as to the movement of traffic. By amendment the Commission must, as soon as practicable, prescribe the classes of property for which depreciation charges may properly be included under operating expenses and the percentage of depreciation allowable for each class. The Commission is to have access at all times to all accounts, records and memoranda, including all documents, papers and correspondence and, by amendment, the provision of this section respecting the preservation and destruction of books is made applicable thereto. The Commission is empowered to employ special agents to examine the accounts, memoranda and records which, by amendment, include "all documents, paper and correspondence now or hereafter existing, and kept or required to be kept by such carrier." The paragraph applies to receivers and trustees of carriers as well as the carriers. By amendment, the provisions of the section apply to all documents, paper, correspondence, accounts, records and memoranda now or hereafter existing kept during the period of federal control and placed by the President in the custody of carriers subject to the act..

The remaining paragraphs are numbered 6 to 12. Paragraph 6 provides a penalty of $500 for failure to keep the accounts, etc., as prescribed, or refusing to allow inspection. Paragraph, 7 makes the falsifying of accounts or the mutilation, destruction, or alteration of records a misdemeanor subject to a fine of not less than $1,000 and imprisonment for a term of not less than a year. By proviso the Commission can prescribe what records, etc., may be destroyed after a fixed time. Paragraph 8 provides the penalty on special agents who divulge information received from the inspection of such records. Paragraph 9 provides that the Commission may mandamus any carrier requiring compliance with any provision of the act. Paragraph 10 authorizes the Commission to employ examiners who shall be empowered to administer oaths, examine witnesses, and receive evidence.

Paragraph 11 is the one requiring carriers to issue bills of lading and fixing the liability on the initial carrier for any loss or damage. A new proviso is inserted providing that if the loss or damage occurs while the property is in the custody of a carrier by water, the liability of such carrier shall be determined by the laws and regulations applicable to transportation by water, and that the liability of the initial carrier shall be the same as that of the carrier by water. What was before the first proviso provides that the paragraph does not apply to baggage or to property, excepting ordinary live stock, as to which the carrier is authorized by order of the Commission to establish rates dependent on the declared or released value of the article shipped. By further proviso, also an old one, it is provided that nothing in the section shall deprive any holder of a bill of lading of any remedy or right of action he has under existing law. The next proviso, which was the third, has been amended to provide that

the period of giving notice of claims shall not be less than 90 days, for the filing of claims than four months, and for the institution of suit than two years, the period for filing suit to date from the day when notice in writing is given by the carrier to the claimant that the carrier has disallowed the claim or any part or parts thereof specified in the notice. The last proviso. specifies that if the loss or damage complained of was due to delay or damage while the shipment was being loaded, or unloaded, or damaged in transit by carelessness or negligence, then no notice of claim nor filing of claim shall be required as a condition precedent to recovery. (See in this connection Erie R. R. Co. vs. Stuart, 250 U. S. 465).

Paragraph 12 provides that the initial line may recover from the line responsible for the loss the amount it was required to pay the owners of the injured property.

SECTION 20-A

See Appendix, Page 139, for text of both
the former and present Acts.

Section 20-a is the new section of the act dealing with the issuance of securities by carriers. It is composed of twelve numbered paragraphs.

Paragraph 1 defines the term "carrier" as used in this section to include all carriers subject to the act or any corporation organized for the purpose of engaging in transportation by railroad subject to the act except a street, suburban, or interurban electric railway which is not operated as a part of a general steam railroad system of transportation.

Paragraph 2 makes it unlawful after 120 days from the effective date of this section for any carrier to issue any capital stock or any bond or other evidence of interest in or indebtedness of the carrier, which are collectively termed “securities," or to assume any obligation or liability as lessor, lessee, guarantor, indorser, surety, or otherwise, in respect of the securities of any other person, natural or artificial, even though permitted by the authority creating the carrier corporation, unless and until, and then only to the extent that, on application by the carrier, and after investigation by the Commission of the purposes and uses of the proposed issue and the proceeds thereof, or of the proposed assumption of obligation or liability in respect of the securities of any other person, natural or artificial, the Commission by order authorizes such issue or assumption. Before the Commission can make such an order it must find (1) that the issue or assumption is for some lawful object within its corporate purposes, and compatible with the public interest, which is necessary or appropriate for or consistent with the proper performance by the carrier of its common carrier service and which will not impair its ability to perform that service, and (2) is reasonably necessary and appropriate for such purpose.

Paragraph 3 empowers the Commission to grant or deny any application made or to grant it in part and deny it in part or to grant it on terms

and conditions which it may deem necessary and to issue supplemental orders from time to time with respect thereto.

Paragraph 4 provides how the application and the certificate of notification shall be drawn.

Paragraph 5 provides for the filing of a certificate of notification with the Commission giving notice of the sale or disposition of securities set forth and described in any application or certificate of notification as pledged or held unincumbered in the treasury of the carrier and subsequently disposed of.

Paragraph 6 requires that notice of any application for authority shall be given by the Commission and a copy thereof filed with the governor of each state in which the applicant carrier operates. The appropriate state authority may make such representations before the Commission with respect to the application as is deemed just and proper for preserving and conserving the interests of the several states involved and the people thereof. The Commission may hold hearings to enable it to determine whether any application should be granted.

Paragraph 7 provides that the jurisdiction conferred on the Commission by this section is exclusive and plenary and that a carrier may issue securities and assume obligations or liabilities in accordance with this. section without obtaining approval other than as specified herein.

Paragraph 8 provides that nothing in this section shall be construed to imply any guaranty or obligation as to such securities on the part of the United States.

Paragraph 9 exempts from the provisions of this section notes maturing not more than two years after the date thereof and aggregating (together with all other then outstanding notes of a maturity of two years. or less) not more than 5 per cent of the par value of the securities of the carrier then outstanding. The carrier issuing such notes must, within ten days, file a certificate of notification with the Commission. There is a proviso that any subsequent funding of such notes shall be in accordance with the provisions of this section.

Paragraph 10 requires the carriers issuing securities, including notes, to report periodically the disposition made of such securities and the application of the proceeds.

Paragraph 11 provides that any security issued not in accordance with the provisions of this section is void except in the hands of an innocent. purchaser for value in good faith, in which case such purchaser may sue the carrier and all officers thereof who had anything to do with the issuance of such securities, for the full damages sustained. A penalty of not less than $1,000 nor more than $10,000, or imprisonment for not less than a year nor more than three years, is provided for any director, officer, attorney, or agent of a carrier who knowingly assents to or concurs in any

issue of securities or assumption of obligation or liability forbidden by this section.

Paragraph 12 provides that after December 31, 1921, it shall be unlawful for any person to hold the position of officer or director of more than one carrier, unless such holding shall have been authorized by order of the Commission on due showing that neither public nor private interest will be adversely affected thereby. And after the section takes effect it shall be unlawful for any officer or director of any carrier to receive for his own benefit, directly or indirectly, any money or anything of value in respect of the negotiation, hypothecation, or sale of any securities issued or to be issued by such carrier, or to share in any proceeds thereof, or to participate in the making or paying of any dividend of an operating carrier from any funds properly included in capital account. Any violation is punishable by the same penalties as provided under paragraph 11.

The significance of the provisions of this section is best emphasized by a consideration of the provisions themselves. A supervision of the issuance of securities and the breaking up of the interlocking directorates were the two definite recommendations made to the Senate by the Commission in its report of July 11, 1914, on "The Financial Investigation of the New York, New Haven & Hartford Railroad" (31 I. C. C. 33). The salutary effect of these new provisions, especially in this period of financial reconstruction, is peculiarly opportune, it would seem.

The administration of these provisions has been delegated to Division 4 of the Commission, a sort of administrative division. The record which has been made in the expediting of matters coming up under this section seems to bear eloquent testimony in support of the suggestion outlined at pages 57 to 61, providing for the permanent assignment of all administrative matters to a single administrative division of fixed personnel, charged publicly with none other than the execution of the administrative functions of the Commission and all the judicial functions assigned to three judicial divisions charged publicly with no other duties than the decision of cases.

SECTION 21

See Appendix, Page 143, for text of both

the former and present Acts.

Section 21 requires the Commission to file an annual report as specified. No change has been made in this section.

SECTION 22

See Appendix, Page 143, for text of both

the former and present Acts.

Section 22 has not been changed. This section contains one provision which is of interest in connection with the consideration of certain phases

of "Shreveport Cases" under section 13. It provides that nothing in the act shall prevent a carrier from carrying, storing or handling property free or at reduced rates for the United States, or municipal governments, and in other cases which are of no particular interest here. A number of the intrastate rate cases involve rates fixed by the state regulating bodies which do not permit the Ex Parte 74 increases on intrastate shipments of roadbuilding material. The freight rate on such material is borne by township or county organizations which come within the term "municipal governments." The provision cited here is urged in some quarters as authority for this action by the state authorities.

The other provisions relate to instances in which carriers may grant free transportation and also provides for issuance of the 5,000-mile joint interchangeable mileage tickets and baggage privileges available therewith.

SECTION 23

See Appendix, Page 144, for text of both
the former and present Acts.

Section 23 has suffered no change. This section is the one, little noticed, which gives to any person alleging a violation by a carrier of any provisions of the act which prevents such party from having interstate traffic moved by said carrier at the same rates as are charged, or upon terms or conditions as favorable as those given by said carrier for like traffic under similar conditions to any other shipper, the right to a writ of mandamus against such carrier, commanding it to transport the traffic, or to furnish cars or other facilities for transportation.

It will be noted that this remedy only lies to secure the same service that is accorded others under similar circumstances, etc. The carrier cannot be required by mandamus under this section, to receive and transport certain freight unless it is receiving and transporting like freight under similar circumstances for others. This substantive expression of the common law right of mandamus goes no further than the enforcement of duties imposed upon the carrier by the act, compliance with which can be enforced by writ of mandamus even under common law practice. This section does not, therefore, reach the deficiency pointed out in the discussion of Section 1 indicating that there is no duty imposed upon the carriers under Section 1 or any other section of the act to receive and transport freight tendered in accordance with their tariffs. The present section only authorizes a writ of mandamus if the carrier can be shown to have received and transported like freight for others under similar circumstances. A mandamus would lie in such a case even under the common law, because such a situation would be in violation of the carrier's duty under Section 3 of the act.