land, Cincinnati, Chicago & St. Louis for granting discrimination, and against the Cleveland, Cincinnati, Chicago & St. Louis, the Chicago, Indiana & Southern, and the Grand Trunk Railway Co. of Canada for conspiracy to grant concessions to the O'Gara Coal Co. These cases are now awaiting trial.

The relations between certain of the New York Central lines and the O'Gara Coal Co. were also the subject of a prosecution undertaken in the northern district of Illinois. Investigation showed that the Lake Shore & Michigan Southern Railway Co. had issued in 1909 seven vouchers for an aggregate of $60,000 in favor of the O'Gara Coal Co. and had concealed the payment on its books by charging it to a large expense account. The vouchers were not supported by any papers whatever. The attention of John Carstensen, vice president in charge of accounting of several of the New York Central lines, was called to the matter less than a year after the payments were made. Several conflicting explanations as to the occasion for these vouchers were offered by certain officers of the carrier. Investigation disclosed that Mr. Carstensen had been one of the organizers of the O'Gara Coal Co. All of the circumstances led to the conclusion that the carrier had knowingly granted a rebate to the O'Gara Coal Co.. Accordingly indictments were secured against the Cleveland, Cincinnati, Chicago & St. Louis Railway Co., the Chicago, Indiana & Southern Railway Co., the Lake Shore & Michigan Southern Railway Co., and John Carstensen, vice president of the New York Central lines, for granting rebates and discrimination. In September, 1913, the Lake Shore & Michigan Southern Railway Co. deducted from a payment for fuel coal due the O'Gara Coal Co. the amount of the alleged rebate. The case is awaiting trial.

Two important prosecutions have been undertaken against carriers for having their company coal billed to fictitious destinations on their line in order to defeat the published rates to actual destinations. Investigation showed that in the case of several hundred cars the Seaboard Air Line Railway Co. had carloads of coal shipped from Briceville, Tenn., and near-by points on the Southern Railway billed to the Seaboard Air Line at Williams, Ga. These shipments were delivered by the Southern Railway to the Seaboard Air Line at its junction at Helena, Ga. Many of the shipments were consumed at that junction point and others were diverted to other points, but none of them went to Williams, Ga., as the billing directed. The result was that, instead of paying the local rate of the Southern Railway Co. from Briceville to Helena or the joint rate from Briceville to actual destination and receiving out of this joint rate its appropriate division, the Seaboard Air Line paid the joint rate applying to the more distant point, out of which the Southern Railway received a division much smaller than its local rate to the junction or

its division of the joint rate to actual destinations. The Seaboard Air Line was indicted in the southern district of Georgia in 13 counts for receiving a concession by the above device. An early trial in this case is anticipated. Similarly the Grand Trunk Western Railway Co. was found to be practicing this device as to shipments of its company coal. This carrier had its coal shipped from Newark, Ohio, and near-by points on the Baltimore & Ohio Railroad billed to Battle Creek, Mich., at a joint rate of $1.60, out of which the Baltimore & Ohio received a division of $1. The coal was actually delivered, however, at South Bend, Ind., to which the lawful joint rate was $1.55, and out of which the division of the Baltimore & Ohio was $1.15. Thus the Grand Trunk Western defeated the Baltimore & Ohio proportion of the joint rate to South Bend to the extent of 15 cents per ton. The Grand Trunk Western Railway Co. has been indicted in the southern district of Ohio and the case is now pending.

These cases are in no sense novel, for the Commission in Beekman Lumber Co. v. St. Louis & San Francisco Railroad Co. (21 I. C. C., 270) announced that such practices by a carrier in an effort to defeat the divisions properly accruing to its connecting lines were unlawful, and following this opinion an indictment was returned against the New Orleans & Northeastern Railroad Co. for this offense, and this carrier pleaded guilty and paid a fine. The cases are chiefly significant because of the extent to which the carriers involved were violating the law and cheating their connections by this device.

One of the cases pending, which is of particular interest, is that involving the application of the criminal provision of the act to express companies. In February, 1912, indictments were returned in the western division, southern district of Ohio, against the Adams Express Co. and in the western district of New York against the Adams Express Co. and American Express Co. for charging other than their lawful rates in violation of section 6 of the act. The defendants at once filed motions in both jurisdictions to quash the indictments on the ground that since these express companies were joint stock associations and not corporations they were therefore not subject to the provisions of section 6 as controlled by section 10 of the act. The lower courts treated these motions as demurrers to the indictments. In the western district of New York Judge Hazel dismissed the motion, holding that the defendants were subject to the act. In the southern district of Ohio Judge Hollister, without handing down an opinion, sustained the demurrer and quashed the indictment. On writ of error to the Supreme Court it was decided in U. S. v. Adams Express Co. (229 U. S., 381), that while as a matter of local law courts have refused to treat joint stock companies as legal entities, yet since the act expressly provides that the term

"common carrier " shall include express companies, it follows that the penalties imposed on common carriers by section 10 apply to joint stock companies like the Adams Express Co. as well as to corporations. In American Express Co. v. U. S. (212 U. S., 522), the Supreme Court had previously held that express companies, even though they were only joint stock associations, must under the act file schedules of their rates. These two decisions make it clear that the great express companies, which are all organized as joint stock associations, are subject not only to the duties but also to the penalties imposed upon common carriers generally.

During the past two or three years a great many complaints have been received from grain dealers located in Philadelphia and elsewhere against the manner in which the Keystone Elevator at Philadelphia was being operated. This elevator is owned by the Pennsylvania Railroad Co. and leased to the Keystone Elevator & Warehouse Co. The Commission upon its own motion instituted an investigation into the manner in which this terminal facility was being operated. The investigation disclosed that the firm of L. F. Miller & Sons, of Philadelphia, was the consignee of over 90 per cent of all the grain passing through this elevator, and, furthermore, that Harvey C. Miller, one of the partners in this firm, owned 93 per cent of the stock in the elevator company. After the case had been submitted to the Commission and before the Commission's opinion was issued Harvey C. Miller withdrew from the firm of L. F. Miller & Sons to devote his attention exclusively to the management of the Keystone Elevator & Warehouse Co. The Commission on January 7, 1913, issued its opinion condemning certain of the practices found to exist in the conduct of this elevator. The disregard of the law was so flagrant, however, that the facts presented a case for criminal prosecution rather than merely equitable relief. Accordingly a further investigation was made by agents of the Commission, with the result that indictments have just been returned against the Pennsylvania Railroad Co. for failure strictly to observe its demurrage tariffs; against the Pennsylvania Railroad Co., H. C. Miller, and J. F. McLaughlin, superintendent of the elevator company, for charging less than the lawful rates for elevation and storage services; against the Pennsylvania Railroad Co., H. C. Miller, and J. F. McLaughlin, for granting rebates to L. F. Miller & Sons by allowing false claims based on false weights (40 counts); against L. F. Miller & Sons, including H. C. Miller, J. E. Miller, M. F. Miller, and their bookkeeper, Thos. M. Sloane, for accepting rebates by means of claims founded on false reports of weights (40 counts); against the Keystone Elevator & Warehouse Co. and J. F. McLaughlin, its superintendent, for making false report of weights on grain consigned to L. F. Miller & Sons; and against H. C. Miller, J. E. Miller, M. F. Miller, Thos. M.

Sloane, and J. F. McLaughlin (1) for conspiracy to violate the Elkins Act, (2) for conspiracy to secure reduced rates by false claims in violation of section 10.

This case is one of great importance to the grain trade throughout the East because L. F. Miller & Sons have been heavy purchasers in the grain centers. All routes leading to or competing with the route of the Pennsylvania Railroad Co. to Philadelphia, as well as routes via other gateways to the southeastern territory and New England points, have felt the effect of the enormous concessions and rebates paid by the Pennsylvania Railroad Co. to the Millers Bros. during recent years. Furthermore this grain firm has been in a position to underbuy and undersell its competitors in the grain markets from the Atlantic coast as far west as Chicago. While the responsibility for this condition is disclaimed by the officials of the carrier, the fact that L. F. Miller & Sons routed practically all of their business via the Pennsylvania Railroad, and, in fact, secured preference as to elevation, demurrage, and storage charges from this carrier, can not be disputed.

In addition to its usual duties of investigating and assisting in the prosecution of criminal cases arising under the act, the division has during the past year taken an active part in two important general investigations undertaken by the Commission-the Anthracite Coal Investigation and the Investigation into the Relation Between Rail Carriers and Water Lines. In both of these matters extended interrogatories were addressed to the carriers concerned and a voluminous collection of data has been assembled. In addition to this method of securing the information needed, considerable field work has been done by special agents of the division. While this work has disclosed certain violations of the act, its value consists primarily in enabling the Commission to pass upon the reasonableness of the rates and propriety of the practice of carriers interested in coal lands and in water lines.

Another particular in which the year's experience demonstrates that the terms of the act need to be made more certain, relates to the language of section 20 requiring carriers to give representatives of the Commission access to their "accounts, records, and memoranda." While carriers generally have shown a commendable frankness in exhibiting all of their files to the agents of the Commission, there have recently been instances where a carrier has refused access to certain of its correspondence files on the ground that they were not properly to be considered as "accounts, records, or memoranda." The work of detecting and prosecuting many of the ingenious devices for rebating and otherwise violating the law has been greatly facilitated in the past by the fact that representatives of the Com

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mission were authorized to examine the correspondence relating to questionable transactions which was to be found in the files of the carriers. It is believed that such correspondence files are clearly comprehended within the class of memoranda to which Congress intended to give the Commission the right of access. Owing to the doubt entertained by certain of the carriers on this point, however, it will be necessary in this connection to present test cases to the courts at an early date. Such litigation may extend over a long period, and meanwhile it is of the utmost importance that the Commission should continue its investigations as it has done in the past. For this reason additional legislation making explicit and certain the authority of the Commission to examine all correspondence files, indexes, and other papers and documents retained by carriers subject to the act is desirable if the many violations of the act which can be disclosed only by access to these papers are to be effectually discouraged.

INDICTMENTS RETURNED SINCE DECEMBER 1, 1912.

1. United States v. American Thermos Bottle Co. (southern district, New York). October 29, 1913, indictment for misdescription of contents of packages for shipment in interstate commerce (5 counts).

2. United States v. American Thermo-Ware Co. (southern district, New York). October 26, 1913, indictment for false billing (5 counts).

3. United States v. L. W. Blinn Lumber Co. (southern district, California). March 28, 1913, indictment for false billing of roofing paint and paper, in violation of section 10 (2 counts).

4. United States v. Willard P. Brown and William H. Sanford (southern district, New York). June 26, 1913, indictment for obtaining allowance by means of fraudulent claims against carriers and for soliciting discrimination in connection with shipments of eggs (15 counts).

5. United States v. Cleveland, Cincinnati, Chicago & St. Louis Railway Co., Chicago, Indiana & Southern Railway Co., Lake Shore & Michigan Southern Railway Co., John Carstensen, vice president New York Central lines (northern district, Illinois). December 17, 1912, indictment for granting rebates and for discrimination.

6. United States v. Cleveland, Cincinnati, Chicago & St. Louis Railway Co. (eastern district, Illinois). May 16, 1913, indictment for giving and granting discrimination in favor of O'Gara Coal Co.

7. United States v. Cleveland, Cincinnati, Chicago & St. Louis Railway Co., Chicago, Indiana & Southern Railway Co. (eastern district, Illinois). May 16, 1913, indictment for granting and giving concessions to O'Gara Coal Co. out of legally published rates on coal to South Bend.

8. United States v. Cleveland, Cincinnati, Chicago, & St. Louis Railway Co., Chicago, Indiana & Southern Railway Co., and Grand Trunk Railway Co. of Canada (eastern district, Illinois). May 16, 1913, indictment for conspiracy to grant and give concessions out of the legally published rate to the O'Gara Coal Co.

9. United States v. G. W. Cowan (district court, Colorado). June 3, 1913, indictment for aiding the unlawful use of an interstate free-trip pass.