NUMBER 46 (See page 80)
LETTER OF EDWARD S. RAPALLO TO GENERAL PHINEAS PEASE, RECEIVER CLEVELAND AND MARIETTA RAILROAD COMPANY
[Proceedings in Relation to Trusts, House of Representatives, 1888. Report Number 3,112, pages 576-577.]
32 Nassau Street, New York, March 2, 1885.General Phineas Pease,
- Receiver Cleveland and Marietta Railroad Company.
Dear Sir: My opinion is asked as to the legality of your making such an arrangement with the Standard Oil Company as set forth below.
The facts, as I understand them, are as follows:
The Standard Oil Company proposes to ship or control the shipping of a large amount of oil over your road, say a quantity sufficient to yield to you $3,000 freight per month. That company also owns the pipes through which oil is conveyed from the wells owned by individuals to your railroad, except those pipes leading from the wells of George Rice, which pipes are his own. The company has, or can acquire, facilities for storing all its oil until such time as it can lay pipes to Marietta, and thus deprive your company of the carriage of all its oil.
The amount of oil shipped by Mr. Rice is comparatively small, say a quantity sufficient to yield $300 per month for freight.
The Standard Oil Company threatens to store, and afterward pipe all oil under its control unless you make the following arrangements, viz.: You shall make a uniform rate of thirty-five cents per barrel for all persons excepting the Standard Oil Company; you shall charge them ten cents per barrel for oil and also pay them twenty-five cents per barrel out of the thirty-five cents collected from other shippers.
It may render the subject less difficult of consideration to determine, first, those acts which you cannot with propriety do as receiver.
You are by the decree vested with all the powers of receiver, according to the rules and practice of the court; are directed to continue the operations of the railroad and can safely make disbursements from such moneys as come into your hands for such purposes only as the decree directs, viz.: wages, interest, taxes, rents, freights, mileage on rolling stock, traffic balances and certain debts for supplies.
In my opinion this would not protect you in collecting freight from one shipper and paying it over to another.
All moneys received, therefore, from any person for freight over your road, must pass into your hands and there remain to be disbursed by proper authority. After an examination of your statute, however, I find no prohibition against your allowing
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