Modern Rebates

Most big corporations own & operate the little switching locomotives that scuttle around within the boundaries of their plants. The railroads merely deliver and collect freight cars at the company gates. That practice eliminates the annoyance of having outside locomotives chugging about the works at odd hours, allows manufacturers to enforce their own rules against fire hazards, minimizes the opportunities for industrial espionage.

For a long time, however, a few big companies have bulldozed the carriers into paying them for operating their own equipment, arguing that freight rates were supposed to cover such switching and "spotting" service. And from 1927 to 1931 these few companies extracted from the railroads $9,000,000 in rebates for performing for themselves a job which they would not permit the railroads to do. Last week the Interstate Commerce Commission, ruling such payment illegal, ordered the carriers to cease & desist. Wall Street chuckled at the list of manufacturers immediately affected by the I. C. C. order: almost all were plants or subsidiaries of three notoriously hard bargainers--U. S. Steel, Standard Oil of New Jersey, Henry Ford.

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