delphia, Baltimore, and points in adjacent territory, were unjust and unreasonable, and comparison was made with rates from the same shipping points to Cordele and Fitzgerald, Ga.

The case was assigned for hearing at Macon, Ga., on January 30, 1907, but previous to such hearing the Commission was informed by the parties that negotiations were pending between them with a view to a reduction by the carriers of the alleged unreasonable rates to Helena and McRae. The case was called for hearing on the date set, and upon statements by the parties that such negotiations were pending, no testimony was taken.

On March 28, 1907, the Southern Railway Company and the Seaboard Air Line Railway (Helena being located on the Southern Railway and Seaboard Air Line Railway and McRae on the Southern Railway) made application on behalf of their lines and connections for permission to put in force, on three days' notice, reduced class and commodity rates from Boston, Providence, New York, Philadelphia, and Baltimore to Helena and McRae. Such reduced class rates from New York are:

These rates are lower than those complained of by the following

amounts:

TO MCRAE VIA BOTH ALL-RAIL AND WATER-AND-RAIL ROUTES.

TO HELENA VIA BOTH ALL-RAIL AND WATER-AND-RAIL ROUTES.

Similar reductions are shown in rates from the other points of shipment above mentioned. The reductions include commodity-rate reductions on apples, onions, potatoes, canned goods, special iron articles, and sugar.

The applications so made by the carriers set forth that at a conference between them and complainants such readjustment of the rates had been agreed upon, and that it is satisfactory to the complainants. Permission was granted by the Commission to the carriers to make the rates effective on three days' notice to the public

and the Commission, and in accordance therewith tariffs naming the new rates have been filed. In view of these material changes in the rates complained of, resulting in settlement of the controversy to the satisfaction of all parties, the complaint should be dismissed.

No. 687.

IN THE MATTER OF ALLOWANCES TO ELEVATORS BY THE UNION PACIFIC RAILROAD COMPANY.

Submitted December 13, 1906. Decided April 9, 1907.

REHEARING ON THE PETITION OF THE CHICAGO GREAT WESTERN RAILWAY COMPANY, THE CHICAGO, BURLINGTON & QUINCY RAILWAY COMPANY, AND THE ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY.

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1. Elevation is defined as unloading grain from cars or grain-carrying vessels into a grain elevator and loading it out again after a period of not to exceed ten days; it does not include treatment" or grading, cleaning, and clipping of grain; and retention in an elevator beyond ten days becomes storage and is not a part of the service of elevation as that word is used in the statute.

2. 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 traffic is in transit, subject only to the restriction imposed by the act that elevation, like any other service offered by the carrier, to shippers, must be open to all on equal and reasonable terms. 3. 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 elevator itself or furnish elevation by arrangement with the 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 it operates to affect the rates charged by the carrier upon the grain traffic or by some device a portion of the allowance is returned to shippers and thus becomes a rebate. 4. An allowance made to a shipper of grain, who furnishes elevation service under an arrangement with a carrier, is a rebate and an unlawful discrimination when it involves a profit over and above the actual cost to such shipper of the service rendered. It is not a rebate when the allowance does not so exceed the actual cost. 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 11 cents per 100 pounds paid by the railroad company to these elevators, controlled by the Peavey interests, who are large shippers 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. Ordered, That such allowance be reduced and shall not exceed threefourths of a cent per 100 pounds.

Davis, Kellogg & Severance for Chicago Great Western Railway Company.

Gardiner Lathrop for Atchison, Topeka & Santa Fe Railway Company.

J. W. Blythe, C. J. Green, and J. E. Kelby for Chicago, Burlington & Quincy Railway Company.

J. N. Baldwin for Union Pacific Railroad Company.
Hagerman & Koon for Peavey & Co.

John H. Marble for the Commission.

REPORT OF THE COMMISSION.

HARLAN, Commissioner:

The allowances on grain received over its lines that have been made for some years by the Union Pacific Railroad Company to the Omaha Elevator Company and the Midland Elevator Company, proprietors of certain elevators at Council Bluffs and Kansas City, commonly known as the Peavey Elevators, were the subject of an investigation undertaken by the Commission on its own motion prior to June 25, 1904, on which date the report and opinion of the Commission was announced. Subsequently, in July, 1906, the proceeding was reopened upon the petition of certain railroad companies interested in the grain traffic of the territory tributary to those points, and much additional testimony was taken, upon which, as well as upon the original record, the whole matter has now been fully reheard, the oral arguments of counsel having been supplemented by printed briefs.

The pertinent facts developed upon the original inquiry are set forth in detail in the report and opinion then announced. (Vide 10 I. C. C. Rep., 309.) It will not be necessary, therefore, now to restate them. Since that time Omaha has become a grain market of sufficient importance to support fifteen grain elevators and to maintain a grain exchange whose members handle a large volume of grain shipments. The testimony adduced on the rehearing shows that the allowance of 14 cents per 100 pounds heretofore made to the Peavey elevators only, and more recently to the Trans-Mississippi Grain Company, has been extended to all other elevators at the cities above mentioned. Much testimony has been offered tending to show that the allowance is excessive and operates as a rebate. The statute itself has also been amended so as to include "transfer in transit," "storage," and "elevation" among the facilities of transportation which

interstate carriers must or may provide for their shippers (sec. 1). But aside from these matters the material aspects of the proceeding remain unchanged. It will suffice therefore briefly to state the conclusions reached by us upon the rehearing without further reference to the history of the matter as disclosed upon the whole record.

Elevation, as commonly understood among elevator men and among buyers and sellers of grain, signifies the unloading of grain from cars, or from grain-carrying vessels, into a grain elevator and loading it out again after storage for a period of not to exceed ten days. The "treatment," or grading, cleaning, and clipping, of grain not properly a part of "elevation" as the word is strictly used, and the retention of grain in an elevator beyond the period of ten days becomes storage and is not elevation. It is in this sense that the word is used in the amended statute. Without undertaking at this time definitely to decide to what extent under the amended act the furnishing of elevation as thus defined is a compulsory requirement, it is clear that the law recognizes elevation as a facility which a carrier may provide for the benefit of its shippers if it finds it to its interest to do so. This being the case, we see no warrant in law for holding, as is suggested, that such elevation can not be provided at destination and is lawful only for the transfer of grain in transit. The law seems to clothe carriers with the right to furnish elevation at any point where it may be a convenience to shippers. The only restriction imposed by the act in that connection is that the elevation offered, like any other service a carrier may hold out to shippers as an inducement to send their traffic over its line, must be open to all on equal and reasonable terms. It is true, as is said, that the usual practice is for consignees to do their own unloading at destination. But clearly there is nothing in the law or in public policy that forbids a carrier to unload for them, if it does so for all shippers alike. Generally speaking, a carrier may build up its traffic by offering its shippers any facilities of that nature. We understand it to have been so held both by the courts and by this Commission.

Having the right under the law to provide elevation for its shippers it is not to be doubted that a railroad company may either construct and operate an elevator of its own, or may furnish elevation facilities to its shippers by making some arrangement with the owner of an elevator for such a service. The amount of the compensation or allowance that may be paid to the owner for rendering such a service is not a matter of concern either to shippers or to other carriers, unless in some way it enters into the rates charged on the grain traffic and thus makes the rates excessive, or unless by some device a portion of the allowance is returned to shippers and thus becomes a rebate. And, therefore, whether the allowance now made

by the Union Pacific Railroad Company to the owners of the elevators at Council Bluffs and Kansas City be called an allowance for the prompt release of its equipment, or for the transfer of the grain in transit, or for elevation, we adhere to the view expressed in the original report and opinion of the Commission that such an arrangement, embracing as it now does all the available elevators at the points named and not being confined to the Peavey elevators only, is in itself not unlawful. By whatever name it may be called, the service actually rendered is in fact elevation and may be so regarded under the amended act. It must be understood, however, that if such elevation is furnished by the Union Pacific Railroad Company for the grain of one shipper over its lines, proper arrangements must be made by it for furnishing elevation to other shippers over its lines; for otherwise the company would subject itself to the charge of practicing an unjust and unlawful discrimination against other shippers who for any reason can not use the Peavey elevators.

The vice in the situation at Council Bluffs and Kansas City arises out of the fact that the Peavey interests, besides operating the elevators in question for the railroad company, are also extensive buyers, sellers, and shippers of grain. If they were elevator men only, the amount of the allowances paid to them by the railroad company on the grain of other shippers would not have been the occasion of inquiry by the Commission, unless upon complaint by a shipper that the allowances entered into the rates and made them excessive or were being used covertly as a rebate. But being themselves dealers in grain, they perform a service for themselves and for their own grain, although operating the elevators under contract with the railroad company. It is for this reason that we still regard the arrangement as objectionable, although not necessarily and in itself unlawful. Such relations between a carrier and a shipper as the Peavey people enjoy with the Union Pacific Railroad Company, although more frank and open than the fictitious leases and contracts with elevator companies that are sometimes resorted to as a cover for rebates and other unlawful practices, nevertheless breed distrust and suspicion. Arrangements of that kind easily lead to abuses and ought not, therefore, to be encouraged. They not infrequently result in some unfair advantage to the shipper concerned. That is the case here. The record discloses that practically all the grain going into those particular elevators belongs to Peavey & Co. They therefore do the work under the contracts with the railroad company in a double capacity and with a twofold interest in the result. They are paid by the company for performing an elevation service for its shippers, and the service they render is chiefly in connection with their own grain. Besides the