mentioned, to the effect that by shipping to said individuals, firms, or corporations (not members of the chamber of commerce), the shipper would avoid the payment of any commission whatever, and would have his grain sold for as high a price as could be secured in the exchange room of the chamber of commerce; or that a less commission would be charged for selling the grain than that provided by the rules of the Chamber of Commerce; and

Whereas, in fact, the shipper in many cases pays two commissions, which fact is entirely concealed from him by various methods; and

Whereas the action of the members of the chamber of commerce is selling the grain for the above-mentioned individuals, firms, or corporations on the floor of the exchange room assists them in carrying on such fraudulent business; and

Whereas the chamber of commerce has no control over such fraudulent conduct or such representations, except to regulate its own members in the furtherance of such schemes; and

Whereas this association is willing for its members and all others to do legitimate trading in the grain business, and does not wish to curtail the trade of individuals outside of its association where not done in fraud or on misrepresentations to the shippers; and

Whereas it is the opinion of the board of directors of this association that the members of this association should be regulated so as not to allow them to handle grain of any kind which is procured under circumstances such as are above mentioned, or any other circumstances which mislead the shipper into believing that he is getting the advantages of this association when in fact he is not getting such advantages; and Whereas it is quite necessary that this association keep complete control of its members to require them and all who represent them to transact business with the shippers in perfect good faith: Now, therefore, be it

Resolved, That members of the chamber of commerce are hereby forbidden to act in any manner as the agent or representative of any individuals, firms, or corporations, in the cities of Minneapolis, St. Paul, or elsewhere, not members of the chamber of commerce, who are soliciting shipments of grain from the farmers or country shippers in the manner above mentioned, or through any scheme, artifice, or device by which this association is falsely represented, either in its dealing or in the right which the shippers get with respect thereto, or at all, unless the person so soliciting such shipment can show a written statement of the shipper to the effect that he realizes that the person receiving such shipment is not a member of the chamber and can not get advantages out of the chamber which he could not himself get.

CIRCULAR No. 421.

TO MEMBERS:

DECEMBER 31, 1912.

At a meeting of the board of directors held this date, the secretary was instructed to forward the following notice. The agreement between the Terminal Dispatch Association and the chamber of commerce is set forth below. Copies of this notice have been forwarded to the manager of the Northern Demurrage Bureau and proper officers of the railroads centering in the Twin Cities.

Yours, respectfully,

JOHN G. MCHUGH, Secretary.

DECEMBER 31, 1912.

To the CHAIRMAN OF THE JOINT COMMITTEE: Under the memorandum of December 19, 1905, between the Chamber of Commerce of Minneapolis and the Terminal Dispatch Association, you are hereby notified that the memorandum of December 19, 1905, between the Terminal Dispatch Association and this association has been called to our attention and we are convinced that on the facts and the law of Minnesota as it now stands, there is grave doubt as to whether or not this instrument is now valid, and that this association should not require its members to carry out the same, irrespective of whether that instrument is now in force. You are hereby notified that if there is any portion of said instrument now in effect, in so far as it controls demurrage, not in accordance with chapter 23 of the General Laws of Minnesota of 1907, it is hereby terminated 30 days after the receipt by you of this notice.

Yours, respectfully,

JOHN G. MCHUGH, Secretary.

(The board of directors, at a meeting held Dec. 19, 1905, ratified on behalf of the chamber of commerce the following agreement entered into with railway companies members of the Terminal Dispatch Association. Effective Jan. 1, 1906.)

Memorandum of agreement between the Chamber of Commerce of Minneapolis and the railway companies members of the Terminal Dispatch Association:

The Chamber of Commerce of Minneapolis and the railway companies who are members of the Terminal Dispatch Association, being desirous of facilitating the quick movement of cars, the prompt collection of car service charges (demurrage), the removal of existing differences and the ready termination of disagreements that may arise in the future as to car service charges, have agreed upon the following rules governing car service charges, to become effective January 1, 1906, and to remain in effect until changed by a two-thirds vote of a joint committee consisting of not less than six (6) representatives of the chamber of commerce and an equal number, but not less than six (6), representing the Terminal Dispatch Association, it being understood that on points of car service charges not covered by the following rules the regulations now in force of the Terminal Dispatch Association shall govern.

RULES.

1. On all grain or seed received on or before 8.30 a. m. disposition shall be given not later than 4 p. m. the same day, provided inspection is reported to office of the chief grain inspector before 11 a. m.

2. When reinspection is called before disposition is furnished as above, one additional day of free time will be allowed provided the local agent is notified of the call for reinspection on the day car is inspected, and a change of grade is allowed by the State inspector or appeal board. If no change in grade is allowed car service will be assessed, providing disposition is not furnished before 5 p. m. of the day car is first inspected, except that when appeal is taken and reinspection is changed one additional day free time shall be allowed, making two days of free time in all.

3. On cars for delivery at mills or elevators, 48 hours free time will be allowed from time cars are set for delivery, excepting that on wheat for the mills time will be figured from 7 a. m. the following day, if delivery to lines on which mill is located is made after 3 p. m. No additional free time will be allowed for reinspection or appeal. Delivery will be considered accomplished when cars have been placed upon tracks designated or upon storage tracks when delivery tracks are full of cars to be loaded or unloaded by consignee. Delivery to Minneapolis western, Minneapolis eastern, or railway transfer railways to be considered as delivery to industries thereon.

4. Cars ordered to an elevator or mill and "run through" witout unloading, except on account of reinspection or appeal being called, of which immediate notice shall be given to agent of delivering line, will be subject to a charge of $2 per car in addition to usual car service and switching charges.

5. On cars loaded out of elevators and inspected (if for inspection) up to 6 p. m. disposition shall be furnished not later than 4 p. m. the following day, excepting that where reinspection or appeal is called and the grade is changed by the State inspector or appeal board, one additional day of free time shall be allowed.

6. Car service charges collected under the above rules will be charged at the rate of $1 per car per day or fraction thereof.

7. All car service charges accruing before cars are finally disposed of will be paid by the party last filing disposition order with the Terminal Dispatch Association or local agent.

8. A joint committee will be established for the purpose of deciding disagreements between receivers, or between receivers and shippers, or between receivers and shippers and the railway companies. The decisions of the joint committee will be binding in all cases.

9. The joint committee will be composed of seven members, three chosen by the chamber of commerce, three by the Terminal Dispatch Association, and the seventh by the above six. Five members of said committee will constitute a quorum, but there must be an equal representation in person or by representatives of the railway companies and the chamber of commerce in all disagreements between consignees and consignors and the railway companies.

10. Car service bills shall be paid within 48 hours after presentation. Errors in car service bills shall be brought immediately to the attention of the manager of the Terminal Dispatch Association. Should disagreement arise as to correctness of such bills, matter will be referred to the joint committee for decision. Bills for car service charges shall be rendered within two (2) days following release of cars. The railway companies shall give notice of car service charges accruing the first day after free time; failure to give such notice, however, shall not relieve receivers or shippers of the payment of car service charges.

37214-14- -10

11. Questions involving abuse of equipment, unnecessary delays in switching, methods or practices of either party hereto causing detention of cars may be referred to the joint committee for consideration and action.

12. The jurisdiction of the joint committee will cover all commodities handled by members of the chamber of commerce.

13. Refunds due under decisions of the joint committee will be made promptly and not later than three days after such decisions are rendered.

14. The members of the joint committee will serve for one year or until their successors are appointed. They are empowered to adopt rules governing their meetings, to select a secretary and place of meeting, and to assume on behalf of the chamber of commerce and Terminal Dispatch Association such expenses as may be necessary. 15. This agreement may be terminated by the railway companies or the chamber of commerce, parties hereto, upon 30 days' written notice to the chairman of the joint committee.

In witness of the foregoing agreement, the parties thereto have, at Minneapolis, Minn., this 19th day of December, 1905, thereunto, by their proper officers, attached their signatures, to wit: The Chamber of Commerce of Minneapolis, by its president and secretary, and the said Terminal Dispatch Association, acting on behalf and by authority of the railway companies, which are members of said association, by its chairman. THE CHAMBER OF COMMERCE OF MINNEAPOLIS, By P. B. SMITH, President,

By L. T. JAMME, Secretary.

TERMINAL DISPATCH ASSOCIATION,

By A. W. TRENHOLM, Chairman.

This agreement went into effect January 1, 1906 and remained in effect until December 31, 1912, until eight days before the Minnesota Legislature, many members of which had made their campaigns upon the proposition that these abuses should be remedied-it remained in effect until eight days before the legislature went into session, Then the board of directors met in their secret sanctum and revoked this agreement, which was absolutely secret, appearing in none of the official records of this close corporation. I have no way of estimating the amount in which shippers were mulcted by this illegal and dishonorable agreement.

The Chamber of Commerce of Minneopolis has established a complete boycott of the grain handled by the Equity Cooperative Exchange. They have not bought the big mills of Minneapolis, all of which are members of the chamber of commerce, and the mills which consume at least 75 per cent of all the wheat which comes into the Minneapolis terminal-these mills have not bought one kernel of grain of the Equity Cooperative Exchange for months. Here is a letter signed by Mr. McHugh, secretary of the organization, and addressed to one John F. Krug, secretary of the Farmers Elevator Co. at Valley City, N. Dak., on the stationery of the chamber of commerce, over his own signature, in which he states that, "there are no buying interests of any consequence except members of the chamber of commerce." That is one of his statements. Another is, "practically none of the milling interests, terminal interests, linseed oil manufactories, etc., will purchase any grain whatever from the Equity Cooperative Exchange, or from any nonmember, for the reason that when they buy grain in the exchange room of the chamber, the seller must guarantee the title to the grain," and so forth. I offer this entire letter in evidence.

The letter referred to is as follows:

THE CHAMBER OF COMMERCE OF MINNEAPOLIS.
SECRETARY'S OFFICE,

December 31, 1913.

Mr. JOHN F. KRUG, Secretary Farmers' Elevator Co., Valley City, N. Dak. DEAR SIR: Your letter of December 29 received. The undersigned will not be able to be at Valley City on January 3, as you request, nor will Mr. Benson. However, we have asked the commission merchants to have a representative at your city on January 3, at 2 p. m., and we have received definite information to-day to the effect that the commission merchants will have a representative present at the meeting which you mention to be held at the city hall on that date.

With reference to the question to whom you should ship your grain, we might state that the majority of farmers' elevator companies ship their grain to more than one commission company, in order to be able to compare the services rendered and the price secured, and by this method to compel the commission merchants to put forth their best efforts on behalf of the customer in order to hold their share of the business. So far as the Equity Cooperative Exchange is concerned, we might state that practically all of the buyers of any consequence both in Minneapolis and also in the neighborhood of 150 miles of Minneapolis, are members of the chamber of commerce. In other words, there are no buyers of any consequence, except members of the chamber of commerce and a very large proportion, possibly 90 per cent, of the grain consigned to the Equity Exchange is sold by them to some member of the chamber of commerce, and in most cases with a deduction by the member of the chamber of commerce of at least a full commission. Since there are no buying interests of any consequence except members of the chamber of commerce, we can see no advantage to a country shipper in shipping to anyone not a member of the chamber of commerce, since this nonmember will have to pay in most cases a full commission in order to have the grain sold in the exchange room of the chamber of commerce. And if another commission is charged by such nonmember, it simply means that the shipper pays from 2 to 5 commissions.

We would also advise shipping to more than one commission concern, members of the chamber of commerce. We would advise that these shipments be made of grain of precisely the same character and value, and without the knowledge on the part of any commission concern that shipments were being made at the same time and of the same kind of grain to other commission concerns. After a number of shipments have been made in this manner, it is very easy to tell which commission concern is the most active in securing the best results; although we do not advise any farmers' elevator company shipping exclusively to any one commission concern. It is a good thing for any commission merchant to realize when selling a car of grain for a farmers' elevator company that another car may have been shipped at the same time of exactly the same kind of grain to another commission concern; because this method keeps the commission concerns keyed up to their very best efforts. Practically none of the milling interest, terminal interest, linseed-oil manufactories, etc., will purchase any grain whatever from the Equity Cooperative Exchange, or from any nonmembers, for the reason that when they buy any grain in the exchange room of the chamber of commerce the seller must guarantee the title to the grain; and in addition to this, in any disputes relating to the car, the buyer can require the dispute to be settled by the board of arbitration, which he could not do if the seller was not a member of the chamber of commerce. So that the big milling interests in Minneapolis, the large terminal interests, and other large buyers, will either purchase no grain whatever from outsiders, or will make the price so low as to offset the risks.

The result is that the Equity Exchange, or any outside selling agency, labors under a great disadvantege in the fact that 90 per cent of the buyers will not purchase grain from them at all; and the result is that grain has to be peddled around and offered to the few who may purchase it, and under these conditions the prices are not, naturally, the prices which are secured in the exchange room of the chamber of commerce, where all the buying interests compete with each other for the grain offered by the commission merchants.

However, the members of the chamber of commerce have no claim upon your grain at all and are not entitled to your shipments unless they can show better net results than you can secure elsewhere. If you see fit to ship to the Equity Exchange at all, it would certainly seem wise for you to ship cars to two or three members of the chamber of commerce at the same time, and of precisely the same quality of grain, and after this has been done a certain number of times you can decide for yourself whether the results secured through members of the chamber of commerce are better than those secured through the Equity Exchange.

We forwarded to you yesterday two copies of the National Grain Grower, giving lists of cars purchased from the Equity Exchange and sold to members of the chamber of commerce with the deduction of at least the full commission. If the Equity Exchange charged another commission to the shipper, then the shipper paid at least two commissions. Since a very large proportion of the grain shipped by the Equity Cooperative Exchange is sold in the exchange room of the chamber of commerce, we can not see what advantage accrues to the shipper. The members of the chamber of commerce insist, of course, upon securing at least a profit equal to the commission, and it would seem as if the shipper was paying from two to five commissions, where one commission would be all that is necessary. We call your attention especially to the Shelley Farmers' Elevator case, quoted in one of the Grain Growers which we forwarded to you. We assure you that if at any time we can be of service to you, or furnish any informa tion to you, we will be glad to do so.

If you make shipments to the Equity Cooperative Exchange, we suggest that you forward confirmation of sales, an account of sales, to the undersigned, requesting the undersigned to investigate these cars, and see if the cars were in fact bought by the members of the chamber of commerce, and the price paid, etc. In other words, find out what really happened to your cars. We shall be glad at all times to furnish you any assistance or give you any information which we may have regarding the general market, and hope that you will not hesitate to call upon us whenever you yourself or the officers or directors or stockholders of your company desire to have any information which we can furnish.

We take this opportunity of wishing yourself and the farmers' elevator company you represent every possible success.

Yours, respectfully,

JOHN G. McHUGH, Secretary.

Here is a statement from the highest man of this combine, admitting a concerted boycott of the grain handled by the Equity Cooperative Exchange. Is that not a violation of some act in restraint of trade? There is another point which I would like to take up, and that is this, the cost to the trade of these commission houses, this duplicated machinery. I wish to offer in evidence the testimony of the officials of this chamber covering the point which I shall now summarize.

What is the cost of maintaining a commission house? One of the commission houses testified before the investigation in Minnesota that the cost of maintaining it was from $30,000 to $36,000 per year. Another, the McCall-Dinsmore Co., testified that the cost of maintaining his firm was $300 a day-over $90,000 a year. Counsel for the commission companies in that hearing introduced a sworn statement which showed that 33 commission houses had incurred a total expense in 1911 of $519,000 and in 1912 of $443,722. Now, gentlemen, that is an average expense, as shown by these 33 commission houses of over $14,000 a year for each commission house. Mr. McHugh swore that there were 200 commission houses upon the floor of the chamber. We think he is here to-day, also to testify that in his opinion there were 200 commission houses. If that is true, and if $14,000 is a fair figure for the expense, the total expense of operating those commission houses is $2,800,000 per year. But it is not true. There are not 100 commission firms in the chamber, and Mr. McHugh knew it. They simply make the claim to try to make it appear that the commission man-the representative of the producer-as they claim, has some influence in this monopolistic institution, completely dominated by the mills and elevators, the buying interests. There are, in fact, not over 100 commission men in the chamber of commerce. So let us cut their claim in two. Their expense then would be onehalf of $2,800,000, or $1,400,000. Now, where do they get the money to pay these expenses? The highest commission paid for grain is 1 cent per bushel on wheat. All inferior grains pay a less commission.