The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-07-30
PEAVEY NOT GUILTY
OF UNLAWFUL DEAL
Elevator Company's Relations
with U, P, Railroad Within
Statutes.
ARRANGEMENT NOT GOOD
THO, DECLARED KNAPP
Review of Former Investigation
Shows Nature of Impend-
ing Probe.
Ry w. w. Jermane.

BY w. w. Jermane. 4
Washington, July 30.-It will be
matter of interest to grain men IN the
northwest to know just what the inter
state commerce commission ls TO 1nyes'
tigate in the matter of the Union IA
cifc Railroad company and the feavey
Elevator company, an lnVest1gaIttIIn I'm
which has been determined upon on the
petition of three of the competing lines
In the Union Pacifc's terrltory-the
Chicago Great Western, the Burlington
and the Santa Fe: .,o,
considered heretofore by the com, commi!s IS
sion and a decision was rendered IN
July, 1905, in favor of the Union r.
cifc and the Peavey companies. Chair-
man Knapp wrote the opinion, IN ~the
beginning of which he says tn an 'i ;1
the nature Of informal complaint, in;
stituted the inquiry on its own mGtlon
to ascertain the facts respecting allow
ances by the defendant company TO the
owners of certain elevators and to de,
termine whether, as IS .clalm1a, 'ne
allowances are in violation OF law,
The agreement between the Union
Pacific and the Peavey company WAS wa
executed under date Of Feb. Z, 1927
the contracting parties being FRANK 2.
Peavey Of Minneapolis and the rail-
road company. Its provisions are s So 70
what elaborate, but those mate H. w.
the controversy are, briefly, as follows;
S...s Land Deal Involved. .--
The railroad company agreed 70 1 com,
yey to Peavey a certain tract OIL ia o. u
in Council Bluffs, containing about w.,
600 square feet, and any adoltaontatt
land adjoining this tract Wh1cn mi M
be needed to enlarge the ele ystruct p4 The
railroad company was to provide yaard q,
room and maintain system OF switches y
+ and sidetracks in connection with tne
elevator; was to deliver to the eleVato!
all grain originating on ITS IT'S n mes +ah n.
CONSIGNED to or in cars of said |, eleva
tor. and to pax Peavey. on all sucl
Grain transporsed thru the elevator
transfer charge not exceeding l cent mt
S.. q hundred pounds during the hlst VI :
wears of the contract, ana MOI eAo go
hut at mo- time more than the transIe
charge customarilY made on s1Hll Id
business lat. similar points. =
The railroad company also bouno y
self to provide for the Peavey eleVatt
equal privileges and adyanIaees -, =,
those granted any other elevator me
r, NJ 18th thereafter served by it at. Oman
or Council Bluffs, and to switch, re
of charge. all cars, loaded or empty, T
and from the elevator, between pun.
on its road within ten miles OF Oman :
and to receive from and d I1l ~ 90,
FOR loading, unloading or transfer
Grain at the elevators as cheaply as
Sandles cars for similar purposes d
other elevators in Omaha and Counc
Bluffs. .e.s>.. -. Wv =,
s,,o;,,. casa at Kansas City.
II Hinder this contract Peavey ,er ere e.
an elevator costing ap oo 400 PSv ,,sSo ~
With capacity of 1,5Oo,O0O bushel
gsWhile t. was in process Of constructl q
! <pnauev assigned the contract to II
/ 6eayeS F E1s company. This il
/ yolyed no substantial change OF oWne
! shin however, as controlling lnte
est in the elevator company ma mas 4 Srm";
been owned by members Oh h sn1 III Frar
II. Peavey was the senior partner: :, :.
other words, according to J., Jud!
Knann, . decision, the firm is the v
tual owner Of the elevator and t
beneficiary Of the cont ract with
Union Pacific.
similar situation exists at Kans
CITY, where similar contract W
made with Peavey. The elevator the
IS operated by the Midland Elevat
company, a corporation whose capl1
stock is substantially all owned by 7
individual members OF the feavgy " "
The decision states that +. II. T.
yey & Co. appear to have some =
country elevators in Minnesota, the |
kotas. Iowa, Nebraska and Kansas,
sides elevators at Council Bluffs, K;
sas City, Duluth, Minneapolis and =
cago. and their business is EXTENSIVE;
the states named and elsewhere. II
are also large buyers of grain upon
Trn;on Paoifio SyStpm. SO much OF
Grain thus bought as is consigned
Omaha or Council Bluffs, that is to
Omaha Elevator company, IS bought
the name of that company; that WIN
is consigned to Kansas City appears
be bought in the name OF the :Mldls
Elevator company.
"Amounts to Rebate.
The decision then states that, IN v
of these and other related facts,
charge is made that the arrangement
preferential and unlawful. This cha
is based upon the claim that the. {
tract price for transferring gram
exorbittant and unreasonable, that
is much greater than the necessary
of performing the service and t
therefore, it has the direct but ac1
effect of prohibited concession
Reaxsy Of c sSs because s4sn na they ars
at a profit thru their own elevator
In the language Of one of the br
submitted to the commission "the
lowance of cent and quarter
hundred pounds, paid to the said
vator companies for transferring
own grain, amounts to rebate,
cause it so much reduces the thru
8 iished rate, in favor of said elev
companies, but not in favor OF
shippers
In this same brief it is also said
IF the allowance be permitted
stand the other railroads in the con
tive territory must necessarily
It in dealing with their patrons
suffer their patrons and themselve
80 be placed at constant disadvan
~ with the tendency of creating IN
territory grain-bnying monopot
favor Of the Peavey elevators a.
grain haul monopoly in favor of
Union Pacific railroad company. =
Nq The commission took the con
and the various allegations s
10 above under consideration, and the
$50 clusion reached was that the arr
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