McEvoy Grain Elevator Law

McEvoy Grain Elevator Law

By: D. Brooks 

There have been several constitutional concerns regarding the Erie Canal in its long and storied history.  Not only have these questions been focused on construction, or improvements and navigation, but also surrounding the products that made up the cargo.  The constitutionality of appropriations, regulations and taxes not only remained aimed at the New York State document, but the United States Constitution as well – as State laws that dealt with economic trade meant interstate commerce had to be considered.  A study of the shift in state as well as national politics makes it apparent that the views toward government regulation – at any level – had occurred over the course of the 19th century.

   One such observation can be made with the McEvoy Grain Elevator Law. In its essence the question dealt with the constitutionality of economic regulation of private and incorporated enterprises.  Let us back up a moment though, to gain an understanding of the law and circumstances that brought it about. 

   By the 1880’s and early 1890’s NYS Canals were in heavy competition with the ever-expanding network of railroads – not only within the state but across the country as well.  Ripe for profit was the cost of handling – the loading and unloading – of grain by use of shovel and elevator at ports.  Along the canal and especially at larger ports such as Buffalo, Albany and New York City, the cost was set by the grain elevator operator or owner; the boat owners were at the mercy of their pricing.  Boatmen saw a collusion occurring between the Railroad Companies and the Elevator operators. 
   Though some regulation existed to ensure equal charges per bushel of transferred grain, there was neither a significant enforcement nor punishment to deter operators from ignoring it. 
   Seeing their livelihoods affected, organized boatmen across the state pushed for legislation in Albany.  In 1888, Congressman McEvoy put forth the bill that would bear his name. During those years leading up to the McEvoy Reduction Bill passing into Chapter 581 of the Laws of New York State, a series of bills from 1882-1886 had been attempted in various forms in order “to regulate and control the elevating business…”  The idea was to install a price limit at five-eighths cent per bushel and only the actual cost of shoveling could be added.  
   With a new regulation, it was sought to mandate compliance by right of the Superintendent of Public Works ability to seize use of the elevators owned by those who “decline to ...handle canal grain at that rate”
   

Grain elevator owners contested this new law immediately, claiming it to be unconstitutional.  Even Governor Hill doubted the constitutionality of the law as it applied equally toward corporate as well as individual enterprises.  Elevators were to be subjected to the regulatory power of New York State, even as part of an interstate commerce system.  The Western Elevating Association of Buffalo took on the canal boatmen and lake forwarders in an appeal against the McEvoy Law.  The State Attorney General cited the 1877 US Supreme Court Ruling in Munn Vs. Illinois (94US113) to uphold the legitimacy of NY to regulate private industry. 
   In the Munn case, the state of Illinois set rates for transportation and storage of agricultural products. In the SCOTUS ruling, the court upheld the right of the state to regulate industry with a public interest or economic common good.  Further it was stated in the ruling opinion that, “property does become clothed with a public interest when used in a manner to make it of public consequence,… When, therefore, one devotes his property to a use in which the public has interest, he, in effect, grants to the public an interest in the use and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created…” 

   Despite that case, operators in Buffalo and Brooklyn in particular opposed NY’s McEvoy regulation and J. Talman Budd, owner of Wells Elevator in Buffalo sued the state.  Budd hoped to leverage his case with concepts found within the dissenting opinion of the Munn decision.  That dissent stated that the declaring of public interest was not enough and must have granted constitutional provisions to the states.  The issue becoming more a matter of property rights than economic regulation, and one that should require a due process of the law. The NYS Court of Appeals rejected his claim and by 1892 the US Supreme Court refused to hear the case. 

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The mechanical system of a  grain elevator was a time saver as well as a reducer of labor; a process that meant large freight boats from the ocean or Great Lakes could have grain cargo transferred on or off the Erie Canal.  At first, the method of conveyance was strictly in the labor of men who literally carried the grain on or off the boats.  With grain cargo increasing from the hundreds of thousands to millions of bushels within two decades of the canal opening, a faster and more effective method was needed.

- In 1842, Joseph Dart—a merchant in Buffalo, built what is considered the first grain elevator.  The wooden structure utilized a steam-driven belt which moved buckets that were attached to it down into the cargo hold of a vessel, scooping up grain and hoisting it up and into the storage structure bins.  This method of off loading cargo was considerably quicker.
- That first elevator had a store capacity of over fifty-thousand bushels, and in short order it was enlarged to twice that size.  Increases to the efficiency meant elevators could unload one-thousand bushels an hour.  This sped up the overall transportation of grain. 
- The harbor of Buffalo saw at least ten additional elevators constructed soon after—increasing the overall capacity of the port to hold over one and a half million bushels—making it the worlds largest grain port.
- Darts design was not entirely his own, and he fully admitted it.  Oliver Evans first devised the methodology, Dart just improved upon it. 
- Elevators stored grain in dry conditions and often away from pest such as birds, rodents, and worms.  It was also an effective means to weigh  total grain cargo being stored.  Within three decades, Buffalo had twenty-seven elevators that could hold more than five million bushels and transfer 2.7 million bushels per hour.

 *This article first appeared in the Friends of Schoharie Crossing Newsletter, Summer 2016.