to the population of the city in which it is located. Each national banking concern is required to deposit with the comptroller of the currency at Washington United States bonds equivalent to twenty-five per cent of its capital stock in case the capitalization is under $150,000, and bonds equivalent to at least $50,000 if the capitalization is over $150,000;1 and in turn it may issue through the comptroller national bank notes equal to the par value of the United States bonds so deposited. In case a national bank fails and cannot redeem its notes, the comptroller may sell its bonds and apply the proceeds to the redemption.

To secure further elasticity for the currency, an act was passed in 1908 authorizing the formation of national bank associations (composed of not less than ten banks having an aggregate capital and surplus of at least $5,000,000), and empowering such associations to issue and circulate notes on the basis of certain specified securities. In 1908 there were in active operation 6,827 national banks with a combined capital of over $900,000,000; but very few of them saw fit to take advantage of this new law.

The general supervision of taxation and finance in all its branches is vested in the Secretary of the Treasury Department, who must scrutinize the annual collection and disbursement of seven or eight hundred million dollars and account accurately for every penny of it—a huge bookkeeping undertaking. He must also master the theoretical and practical questions of finance, in order to make recommendations to Congress and to meet the demands of that body for expert advice; and he must secure a fair and impartial administration of the customs duties which are irritating to importers at best and doubly irritating when administered in an irregular and arbitrary fashion.

As in other departments of the federal government, of course, the work is distributed among offices and bureaus. Immediately under the Secretary of the Treasury are three assistant secretaries, a chief clerk, and a supervising architect. Each of the assistant secretaries has assigned to him certain definite duties. One assistant superintends the customs and special agents; another has general supervision of the preparation of money; and a third, control over the internal revenue office. To look after the accounts of the various departments which, of course, must

'This is the minimum.

"Each has other duties as well.

fed tul [unststy, lan can (dling ery taere is, in the Treassa setguur”ally apnajted, in l'au aay to data of whom is assigned repay often withing a lot ul. gora Supervision of all the acJutuan, chia pl it won ng tự de post-office, is vested in the of our sit on sie well wry, vint 1st be distinguished from the A. lana s acer charged with supervising

sinement of public moneys are placed in

Let cul? * ve Lined States; the issue of bonds and other ses is under the register of the treasury; the r the director of the mint; the superintenested in a commissioner of internal revenue; notes, and other similar paper is placed in pris ng and engraving. The work of the Treasury en: here It embraces, in addition, the bureau Avantie respital service which guards our ports against ants provision for disabled seamen.

me

CHAPTER XIX

THE REGULATION OF COMMERCE

The Power of Congress Judicially Interpreted

CONGRESS has power to regulate commerce with foreign nations, among the several states, and with the Indian tribes; and it may make all laws necessary and proper to carry this power into effect. The term "interstate commerce" has been interpreted by a long line of judicial decisions to include the carriage of passengers, the transportation of commodities, and the transmission of ideas, orders, and information by telephone or telegraph from a point in one state to a point in another.2 In a word, it covers traffic and intercourse in its broadest sense regardless of the changes which time and mechanical ingenuity have wrought. It does not, however, include life, fire, and marine insurance or ordinary contractual relations, even though the latter are incident to the conduct of interstate business.

Notwithstanding the seeming clearness of this definition of the power of Congress over interstate commerce, it is very difficult to draw the line between acts affecting commerce wholly within a state and acts affecting commerce between states.3 In general we may say, however, that the Supreme Court has upheld state legislation primarily designed for legitimate local purposes, although it may impinge at points on interstate traffic.

Federal Control of Interstate Commerce

The statutes now in force regulating interstate commerce may be classified into three groups: (1) those controlling railways and common carriers; (2) those designed to prevent trusts and

This power is subject to the limitation that Congress cannot lay duties on exports from any state, give preference to the ports of one commonwealth over those of another, or compel vessels bound from one state to another to enter, clear, or pay duties in any state.

'For the constitutional provisions and an important illustrative case, see Readings, p. 343.

'For an illustrative case, see Readings, p. 348. See below, chap. xxii.

those aimed at miscelw and the law imposing rjuries to their employees. ay tra in the United States, Cona large and far-sighted plan of eng voted its attention to granting ayerations. As a result all early

grants of public lands, concessions ssion of duties on railway materials and kindred measures favoring a rapid ey system.

ly no aritation for regulation in the interest the dose of the Civil War. In 1868, the roads and canals reported that Congress late interstate railways, secure the safety of sribe uniform and equitable rates and adequate at the House failed to act. Again, in 1872, on a Goa embodied in the President's message, a Senate teed a comprehensive plan for regulating railways, was no practical outcome. In and out of Congress, adway regulation had become the subject of earnest

The connection of many Congressmen with great terests was notorious, and it was believed, with good , that railway corporations were buying support in the al legislature.

Agth, in 1885, when it was apparent that the demand for

could be no longer disregarded, the Senate appointed a ittee which conducted a long investigation into the operaof railways throughout the United States and made a prestion of such notorious abuses that Congress was compelled

The result was the law of 1887, creating an Interstate rce Commission and providing certain regulations for non carriers.

This original act, the amendatory and supplementary acts, ecisions of the courts, and the orders and decisions of the ission now constitute a formidable body of federal law, and • Impossible to give here more than a brief statement of the eral principles."

* For an extract from this Report, see Readings, p. 352.

lt Judson, The Law of Interstate Commerce.

The administration of the law is placed in the hands of an Interstate Commerce Commission which is entirely separate from the Department of Commerce and Labor. This commission consists of seven members appointed by the President and Senate and paid a salary of $10,000 each.

The Act to Regulate Commerce, as the law is called, applies to corporations and persons carrying oil or other commodities, except water and gas, by means of pipe lines, or transporting passengers or property by railway or by rail and water from one state or territory into another state or territory, or from one place in any territory to another place within the same territory, or from any place in the United States to a foreign country.'

A large number of restraints are laid upon the carriers and corporations to whom the Act applies. All charges for services in connection with transportation of passengers or property must be just and reasonable; no common carrier can grant free passes or free transportation except to certain specified persons and institutions; and railroad companies are forbidden to transport commodities in which they have a direct property interest, except timber and its products. Common carriers must construct switches and make connections with lateral and branch lines of railways. They cannot grant rebates, drawbacks, and special rates, thus discriminating and making lower charges to some persons than to others for similar services; they cannot give any undue or unreasonable preference or advantage to any particular person, company, corporation or locality; and they are forbidden. to make arrangements for pooling freights of different and competing railways, or for dividing among themselves the net proceeds of the earnings of such roads. They must print and keep open for public inspection schedules showing rates, fares, and charges for transportation, and no change can be made in the rates, fares, and charges so published except after thirty days' notice to the Interstate Commerce Commission. Finally they must also render full and complete annual reports to the Commission in the manner prescribed by that body; and there is now established

The Act does not apply to the transportation of passengers or property or to receiving, delivery, storage or handling of property wholly within one state. The Elkins law of February 19, 1903, prohibits rebating and allows proceedings in the courts by injunction to restrain common carriers from departing from the published rates.