670
THE GREEN BAG
where it is weighed, graded, receipted for, and put into a common pool of all fruit received of a like grade, the whole being marketed as occasion offers and the proceeds divided among the members according to the quantities shown on their respective receipts. The associations in a given center of production form in turn a local "Ex change," and the local exchanges are in turn members of a principal or general ex change, having control in matters of general policy and government, whose directors are elected by the constituent exchanges, one from each. It was by two of these general exchanges that the present proceedings were brought. » Originally, in shipping his fruit East, the shipper selected that connecting carrier, under the privilege accorded him by the Santa Fe" and the Southern Pacific, which would get his fruit to market best and with the least delay. Keen competition of course at once arose among the connecting lines to obtain the preference from shippers in the selection of their routes. Some of these connecting roads were not so well sit uated as others to command a fair share of this traffic. Physical and geographical diffi culties embarrassed them in the contest; they could not offer shippers a short route, a speedy delivery, or adequate terminal facilities. But there was something they could offer, and they did. It is at this point that we begin to see in practical operation that great principle of competition which has so long been held up to us as the palladium of our liberties, the panacea for our commercial ills, the preserver of individualism, the infallible solution of the problems of monopoly and wealth . But unfortunately competition of the polite and submissive sort contemplated by our law would have been quite useless to these handi capped railroads; they accordingly resorted to competition of the only possible kind. They came into California and offered rebates to shippers who would route their fruit over their lines.
Now the shippers are also competitors. The exchanges are, like all other trusts and combinations, fighting the independents. If a reduction of cost might be obtained, the exchanges could easily undersell the inde pendents, and compel them to come to terms. The independents would gladly, of course, seize the same opportunity if it presented. When it arrived in the offer of rebates from connecting carriers, the exchanges welcomed the chance with open arms. The indepen dents were not organized, and as usual missed their opportunity. The connecting carriers commenced to bid against each other for the routing of the exchanges' business, the exchanges contested with the indepen dent shippers to obtain rebates, and with this weapon made war upon them in all the markets of the country, to an extent which demoralized the business, depreciated orange lands, and ruined many growers. One of these exchanges, the Southern Cali fornia Fruit Exchange, a bitter complain ant in this present action, received after wards in four years, in rebates, the neat sum of $174,491. Under these circumstances, oranges might be sold with profit for less than the cost of production and sale; and the plight of those who were not important enough in themselves or through the trust to command rebates, may be imagined. But the car lines are also competitors. Why should shippers receive the whole of a benefit which might be divided with a car line, to its advantage over its competitors? Why should an Eastern railroad wield the power attending rebate giving when that power might be used by a car line to its advantage over its competitors? Shippers were accordingly instructed in the advan tages of dealing with a car line instead of with numerous connecting railroads a thou sand miles and more away. Shippers and railroads were warned, and it was univer sally believed, that there was great danger in the giving of rebates by railroads, but none at all in the giving of rebates by car lines, upon the theory that the latter were
