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The provisions of the law forbidding rebates were in truth merely a bit of legal hypocrisy. Rebates could not be openly defended; but the business of the country was honeycombed with them, and the majority of the shippers in whose interest the law was passed did not want the prohibition enforced.
This crime is one which in its nature is deliberate and premeditated. I think over a fortnight elapsed between the date of Palmer's letter requesting the reduced rate and the answer of the railroad company deciding to grant it, and then for months afterwards this business was carried on and these claims for rebates submitted month after month and checks in payment of them drawn month after month.
In other words, the Company was to know exactly the amount of the business of its competitors and with whom it was being done. The contract allowed the roads to make similar rebates with anybody offering an equal amount of traffic, but the likelihood of such an outcome was slender in the extreme.
The newspapers were blazoning to the whole country that the Economy Door Strip was a blind for taking railroad rebates, and everywhere he met the report of Inspector Smith that the National Provisions Company's fifty-pound sack of Barclay's Best contained but forty-eight pounds and ten ounces; also that Barclay had been taking three ounces out of the pound cartons of breakfast food, and that the cracker packages were growing smaller, while the prices were not lowered.
Swindling in stocks, corrupting legislatures, making fortunes by the inflation of securities, by wrecking railroads, by destroying competitors through rebates these forms of wrongdoing in the capitalist, are far more infamous than any ordinary form of embezzlement or forgery; yet it is a matter of extreme difficulty to secure the punishment of the man most guilty of them, most responsible for them.
Hardly had the ink dried on its written promise not to grant any rebates when it began granting them to the Standard Oil Company. In those days the railroad rate was not the sacred, immutable thing which it subsequently became, although the argument for equal treatment of shippers existed theoretically just as strongly forty years ago as it does today.
For he was not only an iron-master who knew every detail of his business, who kept it ahead of the times; he was also a strategist, wise in his generation, making friends with the Railroad while there had yet been time, at length securing rebates and favours. Alexander Barbour, its president, had been a great man, but after that he bowed, in certain matters, to a greater one.
From these rates the South Improvement Company was to receive substantial rebates, amounting to forty or fifty per cent. on crude oil and twenty-five to forty-five per cent. on refined. On their side the railroads were promised the entire freight business of the Company, each to have an assured proportion of the traffic, with freedom from rate-cutting competition.
It must include putting a complete stop to rebates in every shape and form. This power to regulate rates, like all similar powers over the business world, should be exercised with moderation, caution, and self-restraint; but it should exist, so that it can be effectively exercised when the need arises.
The cost of living rose with them, for employers their new allies wielding in their service the weapons previously used against them, intimidation, the boycott, and so forth more than recouped themselves from the general public. Their employees got rebates on the prices of products, but for consumers who were neither laborers nor capitalists there was no mercy.
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