" us, ... "for the purpose of injuring" us and our "business"; he "has been uninterruptedly prosecuting ... a series of litigations ... in the courts, as well as before the Interstate Commerce Commission, and before an investigating committee of Congress ... for the purpose of harassing and annoying" us.[452] And when in 1891 Rice was appealing to the Attorney-General of New York to bring suit in the name of the State against the oil combination in New York, like that which had been successfully brought in Ohio, he was publicly stigmatized in court as a "black-mailer" because he had once named a price at which he was willing to sell his refinery and quit. So the citizens of Nashville were called black-mailers for competing, and the citizens of Buffalo for bringing a criminal conspiracy to justice.

It is this dancing attendance upon State legislatures, courts, attorney-generals, Congress, the Interstate Commerce Commission, as shown in this recital, which the modern American business man must add to Thrift, Industry, and Sobriety as a condition of survival.