Sec. 11. #Personal discrimination#.  Discrimination between shippers (personal discrimination) is charging one person more than another for substantially the same service.  This most odious of railroad vices, rarely practised openly, is done by false billing of weight, by wrong descriptions or false classification to reduce the charge below published rate-sheets, by carrying some goods free, by issuing passes to some and not to all patrons under the same conditions, or by donations or rebates after the regular rate has been paid.  In some cases a subordinate agent shares his commission with the shipper, and the transaction does not appear on the books of the company.  In other cases favored shippers are given secret information that the rate is to be changed, so that they are enabled to regulate their shipments to secure the lower rate.

One group of reasons for personal discrimination is connected with the interests of the road.  It is to build up new business; it is to make competition with rival roads more effective by favoring certain agents, as was very commonly done in the Western grain business; it is to exclude competition, as by refusing to make a rate from a connecting line or to receive materials for a new railroad which is to be a competitor; and it is to satisfy large shippers whose power, skill, and persistence make the concession necessary.  Another group of reasons has to do with the interests of the corporate officials.  It is to enable them to grant special favors to friends; or it is to build up a business in which they are interested; or it is to earn a bribe that has been given them.

The evils of personal discrimination are great.  It introduces uncertainty, fear, and danger into all business; it causes business men to waste, socially viewed, an enormous fund of energy to get good rates and to guard against surprises; it grants unearned fortunes and destroys those honestly made; it gives enormous power and presents strong temptations to railroad officials to injure the interests of the stockholders on the one hand and of the public on the other.

Sec. 12. #Economic power of railroad managers.# Other evils of unregulated private management of railroads appeared.  When the railroad was a young industry, it was thought to be simply an iron-track turnpike to which the old English law of common carriers would apply.  This and similar notions soon, however, proved illusory.  It was seen that the higher railroad officials had, in the granting of transportation service and the fixing of rates, a great economic power.  They had complex and sometimes conflicting duties to the stockholders and to the shipping public.  They wore their conscience-burdens lightly, before the days of effective regulation, and frequently made little attempt to meet the one and no attempt whatever to meet the other obligation.  The opportunities for private speculation brought to many railroad managers great private fortunes.  There were no precedents,