The “Chicago, Lake Shore and Eastern Railway” is another of these homeopathic railroads. It was organized in the interest of the Illinois Steel Company and is now owned by the Steel Trust (The United States Steel Corporation) which some time ago absorbed the Illinois Steel Company. Since 1897 this private railway has been allowed a division of 10 percent on business to New York and other seaboard points, 15 percent to Pittsburg, Buffalo, and other middle points, and 20 percent on traffic to the Missouri River. It also has a division on rates to the South. All Eastern and Southern lines as well as the Western roads divide their rates with this Trust road. These divisions amount to $6 to $12 a car for the switching service performed by the private road. Besides this, certain special divisions are made. On coke from the Connellsville region, for example, a division of 70 cents per ton is allowed. This gives the “Chicago, Lake Shore, etc.,” above named, $700 to $1000 for hauling a train of coke 7 miles from Indiana Harbor to its plant in South Chicago, while the actual cost would not exceed one-tenth of this sum. Railroad officers have claimed that such divisions of rates are justified because the little private road is the “gateway of the traffic.” “The business originates on the little road and it controls the routing, and the division is only an application of the custom of allowing the road on which traffic originates a considerable percentage of the through rate, usually 25 percent.” Other railroad men tell me that this is not true. President Tuttle, for example, says: “There is no such thing as a custom to give the initiating road 25 percent or 10 percent or any percent. The division is on the mileage basis, but if one road does special work, switching etc., a reasonable allowance may be made, 1 percent or 2 percent or whatever is fair to cover the special work or expense.” Even if there were a custom to give 25 percent to the initiating railroad that could hardly explain the 70 cents per ton on traffic not originating on the trust railroad in Chicago, but coming to it from Pennsylvania points. Whatever may be the custom or analogy used as a warrant for these divisions it is clear that their effect is precisely the same as that of a giant rebate. The Trust railroad in this case makes a net profit of 150 percent a year upon its capital stock of $650,000. How much the Steel Trust as a whole gets in this way through all the private railroads connected with its various plants is not known, but the Commission says it is certainly a “sum sufficient to pay dividends on several millions of dollars of capitalization.”[256]