shippers of live stock, were indicted in the District of Minnesota for using free transportation in violation of section 1 of the act to regulate commerce. Upon investigation it was ascertained that these persons obtained free transportation upon drovers' tickets which they were not lawfully entitled to use. The use of drovers' free tickets by passengers and shippers who were not lawfully entitled to ride free was widespread, and it is expected that the foregoing prosecutions will remedy the evil.

FALSIFICATION OF RECORDS.

Logan Billingsly, in the Western District of Washington, pleaded guilty to an indictment which charged him with conspiracy to falsify the records of a common carrier in violation of section 20 of the act to regulate commerce. On June 15, 1917, he was sentenced to 13 months' imprisonment. He was engaged in selling liquor in violation of the state laws. The state laws permitted the shipment of whisky into the state when consigned and delivered to a registered pharmacist, and required that whoever should accept delivery of the liquor from the carriers should certify upon the carrier's delivery receipt that such liquor was intended for, and would be delivered to, a licensed pharmacist. Billingsly made such certifications and subsequently sold the liquor unlawfully without having delivered it to a licensed pharmacist.

The Mobile & Ohio Railroad Company was indicted in the Southern District of Mississippi for violating section 20 of the act to regulate commerce, the allegations being that it made false entries in its records of repairs performed on cars of connecting carriers. while in transit on its railway line. The carrier's employees engaged in repairing foreign cars made out car-repair records which falsely indicated that they had applied labor and materials to repair such cars when in fact such repairs were not made. The carrier subsequently rendered bills against the connecting carriers for such alleged car repairs and collected on the bills. This practice is extensive and by its use some carriers obtain from other carriers payments of money to which they are not lawfully entitled.

The Mississippi Central Railroad Company was indicted in the Southern District of Mississippi for violating section 20 of the act to regulate commerce by falsifying its records on carload shipments of lumber. The logs from which the lumber was sawed were shipped from McCallum, Miss., a point on the Mississippi Central Railroad 11 miles southeast of Hattiesburg, Miss. The logs were sawed into lumber at a mill in Hattiesburg and the lumber was switched by the Mississippi Central Railroad from the mill to the New Orleans & Northeastern Railroad upon its junction interchange tracks in Hattiesburg. The purpose of the falsification was to show to the New

Orleans & Northeastern Railroad that the sawed lumber had originated at McCallum and had been transported from McCallum to Hattiesburg by the Mississippi Central Railroad. Acting upon the information conveyed by the false entries, the New Orleans & Northeastern Railroad paid to the Mississippi Central Railroad a division of the joint rate for the transportation of sawed lumber from McCallum which was considerably in excess of the switching charge to which the Mississippi Central Railroad was lawfully entitled.

UNLAWFUL CONCESSIONS.

The Illinois Southern Railway Company was indicted in the Eastern District of Missouri for violating the Elkins Act in granting unlawful concessions to the Federal Lead Company by refraining from collecting demurrage charges on shipments of coal consigned to the lead company. The Federal Lead Company was indicted for receiving such concessions.

The St. Louis Southwestern Railway Company, the Louisville & Arkansas Railway Company, the Bodcaw Lumber Company, and William Buchanan, its president, were indicted in the Western District of Arkansas for violations of the Elkins act. The indictment against William Buchanan was dismissed; the other defendants pleaded guilty and were fined in amounts aggregating $40,000. The Louisiana & Arkansas Railway, for convenience termed the allied carrier, and the lumber company were controlled by the same interests. The railway routes of the two carriers connected at Stamps, Ark. The lumber company operated a mill at Stamps and there received logs from points on the allied carrier's route, sawed the logs into lumber, and shipped the lumber to market over the route of the St. Louis Southwestern Railway. The lumber company delivered its shipments of lumber for carriage directly to the St. Louis Southwestern Railway at Stamps. In order that the lumber shipping interests might be paid unlawful concessions, a subterfuge and device was employed whereby such concessions were paid by the St. Louis Southwestern Railway to the allied carrier. The defendants characterized a certain point on the line of the allied carrier near the mill as Buchanan, Ark. The carriers published joint rates on lumber applicable from Buchanan and agreed upon divisions of the joint rates. The joint rates from Buchanan were made the same as the rates applicable from Stamps for transportation via the St. Louis Southwestern Railway. Thereupon, although no services were performed by the allied carrier in transporting the shipments of lumber, the lumber company and the allied carrier issued shipping records and waybills which indicated that the lumber had been jointly transported by the allied carrier and the St. Louis Southwestern Railway from Buchanan. The St. Louis Southwestern Railway accepted the false

records and paid the agreed division of the joint rates to the allied carrier, which was in effect the payment of rebates to the lumber shipping interests. The allied carrier also transported logs to the mill upon a proportional rate which applied only when the lumber product thereof was shipped via its route. Part of such logs were not so shipped as lumber via its route and in accordance with the allied carrier's tariffs a higher rate should have been imposed for their transportation.

Summaries of all the indictments returned and cases concluded between November 1, 1916, and October 31, 1917, will be found in Appendix A.

BUREAU OF LAW.

On October 31, 1916, there were 32 cases involving orders or requirements of the Commission pending in the courts, of which 11 have been concluded. Of the remaining 21 cases, 6 have been argued, submitted, and taken under advisement by the Supreme Court, and 3 are pending argument and submission to that court. Eleven are under advisement or pending hearing or final hearing and submission in the district courts, and 1 is pending dismissal or reargument in a district court after decision by us on rehearing.

Since October 31, 1916, 10 cases have been instituted in the courts, 2 of which have been concluded. One has been argued, submitted, and taken under advisement by the Supreme Court and the remaining 7 are under advisement or pending argument and submission or dismissal in the district courts. As a result of the foregoing proceedings, there are now 10 cases pending in the Supreme Court and 19 cases pending in the district courts.

With respect to the 10 cases involving orders or requirements of the Commission which have been instituted in the courts during the period covered by this report, two were brought by us for mandatory decrees to enforce obedience to our orders, while one was brought by certain parties for a mandatory decree to compel the Commission to take jurisdiction of a case which it had dismissed after hearing as being without jurisdiction. The purpose of the other seven cases was the annulment of certain of our orders.

Six cases decided by the Supreme Court are detailed below. Six cases have been decided by the district courts in which the Commission was upheld. Two of these have been appealed to the Supreme Court by the petitioners. Five cases were dismissed in the district courts, four on motion of petitioners and one by direction of the Attorney General. In three cases involving orders or rulings of the Commission it filed briefs as amicus curia. In the one decided the order of the Commission was sustained by the Supreme Court. The other two are pending argument and submission to that court. Summaries embracing all the foregoing are shown in Appendix B.

CASES DECIDED BY THE SUPREME COURT.

Six cases to which the Commission was a party have been decided by the Supreme Court of the United States. In four of these, the Terminal Cities Case, the Lake Line Case, the Sheldon Rebate Case, and the Vulcan Coal Case the position taken by the Commission was sustained, while the decisions in the Nashville Switching Case and the Paraffine Tank Car Cases were adverse. The facts and points. decided in those cases were as follows:

NASHVILLE SWITCHING CASE.

Louisville & Nashville Railroad Company et al. v. United States of America et al., 242 U. S., 60.

This was an appeal from a decree of the United States District Court for the Middle District of Tennessee, which denied a preliminary injunction against an order of the Commission requiring the appellants to cease and desist from maintaining a practice, whereby they refused to switch interstate competitive traffic to and from the tracks of the Tennessee Central Railroad Company at Nashville, Tenn., on the same terms as interstate noncompetitive traffic, while interchanging both kinds of traffic on the same terms with each other.

The Louisville & Nashville Railroad and the Nashville, Chattanooga & St. Louis Railway owned switching tracks in the city of Nashville, and organized the Terminal Company, to which they leased their terminal properties for 999 years. The Terminal Company purchased additional property, and erected a union station. The Terminal Company then leased to the Louisville & Nashville and Nashville, Chattanooga & St. Louis Railway jointly all its holdings, for a period of 999 years. In 1900 the two railroads formed an unincorporated organization called the "Nashville Terminals," which maintained and operated property owned jointly by the two railroad companies. The agreement between the roads provided for a board of control, and a monthly apportionment of the expense of maintenance and operation on the basis of the total number of cars and locomotives handled for each railroad.

The Tennessee Central Railroad connected with the tracks of the Nashville, Chattanooga & St. Louis Railway in the western section of the city within the switching limits, and connected with the Louisville & Nashville Railroad outside the switching limits. The appellant railroads interchanged noncompetitive traffic with the Tennessee Central. The Louisville & Nashville refused to switch competitive traffic for the Tennessee Central except at local rates, and the Nashville, Chattanooga & St. Louis refused to switch it at all. The Commission, in City of Nashville et al. v. Louisville & Nashville R. Co. et al., 33 I. C. C., 76, 84, found that the defendant car

riers interchanged traffic with each other, without distinction between competitive and noncompetitive traffic, and held that this refusal to interchange both kinds of traffic with the Tennessee Central was contrary to the second paragraph of section 3 of the act to regulate com

merce.

The district court, in Louisville & Nashville R. R. Co. v. United States, concurred in the view that, despite the joint ownership of the properties, the defendant carriers gave facilities for the interchange of cars to each other which they denied to the Tennessee Central. 227 Fed., 258.

The Supreme Court did not agree with this conclusion. It said, page 73:

*

** * if either carrier owned and used this terminal alone it could not be found to discriminate against the Tennessee Central by merely refusing to switch for it; that is, to move a car to or from a final or starting point from or to a point of interchange. We conceive that what is true of one owner would be equally true of two joint owners, and if we are right the question is narrowed to whether that is not for all practical purposes the position in which the appellants stand. They do still hold jointly a considerable portion of the terminals, purchased with their funds. They manage the terminals as a whole and in short deal with them in the same way that they would if their title was joint in every part. Of course they do not own their respective original tracks jointly and it is matter for appreciation that perhaps defies more precise argument whether the change back to a several tenure of those tracks changed the rights of the parties. We can not see in this modification of the paper title any change material to the point in hand. Neither road is paid for the use of its tracks, but the severally owned and the jointly held are brought into a single whole by substantially equal contributions and are used by each as occasion requires.

This view, that the joint ownership of the terminals by the two carriers constituted them a single entity, so that they performed no service for each other which was denied a third carrier, was concurred in by a majority of the court. The decree of the district court was reversed, and the injunction issued without prejudice to the Commission's making orders to prevent the appellant railroads from discriminating between competitive and noncompetitive traffic.

TERMINAL CITIES CASE.

United States of America, Interstate Commerce Commission et al., v. Merchants & Manufacturers' Traffic Association of Sacramento et al., 242 U. S., 178.

This was an appeal from a decree of the District Court of the United States for the Northern District of California enjoining an order of the Commission which authorized certain carriers to charge, for the transportation of westbound transcontinental freight destined to Sacramento, Stockton, San Jose, and Santa Clara, Cal., greater