Globe Elevator Co. v. Andrew

• Decision Date: 20 April 1906
• Docket Number: 125.
• Citation: 144 F. 871
• Parties: GLOBE ELEVATOR CO. v. ANDREW et al.
• Court: U.S. District Court — Western District of Wisconsin

144 F. 871

GLOBE ELEVATOR CO. v. ANDREW et al.

No. 125.

United States Circuit Court, W.D. Wisconsin.

April 20, 1906

C. H Crownhart, Solon L. Perrin, Koon, Whelan & Bennett, and James I. Best, for complainant.

John A Murphy, for defendant Great Northern Ry. Co.

L. K Luse and George B. Hudnall, for defendants Homer Andrew. M F. Swanston, John D. Shanahan, Byron Kimball, and Peter S. Christenson.

SANBORN District Judge.

Cross-bill of the Great Northern Railway Company was brought against the complainant and all the other defendants.

In the city of Superior, Wis., lying in the extreme northwest corner of the state, and separated from the city of Duluth, in Minnesota, only by a navigable waterway, there are 15 large elevators and 6 flouring mills. The flouring mills have a capacity of about 75,000 bushels of wheat per day, or about 20,000,000 bushels per year. Part of the product of these mills is marketed in Wisconsin, and the balance is shipped to other states each of Wisconsin. The Great Northern Railroad extends from Minnesota into Wisconsin a few miles south of Superior, and runs northeasterly through the city of Superior, and thence to Duluth. The Northern Pacific Railway has a terminus at Duluth, and extends thence into Superior and east to Ashland, Wis. The St. Paul & Duluth Railroad, controlled by the Northern Pacific Railway Company, branches at West Duluth, about due west from the center of the city of Superior; one branch extending to Duluth, and the other across the St. Louis river to Superior. The Omaha Railway Company also extends from Minnesota into Wisconsin to Superior and Duluth, branching at Spooner, about 60 miles southeast of Superior. All of these railroads carry grain; a large part of it being carried by the Great Northern Company. The latter company has very large yards at Superior. The grain trade carried on all these roads amounts to about 40,000,000 of bushels a year.

Prior to the enactment of chapter 19, p. 37, of the laws of Wisconsin for 1905, and for a period of about 10 years, inspectors and weighmen, acting under the authority of the railroad and warehouse commission of the state of Minnesota, had inspected and weighed all grain received in Superior; many of these men coming from the city of Duluth daily for the purpose of doing this work. Being outside of the jurisdiction of their appointment and the jurisdiction of the laws under which they were appointed, they were not subject to any official oath; nor were they amenable to any law prescribing their duties or punishing the failure to perform them properly. Under this system, as might well be expected, grave abuses in the grain trade had grown up, and under such circumstances the Legislature of the state of Wisconsin passed the law in question.

The testimony further shows that, according to the reports of the railroad and warehouse commission, more grain was reported and certified as having been shipped out of Duluth and Superior than was received into these cities, after deducting, from the grain received, the grain that was milled or ground into flour and other food products; one witness placing the amount at 26,000,000 bushels for the 10 years from 1893 to 1902, inclusive. The testimony shows that this was brought about partly by docking all grain that arrived in the city from one-half to seven or eight pounds per bushel, whereas there was no dockage on grain shipped out of the city. There was also an arbitrary dockage in weights of grain going into the elevators of one-half bushel per car. There was also an undergrading of grain as it arrived in the city of Superior and Duluth, and an overgrading of the same grain when it was shipped out of these cities; the reports of the railroad and warehouse commission showing that a less number of bushels of the higher or best grades was received in than was shipped out, and a larger number of bushels of the lower or poorer grades was received in than was shipped out. The price of grain is fixed by grades. Consequently, when grain is received into Superior at a low grade, and shipped out at a high grade, the seller of the grain arriving in Superior receives a less price than the purchaser pays for the same grain when it is shipped out; the profits, of course, belonging to the middleman, the elevator company. This, in part, was the situation as shown by the evidence, when chapter 19, p. 37, Laws 1905, was passed by the Legislature, and the Legislature had these and other facts before them at the time of the passage of the act.

It further appears that the Great Northern Railway has for many years transported large quantities of grain, exceeding in value $1,000,000 a year, from its railroad terminus in Superior to steamboats plying on the Great Lakes for the purpose of further transportation to eastern markets and foreign countries. In order to facilitate such commerce, it built large terminal railway yards and transfer and storage appliances and equipments, as well as two large elevators. It is, and for many years has been, engaged in transporting wheat, flax, oats, barley, rye, and corn received from shippers along its line in Montana, North Dakota, South Dakota, Iowa, Nebraska, and Minnesota; considerable of which grain being delivered by it into elevators in Superior. Prior to the enactment of chapter 19, p. 37, Laws 1905, cars arriving over the Great Northern usually came early in the morning. They were stopped in the yard, which is from two to eight miles from the elevators and mills to which considerable grain is finally delivered by the railway company, and the grain was there inspected by persons acting for the railroad and warehouse commission of Minnesota, under the Minnesota act of 1885. Grades were made called 'Minnesota Grades,' which were exhibited on the Board of Trade at Duluth, a body of about 300 members, and the grain was there bought and sold for delivery either in Superior at some elevator or mill or to some extent for delivery in Duluth. The cars remained in the yard during the day awaiting disposition pursuant to such sales and the disposition of the day's shipments was not made until about 4 o'clock in the afternoon. By this time the cars were made up into trains for delivery either at the Great Northern elevators for shipment to Duluth to some extent or for delivery to the Superior Terminal & Transfer Railway Company, which is a belt line railway company connecting with all of the railroads running into Superior, and by said terminal company the cars of grain were delivered to other mills and elevators, or possibly to some extent for further shipment by rail eastward.

Substantially all the grain coming to Superior is produced in states other than Wisconsin, and its mill product is shipped to states east of Wisconsin, although a considerable amount of flour is marketed in Wisconsin by the mills. After the passage of chapter 19, p. 37 Laws 1905, objection was made to the inspection of the grain in Superior by agents of the Minnesota Warehouse Commission, and the mill and elevator owners and members of the Duluth Board of Trade, co-operating with the railroads, procured the stopping of the Great Northern cars at points on its line in Minnesota called Sandstone and Cass Lake, and the inspection which formerly was made at Superior took place at those points. After such inspection the transit was continued until the cars were stopped in the Great Northern yards at Superior, as already stated. The Northern Pacific cars containing grain were stopped in Duluth, and the inspection there made under the supervision of the Minnesota Commission.

It is charged in the answer that, after the passage of chapter 19 complainant conspired and combined with the owners, managers, and operators of the other elevators in Superior and of the mills, and the Board of Trade of Duluth and members thereof, not to buy or sell or manufacture any grain under the inspection, grading, or weighing of the Superior Warehouse Commission created by chapter 19, but to buy and sell all grain under Minnesota inspection and subject to weights to be made by designated agents of the Duluth Board of Trade. To this end the Duluth Board of Trade, in the summer of 1905, promulgated rules forbidding any of its members, under penalty of expulsion, from buying, selling, or handling any grain under Wisconsin inspection or weighing, from belonging to any other board of trade or like organization located within 100 miles of Duluth, and from maintaining or becoming interested, directly or indirectly, in any office or place of business outside of Duluth for the dealing in grain, and from becoming a stockholder in a corporation or member of a firm dealing in any grain dealt in or quoted upon the Duluth Board of Trade at any point within 100 miles of Duluth; and further requiring all persons applying for membership to the Duluth Board to sign an application containing an agreement that the applicant would resign his membership in said board within five days, if at any time he should violate such rules; and further requiring the applicant to use his influence towards the protection and upbuilding of the business of said board and its members in every way to the limit of his power and the best of his ability. It is further alleged in the answer that the Duluth Board of Trade, for the purpose of restraining trade and commerce among the several states, endeavored and attempted to monopolize and control the market of grain by arbitrarily fixing a limit upon the price which should be offered or bid upon the board, and has prohibited and prevented its members from bidding on, offering to buy, or buying any grain at a higher price than so fixed, or buying or selling grain at any other place than upon the board, within 100...