The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-04-19
DECIDEAGAINSTROAD
Interstate Commission Rules
in Peavey Grain Case.
ALLOWANCES ARE REBATES
Union Pacific Ordered TO Reduce the
Rate of It's Payments TO the Eie-
vator Company--Lane and Clements
DisSent-The Question Has Now
Been Passed Upon Twice.

An important decision. perhaps the most
important handed down since the new
railroad rate law became effective. has
just been reached by the Interstate Com
merce Commission in what is known as
the Peavey grain case.
The commission invokes the rate-mak-
ing power conferred upon it by the law
Ina directing that the Union Pacific Rail-
road reduce its allowance to the Peavey
Company for the elevation Of grain. and
holds in effect that an allowance made 70
a shipper Of grain who furnishes elevator
service under an arrangement with ear
rier. Is a rebate, and an unlawful dis
elimination when Ii involves a profit over
and above the actual cost to such shipper
of the service rendered. 1t Is not re-
bate, the decision holds. when the allow
anee does not so exceed the actual cost.
the commission says:
THE arrangement between the Union
Pacific Railroad Company and the Peavey
Elevators. at Council Bluffs and Kansas
City. Is not in itself unlawful. But the
allowance Of ! Il cents per 100 pounds
paid by the railroad company 20 these
elevators ENAtlDAtLA ny ttAN ~fEfNE 80
terests who are large shippers OF grain,
and own practically ali the grain going
into the elevators. is in excess OF the
actual cost OF the service. and is a rebate.
and therefore unlawful
Must Reduce Allowance.
The commission orders that the al
Iowance by the Urnion Pacific 20 the
Peavey Elevators shall be reduced, ana
shall not exceed three-fourths Of cent
per 100 pounds. Such order 10 take effect
June next.
This is the second decision Of the com
mission In the Peavey case. the first one
having been rendered in 1894. prior TO the
enactment of the new rate law. II was
held then that the commission had no
jurisdiction. In July. 1896 the proceeding
was reopened upon the petition Of certain
railroad companies interested in the grain
traffis Of the territory tributary 10 COun-
eli Bluffs and Kansas City, and much adj
ditional testimony was taken. Upon this,
as well as upon the original record. the
whole matter was reheard and the COM
missions present decision resulted.
Claim Il Is Rebate.
II was charged In substance that the
allowances paid the Peavey Company by
the Union Pacific Railroad was a rebate,
lnasmuch as the former concern was q
buyer and shipper OF grain. and at the
same time elevated the product The
complainants alleged that the Peavey
Company was paid by the railroad for
elevating its own product
The decision OF the commission IN this
case was not unanimous Commissioners
Lane and Clements dissen,ed. Thelg
opinion viii be made public d ter II is
understood they supported the contention
Of the compliments.
Three cases. involving charges Of ex-
cessive rates and discrimination. were put
on for hearing before the Interstate Com
merce Commission yesterday. Thirty
railroads are named as defendants. Cot
ton manufacturers Of the South are the
c0mplainants. The cases in question. al
OF them identical were fled By the Mon
roe Cotton Mills. Of Monroe, Ga; the
Enterprise Manufacturing Company, Of
Augusta. Ga. and the Graniteyille Manu-
featuring Company. Of South Carolina.
Determination By the railroads IN the
matter OF rates and in the supply OF ears
is alleged II is charged that the carriers
favor Eastern cotton mills in their freight
rates on goods shipped for the Orienta
trade.