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April, 1912 Lake Shore & Michigan Southern Railway Co., $15,000 for rebating and $5,000 for conspiracy, total $20,000. Bessemer & Lake Erie Railroad Co., $20,000 for rebating and $10,000 for conspiracy, total $30,000. The New York, Chicago & St. Louis Railway Co., $3,000 for rebating. The Ohio. & Pennsylvania Dock Co., $10,000 for conspiracy. The Union Dock Co., $7,000 for con- spiracy. The Ashtabula Dock Co., $6,000" for conspiracy. The Pittsburgh & Conneaut Dock Co., $7,000 for conspiracy with the Lake Shore and $10,000 for conspiracy with the Bessemer & Lake Erie railroad, total $17,000. ' Total fines imposed, ' $123,000. These indictments were returned a year ago as a result of an investigation Ly the Interstate Commerce Commis- sion of the practice of the companies involved in returning certain allow- ances to shippers, the money being de- rived from the excess earnings of the dock companies. The fines, in our opinion, while cheer- fully paid, were unjustly imposed. The whole situation appears to be one insep- arable from its sudden development. It has all been brought about by the rapid and marvelous efficiency of the unload- ing appliances on Lake Erie. docks, making adjustment of costs beforehand absolutely impossible. The case was very clearly told by R. C. Butler, coun- sel for the dock companies. In fact, everyone interested in lake trade is advised to read it because it makes the subject, which has probably been more or less of a muddle in many minds, absolutely clear. Mr. Butler said: Mr. Butler's .4ddress "On behalf of D. T. McCabe, Dan R. Wanna, R. L. Ireland, the Pennsylvania Co., and the Ohio & Western Pennsyl- vania Dock Co., the defendants in case No. 3458, indicted under section 5440 for conspiracy to violate the Elkins act, and on behalf of the Pennsylvania Co., defendant in case No. 3465, in- dicted for violation of the Elkins act, | 1 desire briefly to call to the court's at- tention the history of the handling of ore over Lake Erie docks, with particu- lar reference to the relationship be- tween the Pennsylvania Co., its docks, and shippers of ore over its docks via its lines. A knowledge of these condi- tions is. necessary to a fair consider- ation of the specific facts upon which the indictments are based. "As early as the year 1890, certain shippers of ore over other lines than those of the Pennsylvania Co. had as- sociated themselves together, as they THE MARINE REVIEW had a right to do, either in co-operative companies or by the organization of corporations for the more satisfactory handling of ore over docks at Lake Erie ports and for the enjoyment of the net profits arising therefrom. These arrangements, while not contrary to the provisions of any law on the statute books as then interpreted, necessarily created preferences in favor of the shippers of ore who were parties thereto. Shippers of ore via the Pennsylvania lines enjoyed no such preferences, as the Pennsylvania Co.'s docks were oper- ated by contractors who were not ship- pers of ore. This discrimination against its ore shipping patrons caused the Pennsylvania Co. to announce on May i, 1891, by a public circular addressed to "Consumers of Iron Ore", that in order to place consumers of ore mov- ing via its docks on an equality with consumers of -ore passing over the docks of other lines via Lake Erie ports, the Pennsylvania Co. would there- after cause to be divided among all consumers of ore whose shipments were handled over its docks the net profits which might arise from the operation of such docks, the division of such profits to be in the ratio that the num- ber of tons handled and _ transported ever the Pennsylvania Co.'s. lines for each consumer bore to the total ton- nage so handled. The notice of May 1, 1891, was given wide distribution among shippers and consignees of ore through- out the entire territory reached by the Pennsylvania and other lines from Lake Erie ports, so that all consumers of ore were fully advised that if their ore passed over the docks of the .Pennsyl- vania Co., not only would there be no ciscrimination by the Pennsylvania Co. as between any shippers of ore over its ewn lines, but also that the discrimina- tion theretofore existing in favor of the certain ore shippers enjoying the profits of the operation of docks belong- ing to other cariers would be reduced to a minimum. The policy announced by the Pennsylvania Co. in the pub- lished notice of May 1, 1891, has been consistently followed up to the present time and, so far as it was within the power of the Pennsylvania Co. so to do, the ore which has passed over its docks has been kept upon an equality with the ore passing over the docks of other carriers at Lake Erie ports. Wonderful Increase of Tonnage "The first ore delivered by vessels at Lake Erie ports was unloaded by shov- eling it into tubs or half barrels in the hold of the vessel, then 'hoisting the tubs or half barrels by horse power, dumping the ore into wheelbarrows at the vessel's side and wheeling it to the 135 cars or to storage piles on the docks. 'As years passed by, the receipts of ore at the docks of the Pennsylvania Co. grew from 22,000 tons in 1862 to nearly 800,000 tons in 1890, and to more than 3,000,000 tons in 1907. This tremendous increase in ore tonnage was necessarily accompanied by an evolution in ore- handling machinery; so that, whereas in 1890 it required four or five days' time to unload a vessel carrying 3,000 -tons of ore, at the present time a ves- sel carrying 10,000 tons of ore can be unloaded in four or five hours. "The profits from the operation of the docks arise from two sources: First, the vessel unloading charge, meaning thereby the amount paid by the vessel for lifting the ore from the hold and carrying it to the ves- sel's rail; and, second, the charge paid to the dock company by the railroad company for transporting the ore from the vessel's rail and placing it either directly on the car, or first onto the dock for temporary storage and later onto the car. During the period under consideration, that 1s, from 1890 up to the present time, the amount collected by dock com- panies from vessels for unloading has varied from 13%c to 22c per ton, the. usual «charge being. 20c. The: customary charge by dock companies to rail carriers for carrying the ore from the vessel's rail to on board cars, whether direct or via the dock, was 20 cents per ton. The aggregate charge of the dock company, there- fore, against the vessel and the rail carrier varied during this period from 33% cents to 42 cents per ton. Dur- ing the years 1908 and 1909 the dock 'company's chargé to vessels was 20 cents and to the rail carrier 20 cents, making its aggregate charge during these years 40 cents per ton. Figuring on Profits "At about the time the circular of May 1, 1891, was issued by the Penr- sylvania Co., careful calculations were | made by the company based on its past experiences as to the net profits arising from its dock operations, and it was ascertained that, taking one season with another, there was a net profit to the dock company of about 12 cents per ton on direct ore, that is, ore handled directly from vessels to railroad cars and forwarded ~ at once to destination, and. a net profit of about 5 cents per ton on dock ore, that is, .ore on which im- mediate forwarding from the vessel was not desired by consumers and which conscquently had to be unload- ed and stured on the dock and later on at the convenience of the consumer