FUNDAMENTAL CONDITIONS 15 



The claims of the fanners that rates were raised at intermediate 

 points to make up for losses at competitive points are probably 

 not true but there was, nevertheless, a distinct injury to the 

 unfavored places in the advantages given to their better situated 

 rivals. 1 Of discrimination between persons, there can be no 

 justification. It appeared in the passenger service mainly in 

 the shape of free passes, the political aspects of which were more 

 important than the economic. In the freight service this sort 

 of discrimination was usually accomplished by secret rates and 

 rebates and was almost always in favor of the large and powerful 

 shipper. It should be borne in mind, however, that most of 

 this discrimination, instead of being freely granted by thef 

 railroads, was rather extorted from them by large shippers,! 

 who were often able to force a rebate by threats of transferring J 

 their business to a rival road. 2 



It is quite evident then that the farmers had a number of real 

 grievances against the railroads, although they did not always 

 clearly understand the situation or realize just where the trouble 

 lay. The power of railway corporations was growing and was 

 being used to influence public officials; the system of construction 

 was wasteful and corrupt; the stocks and bonds were badly 

 watered; and in some instances the rates were undoubtedly 

 higher than was necessary for a fair return on the physical 

 value of the road. There were also gross and often totally 

 unjustifiable discriminations which injured both shippers and 

 consumers and indirectly added to another cause of complaint j 

 by fostering monopolies. 



1 Adams, Railroads, 123-125; Hepburn Commission, Report, 48-71, and testi- 

 mony; Interstate Commerce Commission, Reports, i. 7; Larrabee, Railroad Ques- 

 tion, 143-163; J. F. Hudson, The Railways and the Republic, 25-55; E. P. Alexan- 

 der, Railway Practice, 5-23; W. D. Dabney, The Public Regulation of Railways, 

 67-174; Paine, Granger Movement in Illinois, 16. 



2 Hepburn Commission, Report, 40-70, and testimony; Larrabee, Railroad 

 Question, 136-143; Hudson, Railways and the Republic, 55-66; Cook, Corporation 

 Problem, 34-40; I. M. Tarbell, History of Standard Oil. 



