Indiana, Iowa, Michigan, Minnesota, Mississippi, Missouri, Montana, New Jersey, New York, Ohio, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.

It has been necessary for the Government to use a large proportion of the available railroad service for military traffic and for serving industries that are engaged in producing munitions, especially those on railway lines which reach Atlantic ports. At times embargoes have been laid against the transportation of certain commodities for private purposes to such ports, especially lumber. As embargoed lumber could readily be sold at enhanced prices in the markets at the points of delivery affected, certain shippers took action to procure its transportation into such markets despite the restraining embargoes. These shippers, without the authorization of Government representatives, caused many carloads of lumber to be billed to seaboard terminals, improperly naming as consignees the United States Shipping Board, the Quartermaster's Department and divers individual officers of the United States army. Transportation of such shipments as Government freight. was thus procured. While some of this lumber was sold, in competition with lumber dealers who employed honest methods, to Government contractors, most of it was disposed of at the points of delivery for private uses. The practice added to traffic congestion and effected an unjust discrimination against honest lumber dealers who did not resort to such means in order to secure transportation. Nine indictments, charging discriminations in violation of the Elkins act, have been obtained against the dealers who employed these unfair methods.

The Chicago and North Western Railway Company, the Minneapolis, St. Paul and Sault Ste. Marie Railway Company, the Chicago, Milwaukee and St. Paul Railway Company and several lumber shippers have been indicted for granting and receiving concessions in violation of the Elkins act. Rails and other track material, of substantial value, were leased by the carriers to the lumber companies and the latter were not required to pay adequate compensation for the use of such material. The material was used by the lumber companies to construct logging roads connecting the trunk lines with timber-producing lands of the lumber companies. It was found that the railroads in the middle west leased such material under conditions that were discriminatory as amongst the several lumber shippers. In a large number of instances no compensation whatever was charged for the use of the material. Compensation, when exacted for the use of the material, varied greatly, the rates of rental ranging from 4 to 12 per cent per annum. As the lessor carriers usually were obligated to renew and

replace the leased material, the leasing of such property at inadequate rentals resulted in a depletion of railway revenue. Undoubtedly some of the lumber companies would have preferred the extension of existing railway lines to their timberlands, instead of themselves laying the material.

The first prosecution for violation of the Pomerene bills-of-lading act, 39 Stat., 538, was brought, in November, 1917, in the Southern District of Ohio. The president, secretary, and confidential messenger, respectively, of the Ferger Grain Company, doing business at Cincinnati, Ohio, were indicted for uttering, with intent to defraud, false bills of lading, in violation of section 41 of said act. Sums of money were borrowed by the defendants for the Ferger Grain Company from a bank in Cincinnati, and the false bills of lading, which purported to represent carloads of grain in transit, were submitted as security for such loans. Upon investigation it was ascertained that the grain described in the bills of lading had not been shipped and was not in transit.

A demurrer to the indictment was sustained on October 14, upon the ground that as the bills of lading were false and therefore not representative of, or in respect to, any shipment in interstate commerce, the act had not been violated. The court held that the execution of the bogus bills of lading and their use for obtaining money under false pretenses constituted a crime cognizable by the criminal legislation of the states, with which the Congress, in the exercise of its power to regulate commerce, is not concerned.

Summaries of all indictments returned and cases concluded during the period, November 1, 1917, to October 31, 1918, will be found in Appendix A.

BUREAU OF LAW.

On October 31, 1917, there were 29 cases involving orders or requirements of the Commission pending in the courts, of which 15 have been concluded. During the year 2 cases were instituted, so there are now pending in the different courts 16 cases. Of these, 2 are in the Supreme Court and 14 in district courts.

Of the 15 cases finally disposed of during the year, 2 were dismissed on motion of the petitioners; 2, instituted for the collection of penalties, were dismissed on motion of United States attorneys, acting for the Department of Justice; in one, prosecution was abandoned by the petitioner after the Supreme Court of the District of Columbia had rendered a decision upholding the order of the Commission; in one, prosecution was abandoned by the parties after a decision had been rendered by the Supreme Court in a case involving the same subject matter, namely, the Illinois Passenger Fares Case, referred to below, and in 9, final decisions were rendered by the Supreme Court. Summaries of all the foregoing cases are shown in Appendix B.

CASES DECIDED BY THE SUPREME COURT.

The Supreme Court decisions referred to are summarized as follows: Louisville Cement Company v. Interstate Commerce Commission, 246 U. S., 638.

This was a proceeding instituted in the Supreme Court of the District of Columbia to correct what was alleged to be an error made in construing the provision of section 16 of the act to regulate commerce that "all complaints for the recovery of damages shall be filed with the Commission within two years from the time the cause of action accrues, and not after." Based on decision of the Commission in Louisville Cement Co. v. L. & N. R. R. Co., unreported Opinion No. A-333; see also decision of the Commission in Blinn Lumber Co. v. S. P. Co., 18 I. C. C., 430. Because it believed such construction to be necessary to give effect to other provisions of the act, especially those relating to rebates and undue preferences, the Commission held that an action accrues within the meaning of the clause above quoted, for the purpose of determining whether reparation should be awarded on account of unreasonable charges exacted for transportation by a carrier, when the traffic transported is delivered to the consignee at point of destination. In calling attention to reasons advanced in support of its construction and in holding the construction to be erroneous, the Supreme Court said:

But this two-year provision, obviously enough, relates only to the recovery of money damages, and if Congress had intended that the cause of action of the shipper to recover damages for unreasonable charges should accrue when the shipment was received, or when it was delivered by the carrier, we can not doubt that a simple and obvious form for expressing that intention would have been used, instead of the expression "from the time the cause of action accrues." And in this connection we can not fail to recognize that when the statute was enacted the time when a cause of action accrues had been settled by repeated decisions of this court to be when a suit may first be legally instituted upon it and since no clearly controlling language to the contrary is used, it must be assumed that Congress intended that this familiar expression should be given the well understood meaning which had been given to it by this court. * (Id., 644.)

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Manufacturers Railway Company and St. Louis Southwestern Railway Company v. United States and Interstate Commerce Commission. Manufacturers Railway Company and Anheuser-Busch Brewing Association et al. v. United States and Interstate Commerce Commission, 246 U. S., 457.

These two cases, based on decisions of the Commission in Manufacturers Railway Company v. St. Louis, Iron Mountain & Southern Railway Company, 21 I. C. C., 304; Same v. Same, 28 I. C. C., 93; Same v. Same, 32 I. C. C., 100, were heard and decided together by the Supreme Court and were brought to annul two orders of the Commission, one requiring the cancellation of certain trunk line tariffs providing for allowances to the Manufacturers Railway Company, and the

other requiring the discontinuance of charges on traffic from points served by the Manufacturers Railway Company to points outside. Missouri higher than rates contemporaneously in effect from St. Louis to such points by more than $2.50 per carload.

Complaint was made of the Commission's failure to find unjust discrimination and award reparation, and in upholding the action of the Commission in this connection the court said:

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Whether a preference or advantage or discrimination is undue or unreasonable or unjust is one of those questions of fact that have been confided by Congress to the judgment and discretion of the Commission, and upon which its decisions, made the basis of administrative orders operating in futuro, are not to be disturbed by the courts except upon a showing that they are unsupported by evidence, were made without a hearing, exceed constitutional limits, or for some other reason amount to an abuse of power. (Id., 481.)

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* * * The real ground for resorting to the courts in this case is the failure to fix divisions. In effect the district court was asked to perform a function specifically conferred by law upon the Commission. But that court has only the same jurisdiction that formerly was vested in the Commerce Court * *; and it is settled that this does not permit the court to exercise administrative authority where the Commission has failed or refused to exercise it, or to annul orders of the Commission-not amounting to an affirmative exercise of its powers. (Id., 483.)

One of the orders related to the Commission's I. C. C. Docket No. 3151 and the other to its Investigation and Suspension Docket No. 355. The Commission treated the I. & S. docket as an independent case, and after it had suspended the tariff involved for a period of 120 days, ordered a suspension for a further period of six months. The complainants contended that this action of the Commission was arbitrary and unlawful for the reason that no hearing on the matters involved in the suspended tariff was begun within the 120 days, in accordance with the suspension provision in section 15 of the act to regulate commerce. The court, however, ruled that the Commission had a right to regard the I. & S. proceeding as ancillary to the other proceeding. The language of the court in this connection was:

The question of the validity of the previous allowances, approximately $4.50 per car, or of any allowance greater than $2 per car, being thus bound up in the pending controversy under I. C. C. Docket No. 3151, the Cotton Belt tariff published December 7, 1913, while the Commission had that controversy under advisement, manifestly was an attempt to forestall the decision. There was no error in suspending it pending the decision. And there being nothing further to be submitted to the Commission in the way of evidence or argument, it was natural, and not inconsistent with the substantial rights of the parties, for the Commission to treat the suspension of the Cotton Belt tariff as a proceeding ancillary to the other, involving no different question on the merits. (Id., 487.)

In connection with their attempt to show that the order of the Commission would operate to confiscate the property of the Manufacturers Railway Company, the complainants estimated and included in the valuation upon which they claimed the railway company had a right to earn a fair return, the value of a lease covering property

owned by the Anheuser-Busch Brewing Association, and also the value of a lease executed by the city of St. Louis to the railway company. These values, however, were disallowed by the court, which, in this connection, said:

We are not convinced that these somewhat speculative valuations of the leaseholds, even if the calculations were otherwise correct, ought to be included in the value of the railway's property for the present purpose. (Id., 494.)

Complainants included in their valuation the estimated value of all the property covered by the Brewing Association lease, but the court held this to be erroneous for the reason that the property was not exclusively used for common-carrier purposes.

Concerning the value of the lease executed by the city of St. Louis the court said:

The lease from the city to the railway is not in the printed transcript, but the substance of the ordinance authorizing it is stated. It granted authority to construct, maintain, and operate tracks upon land of which a considerable part constituted a a public wharf. If the stipulated rental is less than the fair annual value of the property it is to be presumed that the grant of the excess was to the public, not to the private interest of the railway. We are at a loss to see upon what principle a presumed annual value of the leasehold in excess of the stipulated rent can be capitalized as assets of the railway for the use of which in commerce the public is required to pay tolls. This would give the lease the effect of converting public property, pro tanto, into private property. (Id., 496.)

Some of the evidence submitted to the court had not been introduced in evidence upon the hearing before the Commission, and the court condemned this method of procedure in the following language:

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correct practice required that, in ordinary cases, and where the opportunity is open, all the pertinent evidence shall be submitted in the first instance to the Commission, and that a suit to set aside or annul its order shall be resorted to only where the Commission acts in disregard of the rights of the parties. * * *. Hence we can not approve of the course that was pursued in this case, of withholding from the Commission essential portions of the evidence that is alleged to show the rate in question to be confiscatory. Certainly, where the Commission, after full hearing, has set aside a given rate on the ground that it is unreasonably high, it should require a clear case to justify a court, upon evidence newly adduced but not in a proper sense newly discovered, in annulling the action of the Commission upon the ground that the same rate is so unreasonably low as to deprive the carrier of its constitutional right of compensation. (Id., 489-490.)

Louisville & Nashville Railroad Company v. United States et al., 245 U. S., 463.

This proceeding was instituted to annul an order of the Commission based on decision of the Commission in Bowling Green Business Men's Protective Asso. v. L. & N. R. R. Co., 24 I. C. C. 228, denying in part and granting in part relief from the long-and-short-haul provisions of the fourth section of the act as to traffic shipped through Bowling Green, Ky., to Louisville, Ky., and Nashville, Tenn. A decree dismissing the petition was entered by the District Court for