Alton over its own iron, and that it forms a physical connection there with the Chicago & Alton and the Alton Bridge Railways. It might, therefore, transport this car to Alton and there make delivery to the western line at substantially the same expense which is involved in the delivery at Edwardsville to the Illinois Terminal; but the Illinois Glass Company as the owner of the traffic insists upon the other route.

It will be seen that the Illinois Terminal Company performs for the Illinois Glass Company at a very low price all those services which are to be paid for by the Glass Company itself. It maintains the tracks within its plant and performs whatever switching service may be needed there for nothing. It transports its coal from Edwardsville to a delivery in the plant for 1212 cents per ton. It switches its carloads of sand for $1.50 per car. Upon the other hand, when the compensation is to be paid out of the rate by some connecting carrier it is disproportionately large. The movement of these cars to a connection with the Chicago & Alton, the Alton Bridge Company, the Big Four, or the Chicago, Peoria & East St. Louis, in the City of Alton, involves a haul of from one-half to two and a half miles. To reach the Wabash at Edwardsville requires a movement of 15 miles. Treating this Illinois Terminal Railroad as a switching road, which it properly is, the amount received for this service, from $8.00 to $12.00 per car, is unreasonably high, to say nothing of the special divisions which yield much more. There can be no doubt that this railroad was constructed for the purpose of exacting, or perhaps more properly extorting, from the different lines with which it connects, these unreasonable divisions; nor is it possible to resist the conviction that these allowances are made by these railroads to the Terminal Company for the sole purpose of obtaining a portion of the traffic of the Illinois Glass Company, not only at Alton but at other points where that company operates.

Just who is to be the final beneficiary of these operations does not so clearly appear. Mr. Ferguson testified that no dividend had ever been paid on this stock. During the year ending June 30, 1904, the company earned, after paying interest on its funded debt, its taxes and making an allowance for deprecia

tion on equipment, a net income of over 16 per cent upon its capital stock, according to the statistical report filed with this Commission; and an examination of that report in connection with the evidence on this hearing makes it probable that upon any fair basis the actual net earnings were much larger. It did not appear whether these three individuals held this stock as their own property or as trustees for the Glass Company whose officers and employees they are. The Glass Company obtains a present advantage in the maintenance of its switching tracks and the low price at which certain important services are performed. It will obtain the ultimate benefit unless its officers appropriate the profits which are entirely due to the influence exercised by that company.

CONCLUSIONS.

No opinion is expressed as to whether lines leading west from St. Louis may properly apply the St. Louis rate to the station of a bona fide transfer company in East St. Louis and absorb the cost of transfer to its depot in St. Louis. Neither is an opinion expressed as to whether these same carriers might, if they saw fit by proper schedules, allow all shippers from East St. Louis a fixed sum per hundred pounds for transporting their merchandise to the receiving depot of the carrier in St. Louis. These questions are not presented by this record. So far as appears from the tariffs referred to in the statement of facts the St. Louis rate is only applied at the depots of connecting railway lines or of transfer companies. No way is provided under these tariffs by which the shipper at East St. Louis can avoid the expense of draying his goods from his storehouse to the depot. When, therefore, the western line allows the Grant Chemical Company 5 cents per hundred pounds for bringing its goods across the river, that being full compensation for the service, this is not only a clear violation of law as a departure from the printed tariff and the payment of a rebate, but is also a manifest discrimination in favor of that company as against its competitor who must dray his goods from the storehouse to the receiving depot in East St. Louis. We think that both the violation of law and the discrimination are equally

clear when that allowance is made to the Eclipse Transfer Company, a corporation using the teams of the Simmons Hardware Company, whose receiving depot is the storehouse of the Simmons Hardware Company and which was organized for the sole purpose of enabling that company to obtain these allowIn such a case the law looks through the fiction to the actual transaction. This phase of the subject has been already discussed in our previous report in this same investigation touching terminal lines at Chicago. In the Matter of Divisions of Joint Rates and Other Allowances to Terminal Railroads, 10 I. C. C. Rep. 385. It is probable that these practices have been resorted to under stress of competition in the belief that they were entirely legal, but we are constrained to reach a different conclusion. While what was disclosed upon this hearing is comparatively insignificant, if the principle be once admitted there is no limit to the discrimination which may result.

It should be further remarked that the railways in interest were not heard. Something may have been overlooked in the examination of their tariffs which would radically change the questions presented.

The testimony does not conclusively show that the Granite City, Alton & Eastern Railroad and the St. Louis Sirup and Preserving Company are identical in ownership. That fact is made reasonably certain by the testimony, however, and inasmuch as such a finding would be of no binding effect upon anyone, it was not thought necessary to continue the investigation for the purpose of obtaining those witnesses who had accurate knowledge. Assuming such identity, the payments made by various railways to the Granite City, Alton & Eastern Railroad are clearly illegal. Not only are they in contravention of the Elkins Amendment of February 19, 1903, but they constitute a rebate under the law as it existed before that amendment. Wight v. United States, 167 U. S. 512.

If the Illinois Glass Company owns and operates the Illinois Terminal Railroad the case presented is in all respects identical with the facts developed at the Chicago hearing in this investigation which is above referred to and the conclusions there announced would apply here. If the three gentlemen to whom

the stock of the railroad company was originally issued and in whose names it now stands are the owners of that property a dfferent question may be presented, although even then the Glass Company obtains an indirect benefit from the extravagant concessions which are made by the carriers to secure the business of that company, and it ought not to be open to either it or the railways to say that the officers of the Glass Company propose to appropriate to themselves the spoils which they secure by means of the corporation whose servants they are.

10 I. C. C. REP.

No. 714.

W. J. KOCH AND H. W. KOCH

v.

THE PENNSYLVANIA RAILROAD COMPANY AND THE PITTSBURG, CINCINNATI, CHICAGO & ST. LOUIS RAILWAY COMPANY.

Decided April 11, 1905.

1. Shippers are not entitled as a matter of right to mill grain in transit and forward the milled product under the through rate in force on the grain from the point of origin to the place of ultimate destination; but allowance of the privilege by a carrier to shippers in one section must be without wrongful prejudice to the rights of shippers in another section served by its line.

2. Considering the defendants as a single line, the granting of transit milling west of Pittsburg and denying it to millèrs at Harrisburg is not necessarily unlawful, because conditions on that line in Ohio and Indiana may be very different from conditions in eastern Pennsylvania, and it does not follow that the allowance of transit privileges in the former territory requires as a matter of law the like allowance in the latter territory; but such differences have not been shown, nor their bearing explained, by the testimony in this proceeding, and upon the meager and incomplete facts now appearing, the Commission is not warranted in making a decision which in principle, if complainants' contention is well founded, would involve a general extension of transit privileges into a large territory where heretofore such privileges have not been allowed. Case continued for further hearing.

Charles H. Koch for complainants.

Francis I. Gowen for defendant Pennsylvania Railroad Company.