Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1907-04-19
JomnisSiOn Holds that it Exceeds OSst Of
Service Rendered.
CHARGE is ORDERED REDUCED
Rulipg that it Must Not Exceed Three
Quarters Cent Per Hundred Pounds.
OPINION is WRTT,O BY Mr.. HARLAN
Allowance In ItseIf Is Not nIeGal, but
when Paid to owner OF Grain
Must Not Exceed Actual
Cost.


WASHINGTON, April 1s-In what
known as the Peavey elevator case the
Interstate Commerce commission today an-
nounoed its decision against the Union Pa
ciic Railroad company The commission
helds that the arrangement between the
Union Pacific and the Peavey elevator was
unlawful! as Il was in excess of the actual
cost Of the elevation of the grain and, there
fore, Il rebate.
The decision was prepared by Commis-
sloner Harlan and his opinion was con-
CURED in by a majority of the commission.
Commissioners Clements and Lane, how
ever filed dissenting opinions.
The proceeding was entitled; In the mat
ter OF allowances to elevators by the Union
Pacific Railway company" 1t was sub
ject OF investigation by the commission on
It's own motion prior to June %, 1904, on
which date the commission on the evidence
then before It, decided that there had been
no violation OF law. subsequently, in July
1906, on petition Of certain railroads inter
ested in the grain trafhc OF the northwest.
the case was reopened and much additional
testimony was taken. The case was then
argued at great extent before the commits
sion and briefs were filed by counsel rep
resenting all parties in interest Upon this
record and the record Of the previous pro-
oeedlngs the commission's opinion Is based
summary of Finding.
The position OF Commissioner Harlan Is
summarized thus: Elevation is defined
as unloading grain from cars or grain
carrying vessels into a grain elevator and
loading II out again after a period OF not
to exceed ten days; II does not include
treatment or grading or cleaning OF clip
ping Of grain and retention in an elevator
beyond ten days becomes storage and 10
not a part OF the service OF elevation az
that word is used in the statute.
''The law clearly recognizes elevation as
a facility which the carrier may provide.
and this authorizes the carrier to grant
grain elevation at destination or while the
trafic is in transit, subject only to the re-
striction imposed by the act that eleva-
ton, like any other service offered by the
carrier TO shippers must be open to all
on equal and reasonable terms.
"Since a carrier subject to the act TO
regulate commerce is entitled to provide
elevation for grain shipments, such carrier
may either construct and operate the ele-
vator itself or furnish elevation by ar
rangement with an owner OF an elevator;
and the amount OF compensation paid by
the carrier to the owner OF an elevator
rendering the service is of no concern to
shippers or TO other carriers, unless II
operates to AFFECT the rates charged by the
carrier upon the grain trafic or by some
device a portion of the allowance is re-
turned to shippers and thus becomes . rO-
bate"
When IL Becomes Unlawful.
IAN allowance made to a shipper OF grain
who furnishes elevation service under an
arrangemene with a carrier, is a rebate
and an unlawful discrimination when 1t
involves a profit over and above the actual
cost to such shipper of the service rendered.
II is not a rebate when the allowance does
not exceed the actual cost. The arrange
ment 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 to these elevators, controlled by
/ the Peavey integ ests, who are large ship
/ pers OF grain and own practically all the
/ grain going into the elevators, is in excess
/ OF the actual cost OF the service and is a
/ rebate and therefore unlawful.
| 'The commission orders that the allow
ance by the Union Pacific Railroad COM
pany to the Peavey elevators shall be
! reduced and shall not exceed Y OF cent
] per 100 pounds, the order taking efect on
/ June !, 1907"
Both Commissioners Clements and Lane
take issue in their opinions with the opin-
ion OF the majority of the commission.
Their opinions will be available In q day
or two.