i6 



HARDWOOD RECORD 



beauty was lost. The time has now come when a bit of creation 

 as nature made it is a somewhat rare sight, and such will become 

 a rarer sight from year to year. 



Supreme Court Decisions Give Promise of Even 

 Greater Turmoil in Rate Controversies 



ON MOXDAY, JUNE 9, THE SUPEEME COURT of the United 

 States, the final tribunal in all litigation, handed down a 

 decision which is momentous in its significance, and which further 

 promises to open up in the incessant controversy between shippers 

 and transportation companies a vastly greater opportunity for mis- 

 understanding. The decision was rendered in the so-called Minne- 

 sota rate case and the opinion was. prepared by Justice Hughes. It 

 promises to very considerably complicate the equitable adjustment 

 of freight rates all over the country. 



The gist of the decision is that in the absence of explicit action 

 by Congress, the various states in the Union are empowered to fix 

 rates on intra-state traffic regardless of what the interstate rates 

 through each particular state may be, or the effect of the intra-state 

 rates on the interstate rates. Of course the opinion provides that 

 no intra-state rates may be confiscatory, but under this provision 

 the railroad commissioners of the various states or the state legis- 

 latures are given authority to make all rates on commerce within 

 the boundaries of their states. 



The railroads' contention regarding the Minnesota rate case has 

 been that the Interstate Commerce Commission should logically 

 control the various local and intrastate rates as well as the rates 

 on long hauls between states. While on the face of it, this con- 

 tention seems entirely just and really the only logical way of arriv- 

 ing at any satisfactory arrangement, still from a legal point of 

 view, the controversy is ultimately on the status laid down in the 

 Supreme Court's opinion or that opinion would not have been re- 

 turned. At the same time it is appalling to think of the probable 

 confusion and the verj' maelstrom of controversy in which it may 

 result. 



As suggested directly in the opinion, the only remedy is that 

 Congress immediately pass legislation which shall give the Inter- 

 state Commerce Commission direct supervision over all rates 

 throughout the states and nation. Favorable action on this vastly 

 important (juestion will remove a very probable cause of still 

 further inconvenience to business. 



Following the Minnesota rate decision, the Supreme Court on 

 June 16 returned a decision upholding state railroad legislation in 

 Missouri, Arkansas, Oregon and West Virginia. This legislation 

 included two-cent passenger laws in Missouri, Arkansas and West 

 Virginia; maximum freight rate laws in Missouri and Arkansas, and 

 freight rates out of Portland in the Oregon case. 



Justice Hughes, who announced this decision, as he did in the 

 Minnesota case, cited frequently the precedents established by that 

 case rather than reviewing in full the arguments on the new de- 

 cision, which were analogous to those on which the Minnesota rate 

 decision was based. 



The New Currency Bill 



THE ADMINISTRATION CURRENCY BILL as a substitute for 

 the Aldrich currency reform measure, which has been given 

 considerable advance publicity, is now before the House and Senate 

 at Washington, following its reading on Monday before the two 

 branches of Congress assembled in general session, by President 

 Wilson. The proposed measure is similar to that advocated in the 

 National Monetary Commission bill, known generally as the ' ' Aid- 

 rich bill," but in the actual application the measures vary widely. 

 As an instance, the Aldrich bill proposed that there should be a 

 central bank with forty-five directors. These should be elected by 

 the various banks in each district and these directors in turn would 

 elect one governor. 



As compared with this the administration measure proposes to 

 give the government absolute control of the situation; to create a 

 national reserve lioard consisting of nine members, three elected by 

 the banks' electorate, three ajipointed by the President and three 



as ex-officio members of the board. The latter three would be the 

 secretaries of the treasury, agriculture and commerce. 



The administration measure does not create a central reserve 

 bank, but rather provides for reserve districts to be organized by 

 a committee consisting of the treasurer, comptroller of currency 

 and attorney-general. There will be at least twelve of these reserve 

 districts, and each will have a central reserve bank incorporated 

 under federal laws. All national banks in each district must sub- 

 scribe to the capital stock of the reserve bank in its district. This 

 provision is not compulsory with trust companies, state banks and 

 other banking institutions. Each bank must subscribe to the ex- 

 tent of twenty per cent of its unimpaired capital stock. 



The only deposits in the reserve bank are those of the individual 

 banks holding this stock and of the federal government. A credit 

 balance in the reserve bank must be maintained at all times by 

 home banks, equal to three per cent of their current demand lia- 

 bilities. The government funds deposited in such banks may draw 

 interest, but the deposits from affiliated banks will not, but the de- 

 positors may reeei%'e five per cent dividends on stocks. Above five 

 per cent, all profits will be turned over to the accumulation of a 

 reserve surplus, up to twenty per cent of the capital stock of the 

 reserve bank, and beyond this such funds shall be turned over to 

 the federal treasury. 



Each reserve bank must have a capital stock of at least 

 .+5,000,000. It is given the privilege of operating branches, but in 

 no case can any bank have more than one branch for each $500,000 

 of its capital stock. 



As to the actual operation, it is notable that the reserve banks 

 are prohibited from loaning for speculative purposes. It is not 

 anticipated that there will be any competition between the reserve 

 banks and their home banks in the matter of purchasing commercial 

 paper and the like. 



The national treasurer is also authorized to issue notes to the 

 extent of $500,000 for the purpose of reducing the amount of 

 national bank notes outstanding. These notes are to be issued to 

 reserve banks on application approved by proper officials. The 

 reserve bank may at any time, by turning over national treasury 

 circulating notes, reduce its account and withdraw its collateral 

 in proportion. The collateral to be deposited with the treasury is 

 to be equivalent to the circulating notes which it secures, and each 

 reserve bank is required to keep in its reserve banks thirty-three- 

 and-a-half per cent of the amount of such notes deposited through 

 it. This reserve will be decreased as the notes are returned, which 

 provides the so-called "clastic" feature of the bili. 



As to intercourse between the various district reserve banks, each 

 is given the privilege of rcdiscounting for any other, upon obtaining 

 permission of the national reserve board. In addition the national 

 reserve board will maintain a national clearing house for the 

 reserve banks. Each reserve bank will be required to clear for its 

 district. Various other minor features also are provided. 



Will Standardize Railroad Scales 



'T'HE BUREAU OF STANDARDS of the Public Service at 

 * Washington, that has been in existence for a good many year.^ 

 without doing anj'thing to attract particular attention, is now be- 

 ing brought into the limelight of government activity. Secretary 

 Redfield of the Department of Commerce can be said to have dis- 

 covered this bureau. The idea which he follows out is that the 

 Bureau of Standards is in a proper position to co-operate with 

 various other bureaus and departments of the federal government. 

 The latest task jdanned for the bureau is an inspection of the rail- 

 road scales used on the railroads of the country that are doing an 

 interstate business. In making this inspection, the bureau will 

 supplement or lead an investigation that is now being made by the 

 Interstate Commerce Commission in freight weighing by railroads. 

 This work, as recorded in the lumber press for some time, has 

 been carried on unostentatiously by the commerce commission, 

 being undertaken in response to complaints from a large number 

 of shippers, which have been coming in for years. 



The Department of Commerce has taken the matter up for the 



