Omaha daily bee., 1905-08-17
PEAVEY TELLS OF REBATES
Says Company he Was Connected with
Has Always Enjoyed Then.
GAINED HIS INFORMATION ON THE INSIDE
Attorney General Brown and Former
Chief Justice Sullivan Develop
InterestinE Information
Before Notary.

/
worral Grain company, was examined
Wednesday afternoon by former Chief JUS
tice Sullivan in his direct deposition in
the suit OF state of Nebraska against the
various grain companies and their officers
who are alleged to compose the Grain
trust Mr. Peavey's cross-examination was
postponed until Thursday. as was that OF
Thomas d. worrall who finished his tesu-
mony shortly after the opening Of the
afternoon session.
Mr.. Peavey at the close OF his direct
examination gave the first testimony far
brought out as to rebates. Judge Sullivan
asked what II anything, the witness knew
about the paying of rebates.
ITO my knowledge" said Mr.. Peavey,
''since the organization Of the Omaha Ele-
vator company Il has never been without |
that source Of income. At the time of its |
organization Il bought an elevator which !
was bonded for thirty years AT per cent !
and issued besides $4,000 worth Of stock.
The money to incorporate, $500, and the /
money to start in business was borrowed |
from an Omaha bank
at the beginning the company got an |
agreement from the Union Pacific road to |
pay l cent a bushel on all grain handled !
over It's lines. no matter where 81 came |
from or whether the elevator company |
had ever handled the grain or not This |
agreement continued in force until the !
road went into the hands of a receiver |
when 1t was discontinued. Then for three
or four years the Omaha Elevator COM |
| pany received ? cents per 100 pounds on all |
grain the company actually handled over |
the railroad line This was afterwards
cut TO Ia cents per 100 pounds, and l
| believe that arrangement is still In effect"
Favored" Companies Get Rebates.
n ATr sal
! II is common knowledge among grain deal
| ers that all of the big elevator companies
| in the state get rebates at present in the
| shape OF elevator charges for releasing
! cars There some companies, he said.
| like the one at North Omaha and Holm
quist Merriam, which do not get re-
bates for one reason or another, but
mainly because they are not what he called
favored companies"
AS Mr.. Peavey was travelling auditor and
adjuster for the Omaha Elevator company
| for several years he claimed to have direct
knowledge
The witness said at the outset of his
testimony that he in great many in
! stances the man sent out to adjust diff
ferences with local buyers
! MY particular mission" said the wit
ness, was to convince the independent
buyers that the line companies. especially
the Omaha Elevator company. should have
an equal share of the business at all sta
tions where we had an elevator"
| Witness went over In detail the methods
used to convince the independents-moraI
suasion, argument, putting up prices, ac-
tual coercion of various kinds. He speci-
fed:
Force a money settlement, say 2 cents
on coarse grains and cents on wheat"
This he illustrated by saying: "If the line
company had 30 per cent OF its elevators
making good profits it could afford TO lose
money at one station for the purpose OF
making the competitor at that point listen
| to reason"
Squeezed from Both Ends.
He continued:
Get bidders at terminal stations to bid
less for the irregular dealers grain than
he could afford to sell II for.
Put prices up until the local dealer had
all his cars full and could get no more cars,
through an understanding with the rail-
roads Then fill the line house at a lower
price and make a good profit
II all else failed the railroads would send
out their freight agents to talk to the re-
calcitrant dealer. and they generally got
him, If necessary by the hat-footed state
ment that IL he did not get into line he
of-way.
Mr.. Peavey, in answer to questions by
Judge Sullivan, gave these instances:
AT Millard Van Dorm had an elevator, in
competition with the Omaha company. He
was forced into line after many confer
ences and witness said he had collected
various sums Of money from Van Dorm in
his capacity of representative OF the Omaha
company. At ElkhorR the same moncy
penalty had been exacted from another
local buyer At Rising City Peter Rein
heimer, a stubborn German, was getting
most of the grain and by his independent
methods was disturbing all the country
tributary TO the b. 4 NJ. No argument
caused him to alter his methods until Mr.
Barron the travelling freight agent of the
Union Pacific, was sent out to argue with
Reinheimer. AS a result of an intimation
from Barron that he would have to move
of the right-of-way Reinheimer put up
500, his local competitor. Garhan did the
same, and Barron brought this money TO
Omaha and got the Omaha company to
put up a like amount. This was to be
forfeited IL the price agreement was vio-
lated, but far as witness knew the
agreement was still in force, although made
in the spring of 1900.
at Stromsburg John Hart owned
lumber yard. He began buying corn and
oats when they We're cheap and had to
be disciplined. He was told that If ne
did not desist the Omaha company would
open a lumber yard and probably could
sell pretty tItdp. ne quit DuSlnB grain.
This was in the summer OF 1899.
Woman Beats the Combination.
AT Plat Center a Mrs. Kehoe. who
p had no elevator, still bought grain and
shipped H. loading into cars on track.
Many efforts failed TO stop her, and Mr..
Peavey paid Mrs Kehoe a tribute as a
game and clever woman. Finally in the
fall OF 1893 she built an elevator, but
insisted on buying Independently All kinds
OF effoIts were made 10 bring her into
line, but she seemed to stand in with the
railroad officials better even than we did.
and we never got her 20 come into camp
In this connection Judge Sullivan brought
: from witness the statement that the keep
ing OF cars from independent and scoop
, shovel dealers was common occurrence
: for years back. He said the general mana
gers in Omaha Of the elevator companies
\ would camp right in the ofices OF the
! railroad officials until they promised 10
withhold the cars.
George Copeland and another man
could not get a site for a farmers elevator
at Elgin and when they consigned grain 10
my company and it was bought by mistake
on the Omaha exchange the fact gave rise
to an argument with Secretary Miller