proceeding we entered separate orders increasing the compensation of the two trustees of a debtor. In two proceedings we have approved maximum limits of partial compensation for debtors' counsel. In the Missouri Pacific Railway proceeding we approved maximum limits for interim compensation and expenses of counsel and special counsel of the debtor in presenting the plan of reorganization and representing the debtor; maximum limits for interim compensation and expenses of special counsel to the trustee of the debtor in litigation arising out of contracts with Terminal Shares, Inc.; and maximum limits of final compensation and expenses of special counsel to trustees of the debtor in connection with the review of an audit of the debtor's accounts, inquiry under section 21 (a) of the Bankruptcy Act with respect to such audit, and an investigation with respect to the solvency of the estate of O. P. Van Sweringen, deceased. In the Chicago & Eastern Illinois Railway proceeding we approved maximum limits for interim compensation and expenses of counsel of the debtor for services in connection with an interlocking directorship proceeding before us and a special counsel of the debtor in connection with the preparation and presentation of a plan of reorganization. In the St. Louis-San Francisco Railway proceeding we approved maximum limits of partial allowance of compensation of special counsel for the trustees of the debtor for services in connection with litigation arising out of the acquisition of certain common stock of the Gulf, Mobile & Northern Railroad and the Chicago, Rock Island & Pacific Railway by the debtor.

Hearings have been held in 9 proceedings on the applications of 11 protective committees for subsection (p) authorization. Such authorization has been granted in 6 instances and 3 applications are now pending before us. Two applications filed in separate proceedings were withdrawn before any hearing was held.

BUREAU OF FORMAL CASES

The formal complaints filed numbered 360, of which 306 were original complaints and 54 subnumbers, a decrease of 97 as compared with the previous period. We decided 541 cases and 125 have been dismissed by stipulation or on complainants' request, making a total of 666 cases disposed of, as compared with 789 during the previous period.

Approximately 49 formal and investigation and suspension cases have been reopened for further hearing and reconsideration.

We conducted 679 hearings and took approximately 110,503 pages of testimony, as compared with 725 hearings and 136,780 pages of testimony during the preceding period.

The following statement shows certain facts with respect to the condition of this docket as of October 31 of the years indicated:

Approximately 32 percent of the total number of formal complaints are now handled by the shortened procedure method as compared with 37, 36, and 30 percent during the 3 preceding years.. In cases so handled and decided during this year the average elapsed time to reach a decision was 307 days from the receipt of complaint. and 156 days from receipt of the final memorandum. The corresponding periods during the 3 preceding years were 317 and 176, and 337 and 202 days, and 310 and 179 days, respectively. The following statement gives details concerning the docket as of October 31 of the years indicated:

Explanation

1934

1935

1936

1937

Suggested for handling under the shortened procedure, either by us or by the parties..

In which method not accepted by one or more of the parties.

In which agreement was subsequently reached by the parties, making further formal proceedings unnecessary:

Before service of complainant's memorandum.

11

After service of complainant's memorandum.

7

In which complaints withdrawn..

13

Dismissed for want of prosecution..
Decided.

22018040

5

111

49

14

63

BUREAU OF INFORMAL CASES

The number of informal complaints received was 946, a decrease of 224. The carriers filed 3,111 special docket applications for authority to refund amounts collected under the published tariffs and admitted by them to have been unreasonable, a decrease of 806. Orders authorizing refunds were entered in 2,585 cases, a decrease of 634, and reparation thereunder was awarded in the sum of $394,799.41. In addition, 436 cases were dismissed or disposed of without orders. The Bureau also handled approximately 11,800 letters, many of which have the characteristics of informal complaints although not classified as such. Others sought general information and informal rulings upon the rights and obligations of the public and common carriers under existing statutes.

BUREAU OF INQUIRY

During the year more than 200 investigations of alleged violations of the criminal and penal provisions of the Interstate Commerce Act and related statutes were directed and made by our staff of attorneys and special agents.

Unlawful practices of rail, water, and motor carriers subject to our jurisdiction, and of forwarding companies and other shippers, were discovered.

One investigation disclosed a scheme on the part of several motor carriers to defeat the provisions of a tariff, published by a rail carrier to attract to its line traffic which it feared would be lost to motor carriers, which we permitted to become effective in the interest of coordination of rail and motor services. This tariff named a rate which was applicable in either direction between Chicago and the Twin Cities for the transportation on flatcars of mixed merchandise loaded in trailers. The tariff also provided for a penalty charge in the event that the contents of the trailers were in excess of a designated weight. The motor carriers, in their capacity of shippers over the railroad, avoided the payment of this charge by causing the weights of the contents of numerous trailers to be falsely represented to the rail carrier. Prosecutions instituted against eight of these motor-carriers under the provisions of section 1 of the Elkins Act resulted in the imposition of fines aggregating $13,000 upon pleas of guilty.

It appears from our investigations that the delivery of ordernotify and so-called advise shipments in advance of the surrender of bills of lading, and without bond being posted with the carriers, is a practice which is growing. The carriers' tariffs generally permit the delivery of order-notify shipments prior to the surrender of bills of lading provided that bonds to protect the carriers from loss are posted with them, but usually there is no tariff authority for such delivery of advise shipments.

During the year the first indictment based on such a practice was returned under section 1 of the Elkins Act against a railroad company which had delivered shipments to the advise party named in the bills of lading without the surrender by that person to the carrier of the bills of lading or of delivery orders or any other authority from the consignor or consignee to make such delivery. The defendant pleaded guilty and paid a fine of $2,000. Other prosecutions, based on deliveries of order-notify shipments, were instituted against a carrier and two shippers, and fines aggregating $3,000 were imposed upon pleas of guilty.

The filing of false claims by shippers with carriers for alleged damage in transit to shipments of perishables is a practice which persists. Fifteen indictments based on this practice were returned.

Several of them named as defendants certain receivers of shipments of grapes at Boston, Mass., and a former inspector of a railroad inspection bureau, who were charged with having filed claims which were supported by false damage reports made by the inspector, and with conspiring to file false claims. Pleas of guilty have been entered by two of the defendants, and fines aggregating $1,000 have been imposed and paid, in addition to substantial fines and sentences of imprisonment which were suspended for a probationary period.

Other indictments growing out of claim practices were founded upon the payment of claims by a carrier to a large shipper of grapes. The claims related to 27 shipments which were abandoned at destination and were sold by the delivering railroad at auction. The moneys thus realized were insufficient to meet the aggregate freight charges due on the shipments, and the shipper was required to pay the deficits in accordance with the carrier's published tariffs. The carrier's claim department concluded upon investigation that the claims, which originally were in an aggregate amount substantially less than the freight deficits paid by the shipper, were without merit. Subsequently, however, the shipper was permitted to amend its claims, and the carrier finally paid as damage an amount which approximated the freight deficits previously collected by it from the shipper, and was several thousand dollars in excess of the damage set up in the original claims which the carrier's claim department had found to be without merit. The carrier and the shipper, and one of the latter's officials, were indicted for granting and receiving, respectively, rebates and concessions, in violation of section 1 of the Elkins Act. A practice on the part of receivers of dressed meats and dairy products at New York of obtaining from the railroads serving that port allowances to which they were not entitled was discovered to have been in existence for several years. Under the tariffs of those carriers specified commodities consigned to New York, instead of being lightered across the river by the carriers, may be unloaded on the Jersey side of the harbor for truck distribution or storage in cold storage houses, and if they are subsequently trucked to New York or Brooklyn by the consignees or at their expense, and they so certify in claims filed with the carriers, they are entitled to an allowance of 3 cents per 100 pounds. Numerous claims containing the required certificate, which were paid by the carriers, were filed in respect of commodities which had not been trucked either to New York or Brooklyn, and in fact had been delivered to the establishments of purchasers in New Jersey. In certain instances the claims related to goods which were still in storage. Prosecutions of 14 shippers were instituted, and aggregate fines of $22,000 were imposed upon pleas of guilty.

Another instance of the payment of unauthorized allowances resulted in the indictment of two water carriers and a brokerage com

pany. The carriers' terminal tariffs provided that in those instances where shipments weighing in excess of 10,000 pounds were trucked by consignees, or at their expense, from the carriers' piers to the consignees' establishments, an allowance of 50 cents per ton would be paid to the consignees, provided (1) that such establishments were located at points on railroad tracks to which the water carriers otherwise under their tariffs might be required to absorb the switching charges of the rail carriers serving the port, and (2) that no split deliveries of shipments were effected. Payments of claims for the allowance in question were made to the brokerage company in respect of shipments of potatoes which were consigned to it and were delivered by truck in split lots, at no expense to it, to divers purchasers whose places of business were not on railroad tracks.

Failure of carriers and shippers to observe published demurrage and transit tariffs was brought to light in several investigations, and indictments charging violations of section 1 of the Elkins Act were based thereon. In one instance a carrier was fined $5,000 upon a plea of guilty to an indictment for the granting of a concession, whereby an advantage was given to the shipper, which resulted from the detention by the carrier on its rails, at the request of the shipper and without any charge being made therefor, of carload shipments of machinery consigned to a point in Mexico. The advantage which accrued to the shipper from this detention was that it was enabled thereby to accumulate at the Mexican border at various times sufficient tonnage to obtain the benefit of lower customs duties than would have applied had the shipments been transported on regular schedule and thus arrived at the border in tonnage lots requiring the payment of higher duties.

In addition to the investigations of alleged violations of the criminal provisions of the statute, investigations were conducted during the year for the purpose of obtaining information to be used in the development of the record in five formal-docket proceedings. One of these is the Freight Forwarding Investigation (Docket No. 27365), discussed elsewhere in this report. In two of the proceedings, namely, Pyrophyllite from Hemp and Glendon, N. C. (I. & S. Docket 4254), and Icing Empty Cars Before Moving to Loading Points (I. & S. Docket No. 4275), we have issued reports (222 I. C. C. 158 and 223 I. C. C. 329). The other proceedings, namely, Practices Affecting Dillonvale & Smithfield Ry. (Docket No. 27745) and Investigation of Alleghany Corporation and Chesapeake Corporation (Docket No. 27825), still are pending, but a hearing has been held in each.

A decision construing the provisions of section 1 of the Elkins Act was rendered by the District Court for the District of Nebraska in United States v. Miller, 18 F. Supp. 389. The indictment in this case charged three individual defendants with having solicited and