The citizen-Republican. (Scotland, Bon Homme County, S.D.) 1???-19??, 1906-04-12
ELIMINATE The RULE;
DISRUPT EXCHANGE
Live Stock Associations Are
Hard Hit by Kansas
Decision.
VIEW OF THE DEALERS
Commission Men of Kansas City As,
sert That Rule Condemned Is Es-
sential to Life of Business
Mortgages Voided.

Kansas City, April 11.-Frank Hager-
man, counsel for the Kansas City Live
Stock exchange, said that he would adj
wise the exchange to eliminate rule 8
of the bylaws, which the Kansas SUI
preme our held to be Illegal. The rule
provides that no member of the ex-
change shall buy or sell live stock for
a less commission than so cents a head.
1t provides also u maximum charge on
carload lots.
Commission men said that the elm
ination of this rule would disrupt the
exchange.
THAI is the one rule that makes the
association-for that is What the ex-
change is-effective," said l.. A. Allen,
a commission a
Effect of the Rule.
when that rule is dropped the ex-
change will have outlived it's useful
ness. Without it the live stock COM
mission business would become chaotic.
Shippers would be afraid to consign
cattle to us, because without rule No. 8
there would be no guarantee to them
of fair treatment. irresponsible agents
would o~vercharge them and the live
stock exchange would be poWerless to
prevent overcharge.
THE objects of the exchange rules
are not well understood" continued Mr..
Allen. Il believe that even the SUI
preme court of Kansas was not in pos
session of all the facts III the case
when it decided that the existence Of
the minimum charge rule was in re-
straint of competition. That rule, as
we'll as all of the bylaws of the ex-
change, was adopted for the protection
Of the shipper. The exchange regu-
lates the maximum commission that
may be charged for selling cattle as
we'll as the minimum. Knowing that
these two rules exist, the shipper IN
derStandS just what he will have to
pay an agent for buying or selling cat
tie for him. He knows what to expect
II he ships to us, and If he doesn't like
the terms nothing is to prevent him
from coming on with his cattle and
selling them himself. In fact, that oc-
ours daily"
Millions in Mortgages.
MIR. Hagerman would not admit that
the elimination of rule 8 from the by
laws of the live stock exchange would
disrupt the organization. "On other
grounds" he said, at is u most serious
matter"
How far-reaching the consequences
of his decision will be l cannot say
| without looking at the opinion myself.
But it affects every mortgage held by
every member OF the Kansas City Live
Stock exchange, secured in Kansas and
may reach securities in Missouri if the
laws of this state are INVOKED in the
matter. There must be many millions
of dollar out on mortgages negotiated
by the exchange members and this
decision covers them all. 1t may even
reach innocent banks or private lend
erS who have accepted transfers of
such mortgages, and the effect would
then be almost calamitOuS.
But let ne again emphasize the
point that the court does not say the
exchange ig illegal, or a trust; it says
that the by-laW is illegal because it is
an agreement to fix prices. The legality
of the exchange was affirmed by the
Missouri court of appeals in Gladish
against BridgfOrd on June 90, 1905. and
by the supreme of the United
States in the Higgins case on October
n, 1885,